Can St. Louis Really Support Another Performing Arts Facility? Local Government Certainly Thinks So

Posted on by Thomas Duda

If I read the tea leaves correctly, I expect an announcement in the coming days, weeks, or months that the Kiel Opera House in St. Louis will soon commence an expensive — excuse me, extensive — renovation. That’s the only conclusion that I draw from the May 28 article in the St. Louis Business Journal, “SCP, McKees invest $2.9 million in Kiel Opera House.” The complexity of the deal appears staggering, but one fact is crystal clear: The project would simply never become a reality were it not for taxpayer largesse. Here is a brief outline of funding sources for the Kiel restoration, as identified in the May 28 article:

The above sources total more than $74 million, of which only $13.9 million appears remotely like private capital that flows independent of a government guarantee. Thinking about it, though, even the private mortgage loan has implicit public backing, because the project that it supports would not exist in the absence of a legislative quagmire of market distortion.

First, in 2009, Ordinance 68380 amended the city of St. Louis’ 5-percent gross receipts tax on ticketed entertainment productions, intending to incentivize the “owner, primary tenant, occupant or operator, or [a]ffiliate” of a “Contiguous Recreation Facility […] contiguous to a historic theatre, opera house or concert hall” to redevelop said historic theater for “$50,000,000-$99,999,999” (hyperlink added). The redevelopment would be subject to the following guideline:

  • “[with] a redevelopment plan approved by the City by ordinance and a Redevelopment Agreement approved by the LCRA.”

Lo and behold, the development team for the upcoming Kiel Opera House renovation — which includes the ownership group for the St. Louis Blues hockey team and Scottrade Center — sought and received each of the above approvals. St. Louis Ordinance 68381 authorizes a redevelopment plan for the Kiel Opera House and affirms LCRA’s approval of the project.

St. Louis did not stop there, however, as Ordinances 68382, 68383, 68384, and 68385 collectively tweak the terms of a lease agreement on the city-owned Kiel Opera House facility, earmark funds from a previously approved Community Improvement District (Ordinance 68377) to support the Opera House’s redevelopment, and bring the entire legislative morass full circle by using taxes abated in accordance with Ordinance 68380 to provide debt service on the project’s city-issued bonds.

If the project’s bonds ultimately find buyers, then a combination of federal, state, and St. Louis taxpayers, hockey fans, and service users would foot the vast majority of the costs for restoring one of St. Louis’ architectural gems. Most will do so unwittingly, because St. Louis city does not examine, account for, or consider fiscal and economic impacts when passing legislation.

Please do not hear me wrong; the last thing that I want to see is another building sit vacant for decades on end. That said, I cannot cheer a rehabilitation project that relies so heavily on bloated and unwieldy allocations of taxpayer capital. Can Kiel Opera House return to life as “a 3,200-seat theater for concerts, Broadway shows, and family and holiday programs [with] four side banquet halls […] available for weddings, conferences and other events” in the absence of public subsidy?

Perhaps not.

But, then again, did you know that the Fabulous Fox Theater in St. Louis sprang back to life without state tax credits or city-backed bonds?

I predict that Kiel’s future success — whatever form it may take — will come at the expense of other performing arts venues throughout the region. The failure of the Kiel project to attract private capital investment suggests to me that it may simply displace performance activities that would otherwise occur elsewhere, at privately supported venues throughout St. Louis.

Although there are strong arguments that markets tend to underproduce artistic work relative to growth in other sectors of the economy and that public subsidy can increase access to art and yield positive externalities, these arguments do not apply to the question of whether St. Louis city is underproducing space for such art downtown. At present, the vacancy rate in downtown’s myriad office buildings is nearly 19 percent, which means that competition for tenants is fierce and that already-low lease rates are falling still lower. Simply stated, the facilitation of architectural space is the last thing that St. Louis City needs to subsidize. Of Kiel’s proposed $74 million renovation cost, $43.4 million will go to the contractor and an indeterminate amount will fund professional services like attorneys’ and bond underwriters’ fees. None of the project’s costs will fund artistic production.

