Bristol Virginia: $50 Million for Crony Capitalism
Just recently, the Bristol Virginia city council voted unanimously to acquire 140 acres (costing $25 million) of land from 12 different property owners near exit 5 off interstate 81. They are doing this in another demented public-private partnership where profits are privatized and cost/risk are fostered off on the taxpayer.
A recent change in Virginia law will allow the city to keep all the sales tax revenue, including if the customer lives in Tennessee. This will allow Bristol to invest 25 million dollars into bonds and be able to pay it back in three years. When the complex is paid off, the sales tax revenue will again be shared with the state. The extra sales tax revenue will also help offset the cost of attracting investors to the project.
Construction should be completed by 2014. Extract WJHL July 23, 2012. Politicians claim we'll get 2,000 new jobs and they will pocket an annual $5 million in sales tax. The problem is retail is already down. Bristol Motor Speedway, the engine behind local tourism, has gotten frantic over falling attendance. Now they are suggesting citizens allow their private campers be rent out to save race fans money and draw them in.
As of July 24 they have still refused to disclose most of the details. This again has been conducted in total secrecy and under Virginia law they are shielded from the Freedom of Information if it's ongoing negotiations or most facets concerning private business. In these kinds of public-private partnerships the FOIA is useless.
To quote the local press, "Retaining the existing businesses for as long as possible would benefit the city, since - if it acquires the property - many would likely continue operating and might want to locate in the proposed development." In other words they will simply relocate existing business, not create any new jobs. They also plan on drawing from surrounding existing business which hurts other down the road.
Thus we have war between local communities spending tens of millions of tax dollars to lure each others retail customers. One such fight landed Bristol Virginia and Washington County into a costly court battle over annexation issues related to retail. Washington County got the strip mall after $7 million in corporate welfare and giveaways and over $2 million in court cost, plus another $1 million from VDOT.
Bristol Virginia plans to spend $22 million for road improvements on a speculative retail project in addition to $25 million for the land. $12 million will come from revenue bond and they hope $10 million from VDOT. "That $10 million could come from the agency's revenue-sharing program.
The borrowing would be in the form of general-obligation bonds, backed by the full credit of the city and applied against the city's borrowing limit, but the $25 million for land could later be converted to revenue bonds, if and when a development begins operating. VDOT has also agreed to pay $125,000 for a traffic study of that portion of Lee Highway...
Once the study is completed this fall, the city can then develop its plan and access the $500,000 for planning and design, as well as apply for additional funding from VDOT. Ref. Bristol Herald Courier July 24, 2012.
This is even worse than the Nicewonder Fiasco of 2003 when I stood alone objecting to that. I predicted then it would fail and it did. I don't think this is going to work either. Again, if it's such a great why is the developer not paying for it? Why the secrecy?