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Stop Subsidizing Sprawl

April 1, 2007
Opinion By TOM CONDON, Courant Staff Writer

As traditional economic development projects go, this was a pretty good deal. Last summer state officials announced an aid package to help Swiss Army Brands, maker of the famous jackknife et al., build a new facility in Monroe.

State aid for the $26 million project is a $1.5 million loan from the Department of Economic and Community Development and a $650,000 sales and use tax exemption for construction materials from the Connecticut Development Authority. The town added $950,000 in property tax abatements over seven years.

The 165,000-square-foot structure on 26 acres will include corporate offices for the company's North American headquarters and a warehouse, and will employ about 175 people. It's scheduled to open in the late spring.

The company is now in Shelton, so the state isn't gaining the jobs, but is at least retaining them. The amount of public assistance is relatively small, and the company is said to be first-rate.

The issue is sprawl. This project, like so many before it, involved the bulldozing of open space. It will increase traffic.

I don't mean to pick on Swiss Army (I own one of their products). They played by the rules. I'd like to revisit the rules.

The state that has belatedly embraced smart growth has to walk the walk. If state officials are handing out public money in the form of grants, loans or tax breaks to corporations, they should require - not encourage or suggest, require - that the corporations set up shop in town centers or transit corridors. If a company feels that it needs to go bulldoze 26 acres of woodland, send them to Montana. We don't have that much open space left.

Gov. M. Jodi Rell has set up an Office of Responsible Growth to guide a smart growth strategy in the state. She created a deputy commissioner at the Department of Transportation to oversee transit-oriented development. She's now seeking a new commissioner of the Department of Economic and Community Development.

Thus this is the perfect opportunity to rethink our whole approach to economic development.

The Connecticut economy is not breaking any records. Job growth has been essentially flat for 15 years, and we're the only state to experience negative business growth from 1989 to 2004. While there are a number of reasons for this, it should raise questions about the effectiveness of our economic development effort. Some questions:

Does it make sense to have four separate agencies or authorities - DECD, the Connecticut Development Authority, Connecticut Innovations Inc. and the Connecticut Housing Finance Authority (and more if you add all the local economic development agencies) - running economic development? (Mrs. Rell proposed consolidating some of the agencies last year, but the legislature didn't follow her lead.)

If a proposed new sports arena goes forward in Hartford, are we again going to buy the argument that it's economic development? I like sports as much as anyone, but virtually every independent study of stadium economics finds they are at best one-cylinder economic engines.

Does it make sense to subsidize retail establishments, especially of the big-box variety? I'm having trouble getting the point of almost $10 million in state financing for Cabela's at Rentschler Field in East Hartford. State officials say the retailer of outdoor goods is a destination that will draw out-of-state traffic (to a site not currently served by transit) and provide jobs.

OK, but the jobs are mostly in the lower income strata - indeed some big-box workers qualify for other forms of government assistance.

Cabela's is the nation's largest direct retailer of outdoor merchandise. If it wants to be in East Hartford, it's because its executives have figured out they can make money there. That's fine. Why do I, as a taxpayer, have to subsidize them? I can understand state aid for inner-city retail ventures, where people need supermarkets and laundries. But subsidies for suburban big boxes makes little sense - a local wag compared it to paying teenagers to think about sex.

There's a Ralph Nader-like figure in the economic development area, Greg LeRoy. He's written books and created a national resource center, Good Jobs First (www.goodjobsfirst.org) on the subject. LeRoy believes that much of the billions of dollars spent each year under the banner of economic development is corporate welfare, windfalls paid to companies for doing what they were going to do anyway.

It's a point. While we ought to be selling the state's advantages to companies who may have a business reason to be here - and have had success with European companies - the whole game of states or cities trying to outbid each other for corporations, at a time when the money is better spent on education and infrastructure, is crazy.

The Connecticut Regional Institute for the 21st Century, a public-private partnership formed in the late 1990s, published a study last year with the radical idea that the state "reshape its traditional project-based economic development focus to one that encourages the creation of attractive, livable cities."

There's a vision there. If what the state has to sell is an educated workforce and a top-notch quality of life, isn't that where most of the money should go? There is a bill before the General Assembly (see state Rep. Art Feltman's adjoining column at right) that would direct companies receiving state economic development aid to follow smart growth criteria.

Pass the bill. Subsidizing sprawl worsens the state's quality of life. Let's stop doing it.