Many contend that tax credits create jobs. However, I see no evidence to suggest that they ever have or ever will.

Policing By Camera: A Discussion of Red Light and Surveillance Cameras as a Tool of Law Enforcement

Posted on by Audrey Spalding

On Wednesday next week, the Show-Me Institute and the Saint Louis chapter of Liberty on the Rocks will co-host a discussion of the use of cameras in public places as a law enforcement tool. During the past few months, red light cameras and surveillance cameras have been in the news, and we’re excited to have Sen. Jim Lembke and Alderman Antonio French, both of whom have taken strong stances on these issues, speaking at this event!

The discussion will begin at 7:00 p.m. on Wednesday, June 9,
at the Show-Me Institute Office at 4512 W. Pine.
Please RSVP either by email, to [email protected],
or by phone at (314) 454-0647,
or by commenting on this blog post.

Sen. Lembke, who represents part of the city of Saint Louis and Saint Louis County, has spoken out against the use of red light cameras, on the grounds that they entail the presumption of guilt. As he said in a Post-Dispatch article, “[the use of red light cameras] takes liberty away in that there’s no other crime that I know of on the books where I as a citizen am guilty until I prove my innocence.”

Alderman French, who represents the 21st ward, has been campaigning hard to have surveillance cameras set up near high-crime areas in his ward. In the Riverfront Times blog, French explained that the crime is coming from a small group of people, and that surveillance cameras might deter that activity. From the RFT:

“It’s the same group of bad guys doing bad things,” French says. “We’ll advertise the hell out if it, that there’s cameras. One of reason people do things is because they think that can get away with it. If they know somebody is watching it’s very likely they’ll go somewhere else to do drug activity and violence.”

One of the most interesting aspects about the use of both red light and surveillance cameras is that the cameras will likely soon be able to identify, without a doubt, the individual committing a crime. At that point, although camera surveillance seems to be a particularly un-American activity, is there any constitutional argument against it? Do cameras really infringe upon our liberties if they are placed in public places where any police officer could also be placed?

French and Lembke will have the opportunity to answer these questions, and others, on June 9. If you are free, please drop by. The discussion will be informal; it our hope that attendees can ask the elected officials questions directly, and be part of an engaging conversation about the trade-offs between liberty and security.

Liberty on the Rocks is a nonpartisan, nonprofit, social organization that seeks to unite individuals, regardless of political affiliation, who desire liberty. With the goal of facilitating networks, friendships, and intelligent conversation, Liberty on the Rocks seeks to initiate the energy and dialogue necessary to move America from the grassroots up, toward the constitutional principles of freedom used to found this nation.

Who’s Afraid of the Big Bad For-Profit Animal Shelter?

Posted on by David Stokes

St. Louis is, George; St. Louis is.

The plan to contract out the operation of the animal shelter to Stray Rescue has been canceled. The Suburban Journals has the story on the new plan here, which still involves Stray Rescue and many other animal rescue groups. Another plan had been offered by a local vet to operate the shelter as a clinic/shelter on a for-profit basis, as has been done in Kansas City. It is one thing to reject the vet’s plan, which was submitted after the deadline, when another plan involving Stray Rescue was already going forward. It is quite another to continue to disregard the vet’s idea now that plan no. 1 has crashed and burned.

I attended the news conference when the program cancellation was announced last week. I asked a health department official there if the veterinarian’s privatization proposal would be revised. She said she would be willing to talk to him, but (and this is an exact quote) “I am uncomfortable with for-profit groups.” So, in other words, the proposal — no matter how great it may or may not be — is off-limits because the veterinarian has the audacity to possibly earn some type of profit from the care of lost, sick, and abused animals.

