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March 14, 2010

When Advocates for Subsidies Say “Local,” They Mean “A Short Distance Away”

This article about local food in San Francisco illustrates the problems with subsidizing food production on pricey urban real estate. When people could more profitably use land for other purposes than growing fruits and vegetables, it takes huge subsidies to keep it cultivated. It’s not enough for people to prefer local food — they have to be willing to pay so much for it that no other use of the land would be more profitable:

“It’s really a conundrum,” says Sibella Kraus, president of nonprofit Sustainable Agriculture Education, or SAGE, which encourages sustainable local farming. “There is this demand for local, but we’re not really investing in local.” Ms. Kraus, known for her work planning the San Francisco Ferry Building market, says that while development is at a lull now due to the real-estate downturn, government at the state and local level hasn’t created enough incentives to prevent farmland loss when economic activity rebounds.

It’s worth noting that the advocates quoted here are not fighting for environmentally sound agriculture, or for forging relationships with farmers, or for supporting small farms. All those things could be done at a distance. They want the farming to take place at close geographical proximity; they think minimizing the physical space between grower and consumer is what matters. If what they really cared about were the environment or small farms, they would drop their demands for farmland in San Francisco — where it makes no sense economically — and instead support those practices where farmland is affordable. Which is more sustainable: farming in a rural area where land values are stable and crops pay for themselves, or farming next to a big city where the high price of land means the enterprise would fail without subsidies?

So, advocates should abandon the idea that “local” is a code word for “sustainable” or “better.” It isn’t. It just means “close by.” If you look around and see that the farmers near you are environmentally responsible, you can’t conclude that farmers everywhere are equally responsible. And those other farmers are local from the point of view of their neighbors. Every destructive, unsound farming practice is local to the people who live near it.

When cities or state grant subsidies to local agriculture — and in every policy I’ve seen proposed, “local” is defined in terms of a geographical area — they can’t be sure that those subsidies will go to the good local farmers and not the bad local farmers. Even if all the farmers who currently work in that region are all virtuous, there’s no guarantee that an unscrupulous farmer from somewhere else won’t move in to become local and claim the subsidy.

To those who argue for such subsidies in Missouri, I say: Not in my backyard!

March 10, 2010

Radio Appearance Imminent!

This notice may be too late for those of you who read our blog to tune in, but for those of you Columbia readers who encounter this blog entry right after I post it and find yourselves near a radio, be sure to tune in to The Eagle 93.9 FM at 4:33 p.m. to hear research assistant John Payne talk about unemployment and possibly our new study of the relationship between taxes and economic growth.

March 2, 2010

April Ford-Griffin on Proposed “Open Space”

I wanted to note that Alderman April Ford-Griffin called me today to discuss the proposed open space map that NorthSide Regeneration Regeneration LLC submitted as part of its plan for a $8.1 billion development of the city of Saint Louis.

I have written about how owner-occupied homes appear to be slated for open space, as are some area businesses.

When I asked Ford-Griffin about the fate of Fehlig Brothers Box & Lumber, a 137-year-old area business that, according to NorthSide’s plans, will become open space, she said that much detail can’t be read into the company’s plans.

“That is a concept,” she said. “That is not a document where you take it and say this is what’s going on this block and this is what’s going on that block,” she said.

You can read the updated report, with Ford-Griffin’s comments, here.

March 1, 2010

When Is a Home Not a Home?

On Feb. 23, I wrote about the proposed “open space” that NorthSide Regeneration LLC, has planned for the company’s $8.1 billion development of the city of Saint Louis. According to NorthSide’s plans and other publicly available documents, at least four owner-occupied homes are slated for open space.

When discussing the possibility of eminent domain, NorthSide representatives, including developer Paul McKee and attorney Paul Puricelli, have stated that eminent domain won’t be used to take owner-occupied residences. The specificity of the qualification “owner-occupied residences” should make anyone looking into the project take pause. After all, there are many types of properties that are important to lives and livelihoods that aren’t owner-occupied residences — for example, businesses. In the latest Show-Me Report, I profile Fehlig Brothers Box & Lumber, a business slated for open space.

February 26, 2010

A Short Rejoinder

First, I’d like to thank Hugh Scott for his response to my op-ed arguing against expansion of the MetroLink system. I doubt we will ever see completely eye to eye on the subject, but an informed dialogue can still be illuminating for everyone involved.

Before I respond directly to any of Scott’s points, let me just clarify something that may have been unclear from the op-ed (a 700-word format does not allow for full explanation of every point): I was not arguing against the proposed half-cent sales tax. My point was that we should not expand the MetroLink system into areas with relatively low population densities because the lines would have low ridership and be even more heavily reliant on tax dollars than current lines.

Scott observes that the flexibility of buses is a disadvantage as well as an advantage, a point well-taken. Light rail is undoubtedly better than buses when it comes to understanding routes. However, the question is whether that disadvantage outweighs the advantages of flexibility and lower costs that buses provide, and my answer is that it depends on population density. The denser an area, the more rail should be preferred to buses, and vice versa.

With regard to the possible lines of MetroLink expansion, Scott is perfectly right that Metro does not plan on expanding the system without federal funds to diffuse the costs of constructing the line(s). However, even if a new line would not cost area taxpayers a cent to build, it could still be a bad deal for them if very few people rode it and they were then on the hook for operating costs. Again, my argument is that the best method of forecasting ridership is through population density. Aside from the north-south corridor, none of the proposed lines come close to matching the densities found along the current lines.

Finally, I agree that MetroLink performs well against the light-rail systems of other cities, but that is a relative metric when the question should be an absolute one: Do the benefits justify the costs? Even existing lines do not meet the profit-loss test used in the private sector, so light-rail systems are not efficient by our most common metric for success. Perhaps we need another absolute standard we could use to determine which light-rail lines are successes and which are failures, but for now the best that can be said is that it is unclear whether the benefits of MetroLink expansion would outweigh the costs.

