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Thread: Your tax dollars at work

  1. #1
    Member Curmudgeon's Avatar
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    Your tax dollars at work

    Here's how it works:
    Absolutely destroy businesses with high taxation and regulation to the point grocery retailers flee the city.
    Form various boards that collect tax money to give to other people who ask for money, like these co-op people.
    Use the taxpayer money to subsidize inefficient and quasi-socialistic food co-ops without regard to free-market pressures.

    WAY TO GO!

    Yet another example of people attempting to circumvent the free market via regulation and taxpayer money.....

    Why is it that co-ops only exist an places where the economy is completely screwed up?





    Co-op gets $380,000 in financing from city

    The Lexington Real Foods Community Co-Op secured the last of the loans it says it needs to build a new store, but the city feels the co-op's chances of repaying all of the loan are so small that it is giving part of the money as something of a grant.
    Buffalo Economic Renaissance Corp., the city's economic development arm, approved two loans totaling $380,000 on Wednesday. The first - $180,000 - must be repaid. However, the second - $200,000 - has more lenient provisions.

    The co-op must pay the interest on the loan and one-fifth of the principal every year for five years. However, if the co-op doesn't have enough money to repay the principal, the city will forgive the payment that year.

    "I think what it amounts to, quite honestly for us, is a gift," said BERC board member Clifford Bell, who voted to approve the financing in an unanimous decision.

    "We might have to make a grant the first or second year," said board member Andrew W. Dorn Jr., president and chief executive officer of Greater Buffalo Savings Bank. "Hopefully, they'll be very successful in increasing revenue. Parking and location are the two biggest things that drive retail sales."

    However, the Lexington Co-op feels confident that its sales will increase from $1.9 million this year to $3.4 million the first year the new co-op is open. The co-op expects to demolish the former Willis & Lowe store at Elmwood and Lancaster avenues in October, build a new store during the winter and open it in late spring or early summer.

    "If anything, we believe they're too conservative," said Tim Bartlett, the co-op's general manager. "With moving from a side street to Elmwood Avenue and adding parking and quadrupling our retail footage, we don't feel we'll have a problem."

    The BERC funding is coming from U.S. Department of Housing and Urban Development's block grant money. The co-op is eligible for the funding - whether it be a loan or grant - because it is creating at least 20 jobs. At least half those jobs must go to low- to moderate-income workers.

    The entire project will cost the co-op $3.2 million, or $711 per square foot of retail space. The co-op raised $560,000 in loans from its member owners and got a $1.6 million loan from the National Cooperative Bank in Washington, D.C.

    It also got a $100,000 loan from the Local Enterprise Assistance Fund, an organization in Washington, D.C., that provides funding to co-ops; A $180,00 loan from the Erie County Industrial Development Agency, and a $300,000 loan from the Northcountry Cooperative Development Fund in Minneapolis, Minn.
    Data is not the plural of Anecdote.

  2. #2
    Gold Member Night Owl's Avatar
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    Is this a post about the BERC? Grants/loans for businesses? or the Lexington Real Foods Community Co-Op?

    You have always said there's no such thing as a free lunch. What the BERC is doing does not provide free money to comapnies. The loans or grants to this business have to be paid back, much like what a business would get from the bank.

    Or is that what your post is about, a business not getting something for nothing?

  3. #3
    Tony Fracasso - Admin
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    News Quote
    The co-op must pay the interest on the loan and one-fifth of the principal every year for five years. However, if the co-op doesn't have enough money to repay the principal, the city will forgive the payment that year.

    "I think what it amounts to, quite honestly for us, is a gift," said BERC board member Clifford Bell, who voted to approve the financing in an unanimous decision.

    Night owl
    You have always said there's no such thing as a free lunch. What the BERC is doing does not provide free money to comapnies. The loans or grants to this business have to be paid back, much like what a business would get from the bank.
    Night owl did you read the same article we did?

    However, if the co-op doesn't have enough money to repay the principal, the city will forgive the payment that year.
    What if 10 years goes by and payments are never paid and it fades away.

  4. #4
    Gold Member Night Owl's Avatar
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    Night owl did you read the same article we did?

    I read this ...

    "Buffalo Economic Renaissance Corp., the city's economic development arm, approved two loans totaling $380,000 on Wednesday. The first - $180,000 - must be repaid. However, the second - $200,000 - has more lenient provisions.

