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I've never understood Economic Development Corporations which are nothing more than a governmental entity funded by sales tax that normally goes into the city coffers. Already this year, the Decatur EDC has received over $1 million of your money. Money that could be used to pave roads and improve a water system.
The curious thing about EDCs is that they give your money to private companies to entice them to "relocate", and I've yet to figure out the guidelines for their generosity. (The EDC in Bridgeport has been roundly criticized for its choice of monetary recipients.)
So why this mild rant?
Tomorrow the Messenger will run a story on page 9A that deserves to be above the fold. The first sentence will read, " The Decatur Economic Development board Tuesday approved an agreement whereby Twisted X Boot Company will refund $40,000 of a $150,000 grant given the company to locate in Decatur."
Uh, guess what? They didn't relocate here. The company ended up near Alliance Airport presumably either buying land or securing a lease with cash they got from, uh, can I say the EDC? Although the new agreement requires the company to keep its "executive offices" in Decatur for three years (that doesn't mean much - a desk and a phone would suffice, I suppose), I guess they still get to keep $110,000. And you know what else? The company was supposed to get $200,000 but the EDC hadn't paid the remaining $50,000 before they apparently figured out that something was wrong.
No one will raise a fuss because that's the way we are. But we should.
44 comments:
I think concerned citizens and taxpayers should call for an independent review to restore residents' trust in town officials.
Were any kickbacks involved? Inquiring minds want to know. Sounds really fishy to me.
Why isn't this a criminal offense by Twisted X? They took money under false pretenses and should be made to pay the entire amount back. How can they legally just walk away with that money????
Economic development corporations can be very effective. The goal should always be to see more NET NEW sales and property tax dollars generated than are collected and spent by the corporation. When that happens, everything is cool. When economic development sales taxes are given to projects that do not yield net new taxes above what is given, or are given to projects that would have located or expanded anyway, or are given to projects that simply redistribute spending within the local economy (a new retailer that only competes with existing retail for example) the model breaks down.
so my question is and there is no sarcasm in me asking this...how do we fight back?
What have I been telling you? It's not the choice of President that hits closest to home. It's the local leaders that get into a job and think no one is watching them. They move money here and there until someone figures out that it was diverted from its original purpose. The biggest example is the robbery of the social security account by federal officials siphoning that money to other uses, including the giving of charitable contributions. Next is the way the City of New Orleans got caught with its levees down because, over the years, money meant to improve those barriers was never spent for that and the improvements never happened. More recently, a City of Denton official found that money meant to improve the city drainage system had been diverted to other projects; therefore, they had the April flooding that caused millions of dollars in damage. Stealing from the public has been going on so long, it can be classified as a profession like prostitution. I'm telling you: everyone should be subscribing to and reading the Congressional Record. The days of this great country are numbered as long we are ignorant of what our democratically elected representatives are up to. And God save us all from lifetime federal appointees and civil servants. What is their motivation to do a good job? They can't be fired so there is no fear, and there is no system of monetary benefit or promotion based on merit. Get yourselves informed and vote every single time you can.
Mr. Green, I don’t understand the basis for your mild rant. You are an educated man, aren’t you? I don’t think you’re considering the larger picture. EDC’s invest your money; they don’t spend your money.
If EDC dollars are spent in a wise manner, then companies come to your town that otherwise might not.
You can't get rid of the EDC's because every (smart) town has an EDC to promote their town. If you get rid of your EDC, then you would get rid of many future growth opportunities.
Think of it this way: companies and sports teams have to give signing bonuses to recruits to ensure the best and the brightest are hired. The EDC gives companies “signing bonus” (of sorts) to ensure those companies come to town.
You have to give companies incentives if you want them to come to town; especially when your town is on the fringes. What other solution do you propose? Do you want towns to NOT promote themselves to companies? Do you want towns to NOT encourage controlled growth? Companies bring employees who need homes, groceries, consumer goods, etc., which they purchase from the towns in which they live and work. The concept is simple: spend half a million dollars to get a company to come to town, and (in the long run) your tax basis will grow by a much greater amount.
EDC’s don’t spend your money they invest your money.
Why do you think Devon Energy built their brand new office building in Bridgeport instead of in Decatur? It wasn’t because Bridgeport is clearly superior. It’s because Bridgeport offered Devon Energy incentives that Decatur wasn’t willing to provide. Without EDC incentives (I’d bet the farm that) Devon Energy wouldn’t be in Bridgeport.
What are the odds 9:24 works for the EDC, or at least gets money from it?
They also stayed in the Chamber offices rent free for over a year. We got fleeced by this company. If we are going to give money through the EDC, it needs to create more than 10 jobs, which is what this company had said it would create.
