In late January, the Allegheny County Council, Pennsylvania, voted 11-3 to subsidize the Target corporation with a staggering $6.7 million in public money to help underwrite the construction of the Mount Nebo Pointe project shopping center. The vote was taken in a room in the county courthouse appropriately named “The Gold Room”. According to the Post Gazette newspaper, the “tax increment financing” is supposed to help the Avonworth School District. So using tax dollars to bolster Target is seen as a way to help school kids. In a lesson the children might not have wanted to watch, the County Council President “took the unusual step of limiting speakers to 90 seconds each,” the newspaper said. Of the 35 people who spoke, 24 (68%) opposed the plan. “You are subsidizing urban sprawl, which is a tremendous problem for our region,” said Sharon Pillar, an Ohio Township resident. “This development does nothing to enhance our region.” Officials in neigbhboring Ross and Ben Avon Heights have come out against the project. In fact, the Mayor of Ben Avon Heights put it bluntly: “They’re not creating economic development. They’re just shifting it around.” Ironically, the developer admitted this was all about robbing Peter to subsidize Paul. A marketing consultant for the developer, Cleveland-based Developers Diversified Corp., admitted that the Mount Nebo Pointe mall would draw away $48 million a year in sales from the nearby McKnight Road corridor. Half of new mall’s sales would come from the other mall. The McKnight mall might only barely notice, because the shift would only mean a 5% drop in their sales. The Sierra Club has indicated that it will likely file a lawsuit challenging the project’s eligibility for the financing, which would pay for road improvements and other infrastructure.
Target, which is not exactly a poor-mouth company, apparently can’t make this deal work unless the project gets taxpayers to pay for road improvements, water and sewer upgrades, etc. Such forms of corporate welfare have drawn increasing fire from local citizens who claim the tax subsidy is only encouraging sprawl, which is costly for the taxpayers because it leads to higher capital improvements costs of new roads and sewer lines, etc. Use of TIF funding for retail projects is being questioned in many states, including Ohio. For more on that subject, search this database by the words “Policy Matters” to see a report critical of retail TIFs. For other corporate welfare stories, search by those two words.
