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Highlighting wages in the Mayor’s race

From the inbox:

Coalition Calls on Next Mayor to Raise Minimum Wage for Publicly Funded Projects

Today, a coalition of community and labor organizations staged a tour of of sites that received tax dollars to tell the story of how the city subsidizes the creation of poverty jobs.

“Of the City of Houston’s 35 economic development tax-incentive deals with developers between 2004 – 2014, only 7 had any job promises,” said Feldon Bonner, a member of the Texas Organizing Project at the press conference that kicked off the tour. “None of the deals included language about the quality of the promised jobs, and only one has provided reports to the City on its job creation deliverables. This is unacceptable.”

The tour started at the Westin Downtown, formerly known as the Inn at the Ballpark, for which Landry’s received $2 million dollars in tax giveaways, and despite failing to provide the 125 jobs promised, the city council voted to allow Landry’s to keep the incentives.

“These tax deals are not going to mom and pop businesses. They are not going to small, women-owned, minority owned or disadvantaged businesses,” said Pastor David Madison, a TOP leader. “Tillman Fertitta, CEO, chairman and owner of Landry’s has a net worth of $2.3 billion. Yet Landry’s is one of the region’s largest poverty job creators paying its more than 10,000 service and restaurant workers in the Houston area low wages.”

The next stop was at Ainbinder Heights, a development anchored by Walmart, and includes a McDonald’s and Taco Cabana. The city awarded Ainbinder $6 million in tax breaks for property improvements. The agreement between the city and Ainbinder spans 48 pages, yet the city failed to negotiate any specific commitments for the number and quality of jobs or any other meaningful community benefits.

“Let’s not forget that Walmart is the largest corporation in the world! And the Walton family is the richest family in America with a net worth of $149 billion dollars. Do you think they need our tax incentives?,” Florence Coleman, a TOP leader, asked the community members present. “Do they deserve our tax incentives? The average Walmart associate makes just $8.81 per hour. Nationally, taxpayers are already footing a $6.2 billion bill in public assistance including food stamps, Medicaid and subsidized housing for Walmart employees who can’t provide for their families because of the low wages Walmart pays them.”

The final stop was at the Astrodome, a project that will probably receive tax dollars. County Judge Ed Emmett has traveled around the world to put together a plan for its reconstruction that includes water park, theater & trails. But there is no plan to assure that the jobs created by this project pay well and have benefits.

“The Astrodome was built by union workers back in the early 1960s, and we’re proud to have contributed to it,” said Paul Puente of the Building Trades Union. “And our elected officials have the obligation to leverage our public dollars effectively so projects like the Astrodome redevelopment provide good jobs that pay at least $15 dollars per hour or prevailing wage, whichever is higher. Jobs that provide training and benefits. And to make sure African American and Latino families in struggling neighborhoods have access to these jobs by including local hire requirements and second chance provisions.”

The coalition staged the tour today to so that Houston’s next mayor makes higher wages a priority.

“We are here today to make sure the mistakes of the past are not repeated with publicly funded development projects like the ones we visited earlier today,” Puente added. “Our local economy cannot afford one more poverty wage job. Our communities cannot accept one more poverty-wage job.”

The following organizations participated in today’s tour: Texas Organizing Project, SEIU Texas, AFL-CIO, Fe y Justicia Worker Center and Working America. Pictures can be downloaded from here: https://drive.google.com/folderview?id=0Bx7Fk8Qnalp0MTdtRXBMa2hyN0U&usp=sharing

That came out the same day as this story about Houston not being the affordable city we are used to it being. High housing costs are a big factor in that, but so are low average wages. Attacking that problem can have an effect on the bottom line as well. There’s only so much a Mayor can do directly about this – we already have an executive order in place establishing a higher minimum wage for companies that do business with the city, thanks to Mayor Parker – but talking about the issue and making it a point in negotiations over real estate deals like the ones cited above are two of them. I’m glad to see this coalition call attention to it.

