Fiscally irresponsible through any eyes

By Vivian J. Paige

"Public services will be reduced, and because cuts were so deep the last two budgets, the next wave of cuts will be the hardest yet," said Norfolk Mayor Paul Fraim in his State of the City address on Feb. 4. Less than two weeks later, the City Council considered guaranteeing the rent of a tenant in a yet-to-be-built office building. The deal fell apart only when the tenant, the nonprofit Southeastern Tidewater Opportunity Project, pulled out.

For the life of me, I couldn't figure out how to reconcile the mayor's statements with the deal to subsidize the Midtown Office Tower.

Fraim's grim outlook for the upcoming fiscal year is to be expected. Unemployment in Norfolk is still hovering around 8.5 percent, lower than the national average of 9.4 percent but higher than the 6.7 percent experienced statewide. Property values continue to fall, with a decline of 4.5 percent reported, putting a $10.1 million hole in the budget.

At the same time, the lingering recession has had an effect on nonprofit organizations. Shrinking donations and grants are the norm. STOP, whose revenues are primarily from government grants, suffered a loss in each of the last two years, according to its tax filings.

It seemed to me, then, that if the developer couldn't get financing without the city guaranteeing the rent to be paid by STOP, it was a no-brainer to nix the deal.

A few years ago, when money was flowing freely, the developer would have had no trouble getting the money to build. Those days are long gone. Granby Tower, proposed in 2004, was never built, even with a $22 million performance grant from the city. More than eight years have passed, and $16 million in city money spent, and The Westin in downtown is still a drawing.

Despite all of this, there was something else going on with this project, an invisible hand pushing it as it rose, phoenix-like, from the ashes for the third time. In various reports since it was announced in 2008, the project was described as being located in an impoverished neighborhood desperately in need of development. A speaker at the town hall meeting finally named it: race.

If I've learned nothing else in my years in Norfolk, it is that the issue of race lurks beneath the surface of almost every decision that is made, from appointments to various boards and commissions to, yes, what subsidies developers receive. President Barack Obama may believe we are in a post-racial society, but if he lived in Norfolk, he might think differently.

The supporters of the now-failed project have a point: Norfolk has historically neglected investment in its black, poorer neighborhoods. But, as my mother taught me, two wrongs don't make a right.

With the fiscal stress that the city is under, giving subsidies to developers of any race is more than just unwise; it is unconscionable. It is unfair to ask Norfolk taxpayers to forgo necessities in order to invest in luxuries, and Class A office space is certainly a luxury.

That citizens of all races deemed this project fiscally irresponsible indicates that the people are more mature on this issue than some of those elected to represent us. Perhaps the council now understands why Norfolk citizens are urging more transparency from and more communication with them.

This is not the paternalistic Norfolk of years gone by, whereby the council makes decisions removed from the citizens. Norfolk is growing into a vibrant, civic-engaged city. Rather than shun it, the council would do well to participate in it - and learn something.

Vivian J. Paige writes about local politics and other topics at blog.vivianpaige.com. E-mail: blog@vivianpaige.com.