The editors of the Chicago Tribune recount a story that’s, sadly, all too familiar to Chicagoans:
If you wonder why this jobs-hungry city has a reputation as a hard place to do business, read on. Looks to us like developers of a big Ford dealership planned for the North Side got tutored in Chicago-style political muscle.
It’s a familiar story in a city and state where elected officials, in the words of Illinois Chamber of Commerce chief Doug Whitley, treat potential investments as opportunities for “threat, coercion, a union squeeze, a minority holdup, a double-dip, a no-show job, a kickback and a sweetheart deal.”
The proposed $57 million Fox Motors project got off to a promising start. The city Plan Commission unanimously approved it in June. Chicago Ald. Scott Waguespack had done extensive groundwork for the development, which would create dozens of temporary and permanent jobs in his 32nd Ward, contribute millions of dollars in tax revenue to City Hall and replace an obsolete building with an attractive new showcase. Then Waguespack and the Fox folks ran into an unexpected roadblock.
Contrary to the usual practices of the City Council, another alderman held up the project. Daniel Solis of the Southwest Side’s 25th Ward says he wanted to send a message that Ford Motor Co. needs to do more to recruit car dealers of Hispanic heritage. Solis was using his power as chair of the council’s Zoning Committee to block the 32nd Ward project.
Turns out that Solis’ political organization had received at least $6,800 in contributions from a Chicago-area Hispanic businessman who, Solis knew, wanted to get into the car business. The donor, Jose Diaz, also had contributed smaller amounts to other members of the council’s Hispanic Caucus.
and on and on and on. Priorities, obviously, are important the one priority that really matters is getting politicians re-elected.
Once you’ve filtered through all of the levels of government and interest and, frankly, political corruption the only thing left of economic growth that actually produces jobs is the smile.
Making ‘deals’ is the hallmark of local governments under control by liberal and especially socially progressive mandates. It’s how they operate – through coersion, fear of government reprisal, and/or greasing the palm of a willing government official.
It’s not easy, if not virtually impossible, to simply open a business, in dem strongholds, by meeting basic, reasonable permit, code etc. demands required by other municipalities who consider themselves ‘business friendly.’
But if all those political deals didn’t get made, Schuler, then children would be eating poisoned food and the water would be full of arsenic. Or something.
And thank God (i.e., President Barry Half-White) that we’re bringing that style of economic growth to the whole country. Why, any year now we’re going to make up the five million missing full-time jobs that we had back in 2007.
“Making ‘deals’ is the hallmark of local governments under control by liberal and especially socially progressive mandates.”
Wins the internet today.
“It’s not easy, if not virtually impossible, to simply open a business, in dem strongholds,”
Which is why business has avoided California, Massachusetts and the entire Eastern seaboard for the last 50 years. Thank heaven we had the booming economies in Alabama and Mississippi sending tax money to support those blue states over the last 50 years.
Steve
Plus, these types of denials attract lawsuits; I don’t enough to know whether or not one here would be viable or not, but I’ve long believed that when an alderman utilizes a prerogative power to block a development from his or her ward, that ward should pay for any legal damages awarded if it violates the law. (Admittedly wouldn’t really apply in this situation)
Steve,
I don’t know how much experience you’ve had with time and paperwork involved in the licensing/permitting of owning, opening or running a business. However, the process is quite different (and with more positive outcomes) when city government is not burdened by the politics of an all-consuming political ideology.
Certainly, CA coastal areas and popular eastern seaboard areas have prospered despite, not necessarily because of their politics. However, that doesn’t diminish the fact that many deserving (smaller) entrepreneurial ventures have been too discouraged to start a business or construct a project, because of not being able to cough up enough money for developer fee agreements, meet over-the-top prerequisites demanded and then changed by some building department official, or not being a member of a favored community constituency who holds more sway with city fathers than others.
