August 17, 2018 10:26:16 AM
Zack Plair - [email protected]
Columbus is pulling out of the Golden Triangle Development LINK.
City councilmen voted 3-2 during a budget work session Thursday afternoon not to contribute its normal $100,000 to the economic development organization in Fiscal Year 2019, which begins Oct. 1. Instead, the city shifted those funds to its "professional services" budget in hopes the money will help more directly with retail development in the city.
The city has appropriated $100,000 to the LINK for each of the last 10 years for the organization's economic development services, which include industrial and retail.
Charlie Box, councilman for Ward 3, offered a similar motion at a work session last week, but it died without a second. When he moved to reallocate that money again Thursday, Ward 1's Gene Taylor offered a second and Ward 6's Bill Gavin voted with them.
"I'm concerned with the city and what's been happening here as far as retail development," Box said, citing a recent study the Columbus-Lowndes Chamber of Commerce commissioned that showed more than $1 billion that could be spent on local retail was being spent outside the Columbus retail market. "We've given (the LINK) more than $1 million over the last 10 years, and we just haven't seen much on the retail development side."
Councilmen Fred Jackson and Stephen Jones, of Ward 4 and 5, respectively, opposed the measure. Ward 2 Councilman Joseph Mickens was absent.
Thursday's decision swells the city's professional services budget to more than $691,000 for next fiscal year. Those services include attorney, engineering and consulting fees, as well as money it pays project management firm J5 and its contribution to the Baptist Medical Group clinic that treats city employees and their dependents.
It also includes funds to hire a retail development firm to help develop retail strategies and recruit new businesses. A representative from Memphis-based NaviRetail is scheduled to appear before the council Monday evening. If the city contracts with that company, it will cost about $37,000 annually.
The new $100,000 for professional services will be in addition to what it pays a retail firm, Box said, and will be used for such things as traveling for retail recruitment opportunities or showcasing the city at home.
"We might want to go to a retail show ourselves, or we might want to bring a retail development conference here," he said.
Jones said after the meeting he didn't oppose, in principle, moving that money away from the LINK. He voted against the measure because he thought it might be too soon in the budget process to make that call.
"I just thought we were moving a little too fast," Jones said. "Maybe we should have met with NaviRetail first, hear what they have to say, and then do this."
Mayor Robert Smith, speaking to The Dispatch after the meeting, acknowledged the city had enjoyed advantages from the LINK's work over the past decade, but he didn't offer definitively on the record whether he agreed with the council's decision.
"This is what the majority of the council wanted, so this is what we have to live with from a city standpoint," Smith said.
County will foot bill
The LINK will not suffer financially for Thursday's council decision. The cost instead will be passed on to county taxpayers.
Lowndes County holds the local contract with the LINK for $400,000 per year. Columbus has paid its $100,000 for the last decade as part of that contribution, and the county has covered the remaining $300,000.
Now, Board of Supervisors President Harry Sanders said the county is obligated to pay the LINK the full amount per the contract.
"We're on the hook for it because we have a signed agreement with the LINK," Sanders said. "We had our own agreement with the city, but we never did formalize it or write it down. We had a promise from the city they would (pay $100,000 per year), so we didn't think there was a need to write it down."
In exchange for that funding, the city was allowed to appoint a member to the LINK board -- which included representatives from Lowndes, Clay and Oktibbeha counties, as well as Columbus, West Point and Starkville.
County Administrator Ralph Billingsley said the city would now lose its right to appoint a board member after the term of its current representative, Michael Davis, expires in September.
City Chief Operations Officer David Armstrong said he is elated with the council's decision to withdraw from the LINK, calling it "long overdue."
"I have no idea what they've done with the $1 million we've given them," he told The Dispatch. "The LINK has never given us an accounting of it. What the council decided will be a much better use of our resources."
In an emailed statement, LINK CEO Joe Max Higgins responded to that criticism, as well as the council's decision generally.
He said the LINK provides the county with an annual audit report and reports its activities to a LINK Advisory Council, which includes two city representatives. Further, he said the city never requested any more information.
Higgins added the LINK's footprint can be seen throughout Columbus, as it has coordinated grants, site development, infrastructure placement and tax-increment financing plans for several projects that have located in the city. He specifically noted development around 18th Avenue North, which now has four hotels and three restaurants in part because of LINK involvement.
That level of cooperation, he indicated, is subject to change.
"The city has taken that position and evidently they are of the belief that more can be done," Higgins said. "We wish them luck on future efforts. ... We are supported by three counties, and with this vote, two major towns. Unless directed otherwise I will recommend that we work to locate investment in the geographic areas that support us."
Sanders: 'In the end, we'll win'
Sanders referred to the council's decision to stop funding the LINK as short-sighted and "desperate." He pointed to the benefit the city receives, even from county-based industries like Steel Dynamics and Paccar, because their workers eat, shop and often live in Columbus.
"They're broke, and they are looking at every way to save money," Sanders said of the city. "But they're cutting their nose off to spite their face. It will come back to burn their asses in the long run."
City officials, including Box, Jones and Smith, acknowledged Sanders' point Thursday that the LINK's efforts in the county organically spawn residential and retail benefits for the city. But they argued that will still happen even without the city's $100,000 contribution.
Sanders said the county absorbing this financial hit is the latest evidence supervisors will have to raise the property tax millage for its next budget. The county has already appropriated $200,000 to support city parks next year, a measure supervisors approved Wednesday. It also will suffer a $115,000 direct loss in property taxes because of a Supreme Court decision that exempts businesses located at airport property -- major industries such as Airbus, Aurora Flight Sciences and part of Stark Aerospace are located on Golden Triangle Regional Airport land -- are exempt from paying ad valorem taxes.
Long-term, however, Sanders issued a thinly-veiled warning to the city about "reneging on its promises" in a way that costs taxpayers.
"It's been said not to get in a pissing match with the county because the county can piss farther and for a lot longer," Sanders said. "In the end, we'll win."
Zack Plair is the managing editor for The Dispatch.