Public Watchdog.org

Council Says “No” (For Now) To Corporate Welfare For Whole Foods, Developer (Updated 05.18.12)

05.17.12

This past Monday night the Park Ridge City Council did something unusual.  It actually struck a blow for good government. 

Not that superficial, namby-pamby, lowest common denominator, compromise-your-principles-away-and-then-lie-about-it, kumbaya “good government” that most politicians practice, the kind that has put our local, state and federal government finances in iron lungs with no hope of exiting any time soon. 

We’re talking honest-to-goodness, principled government – the kind that looks out for the long-term well-being of the entire community instead of jumping at quick-fixes that grease the skids for some special interest or other. 

And they did it unanimously, with all six current aldermen voting to reject the tax-sharing proposal by the developer of the proposed Whole Foods site at Touhy and Washington.  Given the discordance usually displayed by this crew, that in itself is a minor miracle – although we’ll give a big assist to former ald. Tom Bernick, whose absence once again likely contributed more than his presence.

Our aldermen turned a deaf ear to the duet sung by Park Ridge 2004 LLC principal Lance Chody and his high-powered lawyer, about how they couldn’t close the “economic gap” between what they need to get out of the development deal and what Whole Foods wants to pay to lease the developed property from them.  They warned that, without some serious money from the City, Whole Foods would have to accept more of the “burden” of the deal.

Boo hoo.

Remember “gap” and “burden.”  Those were the two watchwords of Monday evening, and you can expect to hear them again and again as this Whole Foods deal continues to unfold.  Also expect to hear them if/when Mariano’s Fresh Market and its developer decide to make their move on their favored Touhy and Cumberland location.

Chody and Whole Foods want their money “gap” bridged by dumping the “burden” on the backs of Park Ridge taxpayers, while blowing smoke up the City’s kilt about all the money the propsed sales tax-sharing might/could/should/will provide in return.

As Gomer Pyle used to say: “Sur-prise, sur-prise, sur-prise.”

Letting business shift its risk and economic burdens onto the taxpayers is what’s become known as “corporate welfare,” “crony capitalism,” or “crap-italism,” and it’s increasingly the rule rather than the exception whenever superficial bureaucrats conspire with gutless and unprincipled politicians to throw scarce tax dollars at any and every shameless business that threatens to go elsewhere unless it gets greased.

In the most polite or clueless quarters, that’s called “bargaining.”  In others, it’s a game of “chicken” or “blink first.”  In still others, “bribery” or “extortion.”  But whatever you choose to call it, it has worked like a charm for all those businesses that have gone on the public dole under the guise of “sales tax sharing” or “property tax abatements.”

Not surprisingly (at least to us), the Council’s decision immediately caught flak from the City’s new Economic Development Task Force, which reportedly barbecued Alds. Jim Smith and Sal Raspanti at its meeting Tuesday night (5/15/12).  At least one of the ED-ers reportedly demanded that Mayor Dave Schmidt make a pilgrimage to Chody and/or Whole Foods and seal a deal – even though none of those ED-ers were willing to say exactly how much of an “incentive” is enough and how much would be too much.

That would actually take some serious thinking, and thinking is hard.  Worse yet, someone might even try to hold them accountable for their opinion if it turned out to be wrong. 

The ED-ers and their Whole Foods sycophants want the City to figuratively grab its ankles, damn the cost.  No thought about the public policy consequences of giving Whole Foods a clear economic advantage over Jewel, Dominick’s and Trader Joe’s.  No thought about what these kinds of concessions will lock us into for new businesses considering Park Ridge (e.g., Mariano’s).  No thought to first establishing some type of benchmark or guideline to replace the worthless Council Policy No. 31 for objectively determining the kinds and amounts of incentives, if any, that would be acceptable; and under what specific circumstances.

And no thought whatsoever to why Whole Foods or developer Park Ridge 2004 LLC is deserving of what could end up being millions of dollars of taxpayer subsidies that other businesses – like the new locally-owned Garden on the Run – aren’t getting.  Or why City government should be using our tax dollars to effectively help pick and choose winners and losers in this marketplace.

Other than the idiotic: “That’s what everybody else is doing.”

