Bankole: History drives opposition to Pistons deal
The public outcry was clear upon learning that City Councilwoman Mary Sheffield was not changing her vote that gives the Detroit Pistons $34.5 million in tax breaks to move downtown.
In a post Tuesday on Facebook, Detroiter Johnny L. Ricks wrote:
“As long as elections are nothing more than political marketing exercises, nothing will change. Billionaires have unlimited resources for marketing campaigns. Politicians are easily compromised by the money. We will always continue to get what we’ve got until the people are able to understand and recognize the game.”
Ricks fired off the note after a public meeting called by Sheffield to correct what she deemed as misinformation about the deal that she and majority of her council colleagues had approved by a 7-2 vote on June 20. The deal — Council President Brenda Jones and Councilwoman Raquel Castenada-Lopez voted no — is the latest in a string of tax subsidies given for major developments in the downtown area, part of the district represented by Sheffield, who is seeking re-election.
Ricks’ sentiment, which largely dominated the public meeting, plays well in an election season and is part of the ongoing downtown vs. neighborhood debate.
It is a sentiment that comes from frustrations of residents who over the years have been told by politicians and successive administrations that Detroit needs to compete with other cities by incentivizing companies with millions of dollars to move to the city. That the city needs to compete with the suburbs or other areas where it is cheaper to do business than in Detroit where income tax and insurance costs are high.
Yet, the tax subsidies that have been doled out in the past to make the city a competitive market always comes with the promises of hiring Detroiters, but often there is little enforcement from the city’s human rights division (now called civil rights division) in ensuring those promises are met. The result leads to no meaningful change in the lives of most Detroiters. In fact after all those tax giveaways, the city plunged into bankruptcy.
Today, Detroit faces a high rate of unemployment. Crime is a major issue. The average Detroiter has not seen a tangible change in his or her life.
“We’ve done a lot in terms of tax abatement, tax subsidies, but the average citizen is not seeing the benefit, even though the companies pay taxes once they move,” is how one city hall insider described the issue. “You have to get something when you give something.”
The public outcry is not so much of a direct stab at the Pistons as a basketball team per se, because any major city should be proud to be the permanent host of an NBA franchise. One would be hard pressed to find many Detroiters who don’t love the Pistons. In fact, the Pistons’ return to Detroit would be marked as one of the highlights of the city’s continued revitalization.
The questions haunting this deal are: At what cost to taxpayers — who are already tax fatigued — should the Pistons be allowed to call Detroit home again? What does the city truly get out of the Pistons for coming here?
“We have an agreement approved by City Council, which includes a construction workforce made up of at least 51 percent of Detroit residents, at least 30 percent of the value of all construction contracts awarded to Detroit-based companies, the renovation of 60 basketball courts across the city at a cost of $2.5 million, a donation of $100,000 to Detroit Employment Solutions Corp. and participation in Grow Detroit’s Young Talent among other benefits,” said Alexis Wiley, chief of staff for Mayor Mike Duggan.
“The annual income tax alone to be generated from the Pistons players and visiting players is expected to be $1.3 million per year. When you include the rest of the Pistons’ payroll (non-players), the total direct income tax revenue for the city each year generated from this move is estimated to be $4 million per year.”
Sheffield said that in addition to commitments outlined in the agreement with the Pistons, she is drafting a resolution that will place all of the Pistons taxes into a neighborhood investment fund that can only be used outside of downtown and Midtown.
“My colleagues and I have attempted to improve deals by asking the administration and developers for more community benefits and stronger commitments in writing for employment and contracting opportunities for Detroiters,” Sheffield said.
She said the Pistons will also “provide 20,000 free tickets per regular season to Detroit youth and residents to attend NBA basketball games in support of and in connection with community educational programs and initiatives.”
On her vote, Sheffield said: “Since I have taken office, I have analyzed every deal based on its merits and I have voted based on what I believe is in the best interest of my constituents.”
The city says the $34.5 million in bonds for the Pistons move will be paid back over a 30-year period using property taxes generated only by increases in property values of land within the downtown area.
Asked if there are any other projects in the pipeline that would require tax abatement or subsidies like that of the Piston deal, Wiley said: “There are always projects on the horizon and tax abatements are among the variety of tools the city has to ensure that Detroit remains competitive in the global market.”
Fair point. But if there are no significant developments taking place across neighborhoods compared to downtown, Detroiters have every reason to question tax breaks that often do not show a return on investment. After all, government exists to provide goods and services for those asked to bear the cost of doing just that. The city’s leaders cannot lose sight of that.
The writer hosts “Redline with Bankole Thompson,” which is broadcast at noon weekdays on Super Station 910AM. This column appears Mondays and Thursdays.