A Who & How of Corporate Welfare for Convention Center Hotel Justifications #mplsmayor

I mentioned on the 22nd that the next wasteful taxpayer funded mega-project would likely be a huge hotel near the convention center, and that Mark Andrew is the candidate who’d most likely support that project.

This isn’t a new idea. It’s one that’s been waiting for a mayor who’s willing to justify redirecting taxpayer dollars from our city’s neighborhoods to a major hotel chain.Watch Brothers (2015) Full Movie Online Streaming Online and Download

Betsy Hodges has made this a point of differentiation between herself and Andrew, as Maya Rao from the StarTribune reports:

Council Member Betsy Hodges said she would not back a publicly subsidized 1,000-room Convention Center hotel at a news conference Friday, in a veiled attack on mayoral campaign rival Mark Andrew, who has expressed support for the idea in recent months.

I tweeted this about that article:

The Editor of The Southwest Journal and The Journal (aka Downtown Journal), Sarah McKenzie, checked in with the Andrew campaign to see where Andrew stands on this and replied to me on Twitter:

However, if we go back to Maya Rao’s article in the StarTribune (update: this quote is actually an excerpt from Sarah McKenzie’s coverage of Minneapolis Regional Labor Federation, AFL-CIO mayoral candidate forum), here’s what Andrew had to say in response to Hodges’ anti-corporate welfare position:

“I am not interested in subsidizing corporations or corporate welfare, but I am interested in smart investments that grow our city,” Andrew said then. “When investing public dollars in any project we need to make sure there are significant public benefits, including job creation and workforce training opportunities for city residents. In the case of the Convention Center hotel, the devil is in the details.”

What people don’t seem to understand is that “subsidizing corporations or corporate welfare” isn’t “subsidizing corporations or corporate welfare” if you call it a “smart investment”. Smart, eh?

If we go back to August, here’s what Sarah McKenzie from the Southwest Journal reported Mark Andrew said about Betsy Hodges’ anti-corporate welfare for a convention center hotel stance:

Mark Andrew, a frontrunner in the race took several swings at Betsy Hodges, another leading candidate, at one point saying she “had the disease of a small vision” when the candidates were asked about whether they would push for a new hotel to help the Convention Center attract more business.

If you oppose redistributing city tax dollars from neighborhoods to a national hotel chain, you’re not thinking big enough?

Andrew went on:

When investing public dollars in any project we need to make sure there are significant public benefits, including job creation and workforce training opportunities for city residents. In the case of the Convention Center hotel, the devil is in the details. As mayor, I will fight for the best deal for Minneapolis taxpayers.

The way to fight for the best deal for Minneapolis taxpayers is to do what Betsy Hodges is doing: don’t support taxpayer subsidies a convention center hotel. But, Mark Andrew isn’t doing that. Instead, he’s claiming that he’ll “fight for the best deal for Minneapolis taxpayers.” Does that sound familiar? It should, because it’s the same thing politicians who voted in favor of the Vikings stadium corporate welfare bill said.

Parallels with Vikings Stadium Corporate Welfare Justifications

It’s pretty clear to me how this would go down if Mark Andrew is elected.

A major hotel chain would pitch Minneapolis on the opportunity to become a “world-class city” by having a mega-hotel next to the convention center that the private market can’t justify. All we need to do is borrow $125 million and give it to them.

Downtown businesses would then lobby for a new hotel because it would be an indirect subsidy of their businesses.

Construction workers would show up to meetings in hard hats explaining that they need the work. Never mind that there are buildings going up all over downtown, along the LRT lines, and around the U of MN, and that construction job levels seem to be compared to the peak of the real estate bubble rather than reality. They’d also tell us that we’d be stupid to not do this now because construction costs keep going up every year. As if hotels won’t be built in the future.

A council member would justify his/her vote by writing in a minority hiring requirement. When counting jobs on the site, they would use the inflated numbers by referring to how many unique people work on the site at some time during the project rather than full time equivalents.

Then, Mark Andrew would sweep in and say that he wasn’t willing to support the deal until he twisted the hotel’s arm and convinced them to put solar panels on the roof and/or dual flush toilets in the rooms, making it a green project. He’d then say that it may not be the perfect project, but it creates jobs and will be the greenest hotel ever built in the City of Minneapolis. Just the sort of thing Minneapolis supposedly needs to be a world class convention city. The hotel would commit to spending $125,000 on solar panels in exchange for $125 million in corporate welfare (a 0.1% concession).

The city would then borrow $125 million and commit city tax dollars to making payments on that enormous debt burden over the next 30 years. On top of that, the project would probably receive a TIF (Tax Increment Financing), meaning that the 1,000 room hotel wouldn’t incrementally increase the city’s tax base, thus putting city residents on the hook to subsidize the hotel another way.

Once built, some other hotels in town would shut their doors or cut staff, leading to a little incremental change in the number of available rooms or hospitality related jobs.

With that in mind, read Mark Andrew’s statement again:

Andrew said Hodges “had the disease of a small vision” when the candidates were asked about whether they would push for a new hotel near the Convention Center.

When investing public dollars in any project we need to make sure there are significant public benefits, including job creation and workforce training opportunities for city residents. In the case of the Convention Center hotel, the devil is in the details. As mayor, I will fight for the best deal for Minneapolis taxpayers.

It’s clear to me that Mark Andrew, who’s endorsed by the same unions that lobbied for the Vikings stadium, would find a way to justify giving city tax dollars to a national hotel chain.

If you polled Minneapolis residents and asked them where they’d rank building a 1,000 room downtown hotel near the convention center I doubt it would even be on the radar. But, if you polled Mark Andrew’s campaign contributors you’d have a picture of why he plans to “fight for the best deal for taxpayers” rather than oppose such a ridiculous use of taxpayer dollars.

5 thoughts on “A Who & How of Corporate Welfare for Convention Center Hotel Justifications #mplsmayor”

  1. The more I read the more Andrew comes across to me as someone whose word is completely untrustable.

  2. From the Strib Endorsement of Betsy:

    “Andrew … his close affiliations with unions representing teachers, police and firefighters make it unlikely he would champion meaningful reforms in education and public safety. In addition, he has too often changed his campaign messages to suit his audience.”

  3. Pingback: Target Center, by the numbers | Thoughts on the Urban Environment

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