Another reason to end local “economic development” efforts by government

In the continuing saga of incompetence in crony capitalism in Dayton, we now can thank the Dayton Daily News for finally uncovering a failure by the powers that be in handing out cash to private businesses.

Note, that this was money that was put aside as payola for allowing Waste Management and the Danis Corporation to build a mountain of trash on the West Side- not actual tax dollars:

A $100,000 West Dayton Development Fund grant the city awarded to Loritts-Neilson Funeral Home Inc. could be pulled back after the Dayton Daily News discovered the state had canceled the funeral home’s articles of incorporation in 2007 for delinquent taxes.

Ernest Neilson III, president and owner, owes an undisclosed amount of taxes to the state and more than $36,000 in property taxes on the business, 3924 W. Third St., to Montgomery County, records show.

“If the tax issues are true, then the funding would be in jeopardy,” said Timothy Downs, deputy director of the city’s economic development office, the division that distributes the grant.

Downs said he was unaware of the canceled articles of incorporation until the Dayton Daily News informed him of it.

The background reporting system the city uses did not reveal the cancellation, said Veronica Morris, senior development specialist for the city’s economic development office.

No decision had been made Thursday about the grant, which is funded through landfill fees paid to the city by Waste Management Inc. The grant money is used as reimbursement money for projects recipients of the West Dayton Development Fund have spent money on.

City commissioners approved the grant to the funeral home Oct. 12.

Neilson applied for the grant in August. The grant application he used included a question as to whether he owed any delinquent taxes to the state or any political subdivision of the state.

He responded “no.”

“I said ‘no’ simply because those were already in arrangements and I felt that was no one’s business,” Neilson said Tuesday….

If the grant award stands, Neilson will use it toward a $450,000 renovation and expansion of the funeral home, according to his application.

“He cannot use (the grant money) to help pay his taxes,” Morris said.

via City fails to investigate grant requests.

The list of grants handed out to questionable companies is long and the return on investment reports totally lacking. No other business would survive based on the practices and policies of “economic development” employees of government organizations. The only people who seem to make as many wrong calls and keep their jobs are meteorologists on local TV news. To list a few favorite “economic development” flops- where economic development gurus blew it: the funding of a new HQ for the ponzi scheme called MCSi, money thrown hand-over -ist to Ultracell which never had a production ready product and the tons of money thrown away on the “Wayne Avenue Kroger” which has decimated a neighborhood and given us an empty lot.

Crony capitalism is the correct term for when government gets to pick winners and losers in the private sector. Read this excellent essay from the NYT on crony capitalism in the US by Nicholas Kristof: Crony Capitalism comes home.

Imagine if the West Dayton Development fund went to funding parks and rec programs for kids, or for consolidating good neighbors into solid savable neighborhoods? That may have been real economic development, instead of crony capitalism at its finest.

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