The Seattle Times is pulling out all the stops to pull in some corporate welfare.
Stop grumbling, move ahead on S. Lake UnionNow I have nothing against Paul Allen, or his plans for a biotech center in the S. Lake Union neighborhood. In fact, I'm delighted that the city council is moving to lift certain zoning restrictions so that Paul Allen can move forward and develop the neighborhood. But I am troubled about spending hundreds of millions of dollars of public funds to subsidize the project. A Times article last week raised some serious questions about an "economic study" commissioned by the mayor in support of the boondoggle. Nevertheless, the editorial page propagates the rosiest scenarios:
The populist grumbles about the city of Seattle's support of Paul Allen are unwarranted.
South Lake Union would attract some 20,000 jobs over the next two decades, many for Ph.D.s. Retailers, service companies and other providers will benefit, as will landowners (including The Seattle Times Company) and taxing authorities. But the beneficiaries will far exceed the boundaries of the lake.Here's the dishonesty: The infrastructure expenses are to be paid no matter what. But nobody knows (a) whether or when there will be enough "new users" of the planned electrical substation to pay off the costs of the investment, and (b) whether or when the "20,000 jobs" will materialize, or more precisely, if the total number of new jobs (as opposed to jobs relocated from elsewhere in the city) attributable to the subsidy will exceed the opportunity cost of jobs lost or not created due to the transfer of wealth from businesses that are productive today.
The infrastructure cost has been pegged at $421 million over 20 years. But that includes $181 million to provide electric service — an amount the new users will pay for through their City Light rates. It is not a subsidy.
The Times print edition included a pie chart that showed that only 8% of the funding comes from private sources with the other 92% from a combination of public sources. This clearly suggests that the project is an economic loser that will enrich a lucky few and offer make-work jobs to a few others at the expense of the majority of taxpayers.
The South Lake Union project is the most promising thing going, and the city would be foolish not to pursue it.Any city official who pursues this "promising thing" is either a tool or a fool, but at least the Seattle Times has just enough honesty to admit its own selfish interest. Posted by Stefan Sharkansky at December 08, 2003 07:00 AM