Is there real reason to celebrate the 25th anniversary of the creation of the New York City Economic Development Corporation?
New York City prospered and successfully grew prior to the creation of the EDC and its predecessor, the Public Development Corporation which was created in 1966.
In 1991, the PDC was merged with the Financial Services Corporation (FSC) to form the EDC. In many instances, projects supported by these government corporations have been heavily subsidized by taxpayers, commonly known as corporate welfare.
Between direct government funding, low-interest loans and long-term tax exemptions, the bill to taxpayers in the end is greater than the so-called public benefits.
There is also a relationship between campaign contributions from developers to elected officials looking for favorable legislation, private property condemnation under eminent domain, building permits and public infrastructure improvements, along with direct and hidden subsidies.
In some cases, city and state development corporations actually compete, attempting to outbid each other in offering potential investors the best deal. This translates to the highest subsidies at taxpayers expense.
Don’t forget the conflict of interest for senior staff from municipal regulatory and permitting agencies. Too many leave in the twilight of any administration to become employees or consultants to the same developers they previously oversaw.
Some developers try to purchase the support of local community groups by making so-called voluntary donations. They also make promises for capital improvements, which after the major project is completed don’t always appear.
Other commitments for creation of permanent new jobs and tax revenues frequently do not meet expectations.
If these projects are worthwhile, why can’t major developers use their own funds or obtain loans from banks, like medium and small businesses?
Real business people who believe in capitalism build their companies on their own. How sad that some don’t want to do it the old-fashioned way with sweat and hard work.
They are looking for favors from elected officials and shortcuts in the form of huge subsidies at taxpayer expense.