This fear is perfectly reasonable of course, given that the for-profit bid for the animal shelter was coordinated by Drexel Burnham Lambert as part of a thinly disguised hostile takeover of the shelter, which would then be cannibalized and sold off piecemeal to enrich the financiers at the expense of the kittens. Oh, wait — you say it was actually proposed by a local vet with a long history of taking care of animals in the city of St. Louis? Well, then maybe the city should reconsider the idea. …

Seriously, only someone who has spent their entire lives working for the government could say something like, “I am uncomfortable with for-profit groups.” I am sure that the director has accomplished many worthy things during her public service, and I am sure she is a fine person, but the knee-jerk opposition to any group that might earn any type of profit is unseemly, albeit not surprising. For too many government employees, P.J. O’Rourke’s words about John Kenneth Galbraith apply:

[…] and, after 97 years of comfort and achievement in a free market society, still believed that a free market society is wrong.

The city should undertake to reconsider new proposals for the animal shelter, and for-profit ideas should be given just as much consideration as any other. Taking care of animals and making a profit are not mutually exclusive.

Salutary Incentives

Posted on by Martha King

A recent article in the Columbia Missourian highlights some of the steps being taken in Missouri to combat childhood obesity. Among the initiatives mentioned are the Walking School Bus and Farm to School programs:

More than 400 students from 10 Columbia public elementary schools participate in this Walking School Bus program, sponsored by the PedNet Coalition. A trained adult walks a set route each morning, picking up kids along the way and guiding them to school.

In addition to cutting costs for buses facing rising fuel expenses, the Walking School Bus is designed to increase physical activity for children in order to combat the country’s growing childhood obesity epidemic.

The difference between the two programs is that the Walking School Bus is grounded in the volunteerism of adults willing to walk with children to school, with the end of incentivizing good habit formation, whereas Farm to School is a government program that encourages the use of local food in school lunches. There are a couple of problems with the latter. As Sarah Brodsky and Caitlin Hartsell have pointed out, it’s incorrect to conflate “local food” with “healthy food”; food produced locally may not always be healthy, and food that is healthy may be imported from outside a given region. Mandating that school food be locally procured is also costly, because price-based competition from a large portion of the potential market for food is left unconsidered, and the increased demand for local food contributes to a rise in its prices.

It can also be a costly mandate for local farmers, who must cope with changes in the types of crops that they grow. A Columbia school district official admitted:

“We’re essentially asking farmers to start to grow what we want them to grow. And that’s a big risk for them.”

It is indeed a risk for Missouri farmers, who must diversify their crops to meet a new form of demand. Modern farmers maintain a delicate balancing act of running up huge debts in acquiring machinery that is geared specifically for the crops they have elected to raise. Mandating that schools provide local food presents an opportunity for local farmers, but also places a burden on them to raise a diversity of crops year-round — for many, a costly and impractical endeavor. Missouri farmers will be taking more than a “big risk” here and now; this involves their whole financial life plans.

Tackling the difficult issue of childhood obesity requires daily diligence in habit formation, because parents ultimately control the health of their children. One or more healthy meals served at school every day can be negated by a pantry full of junk food at home. This is not to say that schools shouldn’t care about serving healthy food — indeed, school lunch programs that focused on meeting nutritional guidelines, whether or not the food is locally procured, would better balance costs with student health.

Similarly, a mandated exercise class during the school day doesn’t affect the inactivity of kids who stay indoors and play video games all day on the weekends and during the summer. Yet initiatives like the Walking School Bus program directly incentivize the most important players on this issue — the parents and children themselves. Children are habituated toward associating activity with involvement with their peers, and parents are given an easy, safe, and inexpensive way of getting their kids to school that may benefit the community (e.g., through reduced traffic congestion near schools) at the same time. Yet again, volunteerism creates a win-win for everyone.

How Green Is the Valley of Recycled Energy-Inefficient Appliances?

Posted on by Martha King

The State of Missouri recently announced that it would offer an extra $50 in rebates to consumers who participate in the Energize Missouri Appliance Rebate Program. The additional money comes as an incentive to help participants in paying the cost of recycling their old appliances.

