But you promised…

Back on Feb. 14, 2008, the Dayton City Commission and the County ED/GE committee gave away $125K to an ad agency that claimed 19 employees at the time and an additional 15 during the next three years. I said then there were problems- in that a video edit suite doesn’t cost $125K- and the jobs were imaginary:

In today’s paper, I see that BGH Studios has politicians believing that what costs about $125K is really a $650K investment- and getting the government to buy them their tools.

Wright Institute to create 62 jobs

BGH Studios received $50,000 from the city and $75,000 from the Montgomery County ED/GE program…

• BGH Studios is a high-tech marketing communications firm that focuses on video content delivery systems, retail marketing, corporate marketing and audio/video and film services. The studio will invest $650,000 for two new video suites, an audio suite and visual effects suite on the third floor of 116 N. Jefferson St. downtown. The studio has 19 employees and plans to create 15 jobs during three years with an average salary of $46,000.

via Corporate welfare with your tax dollars.

It’s not been 3 years yet- but on June 16, 2010- they fired all their staff and closed the doors to BGH Studios – leaving employees unpaid and clients with unfinished projects.. Now, they are back… as “The Radical Giraffe” and they have a lot of video on their front page- probably made with the very equipment they got the taxpayers to fund.

The same people at the helm, the same office space, the only things that seem to have changed are the phone number and the name of the company. Take a look at www.BGHStudios.com and compare.

Now they claim they don’t need staff- they’ll draw upon their “large pool of best in class professionals.” Listen to Bill Galvin in his “director of wow” video.

So no 35 employees, no growth, but- they have some nice video equipment paid for by the taxpayers.

It’s time to hold both the people who handed over your tax dollars and the people who took it- accountable. This isn’t a minor amount of money- if it was Raleigh Trammell, they’d have the FBI in the offices, carting the computers out- and splashing it across the front pages of the paper.

This is theft- the actions are criminal, but, will we see anyone in office ask the questions- or get our money back? Commissioners? Anybody? Deborah Feldman? Anybody home?

NOTE: Oct 12 2010- 2pm- Joe Tuss, director of Development for the County- and head of the ED/GE program called and said that BGH Studios failed to comply with terms of agreement, hadn’t finished the grant process-and that on Feb 19, 2009 it was canceled. That is one year after it had been voted on. This has been mentioned numerous times on this site previously- yet, no official has responded and corrected previously.

It’s nice to know that we get the record straight after this site keeps hammering away.

How your tax dollars end up in the rich mans pockets

The news is sometimes in the details that the Dayton Daily News leaves out. If you read their story, it sounds like the city and county have “won” some new business- from Georgia (the evil people who “stole” NCR from us) for the paltry investment of $125K.

Read and Rejoice!

In September 2009, commissioners initially approved a recommendation for a $125,000 grant to the company, a producer of molded plastic parts. The Montgomery County ED/GE (Economic Development/Government Equity) advisory committee recommended the grant.

The ED/GE process has two parts: First, the county considers the recommendations of the ED/GE advisory committee and then the county enters into a contract with local jurisdictions — in this case, the city of Dayton — as part of the allocation. The expansion will be in Dayton.

Composite Technologies plans to move and expand its mixing and molding division from Georgia to 943 Woodley Road, Dayton, according to its ED/GE application.

via Grant allows company to expand, create 41 new jobs.

Greg Hunter did his dilligent digging and finds out that this is just another of Raj Soin’s businesses. That’s right, the man who owns Mike Turner, now gets another $125K of your money. This is the guy who owns a mansion and doesn’t want to pay his taxes:

The Ohio Supreme Court has affirmed Greene County’s 2003 appraisal of Raj and Indu Soin’s Beavercreek home at $3.7 million.

The Soins appealed to the court, claiming the home at 2489 Kemp Road was worth less than half as much — $1.4 million.

The Soins have battled county officials over property taxes since building the 25,879 square-foot, 16-room home, completed in 2002. The home has six bedrooms, 91/2 bathrooms and a swimming pool and sits on 126 acres — 37 of which were purchased in 2004 for $662,500, according to county records.

