Economic development: more government incompetence

Published 7:01 pm Saturday, July 11, 2015

WARREN SMITH_WEB

 

On July 8, 2015, a recently retired county commissioner submitted a defense of Beaufort County’s economic development program to the Washington Daily News.

The article praised grants to a firm that requested $180,000 from local taxpayers to help reduce its level of local employment by 30 percent, as well as, the River Road grants which cost taxpayers millions of dollars, failed to achieve their employment mandates and consequently resulted in state authorities levying hundreds of thousands of dollars in claw-back penalties on city and county taxpayers. Next, the article offered an explanation of how the county acquired the Chocowinity Industrial Park. Basically, in 2006, our county spent $2 million to purchase 275 acres of farmland in order to attract a small firm from New Bern. Almost immediately, that firm became financially impaired, leaving the Chocowinity Industrial Park to remain as a vacant money sump to this day.

In any world, except economic development, this would be seen as evidence of a lack of common sense and a neglect of due diligence. Economic developers chalk gross incompetence up to bad luck.

On Dec. 14, 2011, I wrote in the Washington Daily News:

“Out of the entire $16.11 million in grants and investments, which the EDC credited itself with generating throughout its history, a remarkable $1.585 million had been continually postponed, $1.75 million had not met with their compliance conditions, $150,000 was an arithmetic error and roughly $7 million came from our own pockets and was then sunk into the mire at the Washington and Chocowinity Industrial Parks. The Report made no mention of EDC’s overall operating cost to taxpayers, i.e., roughly $3 million and rising.

The Report is presented in terms of “cumulative” performance, which neglects highlighting the fact that no new grants were stated as being made in the reporting periods 2008, 2009 or 2010. What was EDC paid over $1 million for doing?

The result of 10 years of economic central planning is that more money seems to have been locked up in failed investments, non-county contractors and EDC payroll than has been recycled into our economy.

The EDC’s claims regarding “Jobs Added and Retained” are presented without any documentation or verification.”

Little has changed over the intervening years. In Beaufort County, economic development is an avenue for political advantage available to the few, paid for by the many and held accountable for as little as possible.

Taxpayers should realize that, despite all the happy-talk and excuses regarding incentive grants, the two biggest categories of expenditure under economic development are bureaucracy and overpriced real estate. Paradoxically, our only real estate success came when we sold the Quick Start II Building to Pronamic Industries for a $1.75 million loss. In liquidating that building we finally admitted our past mistakes and allowed private entrepreneurs to acquire the property and begin creating profits and jobs.

 

Let’s try that again. Admit that these “investments” were a mistake, then liquidate the industrial parks, and allow businesses to take advantage of the bargains as a first step toward spurring a market driven economic recovery.

Warren Smith is a Beaufort County taxpayer.