Fred Hubbell, a director at Macerich, a big beneficiary of Iowa's 2013 property tax reform law, said on Wednesday the law isn't changing the way the shopping mall firm operates in the state and the law ought to undergo a major overhaul.
Hubbell is one of seven Democrats running for governor. And although others in the race also have been critical of state tax breaks for businesses, Hubbell's position on the board of directors of one of the country's largest mall operators, which owns the shopping centers NorthPark Mall in Davenport and Southridge Mall in Des Moines, offers a different perspective.
Hubbell said Wednesday that he had spoken to the chief executive of the Santa Monica, California-based company and that the 2013 law is a "nonevent."
"He's been clear about it, that Macerich never expected to get this benefit, they never asked for the benefit. It's just not made any changes whatsoever in their plans for those malls, in terms of hiring people or reinvesting in the malls," Hubbell said. "It's a nonevent for them."
Hubbell said he would overhaul the property tax law, although he did not specify which pieces of the wide-ranging regulations would be retained or jettisoned.
The 2013 law, which passed with support from Republicans and Democrats, includes a 10 percent assessment rollback for commercial and industrial properties, a business tax credit, a limitation on the growth in agricultural and residential property values and a phased-in reduction for apartment buildings and other multi-residential properties.
Proponents of the law defend its impact, but critics say it has failed to deliver on its promises for promoting a better business climate.
Meanwhile, local government officials have criticized it for reducing their revenues, particularly because the law is not reimbursing taxes lost because of reductions in multi-residential property values.
Now, with the state facing a revenue shortfall, there are worries among local officials that the Legislature might not commit to fully fund reimbursements in this next session.
Iowa Gov. Kim Reynolds declined Tuesday to commit to supporting full funding for what's called the "backfill."
Hubbell warned Wednesday that failing to reimburse local governments puts the burden on local taxpayers.
Hubbell stepped in to lead the Iowa Department of Economic Development in 2009 in the aftermath of a film tax credit scandal, which involved mismanagement of funds and led to criminal charges in some cases.
Hubbell also said Wednesday the 2013 law and tax deals, such as the recent Apple assistance package, are reminiscent of the film tax credit scandal in that too little thought is being given to approving incentives, the state is losing money and isn't achieving its goals.
"It's just another version of that same scandal. It's a race to the bottom — who can have the lowest taxes?" he said. "Fundamentally, it's not a business strategy that works."