The Gazette covers City Hall, now a flood-damaged icon on May's Island in the Cedar River

City Council lets it be known: It’s not hand-outs to everyone who asks

In Chuck Wieneke, Monica Vernon, Tom Podzimek on June 17, 2009 at 8:41 am

Ask and you shall receive, it seems, can often be what happens with the City Council when a business shows up seeking a little financial consideration for doing something.

The current City Council has put something of an elaborate apparatus in place to try to help it judge whether a request for tax breaks or other incentives makes sense.

At its last council meeting, a council majority decided to use the apparatus and to follow what it was saying.

The upshot: Cedar Valley Heating & Air Conditioning won’t get a property-tax break of an estimated $75,000 over 10 years – about 44 percent of the total bill – if it builds a new 11,640 sq. ft. metal building to house its business at 60th Avenue SW and Fourth Street SW. Cedar Valley also intended to rent space in the building to four other shops.

In return for the tax break, Cedar Valley told the City Council it expected to retain four jobs and create three new ones, all with an average wage of $15 an hour.

Seven of the nine council members said they didn’t need time to think about the deal: They rejected it out of hand.

That was so even though council member Monica Vernon made mention of the issue that often can be the only one that guides such decisions. Aren’t we inviting this business to go to another community if we don’t grant the tax break? Vernon asked.

Other council members pointed to the five-point scorecard that the council established in May 2008 as part of an Economic Development Investment Policy.

The five points: Does the request facilitate significant investment that shows a strong commitment to the community? Does if help retain and create “high-quality” jobs? Does it add diversity to the region’s economy? Does it provide a long-term community benefit? Does it comply with sustainable development principles?

City staff credited Cedar Valley with only one “yes.”

The City Council majority thought that the one positive score — that the proposal created well-paid construction jobs — was a stretch. Council member Chuck Wieneke didn’t think $15-an-hour ranked as good pay for a trade job.

Council member Tom Podzimek put it most bluntly: “We’re not in the business to provide tax incentives to build a metal pole building,” Podzimek said.

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  1. This is just another example of money talks.Chuck,$15.00 an hour isn’t bad pay for anyone,especially the way the economy is.I was
    behind a few of these council members when they ran but no more.Guess Cedar Valley didn’t line any pockets,so they are out in the cold on receiving any help to build a new building,retain plus hire a workforce and to stay in Cedar Rapids.Marion,here’s a potential business for your city.

  2. The subjective five point policy was put in place MAY 2008. This policy was enacted pre flood. We are in the midst of a deep recession. The policy may have made some sense in MAY of 2008, but it doesn’t in the world today. Suspend the policy, change the policy. We need jobs and tax base. Instead of ridiculing the small business owner for the the type of building or wage rate, work with them to find a solution that benefits all. Most companies are laying off and the city tells this business trying to expand to go pound sand. Does this sound like an “open for business attitude” from the city council?

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