We would like to see a Whole Foods in Park Ridge.  We’d also like to see it at the proposed site, even if other sites in town might be preferable.  But we think concessions like Chody and Whole Foods are demanding are a Pandora’s Box that, once opened, will not be able to be closed.

The City Council so far has gotten this nettlesome issue right.  Here’s hoping that it doesn’t get bull-rushed into selling out fundamental fairness and a level playing-field for thirty pieces of silver.

Or 20 years of sales tax revenue-sharing.

UPDATE:  One of the things we hope this blog does is cause people – including the folks over at 505 Butler Place – to actually think about the issues our community faces rather than just react in knee-jerk fashion, often based on minimal and incorrect information.  A good example of that is the number of comments this particular post already has received critical of the City Council’s vote on the Whole Foods sales tax revenue sharing proposal and its failure to “negotiate” or “compromise” with Whole Foods – but without offering any suggestion for what the “compromise” deal should look like, and how much “bribe” money should the City throw at these “crap-italists”…and all those who may follow with their hands out. 

That goes in spades for members of the City’s Economic Development Task Force who have come on like gangbusters in ripping the Council for saying “No” to Chody’s/Whole Foods proposal.  Yet none of these self-styled business people have, to our knowledge, offered any alternative to the Council’s “no” – other than just saying “yes” to whatever the crap-italists demand. 

Former British prime minister Tony Blair nailed it with: “The art of leadership is saying no, not saying yes.  It is very easy to say yes.”

To read or post comments, click on title.

18 comments so far

So the plot thickens. I wondered what the ED Task Force’s position was, thanks for the info/analysis that doesn’t seem to be available from any other outlet.

And here I thought the drama in this scenario was reserved exclusively for the NIMBYs. This almost demands a bowl of popcorn to enjoy as continues to unfold.

EDITOR’S NOTE: By the time it’s done, we suspect popcorn might give way to an adult beverage or two. And, unfortunately, to several Extra Strength Tylenol.

Good for the council. This is the same developer that pushed hard for the increased density in the same site years ago, and they got it then. So it is nice to see the council push back on this request. And from what you’ve written, it isn’t Whole Foods that is really asking for this deal. It is what the developer is proposing to “close the gap” because the developer wants more from Whole Foods to lease the site than what Whole Foods is willing to pay. Am I right? Basically, instead of the developer coming down on its rental price, they are telling Whole Foods that the higher rent cost could be offset by the money it would get through tax sharing with the city? If the developer really wants to get this property developed, why don’t THEY take the loss, instead of passing it along to the city?

EDITOR’S NOTE: Gee, what a novel theory. Too bad we didn’t employ it with the Uptown TIF.

Good Lord!!! Do I like these deals??? Of course not. Who does?? The CME Group and Sears made me puke but this is the world we live in. Our elected officials sould negotiate and find a middle ground to get this deal done.

You keep bringing up precedent and Marianos. Well I did a simple google search using “Marianos and Taxes”. The link below indicates two things. First, Marianos has looked for in the past and will be looking for the same type of deal (as would any quality large business) and second, at least in some cases it seems to be generating significant tax revenue.

Do you think that there is going to be someone out there who will want to develope that property without some sort of tax concessions for the city??

http://www.dailyherald.com/article/20120309/news/703099963/

EDITOR’S NOTE: Good Lord!!!! If the City grabs its ankles anytime a developer asks it too, we’ll never know if we can get a better deal, will we? The City took the “middle ground” with PRC and the Uptown TIF and we’re looking at a $6 million deficit and another $6 million or more on the way.

If you have kids, do you buy the “everybody’s doing it” argument? Sucker!

11:44, interesting daily Herald Article. What Public Watchdog is calling a bribe, they are calling an “incentive.” I wonder how much research the City Council did on these types of deals before they quickly and soundly rejected it. I wonder why they didn’t consider negotiating for a larger share for the city, or perhaps a shorter duration.

EDITOR’S NOTE: Simply semantics – the concept is the same. But please advise what “larger share” or “shorter duration” deal you’d accept?

“please advise what “larger share” or “shorter duration” deal you’d accept?”

Beats me. I know it’s far easier to be an armchair quarterback then to sit in the horseshoe listening to NIMBYs whine and developers sing and dance.

