Great Idea Will Be Hard Sell In Olivette

Posted on by David Stokes

I think the proposal by BWB Sports to build a privately operated athletic center on leased public land in Olivette, Mo., is terrific. At the same time, I understand the qualms many Olivette residents may have about the proposal. This looks like a great idea that is too much, too fast; a terrific proposal coming at the wrong time, like Galileo under house arrest or Jason Bateman in “It’s Your Move.”

The proposal is for BWB Sports to lease the land that now holds the Olivette Community Center and athletic fields around it. (My kids have played many team sports on those fields.) The company wants to build ice rinks, lacrosse fields, and more, and operate it as a private entity. BWB officials do not appear to be asking for a subsidy (I’ll amend this post if they are), which is one of the reasons I support this. However, the fact that they are going to lease this land will likely limit the expansion of the tax base, as the city will still own the land. (There likely will be some tax base expansion from business equipment taxes, concession sales taxes, etc.) Not to mention the fact that the company will pay Olivette to lease the land.

So, basically, you have some residents of Olivette telling me that the park and community center really are not in very good shape and desperately need an upgrade. While others – the ones showing up at the meetings attacking the proposal – are demanding that the park be protected and the land preserved.

There is no doubt about one thing – this is not a half-measure. This is a major change to the property that I think would significantly upgrade the facilities and use of the land. The only thing the proposal is missing is an outright sale of the property, which is politically impossible and legally complicated. So they are just leasing it, but I doubt that means much to the opponents.

I hope that Olivette officials can see the long-term benefits in this proposal. But, unlike other NIMBY situations, I see some merit in the residents’ concerns. This is not like recent disputes in Brentwood, Maryland Heights, or South County. I understand why some neighbors are objecting. As I said in my study about privatization in Missouri, park privatization proposals are very contentious for good reason. Outsourcing the management of existing park facilities is not that controversial, but wholesale changes to parks themselves are.

This is the latter. I hope it passes. I think the long-term benefits are significant for Olivette and Saint Louis County. This plan would increase use of the property, grow the tax base (somewhat), inject private money into Olivette recreation instead of counting on tax dollars, and more. But I am not going to attack the opponents as NIMBY-based obstructionists, even the Keynesians among them.

Corporate Welfare Defense: ‘We Could Have Taken More’

Posted on by Patrick Tuohey

Burns & McDonnell, a successful top-20 engineering firm based in Kansas City, is poor. So poor, that in order to build on a site adjacent to its headquarters, the company has to come groveling to the City Council for what amounts to corporate welfare. We had the opportunity to speak to KSHB on this matter as a council committee was considering the request.

Under the best circumstances, Burns & Mac officials claim they will create up to 2,000 jobs for only $40,000,000 in public taxpayer money. That is a cost of $20,000 for each job. That’s not bad by government standards; a study in Saint Louis found that Tax Increment Financing (TIF) created retail jobs at a cost of $370,000 each. Let”s hope the TIF is as successful as Burns & Mac claims, but experience suggests otherwise.

Soon we will write up an analysis of what Burns & Mac is asking for, and it isn’t as small a subsidy as they would like you to believe.

While the Show-Me Institute understands that businesses must seek the best deal they can, including public assistance if offered, we fault municipalities for being too eager to give away the shop. Burns & Mac is well connected. CEO Greg Graves is a former president of the Chamber of Commerce. Kansas City Mayor Sly James said the city was going to help the project months before Burns & Mac (publicly) asked for help. Those are the benefits of being a political crony.

But what’s worse about this whole ordeal is not Burns & Mac’s shameless rent-seeking, or promoting a public policy that has been proven unsuccessful, or that the earnings tax — which Graves said he is proud to pay — is being diverted to political cronies. No, the worst part is the response from Burns & Mac: “We are not requesting all the incentives that were available to us.”

In other words, “we could have taken more.” And certainly the City Council would have given more. Is that comforting to anyone?

Lyft And Kansas City’s Stifling Taxicab Regulations

Posted on by Joseph Miller

This week, Kansas City officials have been hard at work trying to keep ridesharing out of the city of fountains. First, the city rushed through an ordinance requiring permits for vehicles taking “donations” (as Lyft does) for travel. Then, the city pursued an injunction against Lyft for operating in Kansas City.

Some city officials, like Assistant City Manager Rick Usher, have argued that Lyft simply needs to apply for the proper permits. Why didn’t Lyft think of that? Its drivers go through background checks, have insurance, and get their vehicles inspected. Why not go one step further and get permits? The reason Lyft has not done so is that Kansas City’s Livery and Taxicab regulations prohibit Lyft’s business model.

