The City of Mason City has no formal written policy on awarding financial incentive packages to businesses, and now more business owners are coming forward seeking help. The good news is, there may be an “unwritten policy” available if you know the right people. City Councilman Don Nelson asked “When does it end?”|The City of Mason City awarded a nice financial package to Harley-Davidson in order to keep them here and convince them not to move to Clear Lake. It has been said that this deal was brokered by Mayor Eric Bookmeyer and North Iowa Corridor Director Brent Willett. The City Council passed the deal 5-0 with Don Nelson absent.
In a memo from Don Nelson, he writes “The City Council has opened the door for other retail businesses when we began our financial packages to Moorman Clothiers and Harley Davidson’s. Are we so foolish to think that other private businesses don’t want a piece of the taxpayer’s dollars?”
Now, it appears, Nelson was right, as more retail businesses are approaching City officials for financial deals.
City Council member Max Weaver wrote in a recent memo that “I would assume the majority of the Council, like myself, has heard from several business owners about how they could qualify for these types of financial incentive packages.” Weaver included two emails from Mason City businesses asking for help and says he got two other phone calls.
The genesis of the Harley-Davidson deal is not known, meaning, who approached who. Did certain officials, either at City Hall or the NICEDC, simply “hear” that Harley was contemplating a move out of Mason City and approach Harley, or did Harley approach Brent Willett at the NICEDC? That answer has been difficult to ascertain. One thing is certain: City staff had little or no involvement. City Finance Director Kevin Jacobson, for one, was left out. Jacobson would seemingly be the expert on the dollars the City has available to make deals. Apparently, his help was not needed.
According to the August 16th, 2011 City Council meeting minutes, it says “The City of Mason City was contacted by the NICEDC about the retention prospects of Harley Davidson of Mason City. The company was considering expansion at their current site but was also considering other options.” Again, no one knows for sure where or how the deal was hatched.
This lack of transparency is troubling and proves that on the surface, the City has no written policy on awarding financial packages to businesses.
However, the good news for any business owner in Mason City is that an unofficial policy may be in place to get help with their business.
The policy seemingly goes like this: Simply be in the good graces of a few people in power in Mason City and a deal for your business could get done. These people seem to be Mayor Eric Bookmeyer, City Administrator Brent Trout and Corridor Director Brent Willett, the “Big Three.”
A deal might get done this way: One of these guys likes you. Your business seems to have a great reputation. Maybe you bought the right person a beer at the country club or took someone to lunch. Over a drink, you might get told “We have ways to leverage tax payer dollars that can help your business, let us look into this for you. We are not a bank, so don’t worry about us asking you for proof that your business is solid financially. Collateral? Please. We are not a bank, so don’t worry. Bartender, another round, please. As far as public perception, we will paint it like if the deal doesn’t go through, Mason City will lose jobs. This brings by default the City Council along. We might even have a closed-door meeting with our puppet media and help them understand how to write a supportive story. In the end, we look good and you get the help you want.”
The problem with this unofficial policy, if this policy exists, is that taxpayer dollars are being given with no scrutiny. A bank would require at the minimum a financial statement proving the health of the business, as well as collateral in most cases, possibly even a down payment. The City and EDC seem to have no such requirements, at least in some recent deals involving retail businesses. This could be considered a dangerous use of taxpayer dollars.
At the end of the day Nelson may be right when he wrote in his memo “a policy is necessary to maintain a fairness and consistency throughout.”
As far as whether the City delivers more deals to retail-oriented businesses, time will tell. There are plenty out there who would like help and some are coming forward now.
On a related note, there is a trash-to-gas company that is looking to come to Mason City right now, and they want big incentives. They have cooked up a deal with at least one of the Big Three where they are actually paid $5 per ton for Mason City’s trash that is already headed for our landfill. You could see this deal get done by January or February once the proper chips are in place. Much more on this developing situation in a future story.|