February 23, 2010

At Least Four North Side Homes Slated for “Open Space”

The home of Shirley Hamilton, in the 2200 block of Madison Street, in Saint Louis' north side. Photo by Caitlin Hartsell.
The home of Shirley Hamilton, in the 2200 block of Madison Street, in Saint Louis’ north side.
Shirley Hamilton. Photo by Caitlin Hartsell.
Although NorthSide redevelopment plans for her area indicate that Hamilton’s neighborhood is slated to be replaced, Hamilton said she’s not concerned. As a resident of a city block with only three houses, she said, she’s been expecting this. “It’s been going on as long as I’ve been here,” she said.
Another home on the 2200 block of Madison. Photo by Caitlin Hartsell.
Another home on the 2200 block of Madison. Photos by Caitlin Hartsell.

Shirley Hamilton has been living at 2209 Madison since 1978. Her home is one of three houses on the 2220 block of Madison, all of which are small, but tidy. Between each house is a good amount of open space.

These three houses fall squarely within the boundaries of the recently approved $8.1 billion development of the city of Saint Louis’ north side. Of course, about 4,600 other properties also fall within those boundaries, but in the case of the 2200 block of Madison, NorthSide Regeneration LLC, the company behind the development, may be endangering one of its most frequently invoked promises.

That promise concerns the use of eminent domain. Although eminent domain is constitutional, it can be very unpopular, especially if it appears that a government agency is using that power merely to help a private business.

Proponents of the development, including developer Paul McKee, NorthSide lawyer Paul Puricelli, Alderman April Ford-Griffin, and Alderman Marlene Davis, have said repeatedly that the city won’t use eminent domain to take owner-occupied homes, and that fears to the contrary are unfounded. In fact, the company went even further. When NorthSide applied for millions of dollars in tax credits from the state, the company submitted an affidavit stating, among other things, that “The Applicant has not identified any owner-occupied residences for acquisition under the Redevelopment Plan.” McKee, the chief manager of NorthSide, signed it.

Along with that affidavit, NorthSide submitted a list of about 260 owner-occupied residences to the state. Hamilton’s home and the house sitting the farthest west on her block were on that list.

NorthSide has also disclosed some of its preliminary plans for the area in its redevelopment plan, which was submitted to the city when the company applied for nearly $400 million in tax increment financing (it has been approved for up to $380 million). One of the more interesting pages of that plan is page 24, which is a map of “proposed open space” for the area.

According to that map, NorthSide plans to remake four city blocks into open space: the area lying between Madison Street and Maiden Lane, west of 22nd Street and extending a little past Jefferson Avenue. In other words, despite all the assurances about the limits on eminent domain for the NorthSide project — including the affidavit of its chief manager — Hamilton and her neighbor are two owners who may not have long to occupy their homes.

That’s not to say that the company didn’t try to purchase Hamilton’s home. About a year ago, she said, she got a letter from a lawyer, representing an anonymous buyer, looking to purchase her home. When Hamilton called the number listed, she said, she was quickly offered $60,000 for the property. But Hamilton, who is retired, wasn’t interested in searching for a new home, and asked instead if the buyer could offer her a deed to a different property, elsewhere in the city. The lawyer promised to check, Hamilton said, but never called back. A few months later, Hamilton said, she was sent the same form letter.

Hamilton said that her next door neighbor did sell. According to city property data, the second house on the block is owned by MLK 3000, one of the companies that NorthSide used to acquire properties under the radar. Hamilton said she isn’t interested in moving, but if the developer could offer a trade instead of money, she would consider it. She’d like to stay in the city.

An email inquiring about how concrete the plans for open space are, and whether NorthSide would adjust its plans if property owners were unwilling to move, did not receive a response from Bill Laskowsky, NorthSide’s chief development officer, and a company representative.

Ultimately, Hamilton said, she’s not concerned. As a resident of a city block with only three houses, she said, she’s been expecting this.

“It’s been going on as long as I’ve been here,” she said. Laughing, she noted that when Mayor Freeman Bosley Jr. was in office, her home was slated to become a golf course.

“I’ll deal with it when it comes,” she said.

According to NorthSide’s plans and its submitted list of owner occupied residences, two other homes appear to be slated for open space: one on the 2500 block of Madison, and one on the 2700 block of Glasgow Street.

Within other documents submitted by NorthSide, the company has designated the area surrounding Hamilton’s home as “mixed use,” which could indicate a different set of plans for the area.

February 17, 2010

WashU Economist Testifies NorthSide Forecasts “Made Out of Thin Air”

The first round of arguments against a projected $8.1 billion development of the city of Saint Louis’ north side was made in court yesterday.

The bulk of the trial, which will continue on Feb. 25, was devoted to testimony by Washington University economist Michele Boldrin, who clearly doesn’t think much of the projections and forecasts developer Paul McKee used to persuade city officials that his development was viable and worthy of more than $390 million in tax increment financing (TIF).

“I find these numbers completely unbelievable,” Boldrin said. “Pie in the sky” was another frequent characterization.

And, later, “This is something that if an MBA student came up with this as a term paper, I’d throw him out of the office.”

Boldrin’s main argument, repeated many times, was that no justification was given for any of the especially rosy growth and employment estimates. For example, the development company, NorthSide Regeneration LLC, estimates:

  1. That property value growth rates will be as high as 20 percent in 2010, and 15 percent in a number of following years.
  2. That more than 20,000 new, permanent jobs will be created as a result of this development.
  3. That there will be buyers for 6,000 new homes, valued at an average of more than $450,000.

