Just how much is being lost to other towns? Based on the Town of Erie's sales tax rate of 3.5%, it equates to $14.25 million of lost annual sales tax revenue potential in 2019. This alone amounts to 32% of
(excluding "Enterprise / Proprietary" funds received from water, sewer, storm-drainage, and airport activities). If the Town does not address this issue post-haste, based on the
US Federal Reserve), at a forecasted rate of 2.2% average annual inflation over the next 10 years, and not accounting for the additional residential growth that is still occurring, this would result in the Town losing out on a potential sales tax revenue stream of $28.8 million by the end of 2020, $43.7 million by the end of 2021, $106.5 million by the end of 2025, and $193.2 million by the end of 2030. Simply put: we must take the necessary steps
so that Erie can receive these revenues, instead of them being squandered away and instead of them assisting nearby municipalities.
In 2016, the new King Soopers and the ensuing businesses around Vista Ridge opened on Co-7, which now provide the Town with a much needed boost to their total annual sales tax revenues. The following year,
by the name of Ben Pratt. Now I have to admit, I like the ideas this guy is coming up with. He has been the one that has been working with and negotiating with businesses and developers to attract them to Erie, including on such projects as
, just to name a few. Most recently, he discussed at the Town's twice-monthly Board of Trustees meeting his
for Economic Development Services.
The CoSolve partnership provides various services for current and prospective business owners in Erie, among others including the opening of a shared work-space within Erie's Old Town (similar to a "WeWork"), Free WiFi for those within Erie's Old Town downtown district (yes, I said
, as well as provides incubation services for new businesses that are just starting out. The Enhanced Sales Tax Incentive would provide businesses seeking to open within Erie an incremental sales tax incentive, as long as the business would be opening within a non-URA area (not Nine Mile, a portion of Town Center, or I25 Erie Gateway, among others). Among other caveats to this program, the businesses type must be one where the Town currently has a "gap", meaning the business would fill a specific market niche that currently does not exist or is currently underrepresented within the community. As well, the program is available to businesses with the assumption that they are "likely to generate enhanced sales tax of at least twenty thousand dollars ($20,000) in the first year of operation", that the amount of funds received from this incentive "shall not in any event exceed fifty percent (50%) of the enhanced sales taxes", and that the funds remitted back to the business in monthly installments are used solely for "public or public-related purposes."
Needless to say, these are both initiatives that will benefit business owners. The Town's Economic Development team seems to understand what needs to be done, and are taking the correct steps necessary in a very methodical nature, phasing in programs to create change instead of haphazardly unleashing them all at once. Based on the plan that the department has outlined, if the Board and Town's administration assist in seeing things through properly and allow the Economic Development department to move forward on the initiatives that need to be taken, things are going to be looking bright for the Town's businesses, instead of the bleakness that we have seen in years past.
The Steps that I will Take as Trustee
So now that we know what the Town, and specifically the Town's Economic Development team, are doing to move Erie forward, you might ask yourself, "What will Andrew Sawusch do to improve our Town's economic development plan, since they are already handling all of these things currently?" That is a GREAT
question!
First and foremost, I am a business-minded individual. I look at the Town as an organization, and accordingly explore the many different activities in a holistic, in-depth fashion. From there, I move through each of the various issues, analyzing exactly what the root causes are, and then outline the path forward to resolve these problems. This is because I am a solutions-driven individual who likes to think outside-the-box, creating solutions that tackle these issues in new or different ways. Assisting the economic development team would become a priority, since it
truly is the top priority for Erie. Working with the team, I would assist in sharing my ideas, hearing the ideas of the others involved, in order to create new and different ideas that evolve to become better than the original ones.
For instance, when I look at how the Town has been addressing economic development in years past, among the many concerns and questions that I have, there are two questions in particular that stand out in my mind:
- What barriers to entry have there been which has stifled current/prospective business owners and developers from entering Erie?
- What types of businesses do Erie residents feel are missing within the community?
Instead of just thinking these question and not doing anything about it, my personal opinion was that it would be best to ask these question directly to those who know these answers the best: members of our community.