But I do know that with a big deal like this on the line, I would want as many facts as I could get on similar deals and perhaps not instantly reject it unless I was pretty confident it wasn’t a deal-breaker. Maybe the council knows more than I do. I would hope they do, that’s for sure.

EDITOR’S NOTE: So do we, otherwise Park Ridge is screwed.

We’re pegging you for an ankle-grabber who won’t admit it. You may even be one of those ED-ers whose idea of “economic development” is giving away the store and then shouting: “Thank you, sir, may I have another?”

The best negotiating tool is “no” and it’s time the City started using it. If Chody and WF really want to be in Park Ridge, all they need to say is “yes.”

“If Chody and WF really want to be in Park Ridge, all they need to say is “yes.'”

If only it were that simple. I’m hoping they can find a way to come to PR without the City’s help, but as I’ve said before I think it will be a shame to let this opportunity slip away without really looking hard at a possible compromise.

Negotiating a fair deal (I know we differ on what is fair) with this retailer, at this time, is nothing compared to the Uptown TIF deal or, switching to residential development, even to the concessions I’m sure were made to countless shlocky developers who wanted nothing more than to pocket as much cash as possible by building the biggest, yet cheapest and lowest quality, homes they could. Some of the McMansions around here did far more to compromise the identity of our City with their architectural pollution than a Whole Foods ever could.

I am not an ankle-grabber or an EDer, just a concerned resident who, as I’ve said, would like to see PR be able to do more than settle for the “fungi” classification of retailer we discussed yesterday that typically hangs their shingle here.

EDITOR’S NOTE: Stay on topic, Ace. This isn’t about “architectural pollution,” it’s about bribing one particular retailer and one particular developer to grace our community with their presence because without said bribe we’re apparently not worthy. Or is it about a slick developer and a slick retailer taking the lunch money from a bunch of boneheaded public officials?

We’re guessing you don’t want to say what “your” deal is because you don’t have one, other than to grab your ankles for Whole Foods. Don’t be embarrassed to admit it, there are others just like you out there – which is why Chody and Whole Foods feel so comfortable making their demands.

You can’t be serious.

Look at the big picture: does Park Ridge need Whole Foods or does Whole Foods need Park Ridge?

Do you really believe that the council is negotiating from a position of strength? You may understand the underpinnings of how government works, but you are naive to say that all Whole Foods needs to say is yes.

Whole Foods could put up a store in Niles or Des Plaines or elsewhere. The residents of Park Ridge want a Whole Foods more than Whole Foods needs to move into P.R.

This is a negotiation between the City and the others; it’s not ‘my blog, my rules’ issue. It is not Council can dictate the rules because they have never developed them; nor have they applied any consistency in any of their business dealings.

EDITOR’S NOTE: Serious as a heart attack, Slick.

We are looking at the “big picture” a lot more than you are – including how this shakes out as precedent for existing stores and stores yet to come, not as some simple one-off deal for a bunch of whiners who want Whole Foods.

If Whole Foods wanted to put up a store in Niles or Des Plaines, they wouldn’t be wasting our time. But so long as they and Chody think our public officials will turn spineless, they’ll remain shameless in their demands for subsidies from Park Ridge taxpayers.

If these were Revolutionary War times, we’re betting you’d be a Tory. And like the Tories back then, we figure you represent about one-third of the population of Park Ridge, not a majority.

I’m well aware of the topic. The purpose of my detour was simply to point out that City Hall has made plenty of boneheaded decisions that have hurt taxpayers more than they’ve helped them. But I don’t think negotiating with Whole Foods would necessarily qualify as one of them.

I’ve heard people say that Park Ridge is unfriendly to businesses and that’s why our retail/commercial situation is so dismal compared to other municipalities. I’m starting to think that it not that we’re unfriendly, necessarily, but rather that we’re just not very business savvy.

EDITOR’S NOTE: We’ve looked into that “unfriendly to businesses” beef and its more like canard – unless business friendly means throwing money at these crap-italists, like the City did with the Uptown TIF.

But we’re happy to hear any specific examples you can cite.