It’s also relevant noting that many businesses are leaving CA, Illinois and NY because of the difficulty doing and/or staying in business in these states. But, like many fiscal shifts, these only become apparent when a state is in stage 4 distress. Otherwise it’s glossed over….
jan- Just had to move our business office after being in the same place for 13 years. Some petty official decided we didnt meet zoning requirements, even though we had properly submitted everything when we moved there, and we had submitted taxes from there for all of that time. Said we had two weeks ot get out. We scrambled, got an extension, etc. We found a nice new place, though farther away. Months after we move in (we had an occupancy certificate and everything) we get a notice saying we are illegally occupying the place, and we need a work permit to tear down the wall we had already torn down (actually a partition). Two weeks notice to get out. After some frantic calls and getting our lawyer (expensive) to write letters, one of my partners remembers that he took care of the grandchild of the supervisor of that unit. He calls “just to chat” and mentions our problem. Turns out we were ok, they just made a mistake. Good thing we knew someone to talk to.
Now, I could assume they were a**holes because they are Republicans. I didn’t. I think they were a**holes because sometimes city officials can be that way and there are few repercussions. So, maybe the whole Northeastern seaboard has flourished despite everything. Or maybe what you think isnt true.
Steve
IL is going down the tubes because it no longer has a relevant distribution system, and iron ore no comes from MN to feed the Chicago district mills. Heard it from an impeccable, and noted, logistics expert.
I think it works like the three rules of real estate: Location, location, location. Places like California, MA, etc. can accommodate policies that wouldn’t work in Mississippi or a lot of other places. Location matters and a good location, or one with a strong established business community can, for a while, get away with being a bit unfriendly to business. It seems pretty obvious that much of the midwest is not in that category.
In other words, I don’t think Mississippi could adopt the policies of California and MA and expect to climb to where they are.
I think a better comparison is California and Colorado. Both have a western culture and an strong outdoor-oriented lifestyle. The Colorado front range is no longer considered a shit-kicker backwater. And the result is that Colorado is sucking a lot of medium and small business out of California because everything but oranges is cheaper.
Why Calif. firms move to Colorado Springs
Money quote:
That’s just CO springs. The whole front range is like that. Colorado is adding about 25k people a year net from migration. California is losing 200-300k a year. They are only growing because of natural increase and foreign migration. How long can that last?
And yet, according to this, California ranks 3d in the nation as an entrepreneurial state, 10 most entrepreneurial states. Arizona ranks first, Texas, second, and Colorado, fourth.
The lede to the story says,
Not to say that California doesn’t have its problems, but its demise, like Mark Twain’s death, is greatly exaggerated.
And yet, according to this, California ranks 3d in the nation as an entrepreneurial state, 10 most entrepreneurial states. Arizona ranks first, Texas, second, and Colorado, fourth.
The lede to the story says,
Not to say that California doesn’t have its problems, but reports of its demise, like those of Mark Twain’s death, are greatly exaggerated.
Oops.
“We can’t compete with southern states that throw millions of dollars in incentives and tax breaks at big projects.”
What is Texas?
1. Start ups are not exiting businesses. IL (and MI) are losing jobs more to IA, IN and TN than “southern states throwing millions of dollars.” And certainly not a CA.
2. States job creating result should be measured against potential, not absolute numbers. eg If a CA, or CO, NC or NY has cultural, climate, natural resources, 50 years of natural momentum or any other attributes vs a small town in, oh, AK then there is a natural advantage to ply outside of business climate. But that doesn’t change the fact that an exodus of – as I say – those vaunted “high paying manufacturing widget jobs” is occurring in NY, NJ, PA, eastern MI, OH, CA and so on.
Its a cute debating point for people not deeply involved in this activity for a living, but the IL worker still has to decide whether to move to IA or go unemployed. Or a bitter pill for the car mechanic who never gets the car dealership job because some pol is returning a political donor’s bribe, er, contribution.
3. That business I referenced in IA last week we are looking at? Growing and paying high wages. High wages because of solid demand for their product ( a distant derivative of the fracking phenom) and low overall other costs of doing business.
There is no thruth to the rumor that that Madigan gave the unemployed IL workers gasoline vouchers and told “move to California, that’s the place you ought to be, so they loaded up the truck and they moved to Beverly.”
BTW – I’ve been holding back to see how the comments go. The real issue here is comparative advantage. Take a look at this:
http://www.cnbc.com/id/100993061
And then replace the foreign countries with the states losing jobs here. Also ask yourself “why, again is current leftist orthodoxy to make energy and labor and labor more expensive here or in a state losing jobs, just like France etc?”