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COMMUNITY FORUM
Should we let Piper off the hook for incentive money? BY BARBARA YORESH
We ! Piper. Yes, Indian River County has lavished its love, respect and dollars on a company with a tradition here as storied and renowned as that of Dodgers baseball. You might even say that along with the county’s world-acclaimed citrus, balmy climate and beautiful beaches, Piper Aircraft, Inc. helped put Indian River County on Florida’s map. But love affairs are funny things and when one half of the relationship values the other much more, an imbalance occurs that usually leads to discontent, distrust, disillusionment and ultimately disengagement. Right now, in light of Piper’s latest announcement that the company seeks to renege on incentive package repayment provisions, it is beginning to feel like the citizens of Indian River County have been jilted at the altar and left to wonder what went wrong. Alas, Piper has not fully !’d us back and has instead taken what it wanted and needed with little consideration for the county’s residents and local government officials who bent over backwards to help the company with taxpayer dollars. I’ll state right now that I am not an advocate of underwriting private business with taxpayer funding unless those taxpayer “investors” are assured some return on their money. Large private businesses like Piper which seek financial help from governments should be prepared to issue company stock or some tangible collateral in addition to the reimbursement provisions stipulated in the incentive agreement.
CITY HALL FROM PAGE 14
As an example, we have an optimization study of Water and Sewer, which makes a very good department better. By the way, as implemented, it saves $2.5 million a year. That money can be accumulated to move the Waste Water facility off the lagoon sooner. The Utilities and Finance commissions spotlighted the need to
The common practice of communities providing tax dollars to pay for things like sports stadiums for privately-owned professional teams which also threaten to leave if they don’t get a new stadium is a slippery slope and, I believe, a potential legal quagmire. If Piper or the Florida Marlins can get taxpayer-generated funds to make improvements to their companies, they why shouldn’t any private business and employer be accorded the same opportunity? What’s good for the goose should be good for the gander. Some who have looked at Piper’s incentive deal with the state and county note there is a big difference between tax abatements and deferrals often offered to companies for a certain period as a carrot to get them to relocate to a community and the tax incentives which were given to Piper which has been in Vero Beach for more than 50 years. As it stands, the $32 million incentive package granted to Piper in 2008 by the state and county was not approved by the citizenry in a referendum, but rather by state and local politicians who could hardly wait to write big checks and plaster “We ! Piper” bumper stickers all over county-owned vehicles. The very people who were being asked to underwrite the company with their tax dollars were never given the opportunity to say if they agreed. To date, the county has paid Piper $4 million of the $12 million it was to pay out over the multi-year term of the incentive agreement. But now Piper is saying it doesn’t want to pay back money it agreed to optimize and now they, with the City Manager, must be sure it happens. The City of Vero Beach has all the resources and brains it needs to Keep Vero Vero, while slimming down. We just have to be willing to give our “best brains” the opportunity to achieve what we need. It is called “Management.” By R ichard Winger Richard Winger is a member of the Vero Beach City Council
repay according to provisions of the incentive package agreement. That’s like telling your mortgage lender that you have no intention of repaying your loan, but you’ll keep the house and all the improvements that mortgage loan financed. Life just doesn’t work that way and Piper knows it. As the too-big-to-fail banks showed us, a company will continue and even escalate bad behavior if it can get away with it. And, with a disturbing level lack of concern to the public as well as to its own rank-andfile employees, Piper has more than gotten away with it. For six months in 2009, Piper did not communicate with county officials regarding its future performance and job creation standards which were tied to its $32 million incentive package payouts. The company has also been chronically non-responsive to requests for information by members of the press and, according to an employee I spoke to recently, the company “doesn’t tell us anything.” Residents were told that Piper -one of the county’s largest private employers -- was threatening to leave Vero Beach and fly off to Oklahoma City or Albuquerque if it did not get that incentive money. With the economy tanking in 2008 and double-digit unemployment plaguing the state and Indian River County most especially, it would seem that local government officials and business leaders panicked at the thought of losing Piper on the heels of the Dodgers’ exit. That concern was understandable. But if those pulling out the check book had only done their homework, perhaps they wouldn’t have been so quick to spend taxpayer money on what has now become little more than corporate extortion. Piper Aircraft, Inc. has experienced an uncommonly high turnover in upper-level management not to mention corporate ownership. The revolving door of Piper leadership has become reminiscent of that classic Abbott & Costello routine leaving
everyone wondering “who’s on first?” But perhaps the most glaring problem not identified by those handing out the money was the fact that Piper’s light jet project was probably doomed from the start if one can believe the buzz within the aviation industry. Simply put, Piper started its PiperJet/ Altaire project too late. Its competitors like Cessna, Embraer and Eclipse had been building light jets for years and were up to speed on the aviation technology and design that differentiates a propeller-driven aircraft from a jet. Piper was consigned in a tanking economy to play “catch-up” amid an everchanging corporate hierarchy. Our county leaders should have checked with aviation experts on the viability of the PiperJet/Altaire project. Instead, they focused on the county’s own foundering economy and bought Piper’s hat-in-hand appeal hook, line and sinker. County officials pressured the cities to pledge funds to the Piper “pot” and they paid. In 2008, the state paid $6.7 million and Piper is presently trying to renegotiate that agreement with the state in an effort to avoid reimbursement for failing to meet agreed upon benchmarks. With a fiduciary responsibility to its taxpayers, the state and the county should not let Piper off the hook and insist that the company make good on its contractual agreement. While the state and county need to explore every avenue to bolster and expand economic development interests, it is also incumbent for officials to remember that offering financial incentives up front without a secured guarantee of repayment is little more than gambling with the public’s money. Piper Aircraft is known within the general aviation industry for the high quality and reliability of its products. Most of the 144,000-plus aircraft the company built over the years are still operational and safely flying. With such a proud tradition, it would be fitting for its management to pursue the same level of excellence by doing the right thing and meeting its financial obligations.