‘Cause nothin’ from nothin’ leaves nothin’
You got to have somethin’ if you wanna be with me…
— 1986 hit song ‘Ain’t Nothin’ Goin’ On But The Rent’ by Gwen Guthrie
Pagosa activist and financial consultant Mark Weiler has a couple of favorite maxims he likes to use when discussing the importance of consistent revenue streams in government and business. I’ve heard him quote, for example, the following phrase more than a dozen times over the past decade during various conversation with community leaders.
“There’s no romance without finance.”
Fans of 1980s R&B dance grooves may remember singer Gwen Guthrie quoting that same phrase repeatedly in her hit song Ain’t Nothin’ Goin’ On But The Rent to remind members of the masculine sex that “you need a J-O-B if you want to be with me.”
Two years earlier, Madonna had expressed a similar sentiment in her hit song, “Material Girl”.
They can beg and they can plead, but they can’t see the light
‘Cause the boy with the cold hard cash is always Mister Right
‘Cause I am living in a material world, and I am a material girl…
No doubt Mr. Weiler is well aware of the important role played by cold hard cash in male-female relationships… but when he uses the phrase, “No romance without finance” when speaking to community leaders, he implies a much broader interpretation — that any type of government or business enterprise is bound to fail, unless proper attention is paid to the amounts of money flowing into and out of the system.
During the first part of the 21st century, it became increasingly popular for cities and towns in Colorado to establish “Urban Renewal Authorities” that had nothing to do with “urban renewal” per se and everything to do with promoting private development on vacant parcels within the city limits by promising developers 25 years of Tax Increment Financing (TIF) to help make the development “pencil.” These cities and towns have been willing to ignore the obvious intention of Colorado’s Urban Renewal Law, which was written to address “slum and blighted areas which constitute a serious and growing menace, injurious to the public health, safety, morals, and welfare…”
The Pagosa Springs Town Council committed our community to joining this popular municipal movement on November 5 when the Council voted 4-to-3 to create an Urban Renewal Authority, based partly on a report delivered that evening by Town Planning Director James Dickhoff, who found the vacant 27 acres adjacent to the Springs Resort to be dangerously blighted. You can download Mr. Dickhoff’s report here.
Following the presentation of Mr. Dickhoff’s report, we heard each of the seven Council members explain why they were in favor of forming an Urban Renewal Authority, or conversely, why they were opposed to forming such an Authority.
We’re listening here to Council member Nicole DeMarco:
“Well, I guess I’ll start with saying that I’m in favor of the URA, but one of the things I’m uncomfortable with — with any economic development policy — it puts the government in the driver’s seat of determining who gets advantages, and that’s something I am uncomfortable with.
“But I think the potential for getting things done, that we want to see done, with this Urban Renewal Authority is great enough for me to understand that discomfort and move forward with that.
“I think we’re constantly trying to address things that market economics won’t address. That’s what the public sector does. And I feel — particularly when we talk about affordable housing — I feel really limited on what it is we can do to move forward with that. I think this Authority will give us the ability to push a project, that might consider only market-rate housing, into the ability to have affordable housing. So I think the Authority is a tool for us to consider.”
Ah, yes. Affordable housing.
“As far as binding arbitration with the other taxing districts, I think that… I understand what Council member Schanzenbaker is saying, that you want the other entities to be more onboard, but I feel that negotiations should occur when we actually have projects, because it’s so arbitrary… it’s so intangible at this point, to know if other taxing districts are interested in coming onboard. So I think that’s really important, and I don’t have an interest in strong-arming other taxing districts to do things that [Town Council] wants to see done, but that negotiation and consideration should occur once we have projects to consider.”
I’d like to react to Ms. DeMarco’s comments, because she makes some interesting points.
She is certainly correct when she notes that, generally speaking, economic development policies are attempts by governments to use taxpayer revenues to generate “romance” where none might otherwise exist, and thus require elected government leaders — who may have limited business experience — to pick winners and losers.
We watched that ‘economic development’ process flounder rather dramatically over the past four years, after the Town Council decided to hand out half a million dollars in tax incentives to encourage a downtown grocery store. In 2015, the Town government was actively seeking a grocery store tenant for downtown Pagosa. The Kroger Corporation had closed its South 8th Street ‘City Market’ store in 2011, and some economically-challenged downtown residents where having to ride the bus to the uptown City Market to purchase groceries. In an effort to address something that market economics seemed unable to address, the Town government entered into an ‘economic incentives’ package with Colorado-based Hometown Food Markets with a promise of tax subsidies and fee waivers valued at about $500,000.
The store lasted less than four years, but it would appear the Soward family — owners of Hometown Food Markets — may have been winners as a result. They purchased the vacant store property in 2015 for $487,500 — and sold it four years later to Vitamin Cottage Natural Grocers for $900,000. That would appear to be a profit of some kind, which did not accrue to the taxpayers.
And whatever investments the Sowards had made into the physical building, those improvements were immaterial to Natural Grocers, because the building was completely gutted this past summer, and now has a brand new interior design suitable to the Natural Grocers’ financial model.
Natural Grocers is planning to open this, their 40th Colorado store location, on December 18. Without any government incentives or subsidies from the Town government.
Apparently, had the Town Council been a little more patient, they would have got their downtown grocery store without throwing away $500,000.