Kansas City Embarks on New Bad Idea
Kansas City government is going into the grocery store business near 31st Street and Prospect Avenue on the east side. According to the Kansas City Star:
City manager Troy Schulte said the city will spend $950,000 to buy the existing strip mall and parking lot from its current owners, then another $11,050,000 to demolish the empty grocery store that now sits on the site. The city will borrow the money for the project, then repay the loans with projected taxes generated by the development and a special one-cent sales tax collected at its stores.
The city will lease the property to Sun Fresh for $10 a year, but will not provide any subsidies for operating the store.
That last sentence made me laugh: The city will spend $12 million to buy and build the place and charge the tenant $10 a year—but there won’t be any operational subsidies, as if rent isn’t an operational cost.
The problem is that the people who make a living running grocery stores by investing their own money do not think this is a good idea. If they did, the original grocery store might not have remained vacant for 10 years and the proposed grocery store wouldn’t need such a steep subsidy. Taxpayers are underwriting it because it is not a good idea.
Even the Kansas City Star editorial board is skeptical, offering, “The project is a financial gamble for taxpayers.” They concluded, “History shows that a lone project can’t really lift up an entire community. It takes a much bigger effort to do that.” This is true, according to an NPR story last year:
“The presumption is, if you build a store, people are going to come,” says Stephen Matthews, professor in the departments of sociology, anthropology and demography at Penn State University. To check that notion, he and colleagues from the London School of Hygiene and Tropical Medicine recently surveyed residents of one low-income community in Philadelphia before and after the opening of a glistening new supermarket brimming with fresh produce.
What they’re finding, Matthews says, is a bit surprising: “We don’t find any difference at all. … We see no effect of the store on fruit and vegetable consumption.”
It really isn’t surprising. If there was a demand for fruits and vegetables, someone would be providing them. But the demand isn’t there, even when shiny new stores are built.
Once again, Kansas City leaders are embarking on an expensive and ill-considered campaign using public dollars that does not address the real underlying problems. When it fails, the city and its residents will be no better off than before, just poorer. And the infrastructure, crime, and education issues that really need to be addressed will be that much worse.