Dave Roland, a policy analyst at the Show-Me Institute, testified briefly that the north side area, which you can explore here, is not as blighted as NorthSide asserts. He, and Terry Artis, the owner and founder of the River City Examiner, took video of some of the areas NorthSide had noted as being especially blighted. The video, which is a publicly available court record, is linked below.

Dave Roland – A Look at Purported Cases of North Side “Blight” in St. Louis from Audrey Spalding on Vimeo.

February 16, 2010

MetroLink Expansion a Bad Idea

Show-Me Institute research assistant John Payne recently had an op-ed published in the Riverfront Times about the proposed tax hike to fund a MetroLink expansion. Payne’s piece elegantly summarizes the following points about why Proposition A is a bad idea:

  1. Although the campaign message focuses on strengthening current lines that have had service cuts, the proposition would focus appropriated funds on expansion to less populated areas. MetroLink already has trouble paying for its current infrastructure; expansion would only create the need to use even more tax dollars in the future, or cut existing lines still further.
  2. MetroLink has a poor track record of correctly forecasting its costs. (Payne cites as an example the Cross-Country MetroLink Extension, which cost upwards of $676.8 million after an initial projection of $550 million.) If it had been constructed through a public-private partnership (like in Denver), the contractor would have been accountable to spend more responsibly, without repeatedly asking for tax increases. In contrast, MetroLink’s need for a tax increase is written into its 2009 fiscal budget.
  3. Expansion of bus routes is much more cost-effective than expanding light rail. From the op-ed:

    We would obtain a much greater benefit at a significantly lower cost if we instead focused our public transportation dollars on new, higher-speed bus lines, which are cheaper and far more adaptable than light rail. Although the expansion of light rail into every reach of suburbia may promise an end to traffic congestion and the revitalization of the city, it will ultimately entail spending huge amounts of money in order to transport far fewer additional passengers than are served by the lines already in existence.

  4. Some, like the members of this Facebook group supporting the measure, argue that additional public transit services are necessary in order to help the city’s low-income residents. Many advocates of Proposition A don’t realize that the tax increase it would bring is regressive, because it offers no rebates or exemptions based on income level, so it would disproportionately hurt the poor. It would be used to expand services past the city and county, so the people paying the taxes won’t benefit directly from the expansion.

Gridlock and the History of Light Rail in Saint Louis

I’m currently reading Gridlock: Why We’re Stuck in Traffic and What to Do About It by Randal O’Toole, the Antiplanner. Although the book discusses the problems in America’s transportation system in general, certain parts of it are specific to light rail in Saint Louis and the debate surrounding the proposed MetroLink expansion. I’d like to share some passages from Gridlock that communicate why expanding MetroLink is unnecessary and cost-inefficient.

First, O’Toole provides evidence that expanding MetroLink hasn’t historically increased ridership in Saint Louis:

When St. Louis opened its first light-rail line in 1993, it was hailed as a great success because system ridership, which had shrunk by nearly 40 percent in the previous decade, started growing again. But when St. Louis opened a second line in 2001, doubling the length of the rail system, rail ridership remained flat and bus ridership declined. By 2007, total system ridership was no greater than it had been in 1998.

Second, O’Toole describes how Saint Louis experienced a reduction in energy efficiency after launching a light-rail line. He explains that this is because the city ultimately uses more fuel on buses that carry smaller average loads than it did before building the line.

For example, in 1991, before Saint Louis built its first light-rail line, St. Louis buses averaged for than 10 riders and consumed 4,600 BTUs per passenger mile. In 1995, after opening the light-rail line, average bus loads declined to less than 7 and energy consumption by bus and light rail together increased to 5,300 BTUs per passenger mile. CO2 emissions also climbed, from 0.75 pounds to 0.88 pounds per passenger mile.

Third, MetroLink’s revenues add up to less than its expenses, and an expansion would exacerbate this deficit:

The transportation plan for St. Louis [...] notes that the transit agency’s projected revenues could not even cover its operating costs, much less the cost of light-rail expansion. The plan adds that county voters rejected a tax increase needed to support transit operations and that, even with that tax, the agency’s revenues would be insufficient to support the proposed expansions.

O’Toole has written several pieces on the subject of high-speed rail for the Show-Me Institute. His most recent study for the Show-Me Institute, “Why Missouri Taxpayers Should Not Build High-Speed Rail,” was published in September.

February 15, 2010

NorthSide Trial on Tuesday

NorthSide Map
Click to Enlarge
Interactive NorthSide Map
Interactive NorthSide Map

Another round of challenges to the $8.1 billion development of the city of Saint Louis’ north side will be heard in court tomorrow.

If you’re about to skip reading this post because the word “development” seems boring, hold on a moment. The project, put forward by developer Paul McKee, is contentious because it’s enormous — about two square miles — and because it has been approved for a large amount of public financing. McKee has asked for about $380 million in city tax increment financing (TIF), received approval for more than half, and will likely receive the rest in a few years. In late December, the state granted the development company, NorthSide Regeneration LLC, more than $19 million in tax credits (which can be used dollar-for-dollar to pay off taxes). Interestingly, the Department of Economic Development did not issue a press release, which it generally does when it issues tax credits.

One of the issues that will likely be raised at trial tomorrow is whether NorthSide unfairly characterized the area as being blighted. In its TIF application, NorthSide submitted a blighting study that systematically categorized more than 4,600 properties within the redevelopment boundary as being blighted. Along with its classification of properties as blighted for being dilapidated, unsafe, or unsanitary, the company also included blighting factors for properties with excessive vegetation, properties that had neither increased or declined in assessed value between 2003 and 2005, and properties with an increase in assessed value that totaled less than the city average from 2003 to 2008.

