I’m a little unclear about the exact organizational details but I believe that the LDFA may contract with SPARK, which takes on county-wide projects and even has a small business incubator in Plymouth Township. I found some minutes in my files that indicate that the LDFA and SPARK have an agreement that refers to contractual payments.

Note: the LDFA is a special program of the state MEDC. According to the material presented at passage of the measure by the county BOC in 2002, there were then only 10 SmartZones across the state. I don’t believe that the funds collected from this TIF can be transferred back to the city but would go back to the state.

From the county 2002 resolution background:

“LDFA’s specifically established to support a SmartZone have the additional ability to capture public school taxes, something DDA’s and other LDFA’s have not been permitted to do since Proposal A was passed. This capture, however, will have no negative impact on overall school funding…The State School Aid fund will hold the public schools harmless for any lost revenue they might experience from the creation of the SmartZone LDFA.”

Another question then: how much has LDFA received for operations from the city since 2005, beyond the TIF capture (which then reduces the net added value of the program accordingly)?

I don’t support the use of tax abatements to try and lure and retain businesses in the first place, but why pay the huge salaries at SPARK just to help the City and State give away more potential tax revenues? It would seem the City and State are very well-qualified to do this on their own (remember Pfizer and Google?). If City officials are determined to give tax abatements to businesses, then why not just do it in-house, dismantle SPARK, and instead, use the LDFA and general fund money to reimburse the City for its lost tax revenues?

The “economic development” industry seems like the perfect racket. In this depressed economy, what politician would dare say no to funding an agency or organization that claims to be creating/retaining jobs? As a result, the primary growth industry in Michigan appears to be the publicly-funded industry of promoting growth. It has become quite a tangled web of agencies, elected officials, non-profits, laid-off executives, and even certain media propaganda outlets (with plenty of overlap among them), all helping each other to live off the public dole behind the mask of “economic development.”

Perhaps the only real “end game” is to keep the game going.

Why the presentation on LDFA and SPARK now in the midst of budget discussions? I didn’t see any questions from council members that related any of it to budget considerations.

What was the projected increase in property taxes over the 15-year period if LDFA hadn’t been created? In other words, what’s the baseline for calculating the estimated added value of LDFA?

What’s the added cost of providing services to the businesses responsible for the increase in taxes captured by LDFA? In other words, what’s the estimated _net_ added value of LDFA?

So a virtual tenant could be located anywhere in the county or just in the AA-Ypsi zone? Or outside the county? How would someone located outside the city limits (in Ypsi, even) benefit Ann Arbor so as to justify eligibility for subsidized services?

Are the new jobs (106) and jobs lost (11) numbers for 2009, or are they cumulative since inception in 2005?

Was the average number of employees for local tech companies in 1998 trending upward or downward?

What’s the end game? Would having a company “take off” be preferable to other possible positive scenarios regarding the local business community?

Why are we financially supporting with public funds businesses that have a “high risk of failure”? What makes the potential high return worth it? (See ‘end game’ question above.)

Were the 450 jobs retained by SPARK in 2009 all that were at risk of leaving? If there were more, what’s the number? (I’m wondering if the 11 jobs lost, noted in the section on LDFA, are related to it.)

The fiber-optic network question is interesting. My understanding is that it’s a very energy efficient technology (transmits photons, not electrons) in addition to providing faster throughput. It also seems like an opportunity for strengthening the health of many existing businesses as well as for “creating the environment that nurtures the growth” of some new ones.