SUBSIDIES CAUSE MORE PROBLEM THAN THEY CURE

Submitted by Roldo on Sun, 03/07/2010 - 16:18.

The Plain Dealer reported Sunday about the troubled downtown commercial properties. Empty and emptying buildings. It's a shame.

 

“Turmoil in commercial real estate,” says the article by Michelle Jarboe here:

http://www.cleveland.com/business/index.ssf/2010/03/commercial_real_estates_challe.html

 

Yet the Plain Dealer – with business and political leaders - has been pushing for more and more subsidies to build new. That’s just one of the major reasons there are so many empty buildings. We are helping to create excess.

 

You can’t build new when you can’t even keep the old relevant.

 

At the same time retail and commercial properties go into foreclosure Cleveland political leaders are using hefty subsidies to produce more retail and commercial. Why?

 

You can’t have everything you want. Isn’t that what we teach children?

 

Why then isn’t that good advice for developers.

 

As business declines downtown the answer we seem to get is to open new property for development. As buildings are emptying, we are providing very heavy – in the multi-tens of millions of dollars – to the Wolstein project on the East Bank of the Flats.

 

The Port Authority wants to open land on the lakefront to the same kind of development. Now there’s a push to get rid of Burke Lakefront Airport and open it for development.

 

Cleveland, in a dirty deal, opened more than 500 valuable acres in Chagrin Highlands two decades ago. Now, Eaton Corporation will move out of downtown to Chagrin Highlands. So will University Hospitals with a new hospital facility. And other business have been attracted to the open spaces at the Highlands, city owned land that never should have been opened to greedy speculators. But then Mayor George Voinovich, tied to the project via his old Calfee-Halter law firm, and then Council President George Forbes, tied to Dick Jacobs, worked a deal that has hurt the city and will continue to damage downtown.

 

You can’t have it all. We seem to be urged by major institutions to grab more, however.

 

The Port, of course, has gotten itself into trouble with its attempt to serve more as an economic development body than a port. Its desire to open up land on Lake Erie is self-defeating. Developers, led by John Carney of the Port board, push this direction.

 

 The Plain Dealer has been doing a good job of being critical of the Port Board and how it does business. However, the PD has been a chief cheerleader in the past. It helped push the Port into being a financial conduit, starting with its financing of the Rock and Roll Hall of Fame.

 

Again, you can’t have your cake and eat it too.

 

Corporate and civic leaders (aren’t they same?) and the Plain Dealer have pushed and applauded the politicians into thinking they are developers. More and more various levels of governments are acting as economic development entities. As if they know what they’re doing. They don’t. They do what developers tell them.

 

For years and years the politicians have been using public funds to subsidize almost any project that came to them for handouts. I don’t believe they know what they are doing. They obviously don’t care since it helps them, sometimes with campaign dough, sometimes with kudos and pressure from the totally undiscriminating news media, and sometimes, I’m convinced, via the greased hands of corruption.

 

How do we stop it?

 

Citizens have to more and more tell public officials upfront that they dislike all this welfare to business.

 

Tax abatement and tax exemption have produced some development. However, it’s rather clear it also has damaged other business.

 

At the same time the public services that cities, counties and state should provide its citizens declines. Cleveland can’t even pave its roads. Not enough money. That has to change.

Here are some links with evidence of what I’m talking about:

 

 

http://www.lakewoodbuzz.com/RoldoBartimole/RB%2005-03-06_Flats_Deal_Disgrace_Lakewood%20Ohio%20Roldo%20Bartimole.html

 

 

http://www.besthostsreviews.com/ReadRoldoBartimole/2009/04/rock-hall-a-heavy-financial-load-for-cleveland/

 

 

http://www.lakewoodbuzz.com/RoldoBartimole/RB-070208%20Jacobs%20Ratners%20Get%20Reductions%20on%20Loans%20Cleveland%20Lakewood%20Ohio.html

 

 

http://www.lakewoodbuzz.com/RoldoBartimole/RB%2006-22-05%20City%20Politicians%20Very%20Good%20Ratner%20Miller%20Lakewood%20Ohio%20Cleveland.html

 

( categories: )

downtown prosperity

 downtown prosperity will not come until we are ALL whole....

Agreement

More and more various levels of governments are acting as economic development entities. As if they know what they’re doing. They don’t. They do what developers tell them.

I'm in absolute agreement--and the above posting ties in very well with this earlier one.

I'll add that I think government should stick to its knitting--providing necessary services that can not otherwise be made available.

Not just downtown

Thanks, Roldo, for taking the time to respond to this article. I agree completely.

Most interesting is the failures in what have been the cores of recently vibrant suburbs - Avalon Station in Shaker and lots of stuff in Chagrin, in Beechwood. We are now overbuilt EVERYWHERE, which means we are just at the beginning of the commercial and retail real estate shakeout, which will be worse in ways than the home mortgage shakeout... Solon will look very different with a few boarded-up strip shopping centers added to all the unsold development parcels... sprawl may NEVER fill these gaps in the suburbs, as the real core of the region declines further - downward spiral.

Shaker city government looks downright stupid for Avalon Station - and my parents as taxpayers of Shaker were stuck with much of that bill (I think the Port Authority may be a looser on this as well).

Disrupt IT