Buck Passed
By Mitch Berg
Joe Doakes from Como Park emails:
The old Sears Roebuck building on Lake Street in Minneapolis was converted into Midtown Global Market, an indoor bazaar. It’s been losing money for years. Now the mayor wants another $1.8 million to bail them out.
Look, Mr. Mayor: if the project can’t make enough money to fund its own operations, it’s not a business: it’s a hobby. The City has no business funding hobbies.
Granted, it’s Minneapolis, so I don’t care what they do in their own town. But whatever Minneapolis does, St. Paul wants to do, like a younger brother who whines “How come I didn’t get a train?” Throwing cold water on damn-foolishness is wise, no matter where it occurs.
Joe Doakes
That, and the bill is eventually going to be passed on to taxpayers in Moorhead, Wilmar and Lakeville (and any left in Saint Paul) via Local Government Aid.
Which is, of course, why we have Local Government Aid – so the citizens of Minneapolis can continue to be gulled into thinking their government is doing its job with the tax money they extract for life in the city.
4 Responses to “Buck Passed”
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December 5th, 2013 at 10:38 am
The historic loss on this is about $10/square foot annually, about what it would cost to rent a lot of retail spaces outside Minneapolis. So we are talking a seriously bad business model here, especially given that the loss they’re admitting likely does not fully account for their subsidies. Seeing more and more cases–even outstate–where government projects simply do not hold to sound accounting.
December 5th, 2013 at 10:46 am
I believe we should invoke the IRS rule here: if you don’t make a profit in 3 out of 5 years, you’re not running a business, you’ve got a hobby and you can’t deduct it on your taxes. But in this case, if it hasn’t been making the city money, they shouldn’t be able to spend taxes on it.
December 5th, 2013 at 1:03 pm
Nah, just require honest account. They have pro forma losses of over half a million bucks annually, time to make them come up with GAAP losses. When the taxpayer realizes they’re losing $20/square foot annually–more than it would cost total for other retail space–they might wake up.
Same with Block E, same with the Death Trolleys, same with the Zoo of America, same with the new Crystal Cathedral for the ViQueens.
December 5th, 2013 at 1:09 pm
They must be charging minimal rent to the vendors there. I imagine most of the sellers aren’t making tons of money, hence low rent.
Chicago-Lake Liquors is across the street, and does quite well. Maybe they can give Midtown some advice.