When the state legalized casino gaming and decided to dedicate a portion of the taxes to help fund economic development, specifically designated funds were allocated to Allegheny County and the City of Pittsburgh to pay off obligations related to the convention center, the airport, old economic development loans, and a new hockey arena. The legislation also made an $80 million allotment to the County "for distribution to a community infrastructure fund…to fund construction, development, improvement, and maintenance of infrastructure projects". That money has been delivered to the County in installments of $6.6 million annually and, as of September 1, 2012, the County had received a total of $33 million.
According to a County Council resolution from 2008, "…the Redevelopment Authority of Allegheny County ("RAAC") established the Economic Development, Community Infrastructure and Tourism Fund (CITF)". The resolution went on to state that the RAAC fund would receive the $80 million from state and distribute the money "pursuant to program guidelines developed by RAAC". Note that the word "tourism" was added to the name of the fund despite there being no mention of it in the enabling state legislation.
The most recent guidelines for the CITF available on the County’s economic development page dated November 1, 2012, state that the purpose of the program is to "…provide financial assistance to entities to facilitate economic development through infrastructure assistance, stabilize or correct existing infrastructure problems, or plan and prepare sites and buildings for future use". These are noble and worthwhile goals, especially in a County where infrastructure shortcomings are common and a lot of repair is required. The County Executive pushed hard for the state transportation package and earlier split the County’s public works functions so as to have a more focused approach on roads and facilities, showing the importance of infrastructure repair.
The program description in those guidelines notes that the gaming money would be awarded as grants or loans "…to carry out important infrastructure-related projects, or for the acquisition and development of key sites for future use". The evaluation criteria are heavy on job creation/retention numbers, site control, matching funds, and the consistency with existing comprehensive plans of the County or the municipality where the project would be located. The eligible activities listed later in the guidelines are exclusively related to infrastructure with items such as land acquisition, storm water systems, sanitary sewer systems, water supply, buildings, on-site amenities that will improve the value of a site, demolition of structures and abandoned foundations, grading, environmental site assessment, pre-development and planning, engineering, streetscape, and other costs associated with a specific site enumerated. All of the foregoing can be waived by the RAAC in making a CITF award "…based upon a determination of the public benefits of the project".
That had to be what occurred when the RAAC made an award of $225,000 to a reality show, in the guise of a documentary television series, that got press coverage last July and earlier this week. The grantees won’t be filming the state of infrastructure before and after repairs are made, sites that are prime for redevelopment as an "infomercial" for prospective developers, or going underground to take a look at the condition of sewer lines that are going to require a massive upgrade funded heavily through rate hikes. According to the newspaper report the series will "…follow two young directors, each with an $850,000 budget, as each shoots a film about young college students coming home to Pittsburgh for their first Thanksgiving break".
When asked about the project in 2013, the chair of the RAAC noted that while typically going for infrastructure "[CITF awards] are often also used to promote businesses that serve the purpose of promoting the region, creating jobs, promoting tourism — which this [award] clearly does — or enhancing the lives of the residents of Allegheny County". The County Executive, the new Mayor of Pittsburgh, and those associated with the grant all mentioned "job creation", "boosting the region", and "emerging markets" separately in their commentary on the award.
Those sound nice, but how did the RAAC attempt to gauge the public benefits of the project in order for it to hand out an award to something decidedly non-infrastructure related? Surely they must be examining the projected costs and benefits of the awards that go directly for the type of projects that do conform to the guidelines. Note that infrastructure spending typically has an immediate economic impact and also delivers a stream of benefits well into the future. So how did they plan to evaluate benefits for a project such as a TV show? The fact is there will be no way to definitively assess any economic benefits stemming from the TV show beyond any money spent in the County during the making of the programs.
Then too, did the RAAC get advance assurances that the episodes produced will highlight positives about Pittsburgh or the region and not paint the region in a negative light? The RAAC will almost certainly not have editing rights on what appears on the final product.
Did the RAAC ask if the applicants had pursued sources of funding related to film production that the Commonwealth was heavily lobbied to enhance in the past few years? If the applicants did seek the funding and were successful, should they be double-dipping into public coffers? If they sought the funding and were unsuccessful, did the board ask for an explanation? If they did not seek the funding did anyone on the board urge them to try that avenue before coming back for a CITF award?
Imagine this scenario: all 130 municipalities in Allegheny County apply individually to the RAAC for the maximum $250,000 to undertake either an infrastructure project or to hire film crews to produce short documentary films highlighting the competitive advantages each town has in order to attract residents and businesses from outside the region. Which would the board approve and how would they go about it?
Information provided to the Allegheny Institute from the County on the CITF have shown where CITF awards have gone, how much the award was, and a short description of the project’s purpose; those are useful for descriptive purposes, but close-out and independent auditing requirements will determine if the County’s stated goals under the CITF program were met.
Until then, the RAAC’s justification for using state money allocated for infrastructure projects to make TV shows, or any other non-infrastructure project funded with CITF money is flimsy as best.
Eric Montarti, Senior Policy Analyst
Jake Haulk, Ph.D., President
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