The Soins also are appealing the $5.3 million value the county set for 2005 in Greene County Common Pleas Court, claiming the home is worth $2.75 million. Wright State University’s School of Business is named for Raj Soin, founder of Dayton-based MTC Technologies.

via DaytonDailyNews: Dayton, Ohio, news and information.

If you want to look at who owns the Woodley Road property: Court Reporter on transaction

Read about the City bragging about their involvement: Dayton Department of Development PDF PR

See who owns Sansara Properties LLC: State of Ohio articles of Incorporation listing Raj Soin’s son, Vishal Soin as the agent: http://www2.sos.state.oh.us/reports/rwservlet?imgc&Din=200906202950

It’s pretty obvious that $125K makes no difference at all in the scale of this deal- so how do they come up with this number? It’s the exact same amount that they gave to BGHstudios several years back (word on the street is that there aren’t many people working there right now).

However, as your trash bill goes up, your police officers get overworked, and firefighters get cut- somehow we have the ability to give $125K to a very rich man. It’s criminal.

Belt tightening isn’t going to solve the Dayton financial problem

No real time to write a full post about this- but, either Joey or Nan should be happy I’m running, because next year won’t be easy. The city is projecting a $20M shortfall next year:

The city of Dayton’s financial woes grow deeper with budget estimates for 2010 predicting up to a $20 million shortfall.

via Dayton estimates $20 million budget shortfall for 2010.

You don’t fix $20 million in a few months, nor do you get in this kind of trouble overnight. Remember, this is the Commission that spent at least $2M chasing a pipe dream for a Kroger that never materialized, and then bought a bunch of “blighted buildings” at the corner of Wayne and Wyoming for $800K.

Start to see where the problems are?

Economic development, tax breaks, special deals- are a big part of what got us into this mess. Did we really need to give $125K to BGH Studios for their promise of new jobs (that never materialized). It’s been willy nilly spending like this for years- gambling away our money that was supposed to go for service delivery, which might have actually helped project an image of a city that could actually deliver services- when we still had people to deliver them to.

Now, we’re looking at trying to woo tenants to a city that’s broke, and desperate- and we don’t even have money left to pay for the date.

The problem won’t be solved overnight, but, with a little marketing savvy (one of my favorite quotes is from Guy Kawasaki- “Advertising is the plastic surgery of business,: a procedure to make ugly and old products look good”) and some really innovative ways to empower the neighborhoods- we may start to change perception. Throw in some consolidation with other governments and we might be able to start working our way back to financial stability.

I believe that trying to push my proposal for unlimited H1B visas for HUBzones could transform Dayton overnight, but, that would take some lobby muscle.

However, all of these things take the same thing: a new approach to the old problems, and our current commission isn’t equipped for that.

This was your 3.7 million dollars- and mine.

It’s nice to know that the city of Dayton is no longer giving BGH Studios $125K, but only $50k if these numbers are correct (maybe it’s an additional $50K- hard to tell). And, it’s also good to know that they now have 19 employees- can I see the city income tax filings?

You see, BGH is a “competitor” to my firm. And, my tax dollars just helped give my competition my hard earned money. And if they never actually create those 30 jobs, the city won’t go get my money back. Neither will you.

Last year I spent $15K upgrading our video shooting and editing capabilities at The Next Wave so we could produce High Definition (HD) video. Did I ask for a handout? Of course not.

In the mean time, the city has cut back on recreation programming for kids, cut back on police and fire budgets, raised my water and trash bills, raised my property taxes and can’t pass a school levy. What would 3.7 million do to help in any of those areas?

Would schools with arts programs bring more residents to our city?

Would more police on the street make us feel safer?

Why not hire police just to write traffic tickets and slow people down like Oakwood- and make us feel like we have police everywhere? We’d generate revenue, and maybe not have a perception as a place where the police are slow to respond.

