The Bloomington City Council is poised to hand over yet another $78,000 of taxpayer money to the Bloomington Economic Development Corp. under the ruse of "economic development."

The council voted 7-0-1 last Monday to preliminarily approve Secretary of State Candidate/Mayor John Fernandez' proposed 2003 mayoral budget. The mayor's budget includes the annual subsidy to the BEDC, a "public-private partnership," which many argue has helped the privates profit while the public paid.

Councilman Andy Ruff offered the only dissenting voice on the BEDC portion of Fernandez' budget, which was approved 7-0-1, with Ruff passing. Final council consideration on the entire city budget, including the mayor's BEDC subsidy, will occur at meetings on Sept. 4 and 11.

"It was lonely up there," Ruff said while waiting in line for one last tenderloin at Bud's Sandwich Shop, the locally owned West Grimes Lane eatery that closed its doors for good on Saturday.

Indeed, over the objections of several of his fellow council members, Ruff was the only councilman to ask any questions of the mayor about the BEDC, save one addition to question his list from Jeffrey Willsey. Among the dozen or so specific queries that Ruff posed were:

  • Why can't the BEDC offer a sliding scale for small businesses that can't afford $5,000-a-year membership fee?
  • What would happen if the city dropped its subsidy?
  • Does the BEDC help market property owned and/or serviced by its members?
  • Is the BEDC subjected to the same sort of scrutiny as other local nonprofits seeking public support, like social service agencies?
  • What percentage of the BEDC's private members profit directly or indirectly from land development?
  • Is the public getting its money's worth?

Fernandez responded that the city or the BEDC would provide answers to Ruff's questions before final budget hearings in September. He also stressed that accountability is paramount for any organization receiving public funds and that the BEDC's records are open to the public.

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The Bloomington Alternative on Tuesday asked the BEDC for basic information about its membership, structure, budget and mission. The requests, while acknowledged by BEDC Executive Director Linda Williamson, went unfulfilled last week. The Association of Monroe County Taxpayers, however, does include a BEDC membership list on its Web site - .... That list, reprinted below with modified descriptions of each organization's primary business activity, is the basis of the following analysis.

According to that list, the BEDC has 63 members, whose means clearly reflect the pricey entry fee. A conservative interpretation of BEDC members' business activities reveals that at least a majority - 51 percent - engage in business activities that directly profit from the conversion of green space into commercial developments. They include:

  • Financial services - 17%
  • Contractors - 10%
  • Utilities (electric, gas, telecommunications) - 10%
  • Land developers - 8%
  • Real estate agents - 3%
  • Lawyers - 3%

Another 6 percent profit indirectly from green space conversion: insurance (1.5 percent), media organizations (3 percent) and advertising/marketing agencies (1.5 percent).

Business development and lobbying groups, like the Greater Bloomington Chamber of Commerce, account for another 5 percent.

City and county governments, which together subsidize the BEDC with nearly $130,000 a year, receive two memberships each, equal to 6 percent of the total. The county, which this week announced its employees may not receive raises next year due to tight finances, contributes another $50,000 annually to the BEDC.

By contrast, four land speculators/developers who have played key roles in transforming the Ind. 37 bypass from a scenic gateway into Kokomo with on-ramps - Smith Neubecker & Associates, Gates Inc., Bill C. Brown and the Wininger/Stolberg Group - pay $5,000 each.

It should be noted that two community media organizations - the Herald-Times and WTTS/WGCL radio, whose credibility as news organizations is judged on their fairness and objectivity in reporting on issues like taxpayer-subsidized, public-private partnerships - are dues-paying BEDC members. The H-T last week editorially supported the city's BEDC subsidy, again.

Perhaps more telling about the BEDC membership list is who is not on it. The list does not include Kleindorfer's or Bloomington Hardware, Maxwell's or Jim Gordon Office Supply, May's Greenhouse or any of the vendors at the Farmer's Market. It doesn't include Printmasters or Fine Print. It doesn't include the Upland or the Uptown. It doesn't include a single downtown business.

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Ruff wasn't the only person at the meeting to criticize the BEDC subsidy. Craig Harvey from Democrats for the Environment and Sustainable Jobs summed up the elitist nature that the community's economic development efforts have assumed under the BEDC.

"That this entire discussion has been reduced to a simple expansion of membership is unfortunate, when the real discussion should be, 'Is the BEDC's vision of future economic development a community-wide vision?'" Harvey said during public discussion on the mayor's budget.

He was referring to a yearlong effort led by Councilman Chris Gaal that added three new members to the BEDC membership - the Sassafras Audubon Society, the White River Labor Council and the Small Business Development Center.

In his comments Monday evening, Gaal said he was trying to "constructively engage" the BEDC in an effort to broaden its base to be more reflective of the community. He also said he was pursuing the spirit of a resolution introduced by Ruff last year to encourage the organization to do just that. That resolution failed 6-3, with Ruff, Willsey and Gaal voting for it.

Gaal acknowledged in his comments that the addition of three new members after a year's worth of work was a "small step" toward what he sees as the ideal approach to economic development: "a community-based economic development corporation with strong private sector involvement, with support from local government, and with active community involvement."

And while Gaal warned proponents of zeroing out the city's BEDC contribution that such a move might empower more radical BEDC elements, he also acknowledged that constructive engagement may not be possible.

"I think we have to recognize that this is an experiment that may very well fail," he said. "We may not be able to work together."