The Outstater

January 25, 2023

A Pattern of Boondoggling

VERONIQUE de RUGY, an economist for the Mercatus Center, famously said that if you miss your budget estimates 20 percent of the time you are an incompetent but if you miss them 80 percent of the time you are a liar. What would be said about the cost of a project in my city that in two years nearly doubled before they set the first brick?

Some would say that the mayor is planning to run for reelection.

When the project, a typical, officially greased, public-private partnership (hereafter to be referred to as “the pit”) was budgeted in 2020 someone forgot that it was sitting on ground that the government had deemed contaminated. Could that have been why independent, more savvy investors had shied away?

Whatever, that and inflation and sewer problems had stalled construction and left an ugly excavation, a pond after the winter rains where a ribbon-cutting ceremony was supposed to be.

No problem. Last week, the members of our city’s redevelopment commission, whose phone numbers are in the mayor’s black book, approved $1.6 million in Tax Increment Financing funds to help cover an embarrassing shortfall (the pit was supposed to cost $67 million two years ago but now is estimated at $111 million). That’s a sizable miscalculation, not close enough for horseshoes or hand grenades.

But it didn’t rate a headline in the next day’s newspaper. If it were a private business, of course, the owner would have had to cut spending drastically, sell at a loss or close up shop. When it is a so-called public-private operation, you call the redevelopment commission and get a new check cut. The explanation? They will have to build it to know how much it costs.

There is obvious absurdity in a system that allows a developer to win public financing by telling a city council that a project will need this much, or perhaps twice that much, but he really can’t say for sure.

Perhaps, though, it hasn’t been obvious enough.

The size of the pit’s overrun resulted in a more detailed financial sheet coming forward than is the custom. The numbers are terrifying, and they don’t even reflect overpayment by the city in its lease agreement. If we are reading the agreement correctly, that is $40 million over 20 years for the garage, paying $200 per parking spot per month while subleasing that same parking to the owners of apartment leases and city employees for only $60 a spot.

Keep in mind that the politicians involved claim to be attracting “private” money for civic good, not merely borrowing from the future and leveraging taxpayer dollars to aggrandize themselves.

To summarize, pay-to-play isn’t just suspected in my city, it is ensconced. This journal detailed the connection between political donors and city contracts and found that in certain industries and professions it was nearly automatic. When  a councilman fought to put a stop to this cronyism he was overruled by the state attorney general, a Republican no less.

Heck, we learned this week that our Republican city council is building a government financed and operated grocery store on a politically determined and crime-plagued site. They tell us it will be “profitable” as well as “equitable.”

It is no surprise, then, that a huge overrun in a civic project does not draw analysis from the local media. Nor does it generate serious council discussion, nor is it likely to rise to an issue in any election.

No, we trust that hometown officialdom and an elite group of overseers are looking out for us.

We are fools. — tcl


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