City for Champions foes support city-subsidized retail

The Gazette editorial Updated: December 26, 2013 at 11:13 pm • Published: December 26, 2013 | 12:00 am 0

As Colorado Springs celebrates an economic jump-start thanks to the state agreeing to rebate taxes, City for Champions foes rail against the decision with moral indignation about government playing a role in economic development. Yet they praise the city's subsidy of retail. Some might call it hypocrisy.

Few have been more outspoken than City Councilman Joel Miller, whose complaints include the possible involvement of the Colorado Springs Urban Renewal Authority. A "blight" declaration could help revive a run-down portion of downtown with a stadium, arena and museum.

"Since ownership of the projects is yet to be determined, URA funds could be going to benefit private individuals," Miller wrote on Facebook, explaining part of his staunch opposition.

City for Champions proposes a stadium and sports center in conjunction with a U.S. Olympics museum; an Air Force Academy Visitors Center; and a sports medicine center at the University of Colorado at Colorado Springs.

All would bring visitors and their money to the region. Government classifies tourism as an export. That's because it imports money, just as Colorado Springs companies, such as Western Forge and Hewlett-Packard, import wealth by selling tools and technology into distant economies. When a company imports capital, it creates what economist call "primary" jobs.

We need and appreciate retail expansion, though it does little—relative to manufacturing and tourism—to grow a region's economy. It creates secondary jobs funded by primary employment.

Yet, activists opposing "tax-increment financing" of City for Champions give heartfelt support to local government's near-identical subsidization of new retailers that compete for existing dollars.

"I do like this project," wrote Miller on his website, glowing about the Bass Pro Shops Outdoor World that's part of a city tax-increment subsidy deal for the north Colorado Springs Copper Ridge development.

Miller, who fears City for Champions could benefit "private individuals," boasted that city government's subsidy of the retail development may benefit—wait for it—a private individual.

"Here we have a developer taking on the risk, and he's willing to do this because he's studied the market and believes the development will be profitable," Miller wrote in support.

Tax financing of Copper Ridge works exactly like that of City for Champions, with a few differences worth noting. Copper Ridge subsidies, which Miller hopes will help benefit one developer, result from a former council majority fraudulently declaring a chunk of pristine suburban prairie—not a rundown section of downtown—as "blighted."

Another distinction involves the money in play. City for Champions proposes a return of state portions of sales taxes to Colorado Springs. Repeat: a state portion, not a city portion, to help fund the projects. The city's subsidy of Copper Ridge, by stark contrast, comes at direct cost to city government and Colorado Springs taxpayers. It will pay for an extension of the Powers corridor to bring the developer more traffic and accommodate trips his venture will cause.

City for Champions rebates would come from state taxes imposed mostly on tourists, thus expanding the local economy with imported capital. Copper Ridge rebates, alas, come from taxes imposed on people who live here and already spend money at existing retailers. It's a great development, but one that mostly taxes and shuffles money within the economy without creating primary jobs and substantial economic growth. True free-market purists complain that city government chose winners and losers by subsidizing a few retailers who will compete with existing businesses for customers and employees.

Miller is not alone in clinging to a free-market double standard. Denver Post Editorial Page Editor Vincent Carroll, whose paper endorsed the billion-dollar Amendment 66 tax increase, penned a recent article bemoaning the Colorado Economic Development Commission's approval of City for Champions rebates. After Miller sidekick Kanda Calef posted the article to Facebook, City for Champions opponents offered glowing support for the Copper Ridge development's Bass Pro Shops while castigating City for Champions. Contributor Julie Naye characterized City for Champions as a boondoggle: "Love Bass Pro Shops and as I have mentioned in other posts, provided more new jobs than is predicted (not promised) of this money pit of a project CfC."

Another contributor enlightened us with this: "My hubby is thrilled with Bass Pro Shops—even more so when he won a $200 gift certificate."

Most arguments against state tax relief to help City for Champions reveal economic confusion and hypocrisy, disguised as free-market purity. The handful who make such complaints lose all credibility when simultaneously singing the praises of city-subsidized retail.

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