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Fresno pays off $8 million Gap settlement – to itself

Fresno City Hall

Fresno pays off $8 million Gap settlement – to itself

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Fresno is a month away from saying goodbye to the Gap Settlement.

It will be a happy farewell, though City Hall officials tell me they have no plans to hold something along the lines of a mortgage-burning party.

The Gap Settlement is a window into the way business and politics work in Fresno.

City officials on June 30 will pay $804,000 to conclude a long dispute with the Federal Aviation Administration. The total payout will be $8 million.

This final payment in the Gap Settlement, as with the previous nine annual payments, will go to the city’s Airports department. The money comes from the general fund, most of which is spent on police, fire and parks.

That’s right – in essence the feds made City Hall pay $8 million to itself. The feds said the city beginning in 1997 sold airport land near Fresno Yosemite International Airport to Gap, Inc. for a few bucks when the price should have been at fair market value. The company built a huge distribution center on the property.

Moving the money from City Hall’s left pocket to its right pocket doesn’t mean the dough from the Gap Settlement was wasted. But, as we will see, the mandated transfer in the short term most definitely hurt more Fresnans than it helped.

The big question in the long term is whether the subsidy that led to the Gap Settlement generated more public benefit than pain. A case can be made that it did.

But make no mistake. The Gap Settlement once again proves that Fresno sometimes does smart things in a screwy way.

More than that, the Gap Settlement shows that city officials 15 to 20 years ago viewed the Airports department’s assets as a big piggy bank to use in any way they liked as long as their agendas were advanced.

And a straight line can be drawn from long-ago controversy over the Gap subsidy to recent Lee Brand-inspired reforms of City Hall policy on public assistance to the private sector.

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George Hostetter

George Hostetter is a contributor to CVObserver and advisor to The Collegian, the student newspaper of Fresno State.

1 Comment

1 Comment

  1. Jerry Cook

    June 1, 2017 at 2:47 pm

    Great analysis.
    Question: Has the City received enough financial benefit from GAP to offset the value of the land they gave away?

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