Tax breaks, transparency, process

The Gazette Opinion Staff
Published: January 7 2014 | 12:01 am - Updated: 29 March 2014 | 1:43 am in

By The Gazette Editorial Board


Just before Christmas, the Cedar Rapids Board of Ethics quashed a couple of complaints submitted by Robin Kash, a candidate for City Council in November. He was admonished by the board chairman, Bob Teig, for not providing enough facts in his allegations.

We thought Kash raised a valid question: Should the City Council be able to approve tax incentives for a development without naming the project developer and investors, as, for example, it did in November on a 6-2 vote for a new warehouse development on 4700 Bowling Street SW? Kash questioned how the public would know whether an elected or other city official had a potential ethical conflict if that information isn’t disclosed before council approval.

The Gazette’s Dec. 22 story also noted that the city’s practice of not naming project investors is not uncommon. The city’s reasoning for that practice has been that the decisions are based on whether the projects — not the owners or investors — warrant incentives.

Certainly, the specifics of projects are crucial when weighing public assistance to private developments. But in an era when local and state governments are handing out more and more tax breaks to recruit new business and expand existing ones, not naming those who stand to benefit doesn’t meet the test of basic transparency in government.

The case Kash cited involved partial 10-year property tax breaks worth about $480,000 for two speculative warehouse buildings on property being sold to the developers by The Gazette Co. The Realtor representing the unnamed developer said the project will provide new upscale warehouse space not available in our market and that the extra cost to build it required the tax breaks to make it fly.

Whether such assistance is justified is part of a broader discussion about the economic development role of government — not only in Cedar Rapids. Meantime, couldn’t our ethics board — the only local one in the state — develop or be allowed to develop a deeper process that addresses Kash’s question and provides a clearer sign that the board is working in the public’s best interest?

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