City OKs $3.7 million to boost business

CompanyAscending Private Investment City of Dayton Investment Jobs Retained Jobs Created Public Investment Per Job
Allied Supply $700,000 $35,000 33 5 $921
Assembly & Test Worldwide $2,100,000 $125,000 137 113 $500
BGH Studios $650,000 $50,000 19 30 $1,020
Brower Insurance $796,400 $100,000 111 15 $794
Cannell Graphics $350,000 $0 0 4 $0
IDCast $100,000 $85,000 0 64 $1,328
Ken’s Kars $710,000 $0 5 2 $0
Liteflex $1,700,000 $75,000 0 30 $2,500
Litehouse Green Design $5,000,000 $162,000 0 0 $0
Morning Pride $870,000 $50,000 350 125 $105
Mutual Tool $2,100,000 $100,000 100 65 $606
Nanotek $150,000 $25,000 7 77 $298
Oregon Parking Amenity $0 $850,000 0 0 $0
Paradigm Industrial $262,785 $50,000 18 10 $1,786
Rapid Reaction Center $726,000 $150,000 0 62 $2,419
Real Wire $3,000,000 $250,000 28 15 $5,814
RFID Incubator $0 $1,400,000 0 100 $14,000
Stevens Aviation $1,950,000 $0 65 41 $0
Tax Centers of America $950,000 $100,000 159 40 $503
Webster Station Dev Group $120,000 $85,000 10 6 $5,313

Between Jan. 1 and Wednesday, May 7, the city has approved just under $3.7 million in development grants or offered technical assistance to 19 companies also willing to invest significant funds into their own businesses in order to grow.

All told, the companies agreed to invest about $22 million into their businesses, retaining more than 1,000 jobs in Dayton and creating just over 800 new ones.

“We’ve had a great deal of activity these first two quarters,” Shelley Dickstein, Dayton’s assistant city manager for strategic development said…

Dickstein said she expects the city will continue retention and expansion efforts throughout the year, but that approval of grants may slow down in the fourth-quarter, when the construction season ends.

Instead, the City is helping my competition get a leg up.

I’m also wondering if we aren’t seeing some political favoritism going on. A few of these companies may have political ties.

Does it make you want to stick your hand out too? Or does it make you wonder if we haven’t totally gone off our rocker?

What could you think of doing with 3.7 million that could change our city?

Sportsplex downtown? An ice rink with 2 sheets for tournaments and teaching Dayton kids to ice skate and play hockey? More cops? Turning almost vacant blocks into mini farms?

Share your thoughts.

Corporate welfare with your tax dollars

One reporter said to me- it seems like you spend a lot of time writing for your site, where do you find the time? Well, if you’d stop providing so many crazy stories about wasting our tax dollars- I wouldn’t have to write.

In todays paper, I see that BGH Studios has politicians believing that what costs about $125K is really a $650K investment- and getting the government to buy them their tools.

Wright Institute to create 62 jobs

BGH Studios received $50,000 from the city and $75,000 from the Montgomery County ED/GE program…
• BGH Studios is a high-tech marketing communications firm that focuses on video content delivery systems, retail marketing, corporate marketing and audio/video and film services. The studio will invest $650,000 for two new video suites, an audio suite and visual effects suite on the third floor of 116 N. Jefferson St. downtown. The studio has 19 employees and plans to create 15 jobs during three years with an average salary of $46,000.

Now, I happen to be in the same business as BGH- and I can tell you, the cost of buying a video suite has dropped considerably in the last 10 years. For under $20K you can buy a complete Hi-def system, and a camera for under $8K that out-performs what used to cost over $100K. I know, I just invested $12K on a new system and camera myself. As to building out the rooms- it all depends on what level of elegance you include. Sure, you can have the Taj Mahal suite- but, BGH isn’t doing Hollywood level work. The people that are, my friends Mike Webber at Mainsail- and J. Todd Anderson who works with the Cohen brothers, buy their own gear and don’t ask for tax payer handouts.

While government is scrambling to patch roads (the price of asphalt has doubled), we can’t pass a school levy, and even police departments are having a hard time buying ammunition- why are our tax dollars buying expensive electronics for ad agencies?

When will Dayton learn that deals like these have no guaranteed pay back: Reynolds and Reynolds abandoning the TAC downtown less than 4 years after given a sweet deal as one example.

If it was made illegal to give any money or tax breaks to corporations, with the exceptions of ones that reinforce national goals (like decreasing the need for foreign oil) we may not only see a government that does more governing- but, politicians who do less pandering.

Am I the only one who’s fed up? Your thoughts please?