Another issue that could be raised at trial is that of eminent domain. McKee, along with the city aldermen who backed the project and pretty much every other public proponent of the project, have sworn repeatedly that eminent domain will not be used on owner-occupied property. What that means for the fate of non-owner-occupied properties within the boundary is less than clear.

Publicly available court documents also reveal some interesting details:

  • NorthSide is curious about how the plaintiffs’ court costs are being financed, and requested that Sheryl Nelson and Elke McIntosh (two of the plaintiffs) reveal how they’re paying for litigation. Judge Robert Dierker did not grant the request.
  • Both sides have taken deposition from Michele Boldrin, an economics professor at Washington University.
  • NorthSide submitted a letter of interest from the Bank of Washington (in Missouri) as evidence of financial backing of the development. However, NorthSide has not submitted evidence of a contract with the bank, which has less than $800 million in total assets.
  • According to NorthSide’s application for state tax credits, the company has spent about $25 million to purchase property in the redevelopment area.

The trial will start at 11 a.m. in Division 18 of the city’s Circuit Court. Judge Dierker, who quoted economist F.A. Hayek when rejecting the plaintiff’s request for a preliminary injunction, will hear the case. You can read that ruling here.

The Will of the People, Revisited

Today, I’m going to Jefferson City to testify on bills related to the initiative and referendum powers that the Missouri Constitution secures to this state’s citizens.  One of the points that I hope to make plain is related to an article that ran last week on the Kansas City Star’s Prime Buzz blog, which quoted the president of the Greater Kansas City AFL-CIO as saying that the organization would work to prevent citizens from being able to vote on whether Kansas City or St. Louis should replace their earnings taxes, claiming, “This is not the will of the citizens.”

The irony, of course, is that nothing demonstrates “the will of the citizens” more than, say, letting them vote for themselves!

This is yet another example of a problem I have noted several times before: Powerful interests can (and do) game the system to prevent Missouri citizens from voting on issues of great importance. The most prominent example is the way that the Missouri Municipal League has for years been engaging in litigation strategically calculated to keep eminent domain reform off of the ballot. The most damning element, in my mind, is that at least in the case of the Missouri Municipal League, the opponents acknowledge the virtual certainty that eminent domain reform would be approved if the citizens were allowed to vote on it.

If an organization or some other group of citizens is concerned about the wisdom of any given ballot initiative, they are well within their rights to communicate their concerns to voters and to try to persuade Missourians not to approve the proposition. But to manipulate the system in such a way that citizens are denied the opportunity to adopt what they believe to be valuable changes to their laws is reprehensible.

January 25, 2010

Show-Me Institute Question of the Week

Readers, commenters, Missourians, lend me your keyboards.

What do you think is the most heavily subsidized lifestyle: urban, suburban, exurban, rural, or small town? Think of subsidies of every level and in every way — so, basically, when you choose to live in one of these five locations types, which is the one the depends most on other people giving you money through involuntary government subsidies?

Let’s briefly define our terms: By “urban,” I mean within major cities; “suburban” should be the mainline suburbs of those cities; “exurban” should be the extended suburbs that came into being about 20 years ago; by “rural,” I mean farming, ranching, etc.; and by “small towns” I mean towns within rural areas, including small cities like Joplin or Cape Girardeau.

Here are my votes, from most heavily subsidized to least subsidized: urban, rural, exurban, suburban, small towns.

I think there would be a big gap between numbers 2 and 3, and a pretty good space between 3 and 4. I’ll try to find some data to get some answers after I have enough responses. Go!

January 4, 2010

George Bailey Wanted to Be an Urban Planner

I, like billions of other people, watched It’s a Wonderful Life over the holiday season. Unlike many prior watchings, though, this time I sat down and watched the entire movie from beginning to end. I bet a lot of people have seen it mostly like I had, parts picked up here and there until you know the whole thing by heart. However, this time I picked up on a line which either I had not caught before or didn’t really care about before. When George Bailey is discussing his dreams with his father early in the film (scroll down to the third-quote from the bottom for most of the scene, but not this one line), he lists for his dad all the dreams he had, including a desire to “plan modern cities.”

Obviously, things got in the way — so that dream, like so many of George’s, never came true. But, thankfully, it all worked out in the end and Clarence got his wings. I have news for George Bailey: Pottersville was a planned city. Bedford Falls was not. Which one would you rather live in? (I know, I admit I’d rather hang out in Pottersville, too, but I want to live in Bedford Falls.)

December 15, 2009

Obstructing the Will of the People

Here at Show-Me Daily, we have long documented the efforts of the Missouri Municipal League to prevent this state’s citizens from voting on constitutional amendments that would severely limit abuses of eminent domain in this state. For years now, the league (its leadership is made up of elected officials from across the state) has successfully persuaded cities to use your taxpayer dollars in order to help support their effort. Part of that effort has included litigation that the filers claimed to be an attempt to get a “fair” ballot title — but, in reality, it was intended to keep the measure off the ballot entirely by so delaying the signature-gathering process that it would be impossible to collect the necessary number within the limited time available.

Up until a few weeks ago, advocates of eminent domain reform had no real proof that the Municipal League’s lawsuits had this suspected insidious purpose. On Nov. 20, however, at a meeting of the Missouri Bar Association’s Eminent Domain Committee, a managing partner in the law firm representing the Municipal League was asked to give an update on the litigation. She had this to say (audio transcript; emphasis added):

It’s not a real big update, but … um … from the standpoint of the initiative petition, uh, we did partially win, uh, in the … at the trial court level, and it’s on expedited appeal for the western district, um, which will be argued in December, with the main objective being to delay the gathering of signatures and, um, hopefully we’re … we’re accomplishing that.

