The Promise Machine Comes to Town
Every few months, another consultant in a crisp suit shows up at city hall with a PowerPoint presentation full of pie charts and promises. Tax increment financing districts. Public-private partnerships. Catalytic investments. The language of economic development has become so layered in jargon that most residents tune out before anyone explains what it actually means for their neighborhoods.
But here’s what I’ve learned after covering three mayors and countless ribbon cuttings: the difference between genuine economic development and expensive theater often comes down to whether anyone bothered to ask what the community actually needs. Last week’s city council meeting offered a perfect case study when developer Marcus Chen presented plans for a $12 million mixed-use project on the old Brennan’s Hardware site.
The numbers sounded impressive. Sixty construction jobs. Thirty permanent positions. $200,000 in annual property tax revenue. What caught my attention, though, was Councilwoman Sarah Martinez’s question about wage levels. Chen’s answer was telling: most of those permanent jobs would pay between $12 and $15 per hour. In a city where median rent for a one-bedroom apartment hit $1,200 last month, those aren’t the kind of positions that help working families stay in their neighborhoods.
Following the Money Trail
Economic development incentives have a way of multiplying once politicians start talking about job creation. The Chen project qualified for a five-year tax abatement worth roughly $85,000 annually, plus access to a low-interest loan through the city’s revolving development fund. Add in the infrastructure improvements the public works department will need to make, and taxpayers are looking at a big investment.
I called budget director Tom Walsh to run the numbers. Even with the projected tax revenue increase, the city won’t break even on its incentive package for at least eight years. That assumes the business succeeds and all those promised jobs materialize. Walsh has been tracking these deals since 2015, and his spreadsheet tells a sobering story: roughly 40 percent of incentivized projects fail to meet their employment projections.
The pattern repeats itself across cities our size. A recent Brookings Institution study found that most local development incentives go to projects that would have happened anyway. The real winners are often developers who know how to navigate the application process, not the communities these programs claim to serve.
What Actually Works
Three blocks from the proposed Chen development, Maria Santos runs a small café that employs eight people year-round. She’s been asking the city for help with a $15,000 storefront renovation that would let her expand seating and hire two more workers. Her employees earn $18 to $22 per hour, well above the service industry average. But her project doesn’t qualify for development incentives because it’s too small to meet the minimum investment thresholds.
Santos represents the kind of organic economic development that actually builds community wealth. Her employees live in the neighborhood. They shop at local businesses. Their kids attend neighborhood schools. When I asked economic development coordinator Jennifer Kim about supporting smaller projects like Santos’s café, she pointed to staffing constraints and regulatory complexity.
Other cities have found ways around these obstacles. Portland, Oregon created a micro-enterprise loan program that provides low-interest financing for businesses investing less than $50,000. Rochester, New York simplified its permitting process for small business renovations and saw a 35 percent increase in storefront improvements within two years. These aren’t flashy initiatives that generate press releases, but they create the kind of steady, incremental growth that keeps neighborhoods healthy for decades.
The Infrastructure Reality Check
Any honest conversation about economic development has to acknowledge what’s happening beneath our streets. The water main on Elm Street is 70 years old. The storm drainage system floods three neighborhoods every time we get more than two inches of rain. Our broadband infrastructure can’t support the kind of knowledge-based businesses everyone claims to want.
City engineer Dave Kowalski estimates we need $40 million in infrastructure improvements over the next decade just to maintain current service levels. That’s roughly ten times what the city spends annually on economic development incentives. Yet every time council discusses infrastructure bonds, the conversation turns to whether taxpayers will accept the debt burden.
The irony is hard to miss. We’ll offer tax breaks to attract new development, but we struggle to maintain the basic infrastructure that makes development possible in the first place. It’s like inviting guests to a dinner party while the roof leaks and the plumbing backs up.
Building From the Ground Up
Real economic development starts with understanding what you already have. Our downtown has 15 vacant storefronts, but it also has established businesses like Murphy’s Bookstore and Goldberg’s Deli that have survived three economic downturns. The industrial corridor lost 200 manufacturing jobs in the past five years, but it still has rail access and affordable commercial space that smaller manufacturers need.
The most successful development initiatives I’ve covered have been led by people who live in the affected neighborhoods. When residents of the Riverside district organized to save their community center five years ago, they ended up creating a small business incubator that has launched twelve enterprises. None of those businesses required tax incentives. They needed affordable space, technical assistance, and a network of potential customers who already lived nearby.
That’s the kind of development work that doesn’t generate flashy press releases or ribbon-cutting ceremonies. It happens one business license at a time, one storefront renovation at a time, one neighborhood meeting at a time. It’s harder to measure and impossible to summarize in a PowerPoint slide, but it builds the kind of economic resilience that outlasts election cycles and consultant contracts.
Next week, city council will vote on the Chen development proposal. Before they do, residents might want to ask whether a $12 million project that creates thirty low-wage jobs represents the best use of public resources, or whether that same investment might yield better returns if spread across dozens of smaller initiatives. The answer matters more than most people realize, because economic development decisions made today will determine what our community looks like twenty years from now.