Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Sunday, July 26, 2015

City of Richmond, Virginia not making much economic return from holding Redskins football practices

-- "Redskins return amid renewed concerns about economic performance," Richmond Times-Dispatch

A friend's uncle was a high level government official in a capital city government in Central America.  They were dealing with a landfill contract and they got technical assistance from an  international organization.

One of the provisions the group suggested including was about restricting radioactive waste.  They reacted, saying, "we don't have any nuclear facilities in our country."

The reply was "nothing prevents an international firm from depositing such waste in a facility in your country without your restricting it."

They realized it made a lot of sense to seek help from people with a lot more experiencing negotiating such contracts.

I am not party to high level government agency decisionmaking, but I often wonder whether or not similar levels of technical assistance are available within the US, since so many local governments get on the wrong side of contracts with business interests.

It doesn't seem like it. 

Because small and very large governments seem to be on the wrong side of such contracts more often than not.

A small city example is Richmond, Virginia, which so far finds that the economic benefits from sponsoring and subsidizing the Washington Redskins summer training camp are one-sided--although had they specified the number of training sessions open to the public, when they are held--morning sessions have less economic impact than afternoon sessions, etc., the city could have better protected their interests.

But it's also large cities like Chicago, which got its clock cleaned in the contract where in return for upfront payments--to be used to cover budget problems--they leased city owned parking structures and parking meters to a Wall Street group--giving up hundreds of millions of dollars in favor of private interests ("Revisited: Private financing of public infrastructure is good business for business").

But somehow there must be a lot of pressure to not protect a government's interest in these kinds of contracts.

Instead, there's a lot of wishful thinking, cf. "'The Art of the Con:' how scammers dupe art collectors and run off with millions"  (Post) where about people believing in the 'too good to be true" when it comes to art forgeries:
Amore, head of security at Boston’s Isabella Stewart Gardner Museum, provides chastening examples of people ignoring each of these warning signs and others nearly as blatant. The sad fact, as he writes in his introduction, is that the art market’s con artists never have any trouble finding marks who “believe, against all indications to the contrary, that they have actually stumbled on the rare deal that is both too good and true.” 
I think the same goes on when it comes to many municipal-private sector deals, because except in the case of minor league baseball stadiums, there aren't many examples of local, regional, and state governments benefiting significantly from providing stadiums, arenas, and practice facilities to professional sports teams.

Labels: , , ,


At 9:17 AM, Anonymous charlie said...

somewhat off topic, but:

I'll note that Goldman Sachs is proudly advertising it work with DC water on 100 year bonds. I'm not sure that is so great for the rate-payer.

At 12:14 PM, Anonymous Richard Layman said...

I didn't used to understand the concept of social impact bonds, now I do. They're a form of financing for governments that don't seem to have good sources of capital.

They aren't much different from the deals where a company puts up money for energy efficiency, and is paid back through a monetization of the reductions in energy costs.

I do wish that there was a way for govts. to fund innovation without having to resort to Social Impact Bonds.

What do you think?

At 1:28 PM, Anonymous charlie said...

well, I think the real problem is the US muni bond market is tapped out.

For global investors, not a great choice (US income tax exemption isn't that valuable).

For private investors in tax free accounts, also not so valuable.

That leave a pool of people with enough money is investment accounts that care about the tax free returns. And that pool of people is shrinking.

Throw in the pension problem, and it is an ugly world to raise money.


Post a Comment

<< Home