The conservative right has done a great job of selling America the idea that big government is bad and a free-market economy best left unfettered by pesky government interference. Over and over we hear how taxes are too high and the system full of waste.
Isn’t it odd that this same principle doesn’t apply to commercial real estate development, where the biggest public dollars are involved? When for-profit corporations build big buildings, then the government is smarter than the free market. Government intervention is not only encouraged to over-ride current realities of supply and demand, cities are routinely blackmailed by the for-profit sector as they negotiate richer and richer deals at taxpayer expense, our corporate “citizens” suggesting they can get better deals outside city limits if municipalities don’t pay up.
These days Cincinnati is turning the entire decision-making process over to the corporate sector: 3CDC, the Port Authority, and REDI, their governing boards almost entirely composed of corporate executives with no possibility for input from the public. ALL deals are perceived as desirable, with no critical assessments beyond available financing. And it doesn’t seem to matter that government agencies have crappy track records in terms of investment decisions since nobody ever bothers to measure our returns. We’re apparently mesmerized by the soothing repetition of the “job creation” mantra, that greatest trickle-down hoax of them all.
Perhaps my favorite example of bad real estate investments by a public agency is the Port Authority’s involvement in Kenwood Towne Place, now called the Kenwood Collection, a development in a “flourishing luxury retail corridor.”* The Port Authority owns the 2,500-space public parking garage financed with bonds that mature in 2039. Since parking is free at the mall, it’s hard to understand exactly how the revenue is generated to pay off the debt – but it surely hasn’t been easy as the development drowned under a sea of liens filed by subcontractors who were never paid, many of them smaller minority-owned companies trying to benefit from the Port’s Economic Inclusion Policy. The FBI was involved. There was a criminal investigation as well as civil litigation. It’s been a mess.
Why was government ever involved in a $30,000,000 parking garage in a “flourishing luxury retail corridor”? When should public servants expect middle-class taxpayers to shoulder this kind of financial risk with no possibility of personal reward? While there’s a clear public benefit to fix environmental brown-fields and actual blight, using government intervention to provide more covered parking so shoppers don’t have to get wet on their way to Crate & Barrel is absolutely absurd.
According to the Constitution, government was established for the purposes of unity, justice, domestic tranquility, defense, promotion of the general welfare of the citizens and securing liberty for all. It doesn’t say a damn thing about making the rich richer and convenient parking at fancy shopping malls.
* “flourishing luxury retail corridor” is the term used on the Port Authority’s website – though it is currently difficult to locate information on the Kenwood Project. The “Our Projects” tab is now limited to deals done within the last ten years in the Central Business District.