Saturday, September 19, 2009

Corporate welfare

Ukrops in Roanoke is closing.

The grocery chain, which I have visited approximately five times, was nice and all but since I did not shop it frequently (I live too far away), I had trouble finding the deals. To be honest, I stopped in there for one single item that I could not find elsewhere, and it is something I can live without.

What most folks don't know, since apparently few people read an article all the way through anymore, if they read it at all, is that the City of Roanoke gave the property developer many incentives to build Ivy Market (the name of the development) on this location. So let me remind you.

The deals cut for Ukrops/Ivy Market, a $20 million project, are thus (from The Roanoke Times archives):

$9 million package. "The agreement will allow Painter's development company, IMD Investment Group, to get a maximum $600,000 city grant annually for 15 years. The grants, or rebates, are to be based on the amount of revenue Ivy Market produces annually. The program will be administered through the city's Industrial Development Authority. None of the money will be paid to the developer upfront." - The Roanoke Times, December 19, 2004

According to this article, the developer told the city the project would bring in $1.4 million in annual tax revenue. That meant the city would still get $800,000 after it gave the developer $600,000. But the city's own analysis indicated the amounts actually would be more like $900,000. They went ahead with the deal anyway.

In the same article, which reviews emails, note this quote. "The chances of Ukrop's leaving during the next 15 years are extremely small," [Councilman Brian]Wishneff wrote. He is not a councilman anymore.

I call this largess with taxpayer money corporate welfare. It means the city is giving the developer back money because he decided to operate there. The city hopes to gain financially from their investment over time.

I also call it bullshit. If someone wants to develop something in a community, let them come, provided they meet the zoning, but why pay them? They take the taxpayer dollars and run. Botetourt County has offered incentives many times to businesses, and now we have big empty buildings. Was it really to the citizenry's advantage to make concessions, to offer tax breaks or money up front? Did the jobs stay forever? Did they even last 10 years?

Another instance of corporate welfare is federal agricultural subsidies. This is supposed to help small farmers, you know. We are small farmers. Do you know how much money we receive from the federal government?

ZERO. Not one single penny. Nada, nothing, zippo.

And every other small farmer I know, with the exception of a couple of local dairies, receives nothing, too. Guess who does get all of those millions? ConAgra, DuPont, Cargill, all of the big companies. The companies that don't need the money just to eat and be able to watch cable.

Walmart also receives federal dollars. As of 2004, the $256 billion company had received over $1 billion in state and local government subsidies. In the 1990s it received over $5 million from Roanoke City for its Valley View store. (The Roanoke Times, Dec. 19, 2004). No wonder it wants to put in more Walmarts here. Follow the money.

Here are some of Roanoke's other corporate welfare projects, from the same article:

1994 - First Union, $500,000, 200 new jobs
Early 1990s - Wal-Mart - $5 million for the Valley View store
Mid-1990s - Roanoke Electric Steel, $260,000 for a $14 million investment
1997 - Maple Leaf Bakery, $757,324 for a $20 million investment
1997 - First Citizens Bank, $25,000, 30 new jobs
1999 - Johnson Johnson Spectacle Lens Group, $9.17 million, $125 million investment
2000 - Precision Technology USA, $80,000 $2.2 million investment; 112 new jobs
2001 - Foot Levelers, $34,790, $3.3 million investment
2001 - The Roanoke Times, $600,100, $25 million minimum investment
2002 - Advance Auto, $1.13 million, $6.7 million investment; 168 new jobs
2003 - SEMCO, $150,000, $4 million minimum investment
2003 - Boxley Materials Co., $154,000, $2.5 million investment; 9 new jobs
2004 - Member One, $66,000, $6 million investment

And then you have something like Gander Mountain in northern Roanoke County, which is the only development I've ever heard of that actually turned down incentive money. Good for them. I try to shop there when I need something they sell.

This is our country. Corporate welfare is a plague. This kind of madness needs to stop. NOW. Make corporations work within their own budgets. That is what the rest of us. Why should a corporation be any different?


  1. Nice post Anita...really puts the abstract term into focus. I couldn't agree more with what you say! Another pet corporate welfare peeve of mine: local governmants PAYING professional teams to stay in the neighborhood...usually in the form of building stadiums. I guess the county does benefit from business generated by sports events, so perhaps some contribution is justified...but not so much as is given!

  2. Wow. What a good article. Amazing numbers.

    Would you write this to the editor of the Roanoke Times?

  3. I agree, excellent post.

    Well, the corporations run everything. They're getting bigger and bigger and the little guys are going out. Pretty soon there will be no little farmers like you guys--ConAgra and Dupont will be all there is. Wal-Mart and Lowes will be all there is. Think about what that will be like for workers and consumers. Everyone will be doing jobs for low wages without their hearts being in it. Products will be poor. Executives will earn hundreds of times what the actual laborers earn. That's how this country is becoming more communistic. (Is that a word?) Which is ironic because the Republicans claim that is what they're scared of, yet they are the ones who encourage this because they are bought and sold by big business and they resist regulations.

  4. Corporations are different because they *are* the government. Like the old saying went: We don't care, we don't have to care, we're Enron." This country was founded by a rising capitalist class that was being taxed by the King of England to further the King's agenda, not the colonists' agenda. The shoe is on the other foot now and we are being oppressed by the new "king" - the multi-national corporations. It is time to rein in the powers of the corporations. The first step is to eliminate the personhood status that they now enjoy.


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