    The co-op must pay the interest on the loan and one-fifth of the principal every year for five years. However, if the co-op doesn't have enough money to repay the principal, the city will forgive the payment that year. "



    quote:
    --------------------------------------------------------------------------------
    However, if the co-op doesn't have enough money to repay the principal, the city will forgive the payment that year.
    --------------------------------------------------------------------------------
    What if 10 years goes by and payments are never paid and it fades away.

    I highly doubt that they are not going to be monitoring the business considering the amount of money invested. So if one year comes up short, no worries, they will still check for the next year and so on.

    News quote: "I think what it amounts to, quite honestly for us, is a gift," said BERC board member Clifford Bell, who voted to approve the financing in an unanimous decision."

    The BERC is always for saying their grants/loans are a form of free money or a gift. In the end... they always get the money back. When a business has to pay back the interest and one-fifth over five years... that is still a loan in which has to be paid back along with the first $180,000.

  5. #5
    Member Curmudgeon's Avatar
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    What most likely will happen is little, if any of that money will be repaid. Wait and see... Why is the city even in the business of supporting "co-ops"?

    Why is it that Americans have the cheapest food in the world? We're the best at manufacturing and distributing food! The city should changing its economic conditions so that they attract the EXPERTS IN FOOD DISTRIBUTION, who around here is Tops, Wegmans, and Wal-Mart.

    A "food co-op" is not the best way to get food into the hands of consumers. Not even close. In a nation where obiesity is the #1 health problem of people in poverty, the need for a city-subsidized "food co-op" is laughable.

    The Dreadlock/Organic fruit/anti-capitalist crowd is free to have whatever feel-good food club they wish. That is their right. Why they are receiving tax dollars for such an enterprise is completely beyond me.

    Just another example of why the people of the City of Buffalo deserve to have their rights to self-governance taken away with bodies like the Control Board. They keep on doig really stupid things. Habitually.
    Data is not the plural of Anecdote.

  6. #6
    Gold Member Night Owl's Avatar
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    Why is the city even in the business of supporting "co-ops"?

    The BERC is an organization that is in the business of helping businesses; the city is not supporting 'co-ops' through this, per-say.

    A "food co-op" is not the best way to get food into the hands of consumers.

    Of Course, but the Lexington Real Foods Community Co-Op is a business that went to the BERC for help with their business. The BERC is issueing funds via grants and loans, like I mentioned earlier, the BERC will monitor the records of this community co-op as with any other business to make sure money is or isn't available to repay the loans.

    Just another example of why the people of the City of Buffalo deserve to have their rights to self-governance taken away with bodies like the Control Board. They keep on doig really stupid things. Habitually.

    I don't think people should have their rights taken away for the reasons you've stated. According to the article "The BERC funding is coming from U.S. Department of Housing and Urban Development's block grant money. The co-op is eligible for the funding - whether it be a loan or grant - because it is creating at least 20 jobs. At least half those jobs must go to low- to moderate-income workers. "

    Should we lose our rights to self-governance because an organization is in the business of helping by way of issuing repayable loans/grants to aid people with small businesses in the city of Buffalo? Oh, and job creation to boot where at least 10 low income workers will benifit; is that so bad and/or habitually stupid? Let's just say that the BERC isn't willing to help this company, there might be 20 more people aiming towards to possibility of ending up in the welfare or unemployment line.

    The co-op agreed to the fine print of the loan, just like closing a deal with the bank. The BERC will not just allow $380,000 to be swept under the rug.

    I usually agree with your finer points of economics Curmudgeon, but from your last post this is one that I have to say... "oh, pa-leeze, Gimme a break!"

  7. #7
    Tony Fracasso - Admin
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    The co-op agreed to the fine print of the loan, just like closing a deal with the bank. The BERC will not just allow $380,000 to be swept under the rug.
    Nightowl? Are you not from WNY? Our politicians/adminstration allows way too much to be swept under the rug. Lets say the co-op isn't making money now to cover the cost of a loan payment. What makes them think a influx of cash will turn that around?

    I might be talking out of my ass but i would like to know what the salaries our of the berc people are and there true track record. Maybe it is good but is there any supporting documentation?

  8. #8
    Member Curmudgeon's Avatar
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    Local government shouldn't be subsidizing a small retail business to the tune of HUNDREDS of THOUSANDS of dollars to create LOW-INCOME JOBS. That's just absurd.

