Saturday, November 03, 2007

BIZPAC supports Harrison Square

Harrison Square & North River:
BIZPAC and the Chamber strongly support the downtown revitalization project, including both Harrison Square and the North River project. Downtown revitalization is vital for improving the business climate and advancing current businesses as well as attracting new businesses.

Ok, we the taxpayer invest $46 Million in Harrison Square. What is the benchmark for this project? When will we know if the $46 Million of taxpayers' money was well spent or wasted? Let me provide what I think is a benchmark.

The city of Fort Wayne currently knows how much sales tax is generated in Fort Wayne. It also knows how many jobs there are. It should be a simple task to determine just how much increase there is in sales in the city of Fort Wayne every year after Harrison Square opens. If the increase is not on the order of an added $100 million a year, it was a failure. Why do I say this? $46 million is worth at 5%, $2,300,000 a year. For us to recoup this even with a 1% sales tax would require the City of Fort Wayne to generate as whole more than $230 million in sales yearly beyond the current sales.

The City likes to use tables that show how many times a particular dollar gets spent within a community. Every time this dollar gets spent, it generates income for one and an expense for another. Theoretically the faster money travels through the economy, the more impact it has in a given amount of time. The problem with Fort Wayne and Harrison Square is that the dollar that is being multiplied had to come from someplace. Where did it come from? If it is a dollar that was already allocated to be spent in Fort Wayne, then Harrison Square did nothing but divert it from some place else. This cannot be counted as being beneficial. Therefore, we need dollars from outside the city of Fort Wayne, that would not have been spent here to begin with. When that dollar arrives in the city, then the amount of its impact is directly related to the cost of the service or product. If is 100% service, then it has a strong multiplier. If it is an item made in China or some where else, then only a fraction of the dollar will stay in Fort Wayne.

Keep in mind that there is also a cost for tearing down the current stadium, the jobs there that will be lost as well as jobs lost due to closing downtown busineses to make way for Harrison Square. How many jobs have been lost so far?

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