425076-lytapalooza-credit-lyft

According to Kansas City ordinances, the definition of a livery vehicle is:

. . . a public six-passenger or less motor vehicle with driver included, for hire only by written agreement for exclusive use at a charge fixed in advance.

The livery classification was designed to encompass pre-arranged limo and premium sedan services. Lyft charges by both time and distance (not a fixed charge) and, of course, has no advance written agreements. In addition, the Kansas City taxicab code states that livery vehicles cannot:

. . . solicit passengers for transportation in a livery vehicle on any public way or at any public airport or operate a livery vehicle so as to cruise in search of patronage . . . no passenger shall be accepted for any trip in such vehicle without previous engagement for such trip at a fixed charge through the business office from which the vehicle is operated.

If Lyft’s drivers received livery permits, they could not drive around town for passengers, pick up passengers without existing agreements, or charge distance-based fares. Lyft’s business model would be impossible. Lyft’s drivers actually act more like taxis than livery vehicles, aside from the fact that they don’t use a taxi meter.

Unfortunately, taxicab regulations in Kansas City prohibit ridesharing companies’ drivers, such as Lyft’s, from obtaining taxi permits. These regulations include (but are not limited to):

  • Permits are only given to cab companies with a minimum of 10 cars, not individuals with one car.

  • The city has reached its 500 taxi permit limit, and will not issue more.

  • Taxis must use meters with prices that the city sets.

The bottom line is that if Lyft drivers receive livery permits, they cannot operate as Lyft drivers, and if they are to be considered taxis, they cannot get permits, period. Telling Lyft that it can operate if its drivers just apply for licenses is like telling someone he or she can join a football game as long as he or she doesn’t step on the field. I’ll leave it to the reader to decide whether the rules of the game are designed to protect public safety, or whether they are meant to keep newcomers out.

Should Missouri Cities Make Room For Ridesharing? My Uber Story

Posted on by Joseph Miller

On a recent trip to New York City, I had the opportunity to use Uber, a rideshare company that is attempting to break into the Saint Louis and Kansas City taxi markets. The service was fast, convenient, and certainly would improve the transportation options for residents in our largest cities.

Anyone who has been to New York City knows that, at least in Manhattan, the streets at times seemingly are covered in taxicabs. Nonetheless, just going out to the corner to get one can be a chore, especially when demand for cabs is high or the weather is bad. What’s more, most cabs in New York seat only four people, so traveling by cab in large groups can mean splitting up.

I found myself in just such a situation last week. It was midnight in the West Village, raining, with a group of five of us huddled in a small pizza shop. The time we spent arguing whether to take Uber was longer than we waited for the car we ordered, which turned out to be a Suburban. The driver was courteous and payment was all done electronically.

The experience was pleasant, and really prompts the question of why cities such as Kansas City and Saint Louis feel the need protect us from this service. The dogged opposition of regulatory bodies in Saint Louis and Kansas City to ridesharing companies such as Uber (and the way they went after Lyft) needs to end. I can think of a few better ways to support the development of Saint Louis and Kansas City restaurant and entertainment districts than to guarantee prompt and comfortable transportation at the push of a button.

Private School Option – We Can’t Sit This One Out

Posted on by James V. Shuls

My college track coach used to say, “We’re going to dance with the girls we came with.” Initially, I did not understand this colloquial expression. As I have aged, however, I have seen many circumstances where this expression captures the sentiment more than any other. It is especially true of the inter-district school transfer fix, Missouri Senate Bill 493. Different versions of the bill passed the Missouri House and Senate, a conference committee met, and now we have the final draft of the bill. This is it. There is no substitute. There is no other fix to the problems with the transfer program. We have to “dance with the girls we came with.” Yet, the education establishment seems perfectly willing to sit this dance out.

For them, the tiny provision that would allow students in unaccredited schools to attend a private school crosses the line. In their view, public dollars simply should not go to private schools. There is just one problem with that view – they already do. In fact, there is tremendous precedent for allowing public dollars to go to private schools and private organizations. Students use public dollars to attend private colleges and universities. K-12 public schools contract with private providers of all kinds of services, from school maintenance to food service; some even contract with private schools to help deliver educational services.

Take ACE Learning Centers, for example. ACE is one of the few private schools that would meet the narrowly defined criteria in SB 493. The school is located in an unaccredited school district and recently received accreditation from the North Central Association on Accreditation and School Improvement.

ACE currently has 12 centers and serves students from at least six school districts. An external review that AdvancEd conducted of ACE Learning Centers noted that the 2012-13 graduation rate was 86 percent. This is markedly higher than the nearby unaccredited public schools, where nearly half of students fail to graduate on time. This fact is especially remarkable when you consider that ACE serves students who are at risk of dropping out.