For this next section, I must start by first saying this: I am going to address these questions, and the issues that have been described to me, in a way that does not throw any specific individuals, departments, or organizations under the bus. I am doing it this way because I am respectful and believe that it is poor form to do so publicly. The individuals who came forward, or whom I spoke with that are outside parties, did so under the condition of anonymity, and that I would not provide information as to who they were. Specifically related to the issues at Town Hall, I will have separate conversations with specific department heads for the Town, just as the other candidates will too, where I will address some very specific concerns that I have heard, as well as provide additional methods to resolve them that are not noted in this post later. If any of the current Board of Trustee members are reading this and would like to know more, please feel free to reach out as I am more than willing to be of assistance! I appreciate all of your understanding and respecting my decision to address these items in this fashion.
What barriers to entry have there been which has stifled current/prospective business owners and developers from entering Erie?
This question is intended to find out exactly what the barriers to entry have been for both developers and current/prospective business owners, designed to identify the items which have either impeded their progress to enter the Town, or have resulted in their reevaluation of their decision to even
want to return to the Town for their endeavors. I initially intended to have these as two separate questions, assuming that there would be two separate "sets of responses", just as I had initially intended this to be "commercial developer" instead of "developers" (as opposed to "commercial" vs "residential" developer). What I have come to learn is that both residential and commercial developers, as well as current or prospective owners, all came back to me with having the same exact concerns, for the same exact reasons. In fact, the issues have reached such a point that it has resulted in some of these individuals and organizations to simply walk away from their endeavors within the Town of Erie, only to do business in a directly neighboring municipality.
Commercial developers are the driving force behind large-scale projects, and they are those who give rise to the shopping complexes and strip-malls that you see in other towns (as well as the development at Vista Ridge on CO-7 that includes "King Soopers" and other businesses). They work directly with the large corporations and businesses, in efforts to attract them to specific developments that they are working on. Relationships that are formed with these organizations should not only be beneficial to the, but most importantly they should be beneficial to the Town and Erie's residents. In some municipalities, these organizations become the Town's largest supporters and advocates, assisting the Town by working hand-in-hand with them. Likewise, business owners are pillars within our community as they own, manage, and operate the small businesses, mom-and-pop's, or independent stores that are around Erie. They give back their time and financial resources, in order to make our community a better place to live. Both developers and business owners opinions should be respected and taken into consideration when moving forward on the Town's Economic Development plan.
These two questions, and the information that I received, are of the greatest importance in understanding why the Town's economic development has been stunted. In order to understand their concerns, I took the time to speak with some specific developers and business owners who have previously, or are currently actively working on projects within the community. I did this in order to hear their feedback directly, so that I could better understand exactly what their challenges have been previously, currently, and in the foreseen future. What I have found may surprise you, but explains the reason as to why Erie does not currently have much economic development.
The Barriers to Entry
First, the single largest issues that were expressed to me from all of the individuals who provided me with their feedback, was the lack of planning, preparation, urgency, forethought, and leadership that has been exhibited by the Town. Issues of concern expressed to me included the Town exhibiting a nature of either not knowing information, to having to wait for approval from others before addressing an item, even some describing it simply as sheer ineptitude. While these issues have been more apparent in recent years because of the high-turnover that has been occurring with Town staff, the individuals said that it has been, and is still currently an issue. Although the recommendation that was provided to me from many of the individuals was to empower Town staff so that they could be allowed to make the decisions needed as necessary, it is my personal belief that this has been a systemic problem that has existed at Town Hall for many years.
I believe that there has not been the proper leadership necessary to run the Town's operations - starting from the top of the food-chain with the Board of Trustees, and then working its way down. The proper policies, procedures, planning, and vision for the future has not been properly set for the Town. As Erie has grown to a population of nearly 30,000, these issues have simply been amplified to the point where business owners and developers are considering walking away from Erie all together. This is EXTREMELY concerning to hear, since we 100% absolutely need these individuals and organizations to improve our Town's economic vitality. It has reached a pinnacle to the point where some developers will not come to Erie, and as others share their experiences with more developers, it could potentially come to a point where the Town becomes "blacklisted" with specific developers, where they specifically refrain from even entertaining the thought of having any negotiations with the Town. This is completely unacceptable and must be addressed immediately for the Town's economic development needs.
