Corporate Socialism at the Local Level
I live near the intersection of N. Druid Hills and Briarcliff, inside the Perimeter (I-285) in DeKalb County. Said intersection is a parking lot from about 6:30 - 9:30 a.m., again for a couple hours at lunch and again during the evening rush hour.
On the southwest corner of the intersection DeKalb County Schools owns something like 50 or 70 acres on which a high school sits. Next door is an old apartment complex.
Last year the Sembler Company out of Florida proposed to build a high rise "urban mixed use" development where the high school and apartment complex are now. The infrastructure can't support this higher density without radical and expensive changes. Sembler proposed to finance it by use of a "TAD" - a tax allocation district. The school board would dedicate a portion of the property taxes it got in the area for paying off bonds for the next 25 or 30 years to fund Sembler's new mini-city. The theory is that, over time, the new structures will generate more property taxes so that the school district comes out even or ahead.
There was a small problem with the scheme, the Georgia Constitution bars school boards from doing it.
That doesn't bother developers in Georgia. There's a proposed amendment to the Georgia Constitution on the November ballot that will put the developers back in business, on the public schools' dime.
Earlier this year, Gwinnett County (north Metro Atlanta) officials announced that after secret negotiations with the Atlanta Braves, Gwinnett County would be the proud home of the Brave's Class A farm team in 2009! The catch was that the County was going to finance the land purchase and construction. We saw great renderings of the new complex. The county commission rammed the ordinance through. A couple of weeks ago the County announced that there had been a slight error in the budget. The $40 million dollar stadium was now a $59 million stadium (and hotel, office and retail complex).
I don't have a problem with public finance of roads, sewers, etc. The public should provide parks, police and fire protection. But, in light of the current dear caught in headlights reaction of the Feds to the financial meltdown, I really don't want government involved with real estate development and financing at the front end. If Sembler's project makes economic sense, it will be funded by private money. If the Gwinnett Braves will draw enough people to make a profit, the Atlanta Brave's would have build the stadium. That they didn't, and we did, tells you they are smarter than our government officials. The "necessity" of public funding belies the financial viability of these and other quasi-public projects.
Governments these days aren't very good at the things they are supposed to do, they need to stay out of the real estate business.
4 comments:
The Tampa Bay Devil Rays (from St Petersburg) want a new stadium and asked the tax payers of Pinellas County to pay for it. The inital reaction was so overwhelmingly negative with the public that they withdrew the proposal - for the time being. I'm sure that if they make it to the World Series they will be knocking on the door again - and they will probably win. But they will never get my vote!
What is good and what is profitable are sometimes two different things, so there are times where I think public financing is the way to go.
But I've never understood building sports stadiums. Arlington is currently building the Dallas Cowboys a new stadium at a cost of over $1 Billion, up from the initial estimate of $650 million. They would never have agreed to spend that much money on schools, or libraries, or parks, or housing, but they didn't hesitate to pony up the dough for something big and stupid. (I guess that's quintessentially American, isn't it?)
Everything you've said here seems reasonable. I certainly dread the traffic clusterf#@k that will ensue if they develop that site.
100% agree. If the Braves or the Cowboys want to build somnething, they should use their own money. When they threaten to leave for greener pastures, help them load the ^&#*$#^$ truck.
I am a pretty big sports fan but 100% capitalist pig, so private businesses should pay their way.
You are also completely right, the government doesn't do their current job very well so let's keep them out of more areas like real estate.... and health care. We would be a lot better off if they had never gotten into retirement investment plans.
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