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'1 I cause. Too ofte~ public officials regard real estate devest, ~y itself, as ~c 9rowth. Use of ~ublic dollars to assist real estate deve~nt does ~erve to redistribute ~owth. But in sc~ne cases it may prcmo~ umustair~ ~e 9ro~. I ~.tsks of catflict of interest and ccrruption are too high. Any l~"lic 'officials are in~lved in prow'c~ng financial ~ssistance ~une I I I I I I I I I I I I I I private real estate development, risks of oonflict of interest and o0xr~tion are present. The absence of any major problem so far should not delude the State Legislature (as the maj~ body establishin9 rules f~r city government) into thirking that ~otential f~r scamgal is ~ot present. ~ith millions of dol_~-~s in ~ublic assistanoe bein9 offered, businesses star~ to gain or lose large profits, dependirg upon w~ther they are awarded assistance. ~e hea%y involvement of city goverr~nts in real estate assistance is relatively recent. Therefore, s~m- types of risks--whid~ have been present historically in other situations involving public officials an~ private interests--ere now discernable in the real estate area, too. Fo~ example, is it likely that firms which stand to gain finar~ially from real estate projects will become major contributc~s to t~e election cami~ig~ of city officials? Or, is it likely that these firms woA!d be future scurces of ~loyment for city official- and their staffs? Would either of those possibilities affect the independence of the officials ar~ their staffs as they act on pro~o~d real estate projects? Citizens: confidence that 9overmmmt is ..w3xkin9 for each of them may be undexmined. ~he current role of city ~Dverrm~ts in providi~ assistance to real estate developments is new. It differs from traditional government z~ulaticn and public wc~ks. The cc~plexity and obscurity inly. rent in existirg real estate assistar~e progr~.~ make it difficult for citizer~ to have a clear view of w~D is receiving what. At the s~m~_ time those ir~ividu~ls ar~ groups with an ecc~cmic interest in de~alol~ent subsidies play central roles in local ~olitical activity. Gonse~y, citizen confidence that officials are de~otin9 their energies to activities ~f general benefit may be unden~. ~he above-listed flaws, while detailed, represent a need to c~rge, not discard, the practice of providing city assistance for private real estate devest. Moreover, as can be seen from the recc~er~latioas which folly, ~m envision mainly d~ar~ir~ inoentives, not imposi~ a set of restrictive regulatic~s. If lXoperly directed, a mw set of incentives can assure that: (a) public assim is distrit~ted ~a7 selectively, only to the projects with real and potential public benefit, (b) taxpayers are informed of the distribution of burde~ an~ benefit f~. the public assistance, (c) elected officials are held accountable fox their actions, (d) officials will ne~3otiate firmly, giving as .much assistance as is needed, not more, (e) overhead expense is minimi~, (f) risks of coaflict of interest and c~rruption are reduced, (g) citizen confider~e that government ser~.s the broad 1oublic interest, not narrow private interests, is enlmm~ed.