John Kane wants the public to subsidize the cost of constructing the parking deck at his new shopping center, North Hills East. There’s been plenty of discussion about the subject in Raleigh, with Bob Geary panning the idea and Rick Martinez, (N&O subsidized hack of the John Locke Foundation) championing this model of corporate welfare. Mayor Meeker displayed a mensch-like demeanor that makes us almost excited about his next term. Dr. Assad Meymandi (Psychiatrist, Neurologist, Philanthropist and conservative activist) wrote a letter to the N&O to voice agreement with Rick Martinez. Letters from other conservatives followed, criticizing Martinez and Meymandi for abandoning the conservative belief that market forces should dictate the outcome. The truth is, “Market Forces” might have been the conservative mantra in the time of Barry Goldwater but now “conservatives” use the phrase only when it suits their needs, because they aren’t conservative, they’re just pro-business regardless of the cost to society. William Kunstler described Globalization as “primarily a way of privatizing the profits of business, while socializing the costs”. Isn’t that what John Kane is really asking of the public?
Lately, the media seems saturated with stories involving this conservative hypocrisy. I heard an economist from the Club for Growth interviewed about the crisis in the sub-prime housing market. This is the group whose leader, Grover Norquist, famously said: “we want to get it (government) down to the size that where we can drown it in the bathtub.” Well apparently their economist thought the drowning baby, The Fed, should be pumping billions more into the economy by lending it to large banks at a discount. What about letting market forces run their course? And then there was the news last Friday, that the price of NC produce to public schools and military bases had almost doubled, thereby becoming unaffordable to the schools, due to the privatization of a Defense Department program. Remember how privatization was supposed to make our Armed Forces, leaner, meaner and less expensive to society? The results are record spending on defense, the Walter Reade scandal, Blackwater Security, Halliburton, an Iraq that is still without water and electricity, and now the $37.6 million contract with a Foster-Caviness foods in Guilford County. A contract that Gary Gay, the director of the food distribution program at the NC dept. of Agrictulture, refers to as a $200 hammer. That’s the same Pentagon hammer conservatives referenced for decades as a justification for privatizing government programs. With the Bush-era experiment in privatization, people have come to realize that for every $300 hammer bought by the government, there was a corporation writing an invoice for $300 hammers. And the Republicans have put those corporations in charge of the store.
John Kane’s parking deck is a $200 hammer.
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I think you are unjustly harsh here, Mr. Leebowitz. ‘Parking dick’…I could be wrong, I admire your eloquence, but I think you overstep. If this article was about the McLaurin family I could relate, they are for sure a big bunch of Dicks. If I was J. Kane I would be doing the same thing, and whether you like his aesthetic or not (which I assume you don’t, i.e. you are not a fan of his North Hills project, and you would have preferred something else in that blighted area), his outfit has brought some upside to the area, and tax revenues which can be quantified (I think of schools here). He put millions into a blighted area (a gigantic risk!) and created something that seems to be having some success. It seems to me that it may be white bread, but bread is bread and folks got to eat, and schools have to be funded.
That said, I think Meeker is also correct: if you subsidize Kane’s new development you set a precedent to subsidize every other development that promises some potential future tax revenues. Clearly we have two very focused individuals here, Meeker and Kane, both presenting their cases on behalf of their interests. Maybe you have some evidence that Kane is more dicky than I thought. I just see a driven developer with a more or less good (OK, decent) picture of dense urban development. Correct me if I am wrong.
Regarding your comments on privatization: Although I agree that conservatives refer to “market forces” when it suits their ends, I would be interested in your examples of bigger government doing a good job administering much of anything except war. The more power you hand to the government, the more you are in for trouble.
Thanks for the links, long live RDUWTF!
Big chicken, there’s no mention in this post about liking or disliking the aesthetics of the project. And yes, it’s fine that he has asked for the $$$, perhaps I might do the same thing, but I would absolutely expect to be laughed at and turned down. The city would profit from the project, but would the city profit if we put north hills clones every few blocks all over the city? Obviously we agree on that, so how is the post harsh? About privatization, I think you missed the point again and came to your own conclusions. Hope this doesn’t come across as an attack, just stating my opinion.