But just what are the costs of recycling these appliances? Missouri’s State Energy Efficient Appliance Rebate program (SEEARP) is explicitly restricted to the replacement of existing appliances. Further, there are essentially no qualifications on eligibility for replacing older appliances.

Thus, a couple looking to buy necessary appliances for their new home are not given the government incentive to purchase energy efficient appliances, but homeowners with already functioning appliances are.

What happens to the old appliances? In order to qualify for the rebate, consumers must show proof that the appliance was “properly recycled.” Recycling appliances, however, is tricky business. Most of the materials aren’t biodegradable, so the appliances have to be broken down into their parts and either sold as scrap or, in the case of metals, reprocessed altogether. How much more earth-friendly could this process be compared to simply repairing and using an existing appliance for as long as possible? Further, for the appliance to be recycled, its parts need to be in a minimally workable condition in order to be repurposed. Otherwise, the scrap ends up in a landfill. On the other hand, if the appliance could be repaired, why would anyone replace it? Answer: because you can get a government discount on a new one.

Not only does the SEEARP program then distort the market, it incentivizes consumers, who by and large have no real need for new appliances, to wastefully and expensively toss workable ones. Supporters of initiatives like the rebate initiative may argue that the continued use of such appliances generates a negative environmental impact. While that might perhaps be marginally true, there remain serious environmental, and economic, problems with this argument. For one, the process of recycling old, functioning appliances itself requires a great deal of energy. Further, energy-efficient appliances may even encourage individuals to consume more energy overall. Incentivizing the disposal of viable machinery also misallocates resources that could have been spent on encouraging growth in other areas of the economy. Remember: The rebate program does not simply encourage people to buy energy-efficient appliances, but to replace their old — functioning or not — appliances.

Additionally, in order to qualify for the rebate, consumers are limited to select Missouri retailers. This might not be cost effective for the consumer, who, for instance, could potentially find a better deal online — and it’s certainly not cost effective for Missouri.

Because the rebate program only applies to recycling an appliance, consumers are further disincentivized from selling, or donating, these appliances to others who might need them. Those who actually need to purchase appliances, either new or used, are therefore harmed by the program, both because workable, used appliances would need to be recycled, rather than sold or donated, by owners replacing them with energy efficient appliances, and because those who want to purchase a new appliance do not qualify for the rebate.

The truly green solution is to let consumers decide without government prodding when, and how, to replace their appliances.

Good News and Bad News for Missouri’s Sunshine Law Applications

Posted on by David Stokes

Recently, the Pennsylvania Public Interest Research Group ranked the states on issues of transparency and spending openness. Missouri received a “B” in the report, which only assigned one “A,” so I guess we can be pretty proud of the “B.” Kentucky got the only “A,” which is good for them because I only remember one other thing for which Kentucky was considered a leader.

This ranking is great news for our state government, but openness in local government is still an issue. A recent state audit, detailed here at OzarksFirst.com, determined that local governments in Missouri are still committing numerous Sunshine Law violations. My own selfish goals are best summed up by this ranking from the Sunshine Review in their study of local government transparency in Missouri:

Missouri’s counties received an “F,” a reflection of the fact that 61 of the state’s 114 counties have no Website.

I realize that I am one of a very small number of people for whom researching Missouri county and city budgets is a big part of their job. However, it would be very inexpensive for every Missouri city and county to be required to post their budgets online. It does not even have to involve their own website — they could just email the annual budget document to the state auditor’s office, to be hosted there. That would be much better for open government in Missouri.

You Don’t Have to Go Home, But You Can’t Stay Here

Posted on by Christine Harbin

The City of Saint Louis is removing the pretzel vendors along Jamieson Avenue in south St. Louis due to complaints of traffic congestion. John Payne blogged about this yesterday, and cited this as an example of the government shutting down a successful entrepreneur.