God bless the Queen. She would be a better leader than any of the leaders we have in this country, but I digress.

The council has given other entities tax breaks over the past 30 years (LGH, country club, Pickwick Theatre, etc.), why aren’t you crying over milk that has already been spilled….

EDITOR’S NOTE: Put the scotch away and go to sleep.

Forgive me if it has been stated but what exactly have the developers asked for? Property tax or sales tax concessions. I was looking more for specifics such as percentages, time frames, ect.
Thanks

EDITOR’S NOTE: Re-read the post and click on “sales tax-sharing” in the 8th paragraph and you will see Chody’s/Whole Foods’ chart submitted to the Council.

In your response to one of my posts you reference the uptown TIF. I would think you would have to agree that there is a difference between a developer selling a concept with virtually no retailers lined up to fill any space compared to a developer who comes to the table with a project that specifically exists and only exists for a business such as WF.

A big part of the reason the Uptown TIF is such a mess is it was sold on air. IF space is filled and IF sales are generated…..yada….yada. Those turned out to be big ifs!!! It took a long time to fill those spaces.

EDITOR’S NOTE: You’re simply talking mechanics, we’re talking process.

The Uptown TIF was a stupid idea sold to gullible taxpayers by a mayor (Ron Wietecha, followed by Mike Marous), a City Mgr. (Tim Schuenke), a citizens’ task force (the Uptown Advisory Task Force) and a City Council who touted it as the thing that would turn-around Uptown retail. The folks shilling for Whole Foods today (led by the Economic Development Task Force) are touting it as some stupendous retailer that will turn-around Uptown retail.

Sound familiar?

The two most notable differences we see are that, for a change, our public officials are actually seeing the bull-shinola for what it is; and we have a developer who is admitting that he made a bet on that parcel of land a few years back that didn’t pan out, so he wants the taxpayers to bail him out because he doesn’t think Whole Foods will.

Our comments aren’t ‘yes’ to whatever the developer(s) and Whole Food’s want.

Our comments are directed to both sides, figure out how to get this deal done because we want a Whole Foods in our community.

To the Council, establish the bloody rules of the game to be for all business, both new and existing.

To new business and existing business, we want you to develop here and/or stay here, here are the business rules that we shall abide by.

God bless the queen.

EDITOR’S NOTE: “[F]igure out how to get this deal done because we want a Whole Foods in our community.”

The perfect cake-eater response: I want it, and I don’t care what it costs.

Sam Adams and the Sons of Liberty would have tarred and feathered you. Or worse.

“…but without offering any suggestion for what the ‘compromise’ deal should look like, and how much “bribe” money should the City throw at these ‘crap-italists’…and all those who may follow with their hands out.”

If I had those answers I’d probably be spending a lot less time reading this blog and more time trying to fix the economy with my earthshattering insights. I didn’t realize that the only acceptable opinions were those with specific, concrete solutions to the City’s problems.

I still think it’s unfair to say that a sales tax sharing proposal would be taking money out of taxpayers’ pockets. It’s money that wouldn’t even exist without the development — which is why these deals are known as “incentives” rather than “bribes” in some circles. I think in the Mariano’s example posted yesterday, the town actually proposed the sales-tax sharing.

In any case, regarding WF and PR, even in its first cut, the deal still gave the City the larger portion of the sales tax. Furthermore, if you don’t want to have to worry about who’s getting how much of the sales tax on your free-range, antibiotic-free chicken, the solution is simple. Don’t shop there.

EDITOR’S NOTE: If this truly is “money that wouldn’t even exist without the development,” then you must be advocating giving Chody and Whole Foods whatever they want because, so long as the City gets ANYTHING more than it’s getting now, it’s a big win, right?

On that basis, there’s nothing to “negotiate” and “compromise.” The City should just hope and pray Chody and Whole Foods don’t realize how desperate the City is for their project that they revoke their proposal and jack it up to 99% of the sales tax revenue because, after all, that’s still 1% is more than we’re getting now, right?

As we’ve said many times before, the shameless will always beat the spineless. And we apparently have a lot of invertebrates in Park Ridge.