Missouri Citizens for Property rights, the group spearheading the petition effort, has asked the court for permission to supplement the record with the audio evidence of the attorney’s statement, and should hear today whether the court will agree. If the court chooses to take her statement seriously, it could assign sanctions against her firm for violating the ethical rules (yes, attorneys are supposed to understand ethics) governing the legal profession.

The story has started to gain interest nationwide — as it should. It is yet another example of powerful people trying to prevent ordinary citizens from having their own say on important issues. The AP article has so far been run by media outlets in Atlanta, Phoenix, Washington, D.C., Seattle, Miami, Philadelphia, Minneapolis, and Dayton, Ohio. Here in Missouri, the story has been reported in Kansas City, Springfield, Columbia, Jefferson City, Joplin, Cape Girardeau, and St. Louis — although it is interesting to note that the Ost-Pay Ispatch-Day, for some reason, has not yet covered this story.

December 2, 2009

Listen In on Thursday Morning

I’ll be a guest on Charlie Brennan’s morning show on KMOX tomorrow from around 9:30–10:00 a.m. What will I be discussing? I’m glad you asked. …

Although we haven’t yet discussed it on the blog, I hope that all of our readers are aware that the St. Louis Police arrested Gustavo Rendon, husband of the president of the North Side Community Benefits Alliance. Why? Because he was distributing fliers that opposed the NorthSide redevelopment project recently approved by the city. Even worse, he just happened to be doing so outside the church of Alderwoman April Ford-Griffin, a staunch supporter of the project. So, two police officers arrived, threatened to put his kids in foster care if he didn’t stop distributing the fliers, then arrested him.

The charge? Affixing advertisements to private property.

Fortunately, the city attorneys quickly realized that the ordinance under which they arrested him didn’t, you know, prohibit what he was doing. And even if it had prohibited distributing fliers that communicated purely political ideas, the ordinance probably would have been unconstitutional anyway. So, today they announced that they were dropping the charges.

The bigger problem, which I hope to address with Mr. Brennan, is that Mr. Rendon’s arrest is suggestive of a much larger problem: powerful people trying to stop citizens from having their say on important public issues. In this case, it was police officers arresting someone for communicating opposition to a redevelopment project. In Jim Roos’ case, a city agency is trying to destroy a sign calling for an end to eminent domain abuse. In the Northeast Ambulance and Fire Protection District, officials tried to fine and ban from future meetings certain taxpayers who protested the district’s insane spending. And, of course, the Missouri Municipal League is using taxpayer money for a lawsuit with the primary goal of keeping off the ballot a constitutional amendment that would go a long way toward ending eminent domain abuse in the state — because they know it will pass if citizens are allowed to vote!

So, like I said, tune in tomorrow morning as Charlie Brennan and I discuss these issues. Who knows, there might even be some interesting surprises involved. And, if you can’t listen to tomorrow’s show, keep an eye on the Policy Pulse website, where Audrey Spalding is continuing to do excellent work reporting on abuses of taxpayer money and government authority.

November 30, 2009

Uneven Playing Fields

As we have written previously, one of the great evils of tax increment financing (TIF) is that it offers special advantages to the beneficiaries selected by elected officials, forcing everyone else in the market to compete at a disadvantage. Sadly, there’s a new example of how destructive this sort of policy can be.

Months ago, the city of Rock Port, Mo., decided to approve a TIF project worth $175,000 in order to bring a new grocery store to town. The long-time owners of Rock Port Market (up to that time the only local grocery store serving the town’s residents) said they didn’t mind fair competition from a new store, but objected that the TIF would give the new store a gigantic financial advantage not offered to the existing business. Sadly, just six months later, the family that has operated Rock Port Market for nearly 80 years has decided to close the market’s doors.

True economic development happens best when governments allow businesses to compete on a field that offers no special advantages to any of the players. The government does a grave disservice to its citizens when it assumes the responsibility for picking winners and losers in the market, rather than letting businesses succeed or fail on their own merit.

November 17, 2009

A Tree Grows in Kansas City

I agree with this quote about urban farming from an article in the Pitch:

“I’m hoping for more availability and enthusiasm for local food in Kansas City — seeing a code that allows growers to sell and connect with potential buyers. Then local food will grow all on its own,” said Rachel Hogan, who recently completed a year-long internship on a series of organic farms in Missouri and is looking to help develop community gardens in Kansas City.

Farmers should be able to sell what they grow, regardless of whether they live on a rural farm or in a residential area or city. Get rid of the barriers to urban farming, and more people will pursue it.

Some people would be content if government just got out of the way, but other activists are asking the city of Kansas City to promote local gardening actively:

Residents suggested that new neighborhood trees planted by the city could be fruit or nut trees; land could be designated for agricultural purposes similar to park land; organic practices could be mandated for urban farms; and changes to the zoning code could provide guidance for would-be farmers.

Let’s look at those suggestions one at a time: I don’t see anything wrong with planting fruit trees, if the city is going to be planting trees anyway. It could be a problem if the fruit trees require more care than the trees Kansas City would normally plant, or if it’s cumbersome to remove the fruit that falls. Community gardening enthusiasts could probably come up with solutions to those issues.

I’m still opposed to designating public land for agriculture. That gives local agriculture an unfair advantage over other activities — cities don’t give out free land for bakeries or pharmacies. As for the argument that agriculture is special because everyone will depend on local food in the case of economic collapse, everyone would depend on local everything in that highly unlikely scenario. We couldn’t bring in bread from other places if disaster struck, so we might as well start subsidizing the bakeries. If you buy that argument for public farmland, you’re agreeing to local subsidies for every business.

Mandating organic practices is another policy that Kansas City would be wise not to pursue. When you want people to feel free to farm in the city, the last thing you should do is put a lot of extra requirements in their way.

