Incentive guidelines offer welcome clarity

The Cedar Rapids City Council made the right call in adopting clearly defined and targeted standards for providing economic development incentives.

In recent years, the council has awarded tax incentives to a number of business and development ventures. We've supported many of those efforts, but we also worried about what appeared, at times, to be a scattershot approach that lacked clear guidelines. We wondered how all these deals fit into the city's broader economic goals, and what effects they might have on existing businesses.

Flexibility is needed in the competitive world of economic development. But incentives are public resources, and the use should be guided by clear policies. Taxpayers deserve a clearer understanding of what the city is offering to prospects.

Now, the city has four distinct categories of incentives - aimed at promoting housing downtown and in the MedQ District, targeting multiple types of development in those areas along with New Bohemia and the Czech Village, encouraging commercial reinvestment projects, including big box and strip-style retail, and offering incentives hinging on a project's long-term community benefits. Housing projects would be eligible for a 100 percent property tax break for 10 years, with other projects eligible for breaks of 44 percent to 50 percent for 10 years.

City staff developed Cedar Rapids' incentives after studying development breaks offered in 13 other Midwestern cities, including seven in Iowa. Officials believe creating targeted programs will help the city's sales pitch to prospective businesses.

As generous as the city's incentives are, there will be times when it's tempting to scrap standards and sweeten the pot for a particular development. The city owes it to taxpayers, including existing businesses, to stand by its incentives limits.

Long term, we'd like to see regional cooperation in defining incentives packages to encourage regional cooperation and discourage the sort of competition that leads communities to give away the farm. Economic development policy should reflect the fact that projects in one community benefit the entire region.

We're not there yet, unfortunately. But we think setting clear standards for all to see is progress toward that goal.

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