Townsend’s House of Cheese

A Cautionary Tale About Rewarding Polk Developers for their Incompetence

Kudos to Tom Palmer for his ongoing coverage of the futile Polk development industry bailout vote planned for July 21. It’s a fascinating study in business psychology, shamelessness, and government capture by industry – which is to say, the “conservative” school of governance.

To recap quickly, the County Commission proposes to slap one-year, ever extendable moratorium on all impact fees except education for all new residential and commercial construction. That means new development will pay nothing toward future capital expansion for sewer and water, library, ambulance, jail, etc. That apparently includes the Legoland and the CSX/J.D. Alexander/Bob Adams/Highland Cassidy rail hub in Handout City, errr, Winter Haven. But I’m open to correction if that’s wrong. The final ordinance hasn’t been approved.

The commission also proposes to impose a one-industry suspension of the public service tax on natural gas use for a single industry – sand mining. Sand mines, of course, produce the material used in fabrication of concrete.

To justify these moves, the commission’s impact fee moratorium resolution states:

the BoCC finds that the quickest and most effective economic stimulus that the county can provide is to offer incentives to new construction projects by removing the county imposed development costs represented by all impact fees other than Educational System Impact Fees.

Wait, didn’t the county cut its impact fees by like half a while back? I seem to remember that. How did that work? The county has an answer in the exact same impact fee resolution:

Prior actions by the BoCC in reducing impact fees across the board by up to 50% have not produced the necessary economic stimulus.

So, because cutting impact does nothing, the “most effective economic stimulus that the county can provide” is to reduce impact fees. Read that sentence several times slowly. The feedback loop of inanity is almost sublime.

My dear developers, it’s time for some tough love:

The reasons no one is buying your crappy, corner-cutting track houses are:

1) People are underwater and can’t sell the existing houses you sold them at ridiculously inflated prices in 2006.
2) They can’t get financing because of the economic crash caused by the ridiculously inflated prices you and your mortgage buddies talked them into paying in 2006.
3) You built too many crappy, corner-cutting track houses in 2006, and there are godawful numbers that remain empty because you and your mortgage buddies sold them to people who couldn’t afford them.
4) Unemployment is north of 10 percent in Polk County because of number 2.
5) You build crappy corner-cutting track houses that I wouldn’t buy with your money.

The reasons your commercial real estate market sucks are:

1) See reason number 2 above.
2) See reason number 4 above.
3) See reason number 5 above, just because I like saying it.

All in all, it adds up to one thing. You are lousy, incompetent businessmen, and I have no interest in helping you go on as lousy incompetent businessmen. You built too much of a product no one wants, and now you want me to help you build more of it. No thanks.

Even your supposed successes stem from government, which has entirely created the The Legoland, CSX, and USF Poly triumvirate of progress.

From the deal that saved the original Cypress Gardens from being razed, to the 500 percent premium Florida is paying CSX above what it needs to pay for the privilege of making J.D. richer, to the federal stimulus-driven road network going into USFP, anybody making money off those developments owes it to taxpayers and industry capture–not their non-existent entrepreneurial talent.

And it’s not enough to be thankful for that help, you have to come begging/bullying for more. Meanwhile, at the same meeting, the commission will consider what severance packages to pay to the county employees who actually provide services to the public who are likely to get laid off because of budget problems. Guess who won’t be in the market for your crappy, corner-cutting track houses.

To illustrate this a bit, let’s work through a quick thought experiment.

Let’s say that we suddenly have in this country a cheese bubble. Maybe it’s driven by the Food Channel and corporate-funded studies showing possible health benefits of eating a pound of stinky cheese a day. Suddenly the manufacturing of cheeses-from boring American to smelly and delicious Stilton–becomes the growth industry in the country and particularly in Polk County, where we have lots of cows.

To take advantage of this growth industry, I decide to open Townsend’s House of Cheese, a factory/outlet store And for a while, I make a killing, shoveling out Gouda faster than you can say bad breath. Then gradually, everyone discovers that really, a pound of cheese is way too much. The price of cheese itself spikes enormously, along with milk, because of all the demand. Intestines get bound up, and people’s health bills rise precipitously as doctors treat an epidemic of impacted bowels. All of a sudden, the cheese bubble pops-because it was based on the fiction that we could all pay for and eat a pound of cheese a day. We cannot.

With demand for my product plummeting, Townsend’s House of Cheese becomes a house of please. Remove the local sales tax on cheese and milk, I ask the County Commission, because people need to eat, and I used to make money selling people unnecessary amounts of overpriced cheese.

In response, the commissioners laugh at me. The answer, they tell me sensibly, to the lack of demand for my cheese is not to make more cheese. If I mold it, they will not come.

Rather, I need to to either wait until enough there’s enough population growth to support my mass cheese production at lower unit amounts; cut back my production and margins and find ways to increase the demand for my existing cheese by ensuring my customers can afford it; or go back to writing blog posts for free.

However, Townsend’s House of Cheese does not belong to a locally powerful business lobby. And the developers do.

Creative Commons License photo credit: J. Stephen Conn

2 thoughts on “Townsend’s House of Cheese

  1. Billy,

    Hopefully you’ll read this into the record at the public hearing!

    Of course the irony will go over the heads those wedded to reinventing the failed past — rather than moving forward into a new sustainable economic model.

    My guess is that you’ll have to write more about an even worse economy down the road if we don’t turn this boat around.

  2. Billy,

    Hopefully you’ll read this into the record at the public hearing!

    Of course the irony will go over the heads those wedded to reinventing the failed past — rather than moving forward into a new sustainable economic model.

    My guess is that you’ll have to write more about an even worse economy down the road if we don’t turn this boat around.

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