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The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Archive for the tag “economic ic development”

Economic Development Myths

I frequently hear claims made for some development project claiming that the project will create either some large number of jobs or billions of economic development dollars. New projects are all tied to this “great” initial project which in its’ own right may be of dubious value.

There are several obvious misconceptions with this thinking. First, it is very difficult to tie a dollar value to any given project beyond the initial expenditure. Metro is claiming billions of dollars due to Metrolink, a very dubious proposition. There are claims the trolley in Kansas City has created billions of dollars in investment. The main flaw in this thinking is that this secondary development would not have happened if not for the initial development. How do we know? It is safe to say that the Cortex project would have taken place with or without Metrolink.

In conclusion, we should be highly suspicious of economic development statistics. Written by Paul Dribin

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Development Subsidies in St. Louis

The Post-Dispatch today headlined an article which stated that the City of St. Louis gave away through TIFs and tax abatement $30 million instead of $17 million. This article is not written to question the error but the huge amount of subsidies St. Louis provides to developers. I know the city is not by itself always a strong market, but the level of subsidies appears out of whack.

There is not enough targeting of incentives by the city. TIFs were intended to be used in economically distressed areas, not everywhere. When the use of block grant funds to write down development costs is added to the pile, the situation gets uglier. Efforts need to be made to make the development process easier and ease off of some of the onerous historic preservation rules. Written by Paul Dribin

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