Wednesday, April 10, 2013

TIF Tax Giveaways - City Council Steps Up

The City Council has a right and duty to assure that when we give away our tax money we are going to get real value for it. They were looking for a demonstration that Hampton Inn really needs our tax money to do what they are proposing, a firm commitment to stay and deliver on the services they promise, and a commitment to participate in the economic life of Worcester in a way that benefits the residents and taxpayers of our City. 

There were several reasons for the Councilors on the Committee expressing opposition to this bid by Hampton Inn to build a new hotel on Prescott St. 

First, it came out that there was some fancy financial dealing going on where one branch of the corporation would sell property to another branch and make a profit of nearly $1 million up front. This raised questions about their motives and long term intentions. 

Second there were questions about why this hotel would need a tax break when others don't. 

Third, Councilors responded to some serious questions raised by members of the community about what kind of jobs would be created. Evidence was brought forward that the corporation was using a sub-contractor who required employees to work as independent contractors, thus depriving them of benefits, evading paying FICA taxes and of the protections of Federal labor standards such as overtime. 

It was also noted that Hampton Inn had offered no commitment to local hiring or to paying staff more than bare subsistence wages. 

A TIF tax break amounts to the City giving money to an investor in return for something they presumably would not do otherwise. The Council rarely in the past has looked behind the curtain to see what is really going on and what exactly we would get for our money. They should be applauded for doing so now. 

City Manager O'Brien was visibly upset over this unexpected rejection of the deal he had worked out with Hampton Inn. He will have to get used to this new level of scrutiny of where our money's going. 
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