And, finally, I don’t know what specific “guidance” activists want to impart through zoning code changes. Whatever it is, there is probably a less coercive way to guide farmers. People who want guidance usually ask for help or advice — not for an order from the city.

November 12, 2009

Lessons Learned From Kelo

The Wall Street Journal reflects on Pfizer’s recent decision to leave its location in New London, Conn. I like the following statement from the op-ed in particular:

If there is a lesson from Connecticut’s misfortune, it is that economic development that relies on the strong arm of government will never be the kind to create sustainable growth.

This is a lesson that cities like Saint Louis should remember and asseverate in their future development projects. As demonstrated in New London, government involvement produces opposite-than-desired results, such as driving out businesses and attracting feral cats.

October 21, 2009

Listen Up!

This week, I was thrilled to have the opportunity to spend two consecutive afternoons being interviewed on St. Louis’ WGNU, a radio station with programming directed to the city’s African-American population. On Monday afternoon, I spent an hour as part of a panel conversation (with Sheila Rendon and Romona Williams of the North Side Community Benefits Alliance) discussing eminent domain and the proposed NorthSide Regeneration Project on Kuumba Nia’s radio show. (Audio available here.)

The conversation went so well that I was invited back the following afternoon to spend another hour discussing the same topic with co-hosts state Sen. Robin Wright-Jones and John Bowman on her show, “The Wright Side of Politics.” (Audio available here.) My conversation partners the second day were Barbara Manzara and Keith Marquard, also of the North Side Community Benefits Alliance. If you’re interested in hearing from those on the front lines of the upcoming battle over the proposed redevelopment effort, give these two shows a listen!

October 2, 2009

“Little Pink House” Author Jeff Benedict Tells Story of Infamous Kelo Eminent Domain Case

The Show-Me Institute was pleased to be able to host Jeff Benedict, author of Little Pink House: A True Story of Defiance and Courage, for speaking engagements in both Kansas City and St. Louis earlier this month. The first of those events, held in conjunction with the Kansas City Public Library, is now available for your viewing pleasure on our website. Hear how Susette Kelo’s heroic fight to save her New London, Conn., home turned into the landmark Supreme Court case that outraged homeowners and sparked a legislative backlash across the nation. Kicking off the event is R. Crosby Kemper III, executive director of the Kansas City Public Library and chairman of the board of directors for the Show-Me Institute.

I’ve also posted it below, for your convenience. This playlist consists of seven separate parts. After each individual part has finished playing, the playlist should automatically load the subsequent part until the sequence has finished. You may also choose to view any individual part on its own:

Part 1 (10:00) | Part 2 (10:03) | Part 3 (9:47) | Part 4 (10:01) | Part 5 (9:59) | Part 6 (10:00) | Part 7 (5:58)

October 1, 2009

Great Questions About High-Speed Rail at the Columbia Daily Tribune

Today’s Columbia Daily Tribune has a terrific editorial asking a lot of tough questions about the value of high-speed rail for Missouri. Questions like: Will anyone ride it? What about the operating costs? Will more subsidies be required? And where the hell was I?

All good questions, and all answered (except the last one) in Randal O’Toole’s new Show-Me Institute study about high-speed rail in Missouri. Check out both the article and the study, and thanks to Combest for the original link.

September 28, 2009

Urban Planners Know What Is Good for Us!

It is a delicious coincidence that the Show-Me Institute is bringing the Antiplanner himself, Randal O’Toole, to St. Louis on the same day that the Post-Dispatch reports on a county renewal plan for Jamestown Mall that involves the recommendations of a number of urban planners from around the country. Seriously, it apparently wasn’t enough just to get terrible advice from planners in our own state. We had to bring planners in from around the country to give us stupid suggestions and offensive recommendations — i.e., that St. Louis County should just use eminent domain to take the mall if the owners won’t sell it.

From the article:

A key first step, the panel said, is for St. Louis County to take over the entire site, chunks of which today are owned by five companies, all from outside the area. It should buy them out, through eminent domain if necessary.

There are a lot of things wrong with urban planning, but the total lack of respect for basic property rights is the most awful. That goes hand in hand with the insufferable condescension that planners demonstrate in their assumptions that people don’t know how to use their own property, and that it takes a panel of “experts” to build places in which other people want to live. In almost every case, the places most people want to live — the suburbs — are exactly the types of places the planners hate. But still they pretend to know what is good for us.

Thank God for the planners who can help the county achieve this:

[I]t’s the only way to create a fresh start, to build something new that is big enough and great enough and unique enough to draw people there, like people go to the Loop or the Central West End now.

I can assure you that urban planners had little to nothing to do with the successes of the West End (where I used to live) or the Loop (where I hang out a lot now, as a U. City resident). Entrepreneurs and residents, not government planners, built those places into what they are today. (Although one can commend the local governments in both places for allowing entrepreneurship to work, rather than getting in the way.)

One planner from L.A. is excited about the potential:

“We need to be brave,” he said. “We need to be bold. We need to have a sense of urgency.”

Unfortunately, I am pretty sure we will also need taxpayer dollars as incentives for the planners to create their “livable space.” I can pretty much guarantee that if the county trusts the urban planners too much and leaves too little room for the risks and rewards of the free market to operate, anything they do for Jamestown Mall will fail even more than it is failing now.

September 22, 2009

North Side Removal

Last night, I attended the latest NorthSide Regeneration, LLC, community meeting, along with Policy Pulse reporter Audrey Spalding (be sure to read her excellent article.) I was impressed with the presentation; the NorthSide development team has obviously spent a lot of time working on the logistics of the more than 4,000 parcels of land involved in their proposal. (You can read more about those plans on Policy Pulse.) However, aside from the generalities, many questions were left unanswered about how the development might affect the future of current area residents.

