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April 6, 2016 / jeffnward

Quick Hits – April 6, 2016

If you build it, they won’t come!

That’s right! And while I understand why regular folks completely miss this concept, the fact that so many city councils utterly fail to grasp it is truly frightening.

The marketplace, like nature, abhors a vacuum. So if some business, store, or enterprise is missing from the local economic landscape, you better believe savvy entrepreneurs will swoop in to meet that demand. It’s the only way it ever works.

If you build itThat’s why the vast majority of TIFs (Tax Increment Financing districts) fail and fail to create new jobs. That’s why the citizens of Batavia are paying outrageous electric rates. That’s why, when St. Charles Alderman Maureen Lewis said she wanted to see a “mix of retail, medical and office space” on the old St. Charles Mall site, I wanted to bang my head against the wall 47 times.

If that dilapidated old mall property could support that specific development, it would already be there. If Batavia Mayor Jeff Schielke could beat the energy markets, he wouldn’t be a bleepin’ professional mayor. And TIFs don’t work for the same reason. Unless you’re talking about a truly blighted area, local governments simply do not have the power to move the market.

Even totalitarian regimes can’t pull it off! Our most recent 12 percent DJIA correction was driven by a far worse China stock market crash. And that inevitable bear market was exacerbated by the State Council’s brilliant maneuver that forbid that country’s largest investors from selling their shares.

They thought this tactic would calm an already roiling market, but all it did was create a vacuum that made things much worse when the big money finally could pull out.

It’s the simplest concept nobody seems to understand. The market will bear what the market will bear. Nothing more and nothing less.

The best local government can do, is attempt to create a friendly business climate, but even that won’t guarantee a bloody thing. So let’s move on to a couple of fine examples.

The Quad St. Charles is dead

You heard it here long before the first silver shovel hit the ground. And the reason it’s DOA is the market wouldn’t support the Quad from day one and the clues were all there too!

First the Krausz Companies did nothing but delay the project saying, “It’s a very complex undertaking and we just need to get it right.” Translated, we aren’t getting nearly the retail interest we thought so we’ve got to come up with another plan.”

Quad1Then the Krausz Companies failed to provide a list of impending tenants because they didn’t “want to screw up any pending deals.” What that really meant was, “We have no new tenants because if we did, we’d scream it to the high heavens to attract more of ‘em!”

Finally fed up with the lack of project progress, a number of St. Charles residents took to social media demanding an explanation. Mayor Ray Rogina called it a “legitimate question,” which makes one wonder why it didn’t come from the City Council itself.

So Krausz submitted a written statement explaining, “The vision moving forward is to develop a mixed-use project which will build on the strength of the existing retail anchors, Von Maur, Carson’s and Classic Cinema Theater by adding a residential component that reflects the values and high standards of the neighborhood and the community.”

According to an astute insider, what that really means is “They’re cherry picking the out-lots for residential development while pretty much ignoring the old Charlestowne Mall building.” Remember when the Aldermen said, “No matter what happens, at least we’re getting the building torn down for free?”

Not so fast!

Krausz went on to brag about a new Carson Pirie Scott furniture department, a potential Classic Cinemas remodeling effort, and that Cooper’s Hawk Winery was coming in.

Ah yes! Misdirection. Carson’s controls their own destiny so Krausz had nothing to do with that minor development. The movie theater hasn’t attracted a single new tenant, and, when I heard “Cooper’s Hawk Winery” my first thought was, “who the hell are they?”

I’m sure they’re a fine concern, but they’re hardly the stuff of retail legend.

So not even Mayor Rogina believes his recent statement that “Krausz is committed to quite a bit of non-residential development.” But instead of calling their bluff, the City Council is going to go along with it – again – and when the new plan contains 80 to 90 percent residential development, all hell’s gonna break loose.

My source went on to tell me that this was Krausz Companies’ plan along. They knew they could reel in the City Council with the retail/mall bait and, knowing it would never fly, pull a bait and switch after St. Charles would lose massive face for backing out.

And their nefarious plan worked because Mayor Rogina and the St. Charles City Council failed to understand our very basic concept; if the market could support a mall on that site, it would already be there.

Batavia doesn’t get it either

Apparently, massage enterprises are becoming the talk of the Tri-Cities and we will get to the more fascinating variety very soon. But for now, we’ll cover how something two Batavia Aldermen said fits right into our “the marketplace is always right” motif.

To wit, Sunshine Massage just received a conditional-use permit to open at 11 East Wilson. But during the debate, Aldermen Drew McFadden and Susan Stark basically argued that this was yet another example of the City “allowing” a downtown business to come in that doesn’t generate sales tax.

Empty“Allowing?” You mean there’s a horde of eager entrepreneurs banging on those City Hall doors begging do business in Batavia? Or is the more likely scenario, given the continually depressed downtown and the increasing number of Randall Road vacancies, Batavia should embrace whatever businesses they can get.

Merely wishing for a slew of sales tax prone retailers, or worse yet, keeping viable businesses out in the vain hope they’ll magically appear, ain’t how it works people!

Under the poor leadership of a mayor who’s been there way too long and a number of city council iterations that just don’t get it, Batavia’s downtown has decayed to the point where the market simply won’t bear very much.

So I’ll say it again. If the building at 11 East Wilson could support a sales tax paying entity, it would already be there.

2 Comments

Leave a Comment
  1. Ben M / Apr 6 2016 11:53 am

    That’s why the citizens of Batavia is paying outrageous electric rates. How about this? That’s why the citizens of Batavia ARE paying outrageous electric rates. No charge for the assist.

  2. jeffnward / Apr 6 2016 12:14 pm

    Ben, The difference is, you have to dumb it down for Batavians!

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