Political “economic development” harms the economy by diverting resources from more-valued to less-valued uses. Sure, it’s easy for politicians to point to the fancy shops and such resulting from politicized development, but, as Bastiat and Hazlitt warn, we must also pay attention to all the goods and services NOT produced because of the diverted resources.
Unfortunately, today development has less to do with anticipating and meeting the needs of consumers and more to do with sucking up to politicians and city bureaucrats. Those unable to gain the subsidies and special tax breaks — notably, older, established businesses — must compete on an unlevel playing field. Meanwhile, developers waste precious resources playing the political game that could otherwise go into valuable production.
The Denver Post recently reported, “The city of Westminster plans to demolish the blighted Westminster Mall to develop a downtown for the 100-year-old community. At a special meeting Monday, the City Council unanimously approved a deal to pay $22 million to Westminster Mall Co., a partnership between Kansas City, Mo.-based Dreiseszun & Morgan and Dillard’s.”
See my previous article on the city’s bogus declaration of blight. This issue isn’t about blight; it’s about the city playing games with taxpayer money to try to win back sales tax revenue from the Flatiron Mall in Broomfield.
As Brian Vande Krol notes, there are reasons to be skeptical of the city’s grand plans (though I have not personally verified all of his claims): “The Westminster Mall has received millions in taxpayer ‘investments’ over the years. It was once home to 300 shops. Then Westminster helped develop the Westminster Promenade, and then the Shops at Walnut Creek. Now Westminster Mall has 15 shops. The city is buying the mall, and you and I are once again ‘investing’ in the property. And the Promenade is losing tenants.”
The Promenade does host some empty shops, though it also has a number of apparently quite successful businesses. But I remember a few years back the Promenade featured a large, garish sign promising a city-assisted development of a new health center and related facilities at that location. I returned to the sight of the sign a couple days ago and found the following:
It is quite sad to walk through the Westminster Mall these days; most of the shops are closed down. The city, by taking a hostile stand against the mall’s owners while implying sweat deals for the right players, made unlikely any independent action regarding the property.
Maybe the tax-subsidized redevelopment will become as successful as the city hopes, and maybe it won’t. Either way, the city has no business gambling other people’s money on the project.