Josiah Ace Learning Centers

Speaking of his ACE experience, student Josiah said, “ACE is giving me another shot to finish high school and graduate with a diploma. I would recommend ACE to any student having trouble in their home school. I’m able to get a lot done with my classes here at ACE – I learn much better here.”

ACE Learning Centers and other private schools throughout the state are already using public dollars to serve students in Missouri. These schools are no less valuable to the public simply because they are privately run. The beauty of the private option in SB 493 is that it might allow more students like Josiah (and Adam, Bianca, Georgia, Eddie, etc.) to attend ACE Learning Centers.

The education establishment is wrong to draw a line in the sand on this issue. If they want to fix the problems with the transfer program and save the Normandy and Riverview Gardens School Districts from impending bankruptcy, they cannot sit this dance out.

Op-ed: Excessive Regulation, Not Lyft, Needs To Stop Operating in Kansas City

Posted on by Joseph Miller

Last Friday, my op-ed about Lyft and Kansas City’s absurd taxicab ordinances appeared in the Kansas City Business Journal. For many years, Kansas City’s livery and cab industry has been needlessly regulated for the benefit of large taxi companies at the expense of residents and entrepreneurs. As the op-ed pointed out:

City ordinances set fares, require potential cab owners to start with a fleet of 10 cabs, limit cabs to less than 600 city-wide, and require cab companies to provide 24-hour service.

Market controls such as these and others are not justified and Kansas City should lift these ordinances so that new business models can thrive in the city. Read the entire op-ed here.

Lawmaker Holds Double Standard For Private Schools

Posted on by James V. Shuls

School Choice Double Standard

Missouri Senate Bill 493 includes a provision that would allow students in unaccredited school districts to attend non-religious private schools. This provision, the only one in the bill intended to expand opportunities for students rather than restrict them, has opponents of private school choice up in arms.

During committee hearings, Missouri Sen. Jason Holsman (D–Dist. 7) voiced the lone “no” vote against the bill. In doing so, he expressed one of the most erroneous arguments against private school choice: “Private schools have admission standards, they don’t take all kids.”

I have news for you. Public schools don’t take all kids — they only take the kids who live within a geographic boundary. In this sense, my private neighborhood swimming pool is a lot like public schools — you can get in if you can afford a house in the neighborhood.

More to the point, there are examples of public schools in Missouri that do not accept all students within the district boundaries. Here is a snippet that I wrote on Education News about one of those schools:

One prime example of a public school that does not serve all students is Metro Academic and Classical High School, a magnet school in the Saint Louis Missouri Public School District. U.S. News & World Report ranks Metro as the No. 1 public school in the state, for good reason. Metro grads regularly go on to top-tier universities and perform exceptionally well on achievement tests.

There may be great things going on at Metro, but it cannot be denied that part of the school’s success is derived from its admissions process. To be admitted, a student must score proficient or advanced on the state MAP test. In 2013, nearly 14 percent of black eighth graders in Saint Louis scored proficient or advanced. That means more than 86 percent of black students in the Saint Louis Public School District do not meet the admissions criteria for Metro.

Lincoln College Prep in Kansas City is another public magnet school with selective admissions. The school also de-selects, or kicks out, students who aren’t cutting it. If a student’s grade point average drops below a 2.5, he or she has one semester to improve or be shipped out to another district public school.

It is wrong to hold private schools up to a standard that the public schools do not meet. More importantly, it is bad policy to oppose expanding opportunities for the students who need options the most.

Tesla, Car Dealers and Milton Friedman: The Problem of Protectionism and Cronyism

Posted on by Patrick Ishmael

Last week at Forbes, I wrote about an attempt by Missouri car dealers to prevent electric car manufacturer Tesla from selling its cars directly to customers. Although the amendment in question quietly passed the state Senate, I do expect that free market advocates in the House will loudly reject this attempted protectionism and cronyism.

That said, it must be noted that although Tesla is being wronged by the proposed amendment, policymakers would do well not to proclaim the heavily-subsidized company to be some spirit animal of the free market. Indeed, many businesses are quick to proclaim their love of the market while simultaneously marshaling special protections and subsidies to themselves. Tesla fits that description to a T; hit up that last link for a list of examples.

The Tesla episode reminds me of an old video featuring famed economist Milton Friedman. Asked some decades ago about who can save the free market, Friedman framed his response this way:

You talk about preserving the free market system. Who has been destroying it? The business community must take a large share of the responsibility. … You must separate out being pro-free enterprise from being pro-business.

The short video, which I commend to all of our readers, is below:

There is a difference between being pro-business and being pro-market. Clearly the proposed legislation would be pro-dealers; it would not, however, be pro-Tesla or pro-consumer.

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