Kerry DoughertyThey're joking, right?
Virginia Beach city officials cannot possibly be serious when they talk about more manna for developers, on the same day they discover that the Resort City is rocketing toward an estimated $81 million budget shortfall next year.
Worse, the vice mayor reckons the real number could be closer to $100 million.
Despite these alarming numbers, some in City Hall want the Beach to proceed with plans for an ambitious and astonishingly expensive expansion of Town Center that will include more living space, another hotel, another office tower and more upscale shopping.
(One of the big names being mentioned for the new space is Anthropologie, a pricey retailer that sells a $498 purse appropriately named the "Boondoggle Bag." A stylish vessel for your unemployment check.)
Perhaps you noticed the rich newspaper irony on Wednesday. On the front page: City Forecasts Record Shortfall. On the local section front, this: Taxpayers Would Foot More of the Bill Under Town Center Proposal.
Perhaps I wasn't the only one rubbing my eyes in disbelief.
At a time when America is headed for either a deep recession or a depression, depending on which economist is talking, and when the Fed chairman is glumly predicting that the nation's gross domestic product could actually shrink next year, Virginia Beach pretends its Town Center is protected by a magical shield protecting it
from the forces that are wrecking the rest of the economy.
With city revenues down sharply, the City Council is poised to expand the TIF (tax increment financing) plan at Town Center to allow the developer to keep not only his real estate tax increases, but also a portion of the hotel taxes.
How generous. But why stop there? Why not refund sales taxes, too?
This is a bad precedent, especially at a time when the city will be forced to make tough budget decisions, to either take a meat cleaver to city spending or raise taxes.
What's even more stunning is that in the face of foreclosures, growing unemployment and uncertain credit markets, city honchos continue to talk about "economic engines" and iconic developments.
The Town Center is, by most accounts, a smashing success. The Pembroke project, with its national chain restaurants, shops, high-rise office buildings, housing and hotels - is bringing more than $5 million a year to the city.
Excellent.
But before we break out the municipal Moet, maybe we should wait to see how well the project holds up in a recession. Will commercial space be full, will locals continue to splurge on filet mignon and exquisitely tailored suits?
We can only hope.
The city's finance director said Tuesday that without action from the city, the developer, Armada Hoffler, won't be able to get financing for the next phase.
"When the economy gets bad," she said, "the public needs to step in."
No, it doesn't.
In fact, that's the kind of skewed thinking that can lead to more problems.
Seems to me that when the economy is failing, cities must concentrate on funding safety and schools, instead of luxury developments.
Struggling taxpayers should be the top priority, not developers.
News researcher Maureen Watts contributed to this column.
Kerry Dougherty, (757) 446-2306, kerry.dougherty@cox.net
Delicious
Digg
Reddit
Facebook
Google
Yahoo
ditto
Ditto DONVABEACH
Hit the nail on the head...Thanks for the great article..
Scared
Think it's bad now? Just wait until that puppet mayor gets in office and see how bad it can get. Taxpayers have very little voice now, and once sessoms is in charge, developers will rule. VB city hall will be developer controlled. Look out for your wallet. VB will be run like SPSA and norfolk.
Taxpayers will be hit with abuse and waste of tax dollars for any and all developer whims. We will be saddled with abuse and forced to ride the tide of failure and bail out norfolk's silly little train system.
The citizen voice will be silenced. Sad day for VB citizens.
84.29% of The Voters Rejected John Moss And Reid's VBTA
84.29% of the voters rejected John Moss for Mayor and Reid's VBTA, yet Reid is on here essentially arguing that only 15.71% of the voters knew what they were doing.
When you realize VBTA-backed Leona Shuler got only 8.07% of the vote in the Council at-large race, you grasp that Reid's bellicose kooks are simply out-of-touch.
The bottom line: Will Sessoms got over 2 1/2 times more votes than John Moss and is our Mayor-elect. Hang it up, VBTA.
AND NOW THE ECONOMY - FACTS NOT FICTION
Reuben_VA_Beach stated that Kerry did not know what she was talking about by saying "Most of us fall into the 10 percent range of the tax bill and big business pays the other 90 percent around here. Yes those businesses bring in the tourist tax dollar, that’s the one that makes us all the money. You’re smart, stay out of economics until you better understand it." What a cheep shot. The facts are that the taxes in VB are paid 87% by the residents to 13% by commercial. The resort tourism does NOT pay 90% of the taxes as stated. Consider the following tax revenues obtained from the Commissioner of the Revenue(collects the taxes),by Resort Area (R)/City Wide (C): Business License- R $2.4M/C $41.1M, Food-R $6.3M/C $32.9M, Lodging R $7.1M/C $14.7M, Admission R $547K/C $3.58M, Daily Rental R $12.1K/C $180K, Business Property R $1.8M/C $24.8M. The City gives back $20-30 Million more than tourism brings in. Maybe you should check your facts before you misrepresent yourself. Residents pay the Bill. Tourism DOES NOT... KERRY IS RIGHT. You are soo WRONG. Thanks Kerry.
