"The fourth way is when people spend other people's money on other people. In this case, the buyer has no rational interest in either value or quality. Government always and necessarily spends money in this fourth way. This guarantees inefficient public spending because the spenders have no vested interest in efficiently allocating those funds."
Unfortunately, with the rise of Greensboro's and for that matter, America's Elitist Developer Class, Friedman's third way of spending money has become all to prevalent especially at the local level where phrases like economic development and real estate development, while having two entirely different meanings, are used interchangeably. Friedman's third way money is spent:
"The third way is spending other people's money on yourself. Think of the rich man's girlfriend who buys herself the nicest dresses in the store on his credit card without even looking at the tag. She wants quality, but value is irrelevant since she sacrifices nothing."
Too often Greensboro's Developers see public funding as their own money to do with what they wish. Hence the reason Greensboro is currently #4 in the nation in the number of industrial parks under construction for cities with populations between 200,000 and 1 Million. But before you start believing the hype allow me to tell you all about Site Selection Magazine and the business they're really in.
Site Selection Magazine isn't just a publishing company, it is in-fact an arm of the multinational conglomerate Conway Data Inc, the Industrial Asset Management Council and former Georgia State Senator McKinley "Mac" Conway, founder of the World Development Federation. These guys have made $Billions in commercial real estate pitching the very ideas the Greensboro Partnership, Greensboro's developers and council members like Zack Matheny are still pitching today.
And who is one of the sponsors of the Industrial Asset Management Council? Why that would be none other than Greensboro's own economic development "gurus" the Greensboro Partnership. That's right, Greensboro's tax supported "non profit" economic development agency is helping to fund a nationwide propaganda campaign designed to use your tax dollars to inflate the values of commercial real estate.
But what happens to Greensboro if there is the slightest downturn in the commercial real estate market and Greensboro get's caught at #4 in the nation in the number of industrial parks under construction? Yes, the developers lose money but Greensboro looses money too. You see, Greensboro shells out invisible incentives to every one of those industrial parks to the tune of $Millions of dollars each in the form of infrastructure like water, sewer, connections to storm drains and connections to streets and roads. The longer those properties set empty the lower their property values fall. The revenue the City hoped to make in property taxes and water and sewer bills never comes. Hope springs eternal, right?
In an interview, British-American historian Walter Laqueur spoke on that very subject:
"Laqueur: (laughing) Hope springs eternal. It's one of the most frequently quoted verses of English poetry. The poet was Alexander Pope, a decidedly cautious man. He had many enemies, and we know from his sister that he never went out into the street without his large, aggressive dog, and always with two loaded pistols in his bag."
Is this the kind of hope we're planning for Greensboro? I think we can do better. In researching for this article I stumbled across the following quote about CitiStorage, the biggest and most successful privately owned archival storage facility in the nation:
“The key to greatness is knowing that the business is a living, breathing entity. It has to be taken care of. We are more than an archival storage facility, we are human,”
It's time the Greensboro City Council and City Staff came to understand that Greensboro is also a living, breathing entity. We have to be taken care of. We are more than a tax base to be plundered by an elite few whose promises to pay more in property taxes might or might not be kept, we are human.
And with that I ask you to demand that we lay down new rules and look at economic development in a different light:
"What Greensboro needs most of all is a local jobs program that focuses on the long term unemployed, builds small, locally owned businesses and supports existing locally owned small businesses-- an infrastructure designed to jump start the local economy from the bottom up instead of from the top down."
Please continue reading Incentives In Greensboro: Part 35: Loose Ends
