Speaking of Tax Abatements…

Kevin Leininger had an article in Tuesday’s News-Sentinel exploring a request before the City of New Haven for an abatement worth up to $300,000 and a grant for another $100,000 – all of which is public money.  The point of the article, made in the first paragraphs is that:

Normally, I’m all for keeping the private sector private and the free-enterprise system free. But when a for-profit company asks the government to help improve its bottom line, it invites scrutiny of decisions and planning that might otherwise remain hidden.

By seeking tax abatements and other incentives for its proposed $4.2 million production facility in New Haven, Fort Wayne’s Vera Bradley Designs Inc. has done just that – making the troubling allegations raised in a lawsuit filed in June by a former officer and supplier all the more demanding of public review.

[…] What influence should any of this have on public support for Vera Bradley’s expansion? Maybe none. Disagreements between corporate partners don’t necessarily reflect uncertain leadership or direction, and changing market conditions can force companies to reconsider commitments made even with the best of intentions.

[…] I’m not suggesting Allen County shouldn’t take reasonable steps to secure those new Vera Bradley jobs, which the company could put almost anywhere. And abatements carry little risk, since (in theory, at least), the company receives the promised benefit only if it makes the promised investments and creates the promised jobs. But if I were an elected official about to vote on a $100,000 grant or other possible incentives, I’d want to know more about the company’s long-range plans, management stability and reliability.

It’s a private company, yes – but public money is at stake.

The issue of a private company’s inner-workings remaining private was brought up during the Harrison Square debate last year.  Then City Council President Don Schmidt asked for financial particulars about Hardball Capital and Barry Real Estate.  His request to see the financial information was denied.  More importantly, it was revealed during the discussion that for whatever reason, even higher ups in City government had not thought to request the information.  

I agreed with Councilman Tim Pape when he stated that a PUBLIC City Council meeting was not the venue to examine such information, however someone needed to.  I don’t think a company’s books should be opened to public discussion or entered into public domain by such examinations.  This is one area where we should be able to trust our elected officials.  If you bring such information before nine members of a council, someone is bound to say something if things aren’t kosher.  I think it a safe bet that if the council had examined the documents last year, or even this year with the current members, and something was not up to par, it would not have passed.

Fast-forward to today and the issues surrounding the problems of securing financing to build The Harrison and the ramifications for the citizens of Fort Wayne if that doesn’t happen, and Mr. Leininger’s point is duly noted and hopefully heard by those in government.

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