Next,
I have found that there are a number of ordinances and Town-mandated items which are creating barriers to entry for businesses and developers. The ways to address these roadblocks are to review the current policies or laws that the Town mandates, and determine if they could or should be adjusted, or if some are simply antiquated. While it is very true that most of the items set and in place within the Town's Municipal Code
or Unified Development Code
are in fact there to protect the health, safety, and well being of the Town's residents, there are some specific items which need to be addressed because they do in fact place a large financial burden on potential businesses from even opening the doors. While I understand that the Town has been and is still currently planning on adjusting some of these items, we will continue to lose out on prospective businesses and developers until there is a full understanding of the full list of barriers to entry which are preventing others from doing businesses within our community.
Finally, I have come to learn that the cost to even develop or build within the Town - including costs to access the Town's water, sewer, and storm-drainage, infrastructure costs, tap fees, connection fees, permits, impact study fees, etc. - place a very significant upfront financial burden on these individuals. I am not talking about the high water bills which we as residents hate to receive, which business owners hate too. I am saying that for a new residential or commercial building to be built, the cost has begun to outpace other communities. While some developers take these costs and subsidize them within your metro district tax, independent businesses however, do not have this luxury. This item was also expressed to me by every developer that I spoke with, since they are the ones on the hook to pay for these items up-front, explaining that the Town has been simply been taking their sizable checks without even as something as simple as a "thank you for your contribution to our community!" For business owners, this means that leases are more expensive than neighboring communities, and that there aren't many lease-able areas to rent for their business needs.
You might be saying, "well developers make enough money as it is, so boo hoo." These developers and
business owners are the lifeblood for the future of our Town - they are the ones who will bring business and economic development to Erie. These developers not only have an initially significant up-front financial risk, including paying consultants and 3rd parties for renderings, engineering services, surveying, etc. - it adds up quickly. Since these funds are backed by investors with an initial forecast of their return on investment, and since in business "time is money", if they are behind schedule at all from impediments placed due to Town Hall dragging their feet, it means it reduces their profitability, and places a bad taste in their mouth for future considerations.
When I hear that some business owners and developers are loosing sleep due to the Town's actions, or submitting resignation letters in anticipation of the Town not accepting their multiple years-long work on new development items, this is a major red flag for me. In order for the Town to become self-sufficient and pay for the Town's future needs, our town must be able to count on reliable, consistent, everyday revenue contributions that are currently being delivered to other municipalities around us. We have to work to change our Town's practices, from the top-down. We have to be able to be "business friendly", but at the same time maintain our own interests, instead of catering solely to the interest of others.
How to Address These Barriers to Entry
After hearing, listening, and understanding what it is that business owners and developers have said, it has become quite clear that there is a great need for leadership to make the changes necessary. The proper planning, adjustments to the way things are done, and a multitude of other items must be made. This of course, is one of the many reasons why I am running for Trustee, and why I had reached out to all of you to ask for your feedback.
First, I would recommend that the Town implement a survey, which is provided to businesses after they submit their applications for permits, after final inspection, and other key stages, as well as recommend sending a survey out to current business owners to receive their insight. The Town would benefit from the sheer number of respondents that they would be able to receive, so that all of the existing and known issues by current/prospective business can be listed out and addressed accordingly. From there, the main items that come up the most can be reviewed in order to resolve them - whether in the Town code or UDC. These changes must be completed so that the same unnecessary barriers do not limit others when they come to our Town in the future, reducing the potential for them to experience these same exact problems.
In terms of the water, sewer, and storm-drainage charges, well,
you already know where I stand on that. Simply put, it needs to be addressed, and must be resolved ASAP. Not only are residents mad about the high payments, but it is effecting our local economy and inhibiting the Town's economic viability for the future.
Finally, the Town should take a page from the business world's playbook and start to monitor and disclose Key Performance Indicators (KPIs). The city next door to us, Louisville, does an EXCEPTIONAL way of doing this within their budgets and through their Administration and Support Services Key Indicators report. Not only does the City outline their budgeted revenues, expenditures, etc., they also outline exactly what their key indicators are, what they have been in years past, what they anticipate it will be this current year, what they forecast it to be next year, as well as what their departmental goals and objectives are. This should be instituted by Erie so as to help understand where pinch points are in the various processes, which departments at Town Hall are over or under-performing, as well as exactly what the Town defines as their "measurements of success" for each of the various departments and how they will attain them. Also, this provides transparency for us, as the residents, and accountability for those working within Town Hall. While Louisville does this for each and every one of their budgeted line-items/departments, I have included an example below, which is specifically pertaining to their "Development Review Sub-Program":