Previously, I discussed the historical examples of the perils of government regulations and government planning. See here and here. My point was that the more fingers government puts into the market the larger the impetus for big business to buy off politicians and purchase influence. If government is involved then big business has a vested interest in writing the regulations and being part of the plan. The unintended consequences of regulation and planning can be a bitch. In many cases New Deal, Great Society and No Child Left Behind programs created or exacerbated the problems they were intended to solve.

The state prosecutor’s investigation into Sheila Dixon’s ties to Ronald Lipscomb/Doracon and related developers is just another example of my argument. The Baltimore Sun has reported that Lipscomb and his 57 LLCs are linked to Baltimore’s biggest developers.

In their report released this week, Baltimore’s Flawed Renaissance: The Failure of Plan-Control-Subsidize Redevelopment, Baltimore based researchers Stephen Walters and Louis Miserendino lay bare the failures of Baltimore’s government planning.

In a nutshell, since the 1950s Baltimore has seized private property through eminent domain and then provided tax breaks and subsidies to developers to revitalize the area. It is, dare I say it, a form of a planned economy.

Walters and Miserendino argue that this plan-control-subsidize strategy has made Baltimore’s “revitalization” a tale of two cities. The Baltimore that tourists see at the Inner Harbor or Camden Yards, and the Baltimore we know from The Wire or The Corner.

In addition to that sad dichotomy, we also get the Ronald Lipscomb’s of the world, who need to lavish money on politicians in order to receive government largesse in the form of taxpayer dollars to fund their business empires. As the Examiner’s Aaron Cahall notes today:

“For the last half-century, no large-scale private investment in or near downtown Baltimore has occurred without special subsidies or tax breaks,” Walters wrote in the study.

Those deals with the city are funneled through the Baltimore Development Corporation, a 501(c)(3) nonprofit organization charged with promoting economic development across the city. The BDC did not return calls for comment Thursday.

Among the projects that have received city assistance is Cityscape, a mixed-use development that was awarded a package of an undisclosed amount in April, and St. James Place, a $7.5 million Westside residential development that got a $1 million package from the city in 2006.

Ultimately, the city’s Board of Estimates is charged with approving those deals. But Walters said the BDC’s recommendations play an important role in the process.
“If you’re a developer in Baltimore City, you’ve got no choice but to cozy up to the BDC,” he said. “They do the negotiations and make the deals. That gives them power.”

Power indeed, power concentrated in Baltimore’s political and economic elites. While the big developers (and generous campaign donors) get subsidies and tax breaks, the small business owners and middle class citizens are saddled with property tax rates double that of surrounding jurisdictions, and the burden of funding increased city spending. The elites arrogate more power, the middle class is squeezed out and the plight of the Bubbles and Dookies of the world gets worse.

Topics: Baltimore , Government Planning

Feed

Comments

Charm City's Literary Titans

7 comments

May 12, 8:03 PM

Frank Defilippo deserves credit for inspiring this post. In my harangue about the New Deal I cited One from One Leaves Two, a poem by Ogden Nash, which satirized the absurdity of the New Deal’s centralized planning. Frank... Read More
Topics: Baltimore , local history , literary history

Help A DC Boy Out

Add a Comment

April 17, 5:57 PM

As a fairly new transplant to Charm City, (2003) I've enjoyed picking up interesting bits of local history, especially about Baltimore's distinct neighborhoods. If you know of any neighborhoods, people, places, events that you would... Read More
Topics: Baltimore , local history