So is the best justification for this that "companies expect bribe money for them to locate to your town; all the other towns are bribing them, so if you want to attract businesses, you have to engage in the bribery also"?
I humbly submit that that's a messed-up way to run a town, a county, a state, a society.
Good politicians (I know, I know) should be able to find an alternative to this corrupt system.
I'd say the odds are about the same as ever seeing a nickel of that $110K.
9:24 ... how was this a 150k investment? there is no benefit to this town or community when twisted x operates in anothe county.
are you on the edc board?
Hey 10:00, sorry to disappoint, but I live and work in Dallas. I grew up in Wise County, and I read this blog every day.
The argument by 9:24 humors me a great deal. I especailly like the comparison to sports. It makes me think of that wonderful move Mr. Hicks made by signing A-Rod to the Rangers.
The concept is simple, that is if the stewardship of money is sound. The Board of Directors is ultimately responsible for such things. It seems logical that if the money is being sent out, but nothing is coming back from frivilous "investments", then something must be done.
Maybe the citizens of Decatur would be better served with improved infrastructure. Makes sense that the ability to provide service might be a significant criteria to future business and development.
The real responsibility must reside with the voters. If you elect the untrustworthy to guard your money, then shouldn't be surprised when it comes up missing or misspent. The wolves in sheeps clothing have great costumes and believable stories to spin. Might be time to fire their asses and ship them off.
The bottom line is, are the good citizens of Decatur going to take action; or lay down and let their community get overrun with theft disguised as corporate development? My bet
Instead of calling it EDC, why don,t you put a name and a face to it? Because we are being fleeced by the same folks who have access to city hall, the couthouse square lawyer's office, and the county courthouse. Until you are ready to call the PEOPLE RESPONSIBLE on the mat for their actions, don't sit and cry about being fleeced. Besides, 95% of the people in this county haven't got the guts to call the "EDC" hand anyway.
Before you start ranting - make sure you have the whole picture. I think there was also some distribution services involved that failed to live up to its end of the deal. Therefore, Twisted X was hampered in being able to develop as planned in the area. Also does anyone know what happened between the relationship of Twisted X and Wise Co-op and the additonal site development that was supposed to occur. There is more going on here than just Twisted X relocating.
If this had worked out as planned between all parties involved, the incentive to Twisted X would have brought more job opportunities to Wise County besided paper or plastic or do you want to supersize that.
well well well, i see a poster-size picture of a freakin water tower is more news than this.
amazing! SKIP, WHERE ARE YOU?
what happened to the real news on the front page of a paper? does the EDC funnel money to the WCM to keep the big things in the back of the paper?
EDC money is not city money that is diverted. It is a separate sales tax that was voted into existence by the residents of a city. There are two types of EDC corporations, and there are legal guidelines spelling out how the money can be spent for each type. The funds are intended to entice/encourage new business development and retention of existing businesses. If the EDC was voted out of existence, that money would no longer be collected at the point of sale, and no longer received back in the city for re-investment within the city.
AGAIN, I ask! How can Twisted X legally "walk away" with that money? Were there no contracts signed that bound them to their word when that money was given to them? How can that much money juset be HANDED over without some kind of legal binding? Why isn't the city/county attorney filing charges against Twisted X in order to get that money back?
9:24 Look at your own use of words. You end your first paragraph by saying, "EDC's invest your money; they don't 'spend' your money" But then the first line of your next paragraph says, "If EDC dollars are 'spent'...". Hello! Anybody home? Nice argumentation there.
The EDC needs to be voted out. To bad Boswell is not around, he saw this one coming. I remember him referring to Twisted X as the "boot man" in his letters to the editor. Lowes also received a big tax break for moving to Decatur. Yes they built here and brought jobs but how is that fair for existing business like Sear and Decatur Lumber. They have to compete with Lowes without the tax break.
The Mess needs to do some research on the money the EDC has handed out and what the results have been. Brian Knox, you need to show us your stuff.
The payment by the EDC to Twisted X was questionable from day 1. The company did not bring additional jobs to Decatur as was suggested in the beginning and now the few they had are gone. The distribution facility was a farce and unworkable for the company so they had to do something different to keep going.
It's this simple. The boots are made overseas. The management of the company doesn't live here (at least not on a full time basis). They have a couple of office employees who take calls and sales reps spread around the country, not in Decatur. $150,000 would have gone a long way to improving companies that were already here and hopefully this will be a wake up call to the EDC.
First - Crud, I tip my hat to you. Unfortunately, in small town local politics it far too frequently happens that the vote goes to the "good ole boy" or rephrased "yeah, Jimmy would do a better job but I like Harry; he's a friend". Ring any bells?
