No More Picking Winners and Losers

If Major League Baseball decided that the Chicago Cubs needed to win the World Series this year and gave them $39 million in talent to try to make it happen, I can almost guarantee that no one (outside of Chicago) would think that this was fair.   So why would anyone suggest that Rhode Island taxpayers ought to gamble $39 million to finance the redevelopment of a privately owned building?  I’m going to go out on a limb here and say that most Rhode Islanders are probably more interested in using their tax dollars for almost anything but rescuing an out-of-state developer from a bad investment.   In business and baseball, competition should decide the winners and losers—not the government.

Let’s get one thing straight – the significance of the so-called “Superman” building gets inflated by calling it the “Superman” building.  Some folks seem to forget that Superman is fictional and the building just looks like the one in the comic series.  The creator of Superman has even said that the building in the comic was inspired by buildings in Toronto, not by 111 Westminster Street, so it’s not even the stand-in for the fictional building.  Superman has never been to Providence and while this building is certainly an interesting example of 1920’s architecture, Superman isn’t coming to save it and the taxpayers shouldn’t either.

The building in question was most recently the home of Bank of America in Providence.  When their lease ran out, Bank of America left behind an outdated building with no parking and an aging infrastructure.  High Rock Development LLC has owned the building since 2008 and knew since the time of purchase that the lease was coming to an end.  They failed to get new tenants—most likely because there is better, less expensive office space to be had.  Now the building is empty and there is much hand-wringing over what the state and city “must do” to “save” the building.  I see no role for taxpayer dollars in this episode of Extreme Skyscraper Makeover.

If the building had true historic value—like the Arcade—I would think that reasonable historic tax credits could play a small role in the renovations.  However, just like the now-unavailable historic homeowner tax credits, the tax credits should be capped at a low rate and only be available to truly historic structures—not just an old building with a comic book misnomer.

I was heartened to see that the General Assembly leadership’s response to the $39 million ask was tepid, but remained stunned with the hubris of a company to create a plan for public financing to begin with.  While Rhode Island has developed a reputation for making bad investments because of  the 38 Studios debacle, this deal is actually worse because at least Schilling brought jobs to Rhode Island in an industry that was growing and there was reasonable hope of expanding that sector.  If no tenants lease 111 Westminster after renovation and the developer goes belly up, I suspect we’d still be looking at very large and dark pigeon perch—and taxpayer losses to boot.

While I certainly hope that the owners of 111 Westminster can renovate, find tenants and reopen their building, there is no obligation for the state or the city to be involved in their financing.  Our elected officials should be free to concentrate on developing—or rejecting—policies that enhance the state’s business climate rather than taking on projects that benefit a few.  So although many of us would like to see the lights on in every office building—and a Cubs-Red Sox World Series in 2013—I want neither government nor the MLB to pick winners and losers in business and baseball.  Competition is only fair if it’s left on the field.

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