Fair economic development: More fickle than most realize

Dr. Malcolm Cross
Dr. Malcolm Cross

I wasn’t surprised when someone commenting on last week’s column once again brought up Lowes’s decision not to come to Stephenville. Indeed, whenever economic development is discussed, the probability that Lowes will be mentioned is greater than that the sun will rise the next day.

As I’ve frequently explained in the past, the city council was informed by Lowes at the beginning of negotiations that the profit projected from a new store here would not be great enough to normally justify the cost of coming to Stephenville in the first place. The city council did offer concessions, but whether the city council could have offered any concessions at all to induce Lowes to overcome its reluctance to come is unknown.  In the end, Lowes probably declined to come for the same reason it initially said Stephenville was not a likely prospect anyway: insufficient profit potential, especially with the onset of the Great Recession.  Of course, this has not prevented critics from charging me with driving Lowes away. In fact some have even suggested that I was able to not only sandbag Lowes all by myself, but to keep Home Depot from coming to Stephenville as well.  But honestly, folks, if I had the power to do all that, would I have let myself be voted out of office?

Of course I voted against any concessions to Lowes, and would do so again, given the opportunity. Nor would I support any concessions to Home Depot either. It’s not that I oppose the opening of a Lowes or Home Depot in Stephenville. To the contrary, I would hope the community would enthusiastically welcome either—or, preferably, both, and I would oppose any policy to protect current businesses from competition from either Lowes, or Home Depot, or any other business that wanted to come.  Stephenville should be open to all legitimate businesses.

But I oppose having the city government play favorites when regulating businesses, granting some businesses aid while denying it to competitors, and making those who are denied aid pay for the aid granted to the privileged few. And that’s exactly what would happen if Lowes or Home Depot were to get aid denied to others. Not only would they have an unfair advantage over their competitors, but their competitors would still have to pay the taxes used to aid Lowes and/or Home Depot in the first place.  How fair is that?

Actually, quite fair, say some business owners with whom I’ve discussed this issue.  They say that bringing in a Lowes and/or a Home Depot would increase business in general, from which everyone would profit.  But if so, why don’t those who think they can profit from more businesses and more competition simply finance whatever incentives they think are necessary to induce new businesses to come to Stephenville?  They can still do so through the Chamber of Commerce, or STEDCO, or any other private organization they care to form, or through their own individual efforts.  And who knows—maybe someday they may bag a Lowes or Home Depot after all—provided Stephenville grows big enough to supply the necessary customer base to guarantee the required profit.

In the meantime, the passage of Prop 1—which, as I’ve admitted in a previous column must be given a fair chance to succeed (without tax increases or service cuts, of course)—guarantees that the city will at least try to offer more incentives for new businesses to come.  Whether those incentives will be appropriate or inappropriate, successful or unsuccessful, remains to be seen.  One hopes (okay—at least I hope) that such activities will not divert the city from doing what it can do best to grow the local economy—maintain quality services, a reasonable tax rate, a level playing field, and fairness to all with favoritism to none.

Malcolm L. Cross has lived in Stephenville and taught politics and government at Tarleton since 1987.  His political and civic activities include service on the Stephenville City Council (2000-2014) and on the Erath County Republican Executive Committee (1990 to the present).  He was Mayor Pro Tem of Stephenville from 2008 to 2014.  He is a member of St. Luke’s Episcopal Church and the Stephenville Rotary Club, and does volunteer work for the Boy Scouts of America. Views expressed in this column are his and do not reflect those of The Flash as a whole.

Be the first to comment

Leave a Reply