Second - there is really nothing wrong with EDCs. They can be very effective. However, I would observe that maybe the city, in this case, was lacking.
11:10pm and 8:24am had valid points. If a cost/benefit analysis were do be done by a company (excepting motels and fast food enterprises) what benefit are they truly going to get for their costs in relocating in Decatur?
What is the city providing beyond a few dollars (and realistically $150-200,000 is not a large amount in the company's overall picture).
How carefully are these companies being vetted? Are business plans subject to screening by those whose expertise is in this area? If, as has been suggested in this case, there is more than one entity involved, how is this factored into a decision?
So many questions. But folks until people start really paying attention and not just griping about poor results, don't think much change will be seen.
I'll bow out with - has anyone driven by the junk yard that I believe was once called Landmark Business Park? Might give it a look. The business may lack some visual appeal but the scattered hills and native grasses do help to soften the overall picture.
9:27, absent an EDC, a city has the option to collect those same sales taxes for use in the general fund.
10:19-I am right with you on the Landmark Industrial Park! How much did the EDC give to them to build that eyesore? Does that one building make up the whole Industrial Park?
I visualized several warehouse buildings and maybe some inviting landscaping that would be a pleasant sight for people entering our town from the south. Thank goodness Karl Klement put up the flag and welcome sign to deter one's eye from that sight!
I think there should be an independent investigation into the EDC. Someone needs to ensure they are "investing" our money wisely!
Why not give a tax break to a grocery store chain to build here? I truly believe that's what the majority of the people in Decatur would like to see.
EDC is obviously run by a bunch of idiots or this would not have made the paper and they would be receiving all the money back. UHM, was there NOT some kind of legal megal paper work mumble jumkble drawn up???? IDIOTS
BARRY I THINK THEY NEED YOU ON THE EDC!!! Someone who HAS a BRAIN.
My guess is that Decatur made promises it couldn't keep. Pretty typical of the way Wise Countians conduct business. What a bunch of flakes! Now we're just going to sit around and watch Twisted X walk away w/ $110K because that's how we are. No one has the balls to speak up.
Make sure you stop by David's Western Wear and pick up a couple pairs of Twisted X Boots. I'm sure he'll keep on selling them even though the company gave it to the county right up the azz. What is wrong with this place????
Wow, I certainly was'nt offered that kind of deal from the good 'ol boys in Decatur a few years back after meeting with them. It really makes me question the criteria they use for determining grant recipients. We ended up building a multimillion dollar facility in B'port after being enticed by their EDC and we've lived up to every penny of their incentive grant with new jobs and new tax revenue. The B'port folks have been great and we've never looked back.
Once again, rabid complaints being made by people unwilling to investigate the facts, much less the law.
Yes, this business was vetted, as well as could be for a business still in its start-up mode.
Yes, some benefits to Decatur HAVE accrued, and will continue to accrue, from its limited presence here. Maybe not enough to justify the $110,000.00 not repaid, but all EDC investment involves an element of risk. This is one that didn't pan out.
No, there is nothing criminal here. This is a contract matter, pure and simple. And if refund of $40,000.00 is the settlement that was reached, I would assume there was a reasonable legal and factual basis for arriving at that number.
Decatur did NOT make promises it failed to keep. The 3rd party who was supposed to construct the distribution facility failed to come through.
No Barry, and 10:44, those same taxes are NOT available to the city to use for streets or infracture. They are available for an EDC. Which the voters of Decatur approved. And which, by the way, has done some damn good work, if any of you complainers would like to actually study the history.
And no, 11:08, the EDC is not run by a bunch of idiots, though I do have my suspicions about those who fill up the "Comments" section of this blog.
Barry, on this one I'm ashamed of you. You should know better. Too many people read this blog and embrace the opinions you deem to offer. You're entitled to your editorial opinion, but you should have investigated the facts here just a bit more yourself, before twisting off. (No pun intended.)
Now THERE'S your EDC employee (11:38)!!
9:24 PM
Why in the world would I want anyone to invest tax dollars? Give my taxes back to me and let me invest them for myself, I don't need the EDC's help.
Decatur just increased the city budget to over 10 million dollars for the first time and the EDC just announced they received over 1 million dollars in tax revenue last year.
How often do we see a published list of the people who serve on the board?
Have you ever seen an annual financial report of the EDC?
Do you know who they write checks to?
Overall, the problem with all the additional tax revenue is the prerequisite it be spent. That's why we never see our taxes reduced, even when there is a surplus. They feel they must spend it.
The people that sit on these boards are community leaders who care about promoting the town and helping it grow. I believe those people to be honest and trustworthy.
But, if you think you can "control" growth, look at the headlines of our newspapers and see the side effects of controlled growth.
