Irvine Vote on Grant Bad for Business

* The city of Irvine has invested a great deal of time, energy and money over the past two years trying to enhance the city’s image as a “friendly place to do business.” This image was tarnished, however, when the City Council voted (Sept. 13) to turn down $500,000 in federal HUD Community Development Block Grant (CDBG) funds designed to promote the development of small businesses.

These funds were earmarked for allocation as loans to stimulate small-business development in Irvine. The loan program posed no financial risk to the city.

Irvine’s Finance Commission, a fairly conservative group, voted 5 to 0 to endorse the CDBG loan program. The Irvine Chamber of Commerce spoke in favor of it as did executives from local financial institutions. Residents testified in support. No matter, Irvine’s “business-friendly” City Council didn’t want to be that friendly, especially to small businesses and aspiring entrepreneurs.

This decision reveals a significant contradiction in the City Council’s policies to promote business development. Not many months ago, the City Council voted to continue the policy of using local tax dollars to subsidize the cost of processing development plans with the city. The subsidy is considerable at $52.84 per hour, the difference between the actual rate charged and full cost to the city. The conditional use permits for Village 38, as an example, consumed 90 hours of staff time or a taxpayer contribution of $4,755.60 to the Irvine Co.

The City Council is spending local tax dollars to subsidize the Irvine Co. and other developers but is not prepared to use federal tax dollars to help stimulate the creation of small businesses. Consistency, if nothing else, demands that if the city doesn’t want to be in the “banking business,” then it should get out of the “subsidy business” as well.

MARK P. PETRACCA

Irvine