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5 Comments

  1. Bill Daniels says:

    There is a simple solution to this issue, no more tax abatements for developers, period. If a project needs a concession from government in the form of tax relief, then it isn’t economically feasible. It is not fair to every other taxpayer to give special treatment to one, but not all. Businesses should want to locate in Houston because of low taxes for all, including their employees. If that isn’t a draw in Houston and businesses don’t want to come here, then maybe we should be asking why that is.

    It isn’t fair to give favors to one, but not to all. Stop tax incentive deals, period. Problem solved.

  2. Steve Houston says:

    The first time I really looked into an abatement deal closely was with “Action Box” because Councilman Bruce Tatro was very loudly opposed to it and it was in his district. By helping that company minimize taxes, it made other existing companies less competitive, the county later kicking them to the curb over problems with how they were accounting for a separate deal (the city providing them a second boost years later). In the bigger picture, every boost you give to one company means you are harming someone else.

    And you can demand WalMart or other big employers raise wages, kick back money for bike trails, or anything else but you have to understand all that does is raise the costs to the rest of us when the companies agree.

  3. Ross says:

    Geez, do people actually read the agreements? The 380 for Ainbinder wasn’t a straight tax break, it required Ainbinder to spend 6 million dollars on improvements the City wanted done. Killing deals like these will lead to developments that don’t have the necessary infrastructure improvements completed, items the City can’t force the developers to do for free.

    Straight tax breaks for job promises ought to be illegal at every level.

  4. Steve Houston says:

    Ross, I’d argue that you must not have followed the Ainbinder deal all that closely whether you read the “deal” or not, the outcome summed up quite well here:
    http://swamplot.com/tag/380-agreements/

    “For the record, the Ainbinder 380 Agreement did not include drainage detention, they simply tied into existing storm sewer systems–there were no “improvements”. The road was widened at the expense of a tree-lined sidewalk. The sidewalk was “abandoned”, which means “is no longer in existence”. There are no street tree wells and/or no ROW accounted for to plant shade-bearing street trees. The removal of $250K worth of mature Live Oaks resulted in a transfer of this public amenity to Walmart’s parking lot. Yes, that’s right. Public trees were allowed to be replanted on Walmart’s parking lot.
    And, oh yeah, the four-sided intersection has just two pedestrian signalized crossings. Yes, you can’t actually safely cross on two sides because there are no lights and markings. Why? Because PW&E missed it and the developer didn’t end up having to pay for it.
    The “bridge improvement” is the biggest boondoggle of them all. Ainbinder wanted to pave it and area civic orgs fought them. Turns out, after coring was performed on the bridge, that the dead load was far greater than known AS A RESULT OF previous paving. That was the second load limit drop. So, Ainbinder window-dressed and spent 380 monies for cosmetic treatments–changing out balustrades and painting A BRIDGE THAT WILL BE TORN DOWN. That is an absurd waste of taxpayer money.
    Unlike other 380s, the Ainbinder 380 had next to no specifications that ensured deliverables. There were no clawback provisions to ensure public return on the investment. Once the money is awarded to the developer, they can strike or change line items and they still get full payment. The development doesn’t even have to perform to produce new taxes (not just poached taxes), it can be a miserable failure and they still get paid.
    The folks that were championing this development are now trying to pretend the public infrastructure results were worth $6,000,000 of public money. Guess what? You were wrong then and you’re still wrong now. The proof is right there for everyone to see. Own it.
    Andy Icken distributed the original Request for Council Action that misrepresented the content of the Ainbinder 380 to council before the vote. The same Andy Icken approves any changes to deliverables within 380. None of those “substantial changes” reduce the money distributed to the developer. The developer simply transfers money earmarked for a specific line item to something else and they ensure that they leave no money on the table. They can do that by building something worthless to the public and billing the City for it plus interest and contingencies. (Exhibit A: the sidewalk to nowhere behind Walmart.) Anyone who thinks the City is providing some kind of accounting or procedural oversight to stop the misuse of funds is kidding themselves.” (per Texas Spiral)

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