    What government should do is create conditions where businesses start up themselves and create low income jobs out of nessessity! And that's done by reducing taxes and regulation, not by redistributing wealth to somebody who filled out a handout application to some government entity.
    Data is not the plural of Anecdote.

  9. #9
    Gold Member Night Owl's Avatar
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    Nightowl? Are you not from WNY? Our politicians/adminstration allows way too much to be swept under the rug.

    Yes I am a WNY resident, WNYresident.

    The BERC is not a political based organization, and just because the politicians 'sweep things under the rug' doesn't mean the BERC does.

    Lets say the co-op isn't making money now to cover the cost of a loan payment. What makes them think a influx of cash will turn that around?

    If a business is in jeopardy of failing, the BERC probably wouldn't consider a loan/grant filing from the co-op in the first place. They won't just give out money via loans or grants to any company with a full background check first.

    I might be talking out of my ***...

    Now, WNYresident... You know my Forte about language

  10. #10
    Gold Member Night Owl's Avatar
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    What government should do is create conditions where businesses start up themselves and create low income jobs out of nessessity! And that's done by reducing taxes and regulation, not by redistributing wealth to somebody who filled out a handout application to some government entity.

    Much like I have said before in the Seneca Street redevelopment thread... it's better to see tax dollars going into something more benificial than wasted needs like ice rinks and/or outright into our eleceted officials' pockets.

    Let the BERC lend money for the sake of helping small businesses so at least the city can have a better chance with surviving companies that will have the stability to pay it back over 5 years.

    All the complaining that is said about how the government doesn't do anything... this an example of how they are. Absurd? No, not to the buisness owners from all over the city that is being or has had help from the BERC. Have you ever seen a strip that has been aided from the BERC? Well, you will because just like the food co-op, they have moneys set aside via block grants and loans for the businesses along Seneca Street.

    Like it or not, there are hundreds of thousands of dollars that will be distributed to any business on Seneca willing to ask on how to improve their store. The BERC has 6 main targeted areas of the city that will get prioritized aid if accepted.

  11. #11
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    might be talking out of my ass but i would like to know what the salaries our of the berc people are and there true track record. Maybe it is good but is there any supporting documentation?
    I wouls also like to see their track record of repayment. I know that government throws way too much money away. Here is a few that failed:

    The brew company downtown

    The tomatoe farm

    River Ranch Foods

    We even almost gave Adelphia a skycraper downtown

    Great thinking o wise ones in office.

    BF

  12. #12
    Gold Member Night Owl's Avatar
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    I thought the Tomato Farm in South Buffalo failed because the tomatoes were found to be contaminated while growing?

    Adelphia Cable, were their projections for a new building planned through the BERC or just straight funding from the city? Same with the Brew Company? If these examples have not been aided with funds from the BERC then you are just mixing apples and oranges and saying the government is throwing good after bad.

  13. #13
    Member Curmudgeon's Avatar
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    The best thing government can do is TO DO LESS, not more. Where do you think these grants come from? TAX MONEY. If they just stopped trying to help and got out of the way, private enterprise would fulfill most needs by itself. A side-effect of that is that politicans would lose a lot of power and a lot of civil servants would be laid off.

    Giving hundreds of thousands of tax dollars to a hippie-ridden feel-good food club that probably not survive on its own is a pretty stupid way to "help the economy".

    Return that $300,000 to the taxpayers and let THEM decide how it should be spent....
    Data is not the plural of Anecdote.

  14. #14
    Gold Member Night Owl's Avatar
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    The best thing government can do is TO DO LESS, not more.

    This may be a dumb question, but should we still pay the highest taxes in the Nation and have the government do less with our tax dollars? What do you propose 'our' money be used for?

    Street repairs are a complaint, business assitance programs are a complaint, police and fire pay is a complaint, garbage pick up... all the things that are said to be what the tax dollars go for is a complaint and yet so many people say they shouldn't do anything with the money collected. How should the city go about using tax money in our communities? Did you know Dennis Ward is the democratic comissioner- his paycheck will be more than $100,000-that's a great thing to pay a politician so much, but a little old food co-op isn't worth crap in the city of Buffalo.

    Things like the BERC is what our money should be going for and a food co-op may not be something you may need but eventually there will be a need for something else in your community.

  15. #15
    Member Curmudgeon's Avatar
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    ahhh.. just STOP COLLECTING SO MUCH MONEY.

    like most other places in the US currently do.

    Seems pretty simple, doesn't it?
    Data is not the plural of Anecdote.

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