George Hartzman on the hotel deal and Crony Capitalism

...was sent to A. Josnhon before 5pm, Monday, November 14, 2011

President of ...,
...has worked as a ...since 1993,
teaches ...,
is a ..., taxpayer advocate, consumerist and blogger,
who foresaw the worst ... crisis since the Great Depression,
with degrees in Philosophy, Communications and Public Relations
and likes to debate economics, philosophy, politics, ethics and religion,
teach, read, write, speak, coach, play chess with his dad,
and tries to be the human he thinks his dogs believe he is
in Greensboro, North Carolina

"Downtown hotel: Don’t fault the businesses, blame our leaders,
Yes Weekly, Wednesday, September 22, 2010

If a corporation’s purpose is to provide the highest rate of return with the least risk in the shortest amount of time, is there nothing wrong with Randall Kaplan and the Urban Hotel Group maneuvering to leverage tens of millions of other people’s money for a hotel in downtown Greensboro?

Adam Smith, the father of modern economics wrote “The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.”

If a democratically elected government is supposed to protect the public from profit-seeking special interests, so the people don’t end up living “in a van down by the river,” while the “Man” captures the community’s regulatory and political apparatus with campaign cash, is the Wyndham hotel deal symptomatic of a systemic disease afflicted on an apathetic population, enabled by a majority of the Guilford County Commission?

If the analysis submitted by the Urban Hotel Group is correct, by allowing the hotel project to move forward, Guilford County’s Commissioners may have voted to indirectly annually remove more than $6.8 million in taxable revenues directly out of the pockets of privately owned hotels, eateries, caterers and bars to a state sponsored business that may be taxed far less by way of massive taxpayer-provided subsidies and deductable costs.

What many consider the same anti-free market practices were on full display when Greensboro City Council voted to build a VIP catering facility and an amphitheater at the Coliseum Complex, which intends to redirect taxable profits from private entrepreneurs. Combined with profits lost from transferred attendance to a new restaurant, bar and catering facility at the subsidized Wyndham, our local elected leadership aims to eliminate the profitability of lower-cost, innovative small businesses trying to make it on their own.

If our politicians support publicly owned and/ or subsidized competitors that eliminate some lower-cost entertainment venues, and costs for a night out for many are substantially increased, how is transitioning from not paying to park and $4 a beer, to paying $10 to park and $8 for a Bud not an indirect tax increase from those who are supposed to act in our best interests?

After speaking at the public hearing for the meeting on Sept. 16, I was disappointed by what appeared to be ineptitude and/or apathy.

Mark Twain said “Sometimes I wonder whether the world is being run by smart people who are putting us on, or by imbeciles who really mean it.”

Did those who voted for the hotel project allow Chairman Skip Alston, a real estate broker involved in the deal, to personally profit, even though it looks like he failed to properly inform the public and the county of his involvement? Didn’t Alston actively lobby fellow legislators for this project, located across the street from the Civil Rights Museum, of which he is a part owner? What is the likelihood the lofty projections for the hotel aren’t very reality based, like the 60 percent miss on the six-month attendance goals for the museum?

What are the chances that the developers have to come back to Greensboro and Guilford County to ask for a taxpayer-funded parking deck, which was removed from prior plans after public outcry? Did the commissioners who approved the luxury hotel realize that many if not most of the visiting guests may have to use valet parking? What if 100 guests need to leave at the same time?

At the public hearing, I spoke of the differences between two hotel studies created within 30 days by the same company. The first, commissioned by the City of Greensboro, dated Jan. 18, 2010, suggested the project wasn’t feasible. The second, paid for by the developers, dated Feb. 16, 2010 said it was.

The first study said average food and beverage revenues for comparable downtown hotels in large cities ranged from $75.54 to $92.28. The second study projected food and beverage revenues of $169.29 per room, about 4.4 times more than the Downtown Marriott and twice the original estimate, for a hotel surrounded by restaurants, night clubs and a ballpark.

What could the county commissioners who approved the deal have implied? “We trust the findings of those standing to profit from government largess.”

If big print gives what fine print takes, and the downtown hotel project goes bad, who will be to blame? The businesses who acted in their own self interests, or the commissioners who may not have looked at the fine print, and enriched their chairman at their constituent’s expense?"

...contributes to the Triad Watch blog

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