I have a different perspective on the story. Although the city is cracking down on selling pretzels at that particular intersection, it is not banning the sale of pretzels in any other location. According to a recent story by Fox 2 on the subject, the city will take a laissez faire approach in the future:

“We’re not out looking for them, we didn’t put it on our hot list, I don’t have an inspector driving by every day. Our inspectors have plenty to do,” [Streets Director Todd Waelterman] explains. “You know if someone comes out here starts selling again and we receive a complaint, we’ll be back. If we don’t receive a complaint, we’re not planning on coming back.”

In this situation, the policy of looking the other way has many positive consequences. South City doesn’t become a generic, pretzel-less area; it can retain a feature that’s specific to Saint Louis. It secures a job for the vendors, and also generates business for a locally owned firm. Additionally, consumers win because they can get a pretzel fix without driving too far out of their way. Furthermore, instead of cracking down on pretzel vendors, the city can concentrate on bigger issues, like reducing crime and fixing the streets.

I applaud the city for taking a hands-off approach, and I hope that this is predictive of a larger trend of encouraging entrepreneurial activity in Missouri.

Rules Too Cool for the Pools

Posted on by David Stokes

Today’s Post-Dispatch has a big story on pool safety and regulation in the St. Louis area. I’ll stipulate right off the bat that I think public health is a perfectly legitimate function of government, and has been so for a long time (controlling communicable diseases, especially). However, as with so many other things, there are countless examples in which the government has expanded that role to increase its part in our daily lives. And those rules may make us safer by bits and pieces, but they also make us less free in the same manner. I think most people have, and will continue, to accept that trade-off. I think that is unfortunate. But back to the pools.

I can’t imagine most people would have any objection — I certainly don’t — to the government monitoring the water quality and safety rules of truly public pools. But the government also defines “public” to include apartment buildings, private clubs, and more. In St. Louis County:

As of Wednesday, 248 pools had not been approved to open for summer, although many were awaiting final inspections this week. The county expects that some of those pools will remain closed, particularly at apartment complexes.

Assuming that most of these apartment complexes with pools are somewhat large complexes, we can reasonably say that thousands of people in St. Louis will now be denied the use of a pool this summer — and millions of dollars will be spent across the country on pool improvements — because of drain issues that have killed an average of one person per year across the entire nation. I am certain I sound like a jerk, but this immediately brings a classic Onion article to mind.

The Post-Dispatch article points out that Jefferson County does not have any pool inspectors. I think this is supposed to be a criticism of good ol’ JeffCo, but something important is lacking from the article — any evidence at all that there are problems with the pools in Jefferson County! Instead, believe it or not, the people of the county seem to be doing a perfectly good job of maintaining their own pools even without the threat of inspections to close them down.

Without a county, state or federal ordinance on sanitation, public pool owners in Jefferson County can make their own rules.

“We don’t care if we get checked or not. We keep a clean pool,” said Beverly Sweet, the superintendent of the Crystal City public pool. She said the water is tested several times a day and that chlorine tablets are automatically fed into the pool, which opens Saturday.

I’ll end with quoting the famous playwright David Mamet about how people (the vast majority, at least) tend do the right thing and work things out even if the government is not there to compel them:

But if the government is not to intervene, how will we, mere human beings, work it all out?

I wondered and read, and it occurred to me that I knew the answer, and here it is: We just seem to. How do I know? From experience. I referred to my own—take away the director from the staged play and what do you get? Usually a diminution of strife, a shorter rehearsal period, and a better production.

The director, generally, does not cause strife, but his or her presence impels the actors to direct (and manufacture) claims designed to appeal to Authority—that is, to set aside the original goal (staging a play for the audience) and indulge in politics, the purpose of which may be to gain status and influence outside the ostensible goal of the endeavor.

Strand unacquainted bus travelers in the middle of the night, and what do you get? A lot of bad drama, and a shake-and-bake Mayflower Compact. Each, instantly, adds what he or she can to the solution. Why? Each wants, and in fact needs, to contribute—to throw into the pot what gifts each has in order to achieve the overall goal, as well as status in the new-formed community. And so they work it out.

Enjoy the pool this summer. Have a great Memorial Day weekend.

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