Leffingwell Likes Tax Breaks For Tiffany’s, Not Las Manitas
Lackluster Lee Leffingwell told reporters earlier this week that he wants to “tweak” the city’s economic development policies to make them more transparent when handing out tax breaks to existing businesses or those who promise to relocate here. Good enough. A fair and open process would benefit everyone — especially taxpayers.
The hapless hopeful in the next mayoral race (who must first win re-election next year) originally favored, then opposed the recent loan offer to downtown’s Las Manitas that caused such controversy. But he has signaled early support for a new package of taxpayer funds that would dwarf that chips-n-salsa subsidy: as much as $65 million for the Domain, an imperiously named North Austin shopping center expected to host high-end retail giants like Tiffany’s, Nordstrom’s, and Neiman-Marcus.
Those of you in the market for a $25,000 tiara may be able to rest more comfortably now. Are you listening, Jennifer Kim?
Posted on August 30, 2007 – 9:42 am by APR
18 Responses to “Leffingwell Likes Tax Breaks For Tiffany’s, Not Las Manitas”
Unless Jennifer Kim puts in for reimbursement from the taxpayers. See post below this one.
By Willis on Aug 30, 2007
The deal with Tiffany’s makes taxpayers money; Las Manitas just costs it. Reason enough.
By M1EK on Aug 31, 2007
Krueger’s Jewelers and others like them also pay city taxes and have been doing so for years but don’t get special deals like this one.
By Willis on Aug 31, 2007
Even taking Krueger’s plight as a given, the taxpayers are still better off - if Tiffany’s had moved into La Frontera, we’d get jack squat (even worse, actually; we’d have to pay for the road costs of the Austin shoppers going out of town to spend their dollars).
And I agree it’s unfair. Lots of things are - but a fairness-above-all philosophy in a city with lots of suburbs will end up bankrupting us (but we’ll feel good about ourselves, I guess?)
By M1EK on Aug 31, 2007
Wait, how exactly does tiffany’s put more money into the coffers than las manitats?
/not trying to be argumentative
/truly want to know.
By guy on Aug 31, 2007
IF you accept the contention that without the subsidies, the Domain wouldn’t have happened, then Tiffany’s would have gone somewhere like La Frontera - which actually costs Austin money (our drivers driving up there). Read the previous comment.
I don’t know if I accept that contention unquestionably, but it follows if you do.
Paying $750K to Las Manitas, on the other hand, doesn’t bring any new business into downtown which would have otherwise been outside our taxing jurisdiction.
By M1EK on Sep 1, 2007
I get the in vs. out of town thing, but I’m not sure i get what specific tax revenue we get from tiffany’s renting the bldg in the Domain. They don’t pay property tax. sales tax goes to the state. they probably employ what, like 10-15 already fairly well do to houswives and a security guard?
really not picking a fight. just curious to know the specific benefit to austin.
I can’t imagine tiffany’s is a reason to rent or buy an apartment above the domain, so what do we thing the city’s benefits are?
By guy on Sep 1, 2007
Of that 8.25% sales tax, Austin gets 1% and Cap Metro gets another 1%. State rebates it to us based on where it’s collected.
By M1EK on Sep 1, 2007
how long before that equals the incentives?
By guy on Sep 1, 2007
Forever? Or maybe a little longer.
These sweetheart deals are never winners for taxpayers or existing businesses that have been plugging away, paying their taxes, employing Austinites and asking for nothing special in return.
Even the businesses that get ‘em will tell you that. They want to move here for the same reason everyone else does. They don’t need incentives that are unfair to existing businesses, but they’ll take ‘em if they’re offered.
Cabelas is a good example. Held the state over a barrel, got Rick Perry to smooth the way… and then had to return tens of thousands of dollars because they didn’t come anywhere near the employment or tax base goals they promised.
By Willis on Sep 2, 2007
Considering that the incentives at the Domain basically consist of rebating a portion of those same sales taxes collected, the last two commenters have no idea what they’re talking about.
By M1EK on Sep 3, 2007
How can you say that M1? I was just asking, but i think you made my point for me. This boondoggle seems like reason enough to boot these clowns from office.
By guy on Sep 3, 2007
Guy,
If the deal is “we rebate you N% of sales taxes you collect”, then it can’t possibly lose the city money, because 0 sales taxes = 0 rebate.
By M1EK on Sep 4, 2007
And Las Manitas didn’t bring in any sales tax? I guess the question is just which kind of corporate welfare does Leff like? Tiffany’s is ok, tacos not so much.
By guy on Sep 4, 2007
Las Manitas brings in pennies; and the manuevering by the sisters is preventing Marriott from bringing in kilodollars. But if it would help, I’d be thrilled if we gave them a rebate deal that gave them back 20-40% of the sales tax their customers paid in return for getting the hell out of there and letting the hotel go up.
By M1EK on Sep 4, 2007
<p>so really, if the sisters are standing in the way of the marriott, shouldn’t the city figure in the marriott’s potential revenue when offering the sisters a deal? I am enjoying the dialogue between you two. Thanks for participating in this little blog experiment!</p>
By APR on Sep 4, 2007
APR,
If the city wanted to encourage Marriott to directly pay the sisters for their alley rights, none of us would have batted an eye. If the city had struck this same exact deal WITHOUT the cloying bullshit about iconic businesses, well, I don’t know how many eyes would have batted, but I wouldn’t have been very upset.
By M1EK on Sep 5, 2007
You guys even know what you’re talkin’ about? The Domain subsidies were approved 4 1/2 years ago! And Leffingwell as a private citizen testified AGAINST them. But it’s a whole ‘nother can of worms to say well, even though we as a City agreed to this and you’ve held up your end of the agreement, we’re not going to pay you anyway because we don’t have to. It was a bad deal but a deal nonetheless.
By BeatrixKiddo on Sep 5, 2007