SDS Campaign Launches Online Videos
Chamber expected to weigh in on ballot amendment that would halt city subsidies for private retail developers
By Richard Whittaker, Fri., Sept. 5, 2008
Stop Domain Subsidies has spent the last year building a broad coalition of local businesses and voters for the charter amendment it got on the November ballot, which would halt city-subsidized private retail developments. Now the group is using online documentaries to get its message out before opposition can mobilize.
On Aug. 1, SDS launched its own YouTube channel called DomainBusters, which will host a series of short documentaries on the issue. According to SDS founder Brian Rodgers, the docu-series Public Money, Private Profit will help explain the complex issue of development incentives for the average voter and why they should vote for Proposition 2 on Nov. 4. "We were going to do a full documentary of 20, 25 minutes, but we decided to break it into three components," he explained.
Produced by local studio Picturebox ("Everything I do is local," Rodgers said), a five-minute preview and part one of the series are already online. They feature a mix of prominent critics of retail incentives, including former Council Member Bill Spelman, UT associate professor and development expert Michael Oden, and several local business owners, including Tim League of the Alamo Drafthouse Cinema and Sonny James of Sonny's Vintage. Rodgers hopes other business owners will add their own videos and that the documentaries will be a powerful tool for explaining why retail incentives hurt local businesses and damage the local economy.
When people vote on Prop. 2, what they will actually be voting on is a two-page amendment to Article XII of the City Charter. Its statement of intent says it would "ensure fair and equal treatment as between operators of Retail Uses" by blocking certain incentive deals between the city and developers. While Rodgers argues this would keep the playing field level for new and established stores, he also hopes people will understand the importance of the other element of the amendment: canceling the existing deal with the Domain shopping center. In 2003, the city entered into a 20-year economic development agreement with locally based Endeavor Real Estate Group for the first stage of the Domain, based on local sales-tax receipts for the site. In 2007, the land and the deal switched to Indiana-based Simon Property Group Inc. It's Simon that will receive the first scheduled check in October, which the city estimates will total more than $1.5 million, based on sales-tax revenue from September 2007 to April 2008 and the assumption that all criteria of the deal are met.
But the city does not have to pay. In 2004, after being sued by Rodgers in Travis County court, the city and the developers renegotiated the agreement: If the city does not appropriate the funds, the deal is off. Rodgers argues that, even if the amendment fails, the Domain's failure to live up to early promises more than justifies using the get-out clause. "The developer promised $35,000-a-year jobs. Well, they're not out there. There's supposed to be 4 acres of open space; now it's 1.4," he said. "Seeing it's voluntary, we're not legally bound. And seeing as they misrepresented themselves, then we're not ethically bound."
Rodgers, himself a developer, registered SDS as a specific-purpose committee and has pumped $68,000 of his own money into it. "Some people take care of the springs, and some people take care of health issues," he said. "Everyone has their abilities, and mine happens to be my passion for locally owned business."
While there is no organized opposition to the amendment yet, Rodgers expects it to materialize. The Greater Austin Chamber of Commerce will formally announce its position next week, but chamber President Mike Rollins describes the amendment as both redundant and costly. The City Council passed a resolution last year saying it would not sign off on any similar development deals, and he argues that, if passed, the amendment would also affect the agreement between the city and Catellus for the Mueller redevelopment. His bigger concern is the message it sends about Austin to the broader business community, especially bond houses. "There are serious taxpayer consequences when you break agreements," he said.
But Rodgers argues that retail development incentives don't create new sales taxes but pay developers to speed up the flow of cash out of town to corporate chain stores. He argued, "If you spent a fraction of that money helping local businesses and plugging the leaks to keep things locally, then you'll have far more jobs, far more tax revenue, far more entrepreneurship."
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