Glanbia: A wise use of taxpayer money, or an example of corporate welfare?

Glanbia: A wise use of taxpayer money, or an example of corporate welfare?

by
Dustin Hurst
August 27, 2013
Dustin Hurst
Author Image
August 27, 2013
[post_thumbnail] Rep. Lance Clow, R-Twin Falls, believes the consolidation of the Glanbia plant in downtown Twin Falls is a good use of urban renewal funds.

With the completion of Glanbia Food’s new headquarters and cheese innovation center in uptown Twin Falls comes the hopes of a revitalized city district, new business and increased economic activity.

The new, nearly 50,000 square-foot facility, a $15 million undertaking by one of America’s foremost cheese manufacturers, opened to the public with much excitement and fanfare, including a public ceremony and guided tours. Company officials say the facility, especially the innovation center, will hopefully “create a little more passion for cheese” among Glanbia workers.

While a private party, Uptown Developers, shouldered much of the cost, taxpayers—mainly area businesses—also contributed a hefty chunk to the project. According to Twin Falls officials, the city, through its urban renewal agency, contributed more than $1.25 million to the headquarters and innovation center.

The company, which counts its annual revenue in billions, consolidated its operations and its 100 Magic Valley employees into the two buildings after spending years with workers spread across Twin Falls in a number of facilities.

Most of the cash paid for common infrastructure upgrades including streetlights, sidewalks, gutters and paving a parking lot. The rest of the money, about $340,000, paid for the land on which the two buildings now sit.

It was quite the transaction, a deal that might look to some like a corporate subsidy or handout.

Two Twin Falls officials defended the project, telling IdahoReporter.com that the process surrounding the lot sale represents the best of urban renewal practices.

However, two state representatives do not share that same sentiment.

State Rep. Vito Barbieri, a Republican from Dalton Gardens and a staunch supporter of reforming Idaho’s urban renewal laws, stopped short of calling the $340,000 lot price corporate welfare, but he did question if Twin Falls taxpayers would agree that the deal best represented their interests.

“We don’t seem to have any clear way to ensure that taxpayers have their say on what these urban renewal districts do,” Barbieri said. If he could make one change to Idaho’s urban renewal statutes, the north Idaho lawmaker said he’d require a vote of the district’s taxpayers to approve projects financed with debt.

State Rep. Lenore Hardy Barrett, R-Challis, told IdahoReporter.com she felt that the entire package—infrastructure and all—is a corporate handout.

“I don’t like the system,” she said. Barrett, like Barbieri, is a staunch opponent of urban renewal and believes that it distorts the free market. “You pick winners and losers.”

“You have to wonder how the hell anyone ever got along without urban renewal,” Barrett said, criticizing officials and lawmakers who defend urban renewal laws.

Melinda Anderson, Twin Fall Urban Renewal Agency’s executive director, said the new facility has already had a positive economic impact on the uptown area, stocked with crumbling buildings constructed in the early part of the last century.

“Our old town was a prime example of slum and blight,” Anderson said, tapping a key phrase in the urban renewal agenda. Idaho Code allows renewal agencies to clear blighted city sectors with the purpose of spurring private development.

Anderson says that’s exactly what happened with the Glanbia project, suggesting that as many as six new restaurants have opened in blocks near the new facility, though she couldn’t prove a direct correlation.

“This is a big deal for our downtown,” Anderson said, adding that the innovation center has created 10 new jobs. IdahoReporter.com tried several times to reach the company to confirm the figure, but calls were not returned.

One issue that lingers, regardless of the worth of the $900,000 spent on infrastructure, is a concern about the reduced lot price for Uptown Developers.

Anderson said that part of the agreement was simply to entice Glanbia to move downtown, as opposed to choosing a “green space” lot in an agricultural field on the city’s outskirts.

State Rep. Lance Clow, a Republican from Twin Falls, told IdahoReporter.com that the Glanbia project is a “good investment” for taxpayers.

He flatly denied, though, that the $340,000 lot giveaway amounted to corporate welfare. “I wouldn’t call it a subsidy,” he said. “Yes, it’s an incentive.”

Clow, who served on the Twin Falls City Council for two decades, echoed Anderson in cheering the Glanbia center’s effect on the old town sector. “This is one of those projects that is going to perk up downtown,” he said, also pointing to the new eateries as a sign of economic progress.

But wouldn’t the consolidation of the Glanbia workers into a central area, while improving one sector of town, mean losses for businesses in other parts of the city?

“You could say that’s going to happen,” Clow said.

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