Economic Interventions Plaguing Saint Lucie
Port St. Lucie is still trying to rid itself of economic intervention in the marketplace. Or are they?
Larry Pelton, former head of the Economic
Disaster Development Council of Saint Lucie County, was reported by TCPalm as infamously saying:
Larry Pelton, the president of the Economic Development Council of St. Lucie County, who’s played a major role in structuring the deal, said under the agreement every expense is being paid for by Wyndcrest, with the exception of the $10 million from developers.
This comes after an accounting report by Deloitte and Touche in 2009 which said the company was not profitable.
Shortly thereafter, Digital Domain went bankrupt closing it’s doors and leaving the city holding over $25 million dollars in debt as a result.
Larry Pelton believed he knew better than the market on how to allocate resources and gave Digital Domain a blind pass because somebody else told him so on the phone while ignoring accounting reports that said Digital Domain was not profitable.
And local residents are footing the bill.
For some reason devoid of logic Port Saint Lucie has been seeking Pelton’s help and getting the same results, failure.
The city did not use a real estate broker to find a buyer the first time and relied mainly on the Economic Development Council former President Larry Pelton. This time, the city plans to look for a broker, according to a plan outlined in a memorandum to City Council this week.
This has literally gone from bad to worse.
However, this does not come as a surprise when we consider we are witnessing the same mistake repeating itself. Government intervening in the marketplace.
It was government that decided to “invest” in the economy by subsidizing business in the name of creating jobs, prosperity or whatever is publicly favored at the time.
And this is where the error begins and as
Port St. Lucie acted as if it is in the business of property development and now it is acting as if it is a property management company. Neither is an appropriate role for government at any level.
Ludwig von Mises made a critique of this type of economic invention in Bureaucracy:
A government enterprise can never be commercialized no matter how many external features of private enterprise are superimposed on it.
Now we have Port St. Lucie wanting to turn the $25 million dollar boondoggle in to a parks and recreation facility that may choke out private business.
The former Digital Domain studio in Tradition has access to Interstate 95, two soccer fields, outdoor and indoor theaters and a 650-space parking lot, which the city’s Parks and Recreation Department claims are the perfect assets for a recreational facility. The city also could create an indoor extreme park with a skate park, rock climbing wall and roller and ice skating arenas.
The Parks and Recreation Department must have just gotten back from vacation in Colorado because that is a mile-high pie in the sky.
Don’t take my word for it, here is what developers thought of the property:
The city built the studio to fit the needs of Digital Domain. Faiella said she has marketed the building to several companies but they walked away when they realized it would be costly to retrofit it for their needs.
But wait, it continues:
The new strategy also includes finding out what kind of industries the city should target when marketing the building. Some of the options are companies in the fields of technology, medical devices, customer service and advanced manufacturing.
The target should be any willing buyer and the property should be put up for auction.
The taxpayers are paying the obligation to the debt as the city determines how to market a boondoggle. Digital Domain was the result of continuing failed economic policies. Allowing the city to try to market the building to specific industries is not the proper role of city government. Development should not be done with subsidies from the taxpayer. Without economic interference, people can properly calculate the cost of doing something and make a decision guided on profit.
And the continuing failed economic interventions, supported by tax-payer funded Economic Development Council, are still plaguing Saint Lucie.
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