Thursday, April 18, 2013

Screwing up tax incentives is soooo us.

Come on Louisiana, specifically our legislature, get it together.  We have spent years promoting our tax incentives to create new jobs and economic development in Louisiana.  And when we get a major project to finally invest millions of dollars to essentially create a new downtown neighborhood that would rival any SOHO or SOMA, we pull the rug out from under them and say too bad, so sad.

That is what is happening to the South Market District in the CDB of New Orleans. You know the type of project, it replaces parking lots with tax revenue generating businesses and housing for those types of people that, you know, work and pay taxes. 

Before you draw an assumption about this post, yes, the bill that was rejected did ask for an extension or expansion of the requirements of the qualification for tax credits, but if it was reported correctly, its a $4.5 mil tax credit over a 5 yr period($900,000 annually) in exchange for $65 million in direct state revenue through sales taxes and $9.9 million in household income earnings. Read it here.

So to do the math, you give up $900,000 to get $65,000,000 and $9,900,000.  That is a math problem that a 5th grader can solve.

Sure we have a budget short fall, regardless of the tax income that the state received in the years following the storm, but in the scope of things, the annual tax credit is minimal in relation to the deficit and to the income that the project will generate.

Now, is this project just a feel good vision of something that "could" redefine the New Orleans CBD?  Is this a legislator looking to be a hero and lead the charge on new economic development?

Well, lets look at that specific piece of land.  What??? is there an existing project that IS working? Yes, the Rouse's project is doing extremely well and has met a need in the local market, in the Warehouse District and the CBD in general.  930 Poydras apartment building is leased and very active.  The Civic Theater is back.  And the list goes on and on.  So apparently redevelopment works there.  

Need further proof?  New Orleans was on the top of another list which identifies central business districts that have created more jobs near their downtown centers.
So why does our Louisiana legislature push back on these positive, forward moving projects?   In the past we would have been small minded enough to think that it was "other" parts of the state that were not benefiting from economic development and felt that New Orleans was the "favorite child" and was getting everything they asked for.  No, certainly you jest,  that wouldn't happen!

Well, it shouldn't matter.  New Orleans is not the only city in the state to benefit.  Look at the progress Baton Rouge's downtown has made.  And how the movie industry has benefited other parts of the state.  There are studios in Shreveport, new and creative technology ventures in Lafayette, and the largest movie production studio in the state, Celtic Media Centre,  is located in Baton Rouge.

So what the *$#^#&!!!!!  Hey state legislators, yea, you, the ones we elected to represent us.  Quit #$%# around and get over it.  If those parking lots just sit there, and do not become a transformative economic center, WE WILL REMIND THOSE WHO DID NOT VOTE FOR IT.  The evidence will be so vivid. 

Try this.  Stare at those parking lots and envision a vibrant community where people live and work and spend money.  If you do not feel that is not reason enough to approve a tax credit, then please go back to your cave and enjoy your life as it is now.