Aug 16, 2011

Allentown's Grant Programs

News media reported that the roof collapsed on 7th Street because of the heavy rain. Actually, the roof collapsed from neglect during a heavy rain. I don't know anything about the building, but I do know about roofs. Well, actually, I do know a little about the building. The operators of the hardware store received a substantial facade grant. Allentown has been very generous with grants to startup businesses, on both 7th Street and Hamilton Street. A number of these businesses closed within a year, but the building and facade remained improved for the landlord's benefit. This blog documented such grants on Hamilton Street, and The Morning Call later did the story. According to The Morning Call, the owners of the 7th Street building could not be contacted after the collapse this weekend, their phone numbers had been disconnected. I assume that they were more available during their tenant's grant process. I understand the temptation by elected officials and bureaucrats to want to dress up the downtown street fronts, especially with the taxpayer's money. Maybe the Facade Program should be renamed the Charade Program.

UPDATE: In theory the idea of subsidizing manufacturing facilities, potentially large employers, through tax incentives can be justified, although the devil often lies in the details. The idea of subsidizing small retail through grants is increasingly proving to be little more than short term delusion.

23 comments:

Anonymous said...

Do you remember the mayor's Hall of Shame? What ever happened with those buildings? Not sure if true, but someone said they're all still standing or were sold at huge taxpayer losses to new builders.

Anonymous said...

the owners of the 7th Street building could not be contacted after the collapse this weekend, their phone numbers had been disconnected.

How difficult would it be for city to do an annual update and confirm of all landlord contact info? Do businesses operate like this?

Anonymous said...

All about "friends" in low places.
facade grant crap.
Just throwing OUR money around.

binzley said...

Do businesses operate like this? Yes anon 6:13.

My local Ford dealership ordered a new catalytic converter for my car. They provided a free loaner car. I have had it for 6 days (today starts the seventh) because they cannot find it from FED EX even though they already paid for it.

Speaking of bureaucracies, the parts department does not talk to the service department. They must only use the computer. They are only 30 feet away.

steelbreast said...

about businesses being more efficient than government, try canceling AOL or getting Comcast on the phone.

michael molovinsky said...

anon 6:11, some of those buildings were purchased by the city, at much more than the owner ever hoped to receive. use the search engine on the sidebar, Neglect has it's reward

ironpigpen said...

What?

A Potemkin Village for Pawlowski?

Impossible!

Anonymous said...

I love Ironpigpen's knowledge of Russia and the USSR but he discredits Potemkin here. There never were any villages. Look up the research that came out after the fall of the USSR.

ex city councilman said...

Molovinsky: Are you opposed to any grants to start-up businesses? Each year, on average. business fail 50% of the time each year without any grants.

Patrick McHenry said...

Ex-Councilman:

I'm not sure that the success percentage gets any better because of government grants. You might get them through the first year (or the period the grant covers), but the trick is what happens after the money dries up.

Look at Johnny Manana's or the TC Salon at the local level. Or the Brew Works, which is back at the public trough the same year they are to begin paying property taxes. On the national level, look at the Allentown Metal Works or the failed solar company in the news today.

No matter how much those in government think they know better, in the end it will be the customers (otherwise known as the market) that makes the decision on whether the product being offered is worth it.

ironpigpen said...

Of course a Potemkin Village is not an entire village!

Only the travel route of Catherine the Great was "spruced up" by the Imperial bureaucrats.

So, yeah.

I am asking if 7th Street to Pawlowski is what the staged travel route (where the term "Potemkin Village" comes from) is to Catherine the Great?

Did I really need to take the time to spell that out for you, Anon 10:57?

Be honest.

Anonymous said...

And GRANTS cause these businesses to succeed?
Huge gobs of tax money thrown at businesses destined to have a 50% failure rate is good economics?

Please state how many (if any) of these businesses make it after the grants are gone?
How much $$ goes right down the crapper when these grant supported ventures turn belly up?

michael molovinsky said...

former councilman, if pushed for a blanket statement, yes, i'm opposed to all the grants. although occasionally a business may be a plus, i.e., the brew works, the city didn't know when to stop in their case. in other cases, an outright waste of money (the cookie lady). in ALL cases, it creates an unequal playing field, which generally hurts the entire downtown.

