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The Morning Grumpy – December 6th

6 Dec

All the news that’s fit to consume during your “morning grumpy“.

1. This item was sent to me on Twitter by @magnachef and highlights the futility of splintered economic development agencies and agendas in Western New York.

Premier Gourmet is going back to its original ownership, and will eventually follow Prime Wines to its new Amherst location.

Premier Gourmet will remain open at its current location next to Prime Wines on Delaware Avenue in Kenmore. In the spring, both locations will close and relocate to Premier Center, a project currently under construction at 3900 Maple Road in Amherst, just north of the Boulevard Mall.

The Amherst Industrial Development Agency approved more than $500,000 in tax breaks to Prime Wines in July to move the liquor store from the Town of Tonawanda to Amherst.

$500,000 in incentives to move a thriving and regionally successful retail store a total of three miles, from one municipality to another? Pardon my french, but what the fuck?  If not given the incentives, would Premier be a risk to leave the region? No. Will they be better positioned for short term growth if given a series of incentives? Probably. But, the question emerges as to whether or not underwriting tax breaks for “big box” stores or retail of any kind is sound economic development. The Amherst IDA is managed by Jim Allen, a man I interviewed several times while I was  at, and he struck me as a smart guy with the skills and experience to help regionalize our development strategies. Unfortunately on this deal, Mr. Allen proved to be short-sighted along with local government leaders who worked on behalf of the project; State Senator Ranzenhofer, County Legislator Loughran, Assemblyman Jim Hayes, and the Amherst Town Board.

Here are some background details on the deal:

The applicant (Premier) is requesting authorization for a $9,000,000 Lease Transaction for the construction and equipping of a 50,000 square feet headquarters and retail facility for Premier Liquors. The project would be located at a previous vacant building at 3900 Maple Road and vacant land at 105 Meyer Road, within the Sweet Home Central School District.

Prime Wines is seeking a new location because their current location in Tonawanda is an older building that requires several hundred thousand dollars annually to maintain first class conditions due to temperature requirements making that property no longer financially viable.

Prime Wines indicates in their application materials that without their financial commitment and AIDA incentives, the site would remain vacant instead of being transformed into an active property paying additional taxes. The NYS Department of Environmental Conservation classified the site inactive, but requires additional soil testing leading to unknown remediation costs providing for additional financial risk on behalf of Prime Wines.

The application states that IDA participation is necessary due to these factors and that, “the absence of AIDA benefits will significantly increase the costs of the project to Prime Wines. The result of which will be to cause Prime Wines to determine whether it should exercise its option to terminate the purchase contract. “

As a result of the Agency’s participation in this transaction, the project applicant would realize an estimated $246,750 in sales tax savings, $248,405 in property tax savings and $89,435 in mortgage recording tax savings.

While Premier Wines is a regional institution, it is ludicrous on its face to use tax incentives to lure a business from one municipality to another. Reducing tax revenue in one town only to increase it in another. However, the most galling part of the project is the thought of what $500,000 in tax incentives, mortgage assistance, and direct revenue could do for a fledgling startup community in a region starving for locally owned businesses. Rather than pushing the crumbs on the table to established and successful businesses, we should expand the pie by making regionalized investments into tangible technology, manufacturing and knowledge startup companies. Misspent money, in the opinion of this writer.

2. This is some long form reading for you and I’m not going to belabor the points made in the article, but this is a fascinating look at the “corporate model” of education and why its failing.

Corporate school reform aims to transform public schooling into a private industry nationally by replacing public schools with privately managed charter schools, voucher schemes and tax credit scholarships for private schooling. The massive expansion of deunionized, nonprofit, privately managed charter schools with short-term contracts is an intermediary step toward the declaration of their failure and replacement by the for-profit industry in Educational Management Organizations (EMOs). EMOs extract profit by cutting teacher pay and educational resources while relying on high teacher turnover and labor precarity.

Whereas there is a concerted movement afoot to rethink public education while sticking to traditional models of the common school movement.

The common school movement was promoted as a means of political inclusion, workforce preparation and individual character building aiming to bring together children of different classes and provide a common learning experience. The common school movement sought to increase provision of educational resources including the quality of schools, increased duration of schooling to the age of 16, better pay for the mostly female teacher workforce and a broader curriculum.

The aspirations for a common educational experience, the commitment to nonsectarian schooling and the value of citizenry educated for public participation are collateral damage in the privatization trend.

A great read.

3. Unlike Newt Gingrich, a hypocritical, insider influence peddler who hasn’t held a legitimate job off the government teat in 30 years, Ron Paul gets the Occupy movement.

In many ways, it’s a very healthy movement. I’m not one to say, “why don’t you get a bath and go get a job and quit crybabying.” I don’t like that at all. I think that’s a misunderstanding of where the unemployment comes from.

There is a tremendous amount of ideological overlap between the “original” tea party that Ron Paul once led and the current Occupy movement.They might propose radically different solutions to their shared problem sets, but at least they agree on the many of the problems. Hey, maybe this country can be fixed after all.

4. Smart guys study things and we might want to consider their findings.

But a new study (PDF) from the Massachusetts Institute of Technology (MIT) highlighted by economist Dean Baker shows that, contra the conservative talking point, non-military spending can create more jobs than money going to defense programs. The study’s authors, economists Robert Pollin and Heidi Garret-Peltier of the Political Economy Research Institute, used statistics from the U.S. Department of Commerce, the Bureau of Labor Statistics and other sources to deduce how many jobs are created by public spending in various arenas. Among them, military spending was the lowest, creating fewer jobs per billion dollars spent than even consumer-oriented tax cuts.

Maybe we can get some of those smart guys to work with the Amherst IDA on how to more effectively spend their money and dole out tax incentives.

5. Another piece of long form reading for you. Be smarter! Read more! So, why didn’t Canada’s economy go into the shitter like ours did?

When European and North American banks teetered on the brink of meltdown in 2008, requiring bailouts and extraordinary central bank intervention, Canadian banks escaped relatively unscathed. History explains why, according to co-authors Michael Bordo, Angela Redish, and Hugh Rockoff in Why Didn’t Canada Have a Banking Crisis in 2008 (or in 1930, or 1907, or …)? (NBER Working Paper No. 17312). Starting in the nineteenth century, Canada and the United States took divergent paths: Canada set up a concentrated banking system that controlled mortgage lending and investment banking under the watchful eye of a single, strong regulator. The United States allowed a weak, fragmented system to develop, with far more small (and less stable) banks, along with a shadow banking system of less-regulated securities markets, investment banks, and money market funds overseen by a group of competing regulators.

Well, that sounds interesting, eh? Read it and we’ll discuss.

Fact Of The Day: On this day in 1969, a free concert by the Rolling Stones at Altamont Speedway in Livermore, Calif., was marred by the deaths of four people, including a man who was stabbed by a Hell’s Angel.

Quote Of The Day: “Let me be clear about this. I don’t have a drug problem. I have a police problem.” – Keith Richards

Song Of The Day: “Sympathy For The Devil, Live at Altamont” by The Rolling Stones