Eco­nomic devel­op­ment claims are bo­gus —

SundayXtra - - THIS CITY -


Province, city to ac­cel­er­ate cap­i­tal plans as part of pro­posed IKEA site.

Win­nipeg’s cap­i­tal plans, how­ever, did not call for the $ 26.5 mil­lion worth of work that was even­tu­ally con­ducted. The spe­cific work con­ducted by IKEA and Fair­weather, which in­cluded new traf­fic sig­nals and turn­ing lanes to ac­com­mo­date fu­ture shop­pers, did not ap­pear in the city’s cap­i­tal- bud­get forecast, the city’s long- term trans­porta­tion plan or even in Plan Win­nipeg, the city’s old long- term plan­ning frame­work.

The po­lit­i­cal claim about speed­ing up nonex­is­tent plans was made sim­ply to avoid the ap­pear­ance of look­ing like both gov­ern­ments were dol­ing out straight­for­ward devel­op­ment sub­si­dies. Katz’s of­fice, to its credit, con­ceded as much when asked to demon­strate which ex­ist­ing city plan called for wi­den­ing Ke­nas­ton to 12 lanes near a fu­ture IKEA store.

Doer’s staff, how­ever, in­sisted vague Plan Win­nipeg lan­guage about eco­nomic- devel­op­ment in­cen­tives jus­ti­fied the po­lit­i­cal claim, even though the ac­tual por­tion of Route 90 listed as the first pri­or­ity for wi­den­ing ac­tu­ally lies be­tween Tay­lor Av­enue in River Heights and Ness Av­enue in St. James.

To be fair to Katz and Doer, they didn’t have to make any ridicu­lous claim. Given the en­thu­si­asm about an IKEA store in Win­nipeg, they could have called a spade and spade and suf­fered no po­lit­i­cal fall­out for even­tu­ally agree­ing to pay back $ 22 mil­lion of the $ 26.5- mil­lion in­fra­struc­ture tab.

By pan­der­ing to shop­pers, who make up a large com­po­nent of the elec­torate, Katz and Doer could do lit­tle po­lit­i­cal wrong. Spend­ing money to bring IKEA to Win­nipeg was deemed to be such a pop­u­lar move, Katz high­lighted the IKEA devel­op­ment dur­ing the 2010 civic elec­tion cam­paign as his main eco­nomic- devel­op­ment achieve­ment and con­tin­ues to do so. The NDP government, now led by Pre­mier Greg Selinger, gave IKEA prom­i­nent play dur­ing last week’s throne speech.

On Wed­nes­day, city coun­cil’s ex­ec­u­tive pol­icy com­mit­tee will meet 45 min­utes later than usual to al­low Katz and other of­fi­cials time to at­tend the IKEA open­ing. The city is clearly proud of its role in stim­u­lat­ing the Tuxedo Yards re­de­vel­op­ment, which will in­clude not just an IKEA, but other big- box stores and a mall called Sea­sons of Tuxedo.

The be­lief at city hall is the sub­sidy is a good deal, as the devel­op­ment will gen­er­ate new prop­erty taxes. That opin­ion is based on the as­sump­tion there will be no drop in prop­erty- tax rev­enue or busi­ness taxes any­where else in Win­nipeg as a re­sult of the IKEA- led devel­op­ment. That is pos­si­ble but hardly cer­tain, as it would be fool­ish to as­sume con­sumers will not change any shop­ping habits af­ter IKEA and other nearby stores open.

As un­cer­tain as IKEA’s ef­fects on the re­tail mar­ket may be, a sub­sidy for a fur­ni­ture store does not rep­re­sent a sound eco­nomic- devel­op­ment strat­egy. The next time a de­vel­oper con­sid­ers build­ing re­tail in Win­nipeg, will the city and province be just as will­ing to pony up for the in­fra­struc­ture costs? Nor­mally, it’s up to de­vel­op­ers to pay for the new roads, sew­ers and wa­ter­mains.

Like it or not, the IKEA sub­sidy sets a prece­dent for re­tail- district devel­op­ment. The po­lit­i­cal math would

BART­LEY KIVES bart­ley. [email protected] freep­ress. mb. ca

By James Jewell

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