Meeting organizers requested that nobody record the proceedings, and had a few confrontations with some zealous bloggers. Arguments became heated a number of times, as community members questioned how their own properties fit into the proposed plans. Some people had seen the areas in which their houses and businesses currently stand designated as “green space” on the projected plans. Although the developer and city officials responded to some questions, others were left unanswered. The portions of the plans that are publicly available are still vague and general enough that a standard answer was that no one yet knows what will happen to a specific house or business in question, because the plans are not yet finalized.

A PowerPoint presentation provided some revealing before-and-after statistics about college education. Currently, only 3.4 percent of north side residents have a college education, compared to 15.5 percent nationally. According to NorthSide Regeneration’s presentation, they envision that 75 percent of area residents will have a college education. Not included alongside that 75-percent figure was the likelihood that such a drastic increase in college attendance figures will result not from a greater number of existing north side residents attaining higher education, but from a largely new population of better-educated residents populating the area and displacing many current residents.

Parts of the north side area are undeniably blighted, and do need work. The plans as presented showed the possibility of an attractive new community that might work well for upper-middle class residents who are looking for new parks, transit, and grocery stores within walking distance. However, although the presentation seemed designed to reassure area residents about their community’s bright future, it skirted the fact that many of the people who live there now have the most to lose from the new development, and will likely not be able to afford to continue living there if the plans proceed.

September 17, 2009

SMI Releases New Study of Eminent Domain

On Tuesday, Sept. 15, the Show-Me Institute released a new study: “Gradual and Silent Erosions: How the Missouri Supreme Court Expanded the Power of Eminent Domain.” It discusses last year’s Missouri Supreme Court decision in City of Arnold v. Tourkakis, and was written by Timothy Sandefur, a senior attorney for the Pacific Legal Foundation and a nationally recognized expert in constitutional protection of property rights who represented Homer and Julie Tourkakis in their fight to save their dentist’s office from being taken from them by Arnold, Mo., on behalf of a private developer.

Sandefur points out several areas in which the Tourkakis court’s analysis veered away from earlier holdings about how laws should be interpreted and applied, before concluding that the court’s refusal to protect Dr. Tourkakis’ office from the wrecking ball represents only the latest in a series of steps that Missouri courts have taken away from the powerful protections for property ownership that are enshrined in the state’s Constitution.

September 16, 2009

Well, We Can’t Let Just Anyone on the KC TIF Commission, Now Can We?

I am definitely with Kansas City Mayor Mark Funkhouser on this one. The Star has the story here. The dispute over whether an artist and entrepreneur in Kansas City is “qualified” to sit on the city’s “prestigious” (said sarcastically) tax increment financing (TIF) commission is absurd. Apparently, the fact that the artist currently known as Stretch didn’t know every government acronym off the top of his head is some sort of disqualification:

[City Councilwoman Jan] Marcason said she had to explain to him that the terms MBE and WBE meant “minority business enterprise” and “ women’s business enterprise” and that the city set goals for each in awarding public contracts.

I guess he would have been a terrible bureaucrat during the New Deal. It is also apparently being held against Stretch that he understands the economic laws of labor and prices, and is, incomprehensibly, not 100-percent committed to having the government determine the price of labor:

Marcason said she also was unsure of Stretch’s commitment to contractors paying “prevailing wages,” which means the standard pay and benefits to laborers in the largest city of a county.

Oh, the horror! The last thing the TIF Commission should possibly have is one person looking out for taxpayer value. God forbid that government funds don’t get properly spent placating every interest group in town.

The business community is also unhappy that someone might not plan on going along with the tax incentive gravy train:

Some in the business community say the Stretch and Lindsay nominations continue a pattern of replacing experienced board members on development agencies wholesale with newcomers who at best are unfamiliar with incentive programs and at worst, hostile.

Stretch may or may not have known what MBE and WBE meant, but I wonder whether those opposed to his appointment have any idea what “regulatory capture” means. Commissions like this desperately need independent voices like his.

September 8, 2009

Why the Secrecy?

It took awhile to find in today’s paper, but the Post-Dispatch had a good article about developer Paul McKee’s $8 billion pitch to redevelop Saint Louis’ north side. As I wrote before, this development involves Tax Increment Financing, eminent domain, and debate about the role that city agencies should play in the real estate business.

Tim Logan, author of the McKee article, did a great job of talking to the people involved. There’s also some good context. But my recent experience at a public meeting about the development, held at Zion Lutheran Church by McKee, Alderman Marlene Davis and Alderman April Ford-Griffin makes me doubt the thrust of Logan’s article.

Is McKee really winning people over?

At his meeting at Zion Lutheran Church, which was open to the public, Ford-Griffin actually told a journalist to stop recording. When McKee spoke, he told a girl in the back of the church basement to stop videotaping, because it makes people “uncomfortable.”

McKee said then that he doesn’t ask media outlets like the Post-Dispatch to attend such meetings. I can’t be certain, but I’m pretty sure area journalists know this. In order to fairly characterize the community response to this proposed project, you have to go see what community members are saying to the developer himself. I hope some Post-Dispatch journalists have at least tried to attend.

If McKee is winning over the north side community, and there is really a sea change, why doesn’t he want the media to come to meetings and see that? Why would an elected official tell a journalist to shut off his microphone at a meeting open to the public?

Well, in the case of the Zion Lutheran Church meeting, the meeting didn’t go smoothly. Some attendees muttered about the aldermen’s chances at reelection. Others stood and made long speeches about eminent domain. There was some shouting.

In response to some community members criticizing her by name, Davis said, “No one is in love with anything. This is business.”

