The state we're in
John Costello, son of U.S. Rep. Jerry Costello (D-Belleville), has a plan for the economic recovery of the Metro East – one that's guaranteed to put money in his pockets and the pockets of his friends.
John wants to build a giant mall in Glen Carbon and have the taxpayers of Illinois subsidize its construction.
Sounds like a sweet deal. If we want to build a big mall at taxpayer expense, do we have to have a politically-connected father to get those friendly terms?
As Steve Korris reported in last week's edition of The Record, the Illinois House and Senate passed a bill this year to channel $15 million annually in state sales taxes to Costello and his fellow "mall-efactors."
The bill authorizes at least $300 million in sales tax and revenue bonds to subsidize the construction of Costello's billion-dollar University Town Center at the intersection of Interstates 255 and 270. Costello and company would repay the bonds with proceeds from the five-percent sales tax that ordinarily would go to the state.
Gov. Quinn offered an amendatory veto, splitting sales tax revenue 50-50 between the state and the developers. Legislators will consider Quinn's counter at a veto session this week.
Unhappy with the reduction, the Costello group insists the project is vitally important to the local economy. But Illinois Department of Revenue Director Brian Hamer thinks the positive impact may be exaggerated, noting that "most sales activity in this district will most likely be drawn from the adjacent area near Southern Illinois University in Edwardsville."
In other words, the Edwardsville Shopping Center, the Cottonwood Plaza, and other nearby developments will suffer and lose sales to a state-subsidized competitor.
In addition, two new interstate exchanges would be needed to provide access to Costello's mall at a cost to taxpayers of $20 million each. Never mind that retail malls are dying across America and major retail developers are not interested in this new project.
This is what our legislators envision as economic development.
No wonder we're in the depressed state we're in.