I think Kane took a big risk with North Hills but now the area “Midtown” is a proven success and North Hills West is not so risky. He could sell the land to another eager developer tomorrow. As with most investment, the profit is relative to the risk - Mr. Kane probably profited handsomely from purchasing a blighted mall and converting it to a successful development and there’s no need to reward him with tax breaks. As for the title of my post, it is unduly harsh - but funny. Dick jokes are funny. Mr. Kane is overly bold in asking for this subsidy but you can’t blame a guy for trying. If Kane doesn’t get the subsidy and builds sprawl instead of maximizing the density, THEN he’s a dick. I’d like to see Kane develop this as planned, without taxpayer assistance.
I agree that dick jokes are very funny. Also I agree that Rumsfeld’s ideas on privitizing the military have turned out to be disasterous. However, USUALLY if there is a chance to drown off a bit of government now and then, that is generally a good thing. I think government does a better job of overseeing private business than it does actually running the business. Maybe I am missing the point again, but Leebowitz got me thinking about how I tend to straddle some lines when it comes to having liberal ideas about social programs, yet a deep distrust of the government when it tries to adminster anything. They will dick it up almost every time. Hopefully what you end up with looks something like what the city council and Kane appear headed towards, some potential tax breaks to encourage the project, but no wholesale funding by the city.
A point to be noted is that he says the tax revenue will increase thus benefit the city. I don’t see how. The new shopping will only encourage the movement from one location to another (if a local business), or expanding a chain. Either way, the tax base comes from shoppers with choices. I didn’t just start shopping at Target because there is one in North Hills (closer to my house), I just switched from another local Target. Thus, no more business is being made. As far as private residence, I doubt anyone who lives outside the city will be lured in by the condos/apartments. They may certainly chose one at that location over another similar in another local location. Thus, no net tax revenue. I also doubt any commercial (office) space provided will not be enough to tempt an outside company to relocate or expand here. At least not enough to offset the tax incentives Kane is asking for. So where’s the EXTRA tax revenue coming from? He’s not relocating a major business and/or employer. These shops will simply displace others. Besides, it’s a risky business setting such precedence.
The sales tax is only part of the picture, although I think a more significant part than Mr. McDonald. Property tax revenues would be increased as a result of the development. Say the land is worth, I’m guessing, $10 million now. With the planning currently, I’m guessing the land and new construction would be worth more like $100-200 million when finished? More? Just wild stabs, but that is an increase in tax revenue from about $150,000 in taxes per year currently, to somewhere around (my calculator doesn’t go this high, but) between $2-3 million each year. Glancing at the Wake Co. tax records it’s hard to figure out which parcel is the new one. But that is significant tax revenue, some of which would have to go towards infrastructure, granted.
The way I understand the property tax structure, I don’t think the increase will be as significant as 2-3 million. But I don’t know, so maybe so. Not so sure about the sales tax, either, as I think most of it will come from purchases otherwise made elsewhere within Raleigh (or the local area), and thus not much new taxable revenue will be realized. Unless the real estate achieves the added benefit of introducing a franchise new to the area offering something that no one else does. Anyway, I still think that simple rules of economics apply: if it can succeed, it should do so on its own merit. Otherwise, maybe it shouldn’t be built? Again, we’re not building a business that will employee a large number of people in an area with unemployment concerns.
What upsets me most is this *hijacking*, if you will, of the property. It’s Kane’s, and if he doesn’t get what he wants, he’s going to build another strip mall? Ok, he can if he wants. I can also choose not to shop there. If enough people do the same, I suppose the only one out of money in the end is Kane. And whatever unfortunate businesses relocate there.
In the end, what it comes down to is setting a precedence: it’s a Pandora’s Box scenario. I just don’t think it should be opened.
I truly hope that he proceeds with his original plans. And I also wish him success.