To be sure, there were some vocal critics at the church who make it a point to go to all of McKee’s meetings and attempt to cast the development in a bad light. However, I’ve been to a number of meetings organized by the critics. I know their faces. And there were a lot of other faces at Zion Lutheran Church that I hadn’t seen before.

I personally can’t wait for the updated TIF application to come out tomorrow. McKee, Davis, and Ford-Griffin say that the use of eminent domain has been ironed out of that version. If that’s the case, then north side residents will know that their property won’t be taken away from them by the government for the use of a private developer. But I’m still wary. After all, if the application is the answer to all of the critics’ concerns, why wasn’t it made available for scrutiny as soon as possible?

August 26, 2009

Look Here, Please

Tonight at 7 p.m., at Zion Lutheran Church, developer Paul McKee and alderwoman April Ford-Griffin will make a presentation about the $8 billion proposed redevelopment of Saint Louis’ north side. Part of that redevelopment would involve the NorthSide Regeneration company acquiring more than 2,400 properties. On the list are a number of churches, as well as owner-occupied homes.

I hope that the mainstream media will cover tonight’s presentation. The development is contentious, not least because it is very large and involves an application for $410 million in tax increment financing (TIF) from the city, but also because of current residents’ worries that the company will use eminent domain to take their property (there is, in fact, mention of using eminent domain in the NorthSide Regeneration company’s TIF application).

There is also the issue of whether a city agency was somehow complicit by holding on to vacant property in the north side for more than a decade in case a developer came along, rather than putting the property up for sale.

These issues have been brought forward several times by the North Side Community Benefits Alliance (NSCBA), a group of north side residents determined to be involved in the redevelopment process. Although the group is new, it has done a lot to publicize this issue. Recently, the NSCBA held two community forums. At the first, Saint Louis TIF commissioner and Saint Louis School District Board of Education member David Jackson spoke. At the second, Christina Walsh, of the Washington, D.C.-based Institute for Justice spoke. Both speakers were noteworthy, yet both forums were mostly ignored by the press.

To his credit, Don Marsh, host of “St. Louis on the Air,” did have NSCBA members on his show, and when one of the banks holding more than 400 mortgages of McKee’s north Saint Louis properties was seized by the FDIC, KMOX contacted NSCBA’s vice president, Barbara Manzara, for quotes.

It is likely that a number of community residents who oppose the proposed development will attend tonight, which means that reporters could hear both their concerns and McKee’s responses without filter. I didn’t think that media needed a nudge to cover this side of the issue, but here it is: This is important, and this is newsworthy.

July 27, 2009

Turning Your Money Against You, Part II

Almost precisely one year ago, I wrote about how some Missouri cities were dedicating your taxpayer dollars to preserve the government’s ability to take property from one private owner and give it to another private owner. As you may remember, the Missouri Municipal League engaged in litigation intended to prevent Missouri’s citizens from voting on the question — using a combination of funds from city governments and contributions from the same commercial developers who are eager to see eminent domain used to their advantage.

Folks, they’re at it again.

Almost as soon as Missouri Citizens for Property Rights got a ballot title from the Secretary of State, the Missouri Municipal League sued in an attempt to make the ballot title recite a parade of imaginary horrors that they claim would follow the end of eminent domain abuse. A couple of weeks ago, Judge Richard Callahan ruled that the Secretary of State’s ballot title could go forward with only one insubstantial adjustment.

The Missouri Municipal League has appealed that ruling, continuing to insist that the restoration of property rights should be described as nothing less than the death knell for America. And, again, they’re calling on your elected officials to pony up your money in order to prevent you from having a say in the matter.

As a “Red Alert” sent out by the Municipal League states:

[A]lthough cities cannot directly contribute to support or oppose any ballot measure, cities may fund public informational campaigns. The City of Springfield has already committed $5,000 to this effort. Other cities are following suit. City contributions should generally reflect the size and financial capacity of the participating city. The League will also continue to coordinate these efforts with private sector “partner organizations” such as the Missouri Chamber of Commerce.

Of course, other cities have a more direct means of trying to prevent your participation in the political process. The city government of Slater, Mo., passed a resolution last week that “urges the citizens of [that] community to refrain from signing a CPR constitutional initiative petition because doing so would be contrary to the best interest of most property owners within the State of Missouri.”

When I used the Sunshine Law to compel the city to produce all documents its officials considered before adopting this resolution, all they could provide was a PowerPoint presentation created by the Missouri Municipal League — meaning, apparently, that city officials did not even consider the actual text of the proposed amendment, much less seek out any alternative interpretations. Instead, they resorted to the Orwellian suggestion that a constitutional amendment designed to protect the property rights of all Missourians would somehow be bad for property owners.

This should not be tolerated. Fortunately, it seems that some people have recognized this and are taking action. The Post-Dispatch reported just the other day that some citizens in Pacific, Mo., have demanded that their city withdraw from the Missouri Municipal League.

If enough people put pressure on their city governments to do the same, the Municipal League may have no other choice but to start respecting property rights instead of continuing their defense of eminent domain abuse.

Columbia’s History With Eminent Domain Abuse

This weekend, the Columbia Business Journal ran a tremendous article (part one of what looks to be a series) discussing how that city used eminent domain to demolish a thriving part of its black community. I’ve discussed previously how, particularly in the mid–20th century, cities would frequently use eminent domain to accomplish “Negro removal.” I had not previously been aware of Columbia’s own experiment with this racist enterprise, and I’m thankful to the Business Journal for bringing it to light.

July 24, 2009

How Should We Deal With Carbon Emissions?

I was in Washington, D.C., yesterday to hear a presentation by Wendell Cox at the Heritage Foundation. His presentation centered on whether technology or behavioral changes should be emphasized when considering greenhouse gas emissions. It was a great talk, and I just want to share the accompanying slides with all of you. Check them out.

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