City spending in tight times: the SoLittle virus

Share this:
September 1, 2003 // UPDATED 11:03 am - April 30, 2007
By: Sam Grabarski
Sam Grabarski

With public treasuries tapped, will business fill the gap?

I wasn't fooled by any of the e-mail messages the SoBig virus sent to my office. "Regarding Your Offer" couldn't lure me to open evil attachments since I had nothing to offer to anyone in the first place. Here are some "Regarding" messages that could have ensnared me: "Your Cancelled Dinner Reservations." "What You Left in My Hotel Room." "The GOP/DFL Merger." "Your Winning Lottery Ticket.

"Money Doesn't Talk, It Shouts" could be the e-mail header for St. Paul's new Strategic Investment Fund Program, and the details are an impressive attachment. The fund offers low-interest loans or grants to recruit new locally owned businesses willing to construct, purchase or lease commercial or industrial space within city limits. The loans are based on positive economic impact and the number of jobs the company will maintain within the city. Loan amounts range from $500 per employee to a maximum of $3,000 per.

This "bounty" on employees has folks in Minneapolis talking. St. Paul scores the new business based in part on its origin. Outside of St. Paul, but within the Twin Cities earns five points. Outside the area, but within 300 miles earns 10 points. More than 300 miles from the seven-county area earns the blue ribbon (20 points). A company's historical performance, the wages and salaries it pays, and its market area also earn points.

Do you get what you pay for in such a program? If you have a large supply of vacant office space, maybe so. Viable businesses, new to the tax rolls, do pay back the investors over time, whether the fund is comprised of city or private resources. Minneapolis plans no equivalent program, suggesting that all bags of low-cost money were gone already before we could think of the idea.

All fun aside, most incentives programs carry their own SoBig viruses attached. "What You Didn't Get" is the attachment for businesses already located there. "Here's What You Didn't Need" is attached for businesses that would have moved there anyway. "Promises Unmet" is attached for taxpayers' continuing entertainment. Just the same, when we're pitching our tall buildings against St. Paul's, I might like to have louder money.

"You Get What You Pay For" summarizes my personal anxiety over the draft 2004 Minneapolis city budget. A sharp decline in resources for public works and city marketing might be ahead. There could be a reduction in the number or scale of free public events, or the parking incentives programs, or how often sidewalks are repaired. However, fewer resources could cause a necessary and timely retooling of things we do out of tradition, rather than necessity.

Since the Downtown business community matches the funds placed into marketing, events and parking programs, there's reason to worry this could become the SoLittle virus. The city, which owns a third of Downtown's parking supply, might prefer to advertise their ramps rather than ante into the fund that sustains the Do The Town Parking Program ("free" parking for people spending $20 or more Downtown on weeknights and weekends). Larger, better-known private ramps that supply most of the Do The Town stalls at cheap rates could see this as an opportunity to withdraw by degrees from the program. Do people still require free parking to shop or play here? Open this attachment: "Regarding Your $15."

Knowing the full value and costs of events such as the Aquatennial Festival or the TCF-Holidazzle Parade can be elusive. Do we measure them in terms of ringing cash registers, community pride, first-time visitors, employee enjoyment or retention, city image, or public safety's unreimbursed costs?

It certainly is right that public officials ask challenging questions during harder economic times. And, since so few events cover their actual costs, business leaders should ask their own questions about the scale and existence of free community events.

Here are a few more e-mail attachments I might open, each starting with "Regarding." "Your Rent Increase." "Free Beer at The Local." "Your Two Flat Tires." "The Fire in the Reception Area." "The Surplus Discovered by the City."

Sam Grabarski is president and CEO of the Minneapolis Downtown Council, a group of business leaders.