Kudos to the City Council. I believe that both Whole Foods and the developer are posturing to get a public donation. No large business like Whole Foods would locate a store in an area where $160,000 is the difference between a profit and a loss; it’s going to be the difference between a profit and a larger profit.

I want a Whole Foods in PR but I don’t think that we should spend our tax money to get it. We also shouldn’t spend it to bail out a developer who got in over his head.

Like 1:08, I too would like Whole Foods in Park Ridge at that Touhy and Washington location. But I don’t get these people who seem to think it’s so important we have to make it happen at any price. Your point about fairness and a level playing field is right on target. I went to Garden on the Run, which I hear is a local family-owned business, and I don’t believe it got any kind of subsidy. So why should the City give our money to Whole Foods if it didn’t give any to Garden on the Run, or Jewel, or Dominick’s, etc.?

I’m tired of special deals for special people, while everybody else gets nothing and has to pay for those special deals.

The ED task force merely had a problem with the aldermen not voting to DEFER. They simply closed the door and hope that WF and Chody come back with a better proposal. The EDTF’s is concernned with this city council being very closed-minded; how can we attract business to the City … Suggestion??

I’m not suggesting that we take anything bc its more that what the city is making off the property now … I’m asking that the city council ask if this is good for the community …

EDITOR’S NOTE: Suggestion?? The EDTF should do what it was organized to do, which doesn’t necessarily include throwing buckets of money at developers or retailers – because any idiot can do that.

Whether “this is good for the community” goes well beyond whether one particular deal is good, bad or ugly right now. There are long-term policy considerations – including considerations of fundamental across-the-board fairness to current and future merchants – which the EDTF hasn’t even begun to address.

For example, at its 04.24.12 meeting (according to the minutes), member Mary Wynn Ryan asked that Mayor Schmidt “give a call to businesses like Whole Foods” with no suggestion that the City offer them buckets of money, whether in the form of sales tax sharing or other “incentives”/bribes. In fact, we can find nothing in any of the EDTF’s meeting minutes where anybody advocates throwing money at developers and retailers, save for the 03.20.12 meeting where a consultant talked about how successful Elmhurst’s $10,000 “Retail Grant” has been in attracting businesses. That’s right, $10K – a tiny fraction of the $400K Chody/Whole Foods is asking for in just the first 5 years of the proposed 20 year deal.

The law recognizes that every parcel of real estate is unique, and we trust that Whole Foods appreciates the uniqueness of the Touhy and Washington site. Our guess is that Whole Foods really wants to be here, but Chody is trying to put some extra cash in his own pocket by having the City’s taxpayers make up the “gap” between what he wants to receive and what Whole Foods wants to pay. As a policy matter, we don’t think it’s the taxpayers job to cover Chody’s miscalculation of the risks he chose to incur when he bought the site several years ago. And that’s the same position we took when he wanted 8 above-zoning ordinance units for his condo project on that site.

Just catching up on this discussion….naturally I’m against any tax breaks for business. Any business person taking an unfair competitive advantage from the public trough is just not respectable. Napleton should have been ashamed to accept the $400,000 gift from the city council years ago.

Then again, why not? OPM* is an addictinve narcotic.

Here’s why not: No one gives homeowners the same kind of tax exemption. The self-styled “pro-growth” (really “pro-handout”) people always claim we need to entice businesses to come to Park Ridge and take tax burden off the homeowners. Well, every year’s property tax bill is always bigger than the last. Yes, I’m only looking at the municipal taxes. Actually, God bless Cook County; they’ve kept their part of my property tax bill almost exactly consistent. It’s the school districts and the city that always ask for more. But not from a chic grocer. It doesn’t hurt me at all if you have to buy your arugula in Des Plaines.

*OPM = Other People’s Money

EDITOR’S NOTE: Your points are solid, especially going elsewhere to buy stuff. We’ve been buying our arugula at Jerry’s in Niles, and we never thought of asking the City to give somebody a $400,000+ tax break just so that we can buy it here. We enjoy Houlihan’s and Blue Fish, too, but we sure wish the City wasn’t $6 million in the hole just go get them here – and that was indirectly, not them coming in and sticking up the City for that cash “or else.”

Mrs. 5th Ward Taxpayer and I shop regularly at Jerry’s, never considering what town it’s in.



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