Allow me to begin by saying, Greensboro is already doing what I'm about to suggest Greensboro do through investments of the "rainy day fund" the investments just aren't being made here in Greensboro. And because of that, even if Greensboro's "rainy day fund" grows, Greensboro's citizens lose.
As I understand it the cost to take a corporation public-- that is, make shares of stock available for sale either over the counter via the regular stock exchanges or under the counter through more direct selling of shares is at or above $1 Million Dollars by the time you hire lawyers, pay various state and Federal filing fees and jump through the many hoops necessary. In other words, if Henry Ford and his partners, the Dodge Brothers, were attempting to start Ford Motor Company and Dodge today it would never happen. The Cone Brothers could never start Cone Mills in Greensboro or anywhere else today like they did over a hundred years ago when regulations were less restrictive and cost almost non existent compared to today's costs. There could be no Vick's Chemical Company start-up in Greensboro today.
Now, for the sake of argument, let's assume the downtown Wyndham Hotel on which the City of Greensboro recently issued a $1.975 Million Dollar incentive grant is in-fact a solid investment. Everyone likes to get in on a solid investment, right? What if the City of Greensboro, instead of having provided a grant, had instead paid the cost of the initial public offering and getting the downtown Wyndham stocks on the market in exchange for $1.975 Million Dollars worth of preferred shares in the corporation?
What if? Well there is a risk. Worst case scenario, it could go belly up and Greensboro looses $1.975 Million. But under the current grant arrangement even if the hotel profits beyond the wildest dreams of everyone involved the City of Greensboro is still out $1.975 Million Dollars plus the interest Greensboro could have earned on your money.
Wait a minute, wasn't that worse that the worst case scenario?
But had Greensboro helped the Wyndham Hotel go public Greensboro would then have the options of holding on to the shares in hopes of drawing dividends (interest) or, if the price of the shares goes up, selling them at a profit.
You see, grant, loan or initial public offering, all the advantages that the developers are claiming will come to the city are coming anyway. That is, if it, the Biltmore or the Marriot doesn't go belly up. And being that two of the owners of the Wyndham own the Biltmore, who wants to bet they are already planning to close it?
Now think of how many homegrown businesses Greensboro could have if Greensboro's legal department had specialists in getting Greensboro's businesses into the markets and helping start-ups get on the markets. And if some of the $272 Million Dollars in Greensboro's "rainy day fund" were being invested in Greensboro instead of businesses all over the world.
And think how big the "rainy day fund" might someday become.
You want those homegrown businesses? You want that auto manufacturer? You want those high tech manufacturers or pharmaceutical companies based in Greensboro? That's how you get it done. You don't attract them, you find the people with the know how and you build them.