Anonymous said...

Potemkin did not, repeat did not, create pseudo village fronts for Catherine. Nevertheless this phrase has taken on its own meaning now. I just wanted to make sure the Ironpigpen doesn't mislead Molovinsky's readers. ...sorry if I offended you. You are the most informative writer on this blog and I would love to break bread and eat some borscht with you.

michael molovinsky said...

anon 3:52, i have not printed your additional comment. although ironpig's potemkin village analogy was very on topic, your comment is not.

Anonymous said...

Here is a novel idea. Why doesn't the city make a list of the small businesses that got grants and put them on a piece of paper. Make two columns one Yes and one No. Then all they have to do is go down the list and if the business is still open mark yes. If it is not, mark no. Count each column and divide by the total number of businesses that got grants. That would be interesting and should give one a good idea if the pograms help or not. What do you think?

Anonymous said...

The above study only makes sense if you compare the business without grants to those with grants. I'll wager the grants improved the chances business survival.

Anonymous said...

...reminds me of Obama's green energy grants that have flopped.

ironpigpen said...

I will, of course, acknowledge that whether or not one-time Russian Imperial minister GRIGORY POTEMKIN did actually construct phony settlements and dress up impoverished peasants in the late 18th century to impress his boss, Catherine the Great, is not universally agreed upon by all historians.

Personally, I think it could have very easily have happened; the Soviets did become famous much later for this sort of chicanery.

Unfortunately, there can be no debate what the perhaps-not-so-well-known term, "Potemkin Village", clearly means and has been recognized to mean for quite some time --- long before there ever was such a thing as a USSR.

Pleasant evening to you, Anon 3:52.

Anonymous said...

10:21 - Do the study fool. Typical of the Pawlowski minions to once again make profound statements with absolutely NOTHING to back them up. I am also thinking street cameras. Wanna buy one of your very own? Call Ed.

petelewnes said...

Hi Mike - I wasnted to post a few facts about this property...more specifically the owners. We - the main street program helped this already existing business with a facade grant in our first year of the program - 2006. The owners put in their own funds as well and also many years volunteering to make 7th street better - one serving on 7th Street's board up to just this June. They are hard working, responsible people that have run a hardware store while raising a family. This is pretty much the story of 7th street. The facade improvements were to the exterior of the building - and mainly for code issues - 7th street and the owner's funds went into specifics like signage and lighting. The owners have been devastated over this and are working frantically to tend to their displaced tenants as well as getting their business open again. They have consistently upgraded the building on their own - just recently asking my advice on appropriate windows to put in etc. Roofs - and I know alot about them are funny in older buildings - they are normally covered in plaster and lathe and the wood on these are over 100 years old in alot of cases...issues would not present themselves without gutting the building down to the studs unless there's a leak - the night that this happened we had a torrential downpour - could happen on any building even with snow loads of this age if major work has not been done...I'd not be so quick to blame the owners on this one or the facade program. Numbers taken when we finished this building's facade were that their sales were up 150% every day...this and most of the businesses we help have stayed open throughout the past 6 years...we're operating at about a 98% occupancy rate...is that because of the facades...maybe not but new merchants are being attracted to the area and they have a positive response to the changes - just wanted to post an alternate side to the conversation for 7th street - thank you.

michael molovinsky said...

pete, to my knowledge, you run one of the better grant and facade programs. flat roofs should be inspected from the top, at least every other year. damaged roof boards should be replaced when the old roofing material is removed, and new material applied. new rubber roofs last for many years, but all other materials require frequent inspection and maintenance. looking at the ceiling in the top floor tells nothing about the roof, except perhaps that it hasn't leaked yet. again, your program is one of the best, but may i respectfully suggest that the roof be inspected from the top before grants are given in the future. p.s. getting up there may well require the service and experience of a professional roofer.

petelewnes said...

thanks mike...you've always been more than fair with us - we always you licensed roofers - this of course was 5 or 6 years ago though.