LOSER BUSINESSES

The Grand Rapids City Commission did the sensible thing yesterday of nixing developer Jonathan Rooks's request for a fifteen-year extension of the tax-free Renaissance Zone that includes an old factory he wants to remodel as an apartment building.  Rooks has an option to buy the old Sligh Furniture factory, currently in use as a warehouse.  His plan is to convert it into 400 residential apartments, but he complained that without this big tax break his venture won't make money.

So that's our problem?  That is, the problem of the rest of us taxpayers who have to make up what Rooks's project and renters don't pay in state and local taxes?  In effect, Rooks is asking you and me to provide his profit to him.  Hell no to that.  Of course, this is the problem with these targeted tax breaks like Renaissance Zones.  Taxes are too high, and that dampens business growth -- and no doubt some marginal businesses go under because of them.  So a general tax cut is good policy.  But little good comes of giving tax breaks to businessmen who can't make money without them.  Why would a city, like Grand Rapids, want to promote the development of businesses so marginal that they would be defunct if they had to pay taxes?

Let's be clear.  When I talk of businessmen, I'm not talking about the small-timer or the guy who is making a buck on the side, such as a B&B owner, where the demand by the government to collect a few dollars in taxes snuffs out a small venture.  I'm talking about developers like Rooks, the new German owners of Autodie, and the alleged billionaire Rich DeVos.  If these guys can't figure out how to turn a profit without stiffing the tax coffers that pay for all of the municipal services they are using, then their businesses are losers.  Why should they be encouraged at the expense of the rest of the taxpayers eludes common sense.