Topgolf: Idiot Project of the Year, and Economic Development 101

June 18, 2018

 

 

The incompetent nitwits on the Albuquerque City Council, the people who helped give you the infamous ART project, are about to throw three million bucks of your money at a project taxpayers have no business subsidizing.

 

The council is expected to approve the $39 million Topgolf project, which will basically be an indoor driving range with a restaurant and bar. The developers are looking for handouts of $3 million from the city and $1.5 million from the county. These taxpayer handouts will basically allow Topgolf to take business from other restaurants, bars, and even golf courses in the area.

 

 

 

We're basically giving taxpayer money to one business so it can take business away from other, similar business. That's insanity, and it's immoral.

 

 

ABQ City Councilors: Not exactly geniuses.

 

Here's the problem: Topgolf is a service sector business that does nothing to grow the area's economic pie; it only makes the slices of the pie smaller.

 

So here's a quick less on on economic development:

 

Think of an area's economy, or its wealth, or the total money in circulation as a pie. Every business and employee basically has a slice of the pie. The idea of real economic development is to make that pie of money bigger so that everyone in the community has more money.

 

The only way to make that pie of money bigger is to bring in money from outside the area – money from people in other cities, states or nations. You do that by selling your goods, services and ideas to people in other cities, states or nations so the money they spend to buy your stuff comes back to your community and grows your economic pie.

 

The jobs that create the stuff that are sold to people in other areas are called export, or economic base jobs. They are the only jobs, or companies, that make an area's economic pie bigger.

 

On there other hand, there are service sector jobs – dry cleaners, restaurants, auto repair joints, etc. - that sell their services to people in the area. They export nothing, bring no new, or outside money into the area, and only cause the existing economic pie to be cut into smaller and smaller pieces.

 

Topgolf is a service sector company. Its developers say that it will attract people from a 150-mile radius to come to Albuquerque and hit golf balls and get hammered. If that were true, it might classify as an economic base company because it would be bringing new money into the area. But I doubt that that will happen. Surely 80 to 90 percent of its business will be from people already in the area. And if they go to Topgolf to spend their money, that means they won't be spending that money at other area golf places. They'll just be moving money in the existing pie around, not growing the size of the pie.

 

Here's another way to look at it. If you have an economic base job, your salary is being paid for by people on other cities, states and nations because they're the ones buying the stuff you make. Your salary is bringing new money into the area's economy.

 

If you have a service sector job, your salary is being paid for by people already in the area. Your salary brings no new money here; it just slices the money pie into smaller peices.

 

Cities and states generally concentrate their economic development efforts on economic base companies because, well, they want to grow the economy and make their pie of money bigger. And that's a good use, and really the only use, of taxpayer subsidies for economic development projects.

 

If you ask most politicians, or reporters, or bloggers, or commentators-on-everything what an economic base job is, you'll get a blank stare. Some Bernalillo County commissioners understand what economic base jobs are, so does state Auditor Wayne Johnson.

 

And there's another politician who understands what an economic base job is and why such jobs are important: Mayor Tim Keller.

 

Keller's administration is against the taxpayer giveaway to Topgolf, and it should be. Keller knows it's wrong to subsidize a service sector business that brings no new money into an area and that will only take business from other, existing businesses.

 

But the city councilors?

 

Naah. They don't understand. And remember, these are the geniuses who helped give you ART, who said and did nothing for three years while then-police Chief Gorden Eden and gang sabotaged APD's settlement agreement with the DOJ, and who have been a group of do-nothings for several years.

 

Under the council's logic, we should be giving taxpayer money to people who want to open tattoo parlors, barber shops, rip-off, payday lending joints, McDonlads', laundromats and other service sector businesses that only cut the existing economic pie into smaller and smaller pieces.

 

Why would these councilors go to bat for smaller pieces of the pie?

 

Just look at the size of their brains.

 

 

 

 

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