A bad deal?

Council needs a mulligan on its Topgolf giveaway, Editorial,

There’s no question that Topgolf — with its self-scoring, microchipped balls, climate-controlled hitting bays, chef-driven menu and top-shelf drinks — would be a great addition to Albuquerque. And it’s not surprising our city councilors are star-struck by the $39 million project.

But it’s a proposal that leaves taxpayers vulnerable to a bad deal. The $2.6 million in economic development incentives the City Council seems determined to pass tonight don’t make sense, and the end-run around Mayor Tim Keller’s administration sets a terrible precedent.

The city’s Economic Development Department, under the previous administration, opted not to pursue this project in November because it didn’t meet the standards for Local Economic Development Act funding. Keller has similar concerns.

But the council stepped in and has pushed the project forward anyway.

“This is not about whether or not we want Topgolf,” city Economic Development Department director Synthia Jaramillo stressed last week. “We’re still not convinced that it makes sense to give away almost $3 million for this project.”

(Bernalillo County, meanwhile, has given an initial OK to spend $1.75 million in its public money to help fund the project — so that adds up to almost $4.5 million in taxpayer giveaways, all for low-wage, service-sector jobs.)

Public funding should be used for projects that create higher paying jobs, as well as attract new revenue and businesses to the community. This project does little of that.

Fiscal responsibility

As part of the package, councilors are now willing to pledge $400,000 to $500,000 in general fund tax dollars in an effort to sidestep the LEDA eligibility issues. That’s puzzling since just a few months ago they said they had to pass a gross receipts tax increase — sans voter approval — to plug a $40 million deficit and deal with the public safety crisis. Where did this extra cash come from all of a sudden?

Topgolf says it will be creating 123 full-time jobs and 227 parttime positions. Most are expected to pay from about $8 an hour to $12 an hour. Once operating, the center expects to generate $13 million to $16 million in annual taxable gross receipts.

While that could be considered a nice addition to the local economy, the reality is that much of the additional tax revenues Topgolf would generate won’t be new dollars, but money that otherwise would be spent at other local entertainment venues. And since when are those salaries “higher paying jobs”?

Critics also question the proposed location, pointing out the high costs of creating the street access Topgolf wants and the fact there is no adjacent vacant land, meaning the project won’t drive other businesses to open up nearby.

Then there’s the fact that another golf and entertainment venue, BigShots Golf, has announced plans to open here — and hasn’t sought city incentives.

Revised proposal

The agreement the council and its staff negotiated doesn’t have much in the way of clawbacks should Topgolf fail to deliver on its underwhelming promises. The Albuquerque Development Commission made several changes to build in protections for taxpayers.

The commission then voted to recommend the council adopt the revised $2.6 million economic development package. It included $400,000 — down from $500,000 — of city general fund money unspent from the fiscal 2018 budget; the city reimbursing 30 percent — changed from 50 percent — of incremental city gross receipts tax revenue, up to $1.8 million, to assist the site developer with costs of land, building or infrastructure; and $326,000 for improvements to Culture Road, which leads to the project. The revamped proposal is better than the original one, but it still is a bad deal for taxpayers. And it’s highly questionable the council will even accept the changes.

Councilors should wipe the stars from their eyes, see the project for what it is — a nice development that should pay its own way. Keller is right to be concerned, and has said he may end up taking it to court since the council is infringing on the authority of his office. A mayor-council court fight would be costly, but a project like this should not be crammed down taxpayers’ throats.

Councilors should realize the vetting process for economic development incentives is critical, and when they short-circuit it for something shiny and bright they dim the prospects of having adequate resources for ones that truly could make a difference.