Tag Archives: Angie’s List

It Depends

Early each semester, I tell my students that–after taking my class–they should find themselves using two terms more frequently than they did before: it depends, and it’s more complicated than that.

For example, in recent posts, I have pointed to significant problems with two proposed public-private projects: a Justice Center and a soccer stadium. In the case of the Justice Center, my qualms aren’t with the project itself, but with the secrecy surrounding it, the important questions that remain unanswered, and the potential for both poor design and unnecessary expense. In the case of the soccer stadium, i’m flat-out opposed to putting scarce tax dollars in a project that’s unlikely to do anything but enrich its politically-connected developer.

But just because some projects raise red flags doesn’t mean taxpayers should never support local business efforts. It simply means we need to be savvy about which ones.

Take the recent proposal from Angie’s List. The company has asked the city to create a TIF to secure approximately 18 million in bonds. In return it has promised to invest $44 million of its own– to retain a thousand jobs on its near-Eastside campus, to relocate another existing 800 employees to that campus, and to grow the workforce there by yet another 1000– all by the end of 2019. In addition to those jobs (paying an average of 50,000), the company will purchase and redevelop an existing building and construct a parking garage.

Obviously, adding 1,800 well-paid workers to the near Eastside of downtown would be very good for the city. But what if Angie’s List defaults–what if it cannot grow its workforce, or even honor the “clawback” penalties for failure to do so?  What will the city have to show for its investment?

Several things, actually:

  • A contaminated property, the Ford Building, that has been redeveloped and returned to the tax rolls.
  • A new parking garage and street level retail on 3 acres of currently undeveloped property added to the property tax base.
  • Physical improvements that should spur redevelopment east of the interstate towards Irvington.
  • Creation of 500 construction jobs that will generate COIT and sales tax revenue.
  • Facilitation of IPS’ relocation of operations from the former Coca-Cola building on Massachusetts Avenue – something both the city and IPS have long desired.

Note that these aspects of the project will benefit taxpayers whether or not Angie’s List can fulfill its employment promises. If it can, the city will obviously see many other benefits.

The point is, every proposed project, every proposed TIF district, every “partnership” must be independently evaluated. Hard questions must be asked, and “what ifs?” must be considered. If rosy projections don’t materialize, will taxpayers still come out ahead? If not (soccer stadium), we shouldn’t proceed. If we don’t have enough information (Justice Center), we shouldn’t proceed until we have that information. If a project has been thoroughly vetted, however, and the downside is still acceptable, it’s a prudent investment.

In other words, it depends.