Fresno City Council Member Lee Brand on Tuesday unveiled his latest legislative proposal – the Economic Expansion Act.
As my CVObserver colleague Alex Tavlian says in the wake of such intriguing events, let’s break it down.
1.) “The following policies are enacted to improve the City’s ability to attract new business, grow existing businesses and expand our tax base with carefully crafted, measurable incentives,” Brand says on the first page of his 18-page act.
There you have it, in a nutshell.
2.) The act lists three objectives:
A.) Lower the city’s unemployment rate “for a sustained period of time by supporting job creation.”
B.) Boost “citywide property values and attract investment in industrial, infill and revitalization areas of the City that might not otherwise take place.”
C.) Build a strong economic base “capable of supporting current and elevated levels of City services including public safety, public works, parks and other core services.”
3.) Fresno is to get there by (a.) reducing/eliminating development impact fees for eligible projects; (b.) reimbursing the developer for offsite improvements triggered by the project, the money coming from new revenues generated by the project itself; (c.) the sharing of new revenues directly generated by the project with the project’s developer.
4.) For more than 40 years the manipulation of development impact fees has been a favorite City Hall tactic to encourage growth in favored parts of town and discourage growth in disliked areas.
The former generally has been the inner city. The latter generally has been suburbia.
We all know how that effort has turned out.
Developer fees are supposed to help pay for infrastructure. We’re talking public safety and parks as well as things like curbs, gutters and sidewalks.
But, as Brand says in his act, city officials are coming to believe that development in some parts of town has “little to no impact on public infrastructure and/or provide benefits to the City that offset the impact to public infrastructure.”
This belief sets the stage for the reduction/elimination of developer fees for projects in those neighborhoods.
5.) Brand lists a number of projects eligible for the break on developer fees.
For example, industrial projects that, among other things, create jobs for the four-county area and are owner-occupied would be eligible for reduced fees.
The construction of commercial buildings on certain vacant or underutilized lots also would be eligible.
6.) Brand in his City Hall news conference repeatedly emphasized that his proposal would minimize taxpayer risk while maximizing economic growth.
His second incentive – reimbursement for offsite improvements – spotlights this point.
The idea has two parts.
On one hand, a major business project might be required to spend big bucks on infrastructure improvements. This expense affects the company’s bottom line and, hence, its decision whether to build in Fresno.
On the other hand, such a big project, if it comes to town and succeeds over the long haul, generates a ton of positives: More sales taxes, higher property taxes, paychecks, a very real boost to social stability and civic pride.
Such a project (if it meets certain criteria) deserves a break from City Hall, Brand says.
The developer “would pay for the improvements at the time of development and be reimbursed by the City as local revenues are generated from the project,” Brand says in the act.
7.) Brand’s third incentive might as well be called The Nordstrom Effect.
Brand proposes revenue-sharing subsidies to businesses that come to town, spend a substantial sum on new buildings and generate at least 500 new jobs.
“This type of incentive agreement is reserved for unusually large and publicly beneficial projects,” Brand says in the act.
Nordstrom has forever changed the local attitude toward business incentives. The Seattle-based retailer wants to build an e-commerce fulfillment center in the Valley. Fresno and Visalia are the top contenders.
Nordstrom has yet to make a decision. But the fulfillment center figures to generate hundreds of jobs and tens of millions of dollars of benefits for the winning city.
That is why Fresno area leaders are offering a lucrative revenue-sharing plan with Nordstrom.
Visalia area leaders are doing the same thing.
8.) There’s much more to Brand’s act.
For example, it requires City Hall to keep track of vacant land within the city that is zoned for industrial use.
The city will take the lead in building a network of venture capitalists. The idea is to make it easier for risk-takers with good ideas to get that first grubstake.
Brand also wants City Hall to become an advocate for career technical education. In other words, the Mayor should call Fresno Unified and the State Center Community College District and say, “Let’s be partners!”
9.) Brand at his news conference said his expects the act to have a “transformative” effect on life in Fresno.
Brand said the act will take the form of a resolution. This resolution is slated to go to the City Council on March 17.
Brand said Mayor Ashley Swearengin and City Manager Bruce Rudd support the act.
10.) Brand’s proposal sounds interesting.
But I couldn’t help thinking of the Regional Jobs Initiative (RJI) as Brand spoke Tuesday morning.
I’m not sure how many people remember the RJI. It was a big deal back in 2003 and 2004, during the tail end of Mayor Alan Autry’s first term. Local, county, state and federal leaders got involved. So did the public schools and the universities and the private sector.
Swearengin was the RJI’s chief operations officer for a while.
I wrote quite a bit about the RJI’s creation when I was at The Bee. I remember spending the better part of a day in a small room at City Hall. I had made a state Public Records Act request, asking to review all economic development plans generated by (or for) City Hall since the end of World War II.
There were a lot of them. They all said much the same thing.
Vince Lombardi said football comes down to blocking and tackling. A city’s economic health comes down to hard work, effective institutions and good values in the people.
I noted in my RJI stories that these economic plans had gathered a lot of dust while sitting on City Hall’s shelves.
11.) I posed several questions to Brand on Tuesday.
First, it seemed to me that Brand’s formula for funding his act’s incentives was a lot like the formula pitched by city officials (including then-Council Members Garry Bredefeld and Henry R. Perea) in 2000 for funding the downtown stadium.
To wit: You gotta spend money to make money. He who hesitates is lost. If you can’t stand the heat of leadership, get out of the political kitchen.
Brand strongly disagreed with me. He said his formula is much wiser policy. He gave a lot of reasons.
I thought it odd that Brand, answering another reporter’s question, spoke about the importance of quality of life in attracting new businesses.
One of Fresno’s amenities, Brand said, is the stadium.
12.) Finally, let’s talk politics.
Brand didn’t mention it on Tuesday, but he’s running to succeed Swearengin next January as Fresno’s chief executive.
His opponents include Perea (now a Fresno County supervisor) and H. Spees (who might have been elected mayor in 2004 if the tentacles of circumstance hadn’t intervened).
The Big 3 will tangle Thursday from 4 p.m. to 6 p.m. in the year’s first mayoral debate. The event will be broadcast by Power Talk 96.7, and is sponsored by CVObserver and the Fresno Police Officers Association.
The three panelists are FPOA President Jacky Parks, Granville Homes President Darius Assemi and myself.
It’s a safe bet that Parks will ask plenty of tough questions about public safety – police and fire. No issue resonates with Fresno voters like public safety.
It’s a safe bet that Assemi will ask plenty of tough questions about the economy – city permitting processes, business-friendly policies, workforce preparation, general plan implementation.
And it’s a safe bet that Parks and Assemi will establish the connection between their two areas of interest. There won’t be a booming private sector if Fresno isn’t safe. The Police and Fire departments won’t be strong unless there’s a healthy tax base to pay for everything.
Was it a coincidence that Brand trotted out his Economic Expansion Act just 48 hours before the high profile grilling by Parks and Assemi?
I think not.
