Tale of Two Cities
By Manny Santos
I often look at our Meriden as “a tale of two cities:” one as it is and the other as it could be… if citizens voted for people who understood non-taxpayer funded economic development.
The Record Journal article of 3/20/17, entitled Corporate Tax Changes Could Impact Meriden’s Downtown Development, contained a brief update on some of the revitalization efforts, but focused on the uncertainty in the future of tax credits that have up to now, been so central to the success of these projects. With a new administration in Washington anxious to get our national economy roaring once again, as well as the business community already showing optimism, the misleading need for these taxpayer monies might be disappearing. So what will happen to these projects, and Meriden?
First, let’s remind ourselves how we got to this predicament. As I wrote in previous columns, President Obama and our own Governor Malloy, influenced and presided over such a poor economic climate, that banks were reluctant to make traditional loans and businesses were reluctant to take risks. This created an opportunity for politicians to promote the federal Low-Income Housing Tax Credit program (LIHTC), and with great success for developers, because it allowed massive tax reductions, at taxpayer expense.
There are two huge problems with this. The first and most important is that it drives out other market-driven economic development that don’t rely on tax credits, because they can’t compete and the concentration is on lower income demographics. If a neighborhood can not support businesses, be it restaurants, boutiques or supermarkets, they won’t locate there. It robs the community of the opportunity for a middle-class.
The second huge problem is that it essentially demands we remain in a bad economy. This was the most glaring aspect of the Record Journal article I sighted. To spur business activity, corporate tax rates will have to be reduced. Businesses provide jobs. If they have to pay high corporate taxes, they will either raise prices (not good for us) or they hire elsewhere, or not at all (also not good for us).
Because Meriden has relied so heavily on state and federal aid, including the aforementioned LIHTC, we are at the mercy of conniving politicians in Hartford and Washington. This is why two years ago, with the help of Len Suzio, we introduced the Meriden Preferred Economic Development Advantage Loan (PEDAL) program, which leveraged provisions in the Community Reinvestment
Act, encouraging private banks to invest in the development of communities they service. We managed to get half-dozen banks to participate, with others close to making a decision to join. This would have potentially made available, in aggregate, over $150 million for local development projects.
Not one Democrat City Councilor even as much showed any interest in making the PEDAL program successful. So it’s no surprise the current mayor and Democrat-controlled city council neglected to continue the program, leaving no other options, should we ever get to where we now find ourselves. On the other hand, as the Record Journal points out, Larry Kendzior, former city manager and current Housing Authority commissioner, mentioned they may be able to get alternative funding through the Community Reinvestment Act. So, maybe at least one person in City Hall saw some value in the PEDAL initiative.
Many of us believe Meriden does not need more affordable housing in the downtown we want to revitalize. Yet, it should be clear to every Meriden taxpayer the scope and makeup of all the proposed mix-use, mix-income housing projects (not including the 16 units on city owned building lots and the 39 low-income in Yale Acres). Of the 9 distinct multi-unit projects, all 9 contain affordable and/or low-income housing. That is, of the 615 units downtown, 240 are otherwise affordable and 101 are low-income Mills replacements, resulting in 55% being affordable or low-income. Of the five projects closest to the Meriden Green, totaling 464 units, 267 are affordable or low-income (58%).
Make no mistake, people less fortunate should have access to housing. The question is, should it be downtown? We all deserve a vibrant downtown, day and night, and this can happen only when businesses locate there. These businesses will not locate there, if the residents cannot support them and if the downtown does not attract others from surrounding communities.
Every effort should be made to shift the number of affordable/low-income units to approximately 20%. With a renewed national business attitude, other funding mechanisms should be sought, including the use of the Community Reinvestment Act (a blueprint already exists). Increasing the number of market- rate apartments can be achieved, if the city council, the mayor and the city manager make it a priority. Otherwise, it’s up to the citizens to demand it.