The purpose of government is to enable people to build and do things that don't hurt others. Why should they stand in the way of this any more than someone putting in a roller coaster or casino?
I highly doubt the private developer is spending billions of dollars to give the middle finger to other cities. Clearly they see demand and are trying to fill that demand at a profit.
I think this story is completely missing the point. Most companies would be risk adverse and would want the city to shoulder the risk with a bond and increased taxes to pay for it. It sounds like Google is proposing a form of equity compensation where they are paid based on performance. The metric for that performance just happens to be tax revenue generated by the project. It could just as easily be some non-monetary metric correlated to city revenue.
You're being downvoted, but you're not wrong. Under the guise of things like public-private partnerships, public money is increasingly funneled to private interests. Look at the humble TIF. Does your city need a big-ass stadium that won't actually help development or build community? Cool! Let's draw a border around several blocks and capture all of the tax increases for 20 years and then give it to a private company. Once that's over, the company can collect on the next boondoggle while everyone wonders why their city is a decaying, boring place to be, ultimately resulting in demolition of the stadium.
No it sets a terrible precedent. Businesses need to support their community. I would willing to bet that the city council will not let it happen. They may cut a deal but it ain't gonna be 100%. More like on the order of 10-25% like other companies get. Corporations are too greedy. I contract for a living and through local contacts never go more than a month between contracts. The job market here is still pretty great for people who have solid backend/embedded skills, in general it's solid for most people. Those other people can go work for the other big guys or the new Tesla plant who actually cut a reasonable tax deal.
Last I was aware, there was no evidence that this investment provided any return.
Not that it matters because that still wouldn't justify a huge investment by the public into a private entity without any ownership stake.
If the idea was really to create something resembling a grant to private organizations to create business that stimulates the economy, you would rationally have some kind of process around for screening candidates based on merit and be more diversified in your awards.
I'd like to believe it's anything other than a kind of blackmail where these organizations use their media power (== public opinion) with impunity to bully municipalities into providing them the tax revenue of citizens, wasting money that could otherwise be used for individual or public good, but that's all I can make out of it.
Right. I don't think it's possible to make it profitable without a corporate sponsor or heavy subsidies from the local city government for the first few years.
This is a pretty weak point, essentially "Lets give that guy money, he might do good things with it, he's done good things with it in the past." except instead of being a personal investment this concerns tax payer money being funneled to a private corporation.
They'd be much better spending that money on their neglected public transit or their neglected public housing...
sounds like an interesting experiment that these investors want to foot the bill for, so why not? Perhaps ideas could be fruitful for other cities if proven to work.
I agree. Passing costs on to future generations is common place in other cities. This practice would surely cause elected officials to think twice before building.
Why yes, because hoping to take this insane amount of money flowing into the city (and state!) and use it to make everyone else's lives that much more livable is a terrible, horrible, no good very bad thing. I'm sure nobody involved in the tech sector has ever benefited from any public monies; it's only right that they shouldn't have to pay any taxes!
No, the idea that the city should have to provide roads, utilities, etc to a huge, rich corporation and get nothing back for their trouble is terrible.
"But some skeptics of these types of partnerships say that private citizens already pay taxes and should not be expected to pay for added expenditures that are the responsibility of the government."
Sort of, but no. The entire problem with Detroit is you draw arbitrary lines on the ground, and allow people and capital to flow freely across those lines, but don't allow taxes to flow across those lines.
This is a company asking a city, that will see no income taxes from the at most 2,000 employees, permission to pay zero taxes at all to the city in exchange for the honor of housing a future EPA Super Fund site. Sure, the city will get some sales tax revenue from the 2,000 who will almost assuredly live outside of the city. So they'll get what, 6.25% of a $10 lunch from maybe 30% of workers per day? So they'll expect about $100k/yr in tax revenue in exchange for more road utilization and a future EPA Super Fund site. That doesn't seem like a good deal for the city. And that's assuming 100% of the sales tax goes to the city which it doesn't. Most of that goes to the county and state.
Pretty much must be, because the city is spending the money on something. If the city isn't using the money on something essential, they could reduce taxes.
Might be a struggle to get tax reductions past the voting public. But I think a bit of political elbow grease could get it done.
This is no different than Toronto issuing a bond based on property tax revenue and giving the proceeds to Sidewalk Labs to construct what they proposed.
Sizable state/municipal tax breaks have been granted to other companies and industries over the past three decades. While things generally worked out for the southeastern U.S. states that granted breaks to auto manufacturers and their suppliers, the situation hasn't been so rosy for states that targeted huge solar research/manufacturing projects (1) or municipalities which have subsidized stadiums for professional sports teams (2, 3).
In Tesla's case, what if the demand doesn't meet the projections cited in the article? What would that mean for taxpayers in Nevada?
If it’s privately funded, I don’t think the foolishness of this plan can do a lot of long-term damage to the city.
reply