VB vs. Norfolk, the battle continues...
The impetus for all this despite the economic downturn is the age old rivalry between Norfolk and VB. With Norfolk getting their toys despite money shortages (toys=LRT, Westin Tower, Wachovia (?) Tower, ODU University Village expansions), VB cannot be outdone! In fact, with Granby Tower failed, VB is flooring the spending accelerator to take the lead in the race...to the bottom that is...
Well said!
This is one of the times that I'm in total agreement with you, Kerry. Well said! You don't need a degree in Economics to understand that what is being proposed is nothing more than an attempt by the builders to follow in the steps of the pin-striped pigs on Wall Street in looking for a handout, regardless of what euphemism they choose to call it.
If the projects are really profitable, let the banks loan the money; don't stiff the taxpayers for it. The City Council has a obligation to protect the interests of all of its citizenry, not just attempt to keep builders in multi-million dollar homes.
As to the city's finance director, who incredulously pontificated: "when the economy gets bad, the public needs to step in"....I'd say we need a new finance director. I think, thanks to our local rulers, the public (aka taxpayers) have been "stepping in it" for a long time. And it stinks.
Huh????
Reuben, Reuben, Reuben, may I call you Reuben? Almost half of city revenue comes from real estate taxes alone. Business taxes and revenue from hotel and restaurant taxes only make up a meager percentage. VaBeach.gov has all this information readily available. Unless of course the city is lying.
Top Ten List
Top ten reasons you know that the Virginia Beach city council does not care.
10. The stock market goes lower everyday.
9. People are losing their jobs.
8. People are losing their homes.
7. Well know stores are closing their doors.
6. Foreclosures and bankruptcy are common everyday occurrences.
5. Food and medicine prices are going through the roof.
4. Taxes, taxes and more taxes.
3. VB has a deficit and people that work for the city are in for a rough time.
2. VB has a deficit and the people that live here are in for a rough time.
And the number one reason you know the VB city council does not care about its citizens.
1. VB wants to take what little we have left in our pay checks for more hotels and fancy shops we can not afford to shop or stay in..
(Sorry David Letterman)
And Now the Economy
Kerry, Kerry, Kerry…May I call you Kerry? I was not aware you were an economist. I think I remember some very amusing articles you’ve written in the past. None of them had to do with money though. Seems you’re a little out of your depth with this article and I am sorry you’re confused. I’m surprised to see it in print. You know what I’d like to see? Virginia Beach cleaned up, get rid of the circus like atmosphere surrounding your meager tax dollar. Most of us fall into the 10 percent range of the tax bill and big business pays the other 90 percent around here. Yes those businesses bring in the tourist tax dollar, that’s the one that makes us all the money. You’re smart, stay out of economics until you better understand it.
willie...
willie, the developers boy, needs to be careful about those loans...the SEC is watching....
Keep on building the
town center? I don't think anyone has a problem with that as long as the citizenry does not have to donate a large portion of the expenses. City councel has more than doubled property taxes in the past few years, yet fact a budget deficit. Sounds irresponsible to me.
Virginia Beach Deficit
Will the new people we voted for be as bad as the present crew????Surely not! The voting total told how great a leader John Moss is....16% 'bout sez it all! Now grow up and move forward with what we have, not what we want!
This deficit is no surprise with the Meyera regime. Remember the hotel? Just one big sell-out.!
Keep on Going
Don't stop. Keep building Town Center as planned. The project is a huge success. People need a nice place to live, shop, dine and be entertained.
EXCELLENT PIECE, Kerry!
You said it so well. Keep it up!
I Agree!
The City of VB is not in touch with reality and has not been for a long time. I'll leave and put my tax dollars elsewhere. Bye, bye VB!
The voters had a chance to elect John Moss, Sessoms = developers
Sadly this situation could have been avoided had Beach voters taken the time to understand the opportunity they had on their ballot. While 61% of Beach voters rejected Will Sessoms as their choice for Mayor, only 16% of the voters knew that John Moss would have lead the Council on a better path avoiding with the economic train wreck the Beach government is heading towards. The good news is that the "short fall" being discussed is largely due to the city still planning on INCREASING its budget spending. Much of the "short fall" doesn't mean the city doesn't have enough money to deliver essential services, it means it doesn't have enough money to give out raises, increase department budgets, and keep supporting lavish plans to subsidize politically influential developers(Oceanfront, Town Center, Light Rail/TOD). The question that needs to be asked is; if Banker Will Sessoms' bank will not loan AH the money to expand Town Center, why would he vote for the Beach taxpayers to give AH the same risky loan? If AH needs the money, why isn't Sessoms' bank giving the loan it to AH?