The Alexandria City Council unanimously approved almost $4.5 million worth of industrial revenue bonds last night to aid an automobile dealership and two associations.
The bonds, which do not involve expenditure of taxpayers' money, will provide $3 million to the Polk Motor Co. to finance its purchase of the financially ailing Aero Chevrolet dealership, $925,000 to the nonprofit American Chamber of Commerce for a national headquarters and $500,000 to the Boat Owners Association of the United States for "essential equipment, machinery and furnishings" at its Alexandria headquarters.
Industrial revenue bonds, designed to lure private investment, enable the businesses that receive them to obtain low interest loans. Traditionally used by Northeastern states to attract industry and save jobs, they have come under increasing attack by congressional critics who question their use to finance such enterprises as fast-food chains and retail stores.
Commercial banks that buy the bonds pay no federal taxes on interest they receive from them, and some federal budget analysts claim the bonds cost the government billions in lost tax revenues.
Only the bonds to aid the auto dealership proved controversial at last night's council meeting. Council member Marlee Inman protested: "this involves the purchase of one business by another, and I'm not sure that is proper use of industrial revenue bonds."
Councilman Carlyle C. Ring defended the bond authorization saying it fulfilled the city's general objectives of making room for development around the King Street Metro Station (the dealership will move from a spot near the station, making room for other development there), supporting local business and keeping a source of revenue within the city.
Councilman Donald Casey said before the meeting: "This is in keeping with our policy of offering relocation assistance to businesses remaining in Alexandria. Sixty associations have moved to Alexandria in the last several years, and most of these moves have been accomplished with revenue bonds."
Inman finally voted with the other council members for the bonds.