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Russell Moore: Superman Is Not Curt Schilling

Monday, May 06, 2013

 

It’s pretty easy to oppose giving tax credits to the owners of the so-called Superman Building—that iconic structure smack dab in the heart of Providence.

Our state’s budget, while in better shape as of late thanks to cuts during the recession, still always seems to be cash-strapped. The Superman Building’s principal owners are wealthy investors, which leads people to interpret the potential tax credits as corporate welfare. And then of course what’s most concerning is the fact that Rhode Island is still smarting from the 38 Studios debacle.

But saying that spending tax credits to save the Superman Building is like saying I lost money buying Enron or Lehman Brothers stock and therefore I’ll never buy another stock again. It’s like a business owner saying that he lost money on one business venture and therefore he’ll never get into business again.

That hasn’t stopped some political opportunists who have been quick to jump on the issue and try to exploit it for their own advantage. Ken Block, of the Moderate Party, sent out a release comparing the Superman Building to 38 Studios, and Representative Patrick O’Neill (D-Pawtucket) has also compared the two issues.

I could certainly emphasize with that “once bitten twice shy attitude” if the two projects were in anyway similar to one another. But the empty Superman Building is only similar to Curt Schillings video game venture is that they’re both projects that sought historic tax credits. Outside of that, it’s hard to see what else the two issues have in common.

The 38 Studios project was highly speculative in that the business owner either had little or was willing to invest very little of his own capital on the project. The owners of the Superman Building already spent $40 million of their own money on the project, and the company is willing to invest another $55 million of their own money to make the project a reality.

Further, if the state didn’t choose to invest tax credits in the 38 Studio’s deal, the state wouldn’t have lost anything by telling the retired baseball star to find another interested party—the same way the state of Massachusetts did. For that reason, practically nobody, outside of Governor Donald Carcieri and his cronies, supported the deal.

But if the state just slaps its hands together and lets the Superman Building stay dark and vacant for an extended period of time, we very well may be cutting off our collective noses to spit our face. Does it really do us any good to have the tallest building, with lots of historical significance, just sit vacant in the middle of Rhode Island’s capital city? I think not. I would argue that if we don’t be proactive in preserving our economic climate, we run the risk of becoming Detroit East.

The fact of the matter is that this is a brick and mortar building that’s already here and is already an integral part of our state’s culture and our capital city’s skyline. If the state were to invest the tax credits, we will see a result of our investments sooner rather than later. If the project moves forward, it will create over 600 construction jobs, and would generate $44 million in employee compensation, according to a feasibility study commissioned by Highrock Westminster LLC. This includes $25 million in employee compensation from direct jobs and $19 million from multiplier jobs. Those numbers are admittedly from the people seeking a cash infusion and therefore can’t be taken as gospel truth, but it’s without question that the state would see some sort of an economic boon from the project’s construction, and the multiplier spending it will