Tuesday, November 13, 2007

Development Costs Shouldered By Taxpayers Benefit Developer of Waterside Park

Prepared Comments Made to
October 22, 2007

Although I have not attended city council meetings since council came back from their summer recess, I have followed news reports of council meetings and, as in the past, it is clear that council will continue to spend declining public funds wherever it is politically expedient.

Never mind that over the last two years, this council has seen fit to forego staffing positions in the city’s police department as well as other departments in the city. Never mind that citizens have come before this council body asking for needed infrastructure improvements in their neighborhoods. All of those needs were left unfilled as council repeatedly said that the city did not have the funds.

But miraculously, this council has come up with funds to benefit and enrich private interests using the pretext that they are bringing jobs to the city. I am talking about the planned expenditure of $275,000 of public money to assist McKinley Development in the development of Waterside Technology Center Park on South Main Street.

A recent newspaper article stated that Council member Kathy Magel had concerns because infrastructure costs of the project had risen from $600,000 to $951,000. According to press reports, others on council also expressed concerns on the city’s participation in this project. I believe those concerns are just the tip of the iceberg.

How is it that the city could budget $125,000 for commercial development of Waterside Park and then state on numerous occasions publicly all year long that funds were not available to maintain city services or make desperately needed residential infrastructure improvements?

And now, not only can council budget $125,000 to provide assistance to a developer in times of declining city revenues, it can more than double that budgeted financial assistance to the tune of $275,000.

I have concerns about these expenditures. It is on you agenda tonight as Ordinance 126-07 and of course it is an emergency. Clearly council does not want to allow the public the time to discuss the pros and cons of this decision.

I would like to know what additional costs the taxpayers of North Canton are going to have to shoulder to assist the developers of this property. There is a new light signal that has been promised at South Main and Mississippi to accommodate an alternate access to the Waterside Technology Center Park. I suspect that will require more than $100,000 from the city. Further improvements will be needed on Mississippi where the road for Waterside Center Technology center will intersect. Would $200,000 cover that expense?

The public monies going to assist in the development of the Waterside project have now risen to $575,000. Did anyone on this council discuss or acknowledge any further costs the city might have to incur for this project that are incidental to this development?

The grant requires that a majority of jobs in the Waterside Technology Center Park be in the high tech/research and development field. If this commitment is not met, the grant funds must be returned.

The City of North Canton is clearly at risk in this arrangement and could be expected to repay the grant funds back to the Ohio Department of Development. That is a liability to the city of $350,000. Is there anything in writing requiring the developer to reimburse the City of North Canton for repayment of the grant funds if the project fails to generate the required number of technology jobs?

The City of North Canton’s financial obligations for Waterside Technology Center Park are conceivably at least $925,000. This is equal to, if not more than, the stated infrastructure cost of the entire project. Why are taxpayer’s funds being utilized in this fashion?

Revenues for North Canton are dwindling and yet this council continues to pledge taxpayer funds that further the well-being of private individuals. In a related expenditure of public funds a few months ago, the city’s CIC authorized expenditures to purchase a half acre of Waterside Technology Center Park property to expand parking for Abbott’s Bridal Shop.

As you all know, Abbott’s Bridal Shop is the abutting property to the south of Waterside Technology Center Park. Abbott’s Bridal Shop is private business and yet the expanded parking is to be paid for by the North Canton CIC with funds removed from North Canton’s general fund.

McKinley Development, the owner of Waterside Technology Center Park is also a private business and it, too, is receiving assistance at the expense of North Canton taxpayers.

Waterside Park, as it’s been known for years, fronts right on South Main Street. The property has been promoted and marketed for development for years. If the State of Ohio will provide $350,000 in grant funds, why isn’t that enough of an incentive to develop the property.

The City of North Canton does not need and cannot afford to bear the development risks of this property. Developers are duly compensated in the marketplace for the development risks they take. Free market forces must be allowed to play out. Citizens pay their taxes to fund city services, not to have those funds risked for the gain of individuals.

I ask that you limit the City of North Canton’s participation in the development of the Waterside property by assisting in securing the $350,000 grant from the state and that McKinley Development assume all risks regarding compliance with the requirements of the grant.

Financial assistance from the State of Ohio covering one-third of the infrastructure costs for Waterside Park is quite a windfall for any developer. If that is not enough of an incentive to develop the property, then it is not a good risk under any circumstances for anybody.

Thank you,
Chuck Osborne
City of North Canton