If you think generating additional tax revenue for the city is going to benefit the people, just ask someone if they pay less tax than they did 5 years ago...or if they have better city services than they did 5 years ago.
Even better, ask over 100 homeowners who had to move so a new stadium for the Dallas Cowboys could be built in Arlington.
Justify it all you want, but giving tax money to business is not why I pay tax.
11:38, you are dead wrong. Cities have the option of collecting up to two cents in sales tax. By choosing to dedicate, for example, 1/2 cent of the 2 cents for economic development, a city is FOREGOING its ability to apply that 1/2 cent to its general fund. If an EDC collecting 1/2 cent goes away, then a city has the option of deciding to collect that same 1/2 cent toward its general fund.
11:38 here.
12:24, I do stand corrected. However, again, the decision to create an EDC was made by the voters, and can only be unmade by the voters, not the City government itself, unilaterally. And the Decatur EDC was created in the first place because of the public uproar demanding that the "City" do whatever it could to recruit more business and industry here. (No doubt some of that uproar came from the same people who now decry the EDC in this forum.)
But no, 11:45, I am not an EDC employee, nor board member; just someone with a closer familiarity with actual facts.
And Denny Crane, the membership and all records of the EDC, financial and otherwise, are all public, as are their meetings. So stop suggesting that all of this is somehow conducted behind a veil of secrecy.
My point is that newspapers offer summary points of what is going on, often couched so as to best sell papers. If you see an item there that disturbs you, then it is perfectly appropriate to dig deeper, ask questions of various people involved, and look at records for yourself. But don't start throwing mud based on your own prejudices and what you imagine to be "between the lines" of print in a 2 column newspaper story.
the WCM needs to do more on this than type up a press release. thats plum lazy.
i read there is a change in leadership at the MESS and that there will be stories that will make us "sad, happy, laugh and mad"
will, you got the mad part on this one because you are not reporting the whole story.
8 million for capital improvements is bigger news than this? is that the biggest news in the WHOLE county?
btw, we have a water tower in here in decatur, will you come take a picture of it? and we have a cool telephone pole.
I am always amazed at how much people know, yet continue to be so misinformed. To really get a good picture of the EDC, go to a meeting. As it is a government entity, it is subject to the open meetings law and everyone is welcome. Ask questions.
As for publishing the members, in the Messenger today, it named the chairman, Tim Rieger, the new secretary, Roy Eaton, and the newest member, Randy Parker. Call the EDC office and get the names of the others. It is NOT a secret and you'd better believe they're not getting rich from this board. If anything, it costs them-time.
3:14
No one said anything about them getting rich from it BUT if it was their OWN money Im betting they wouldnt be so generous.
I would like to know how many other "transactions" have gone bad?? And what companies have received money to come to Decatur and how much???
They need a web page so citizens can SEE ALL!!! ( I dont want to sit through all the mumble jumble, I just want to see the figures)
3:14, economic development negotiations between an EDC and a prospective company are exempt from open records, and often will not be discussed in open meetings. Citizens should not go to an EDC meeting thinking they are entitled to hear about any "deals" that are in the making. They might, but only if the EDC chooses to discuss them publicly. Those negotiations are permitted by State law to remain secret, at least until the very end of the process when approval is required.
How do we get the money back? And how to we not repeat this behavior?
That's easy 2:38. We "don't repeat this behavior" by doing away with the EDC and all incentive to bring new business and industry to Decatur.
I don't think any of you idiots have a clue how the real world works. And I'm NOT talking about kickbacks and graft. I'm talking about good, honest, hard-working, negotiating, managing, planning, dealing with the unexpected. Murphy's Law, inovating, contracting, lawyering, stroking, cajoling, making-the-best-of-bad situations, COMPETING, succeeding, succeeding, failing, succeeding REAL LIFE.
My thanks are to the EDC for all of its hard work and efforts, for its several successes, for trying to make this deal work, for its partial recovery in this one unfortunate case, and for the members continued efforts to roll up their sleeves and actually DO what other people only seem able to bitch about.
Jesus, I'm betting Rottner is happy he moved outside the city limits and had to give up his spot in the city council and EDC right about now. That dude has got to be the best businessman in Wise county.
speaking of newspapers, did anyone read the column in the index by "editor" jd clark? this kid is a loose cannon. the last paragraph sums up is maturity as he speaks as if he is in a position of god, while working in a funeral home is the lowest grade of mankind. why is a kid a "editor" anyway? the paper has stunk since we lived here, and now its like reading a high school paper.
BARRY! post that index column so we can read it. some of use dont have access
8:43, there are people commenting that seem very knowledgeable about EDCs and how they work both in theory and practically. And there are comments by people that have no clue. Would not suggest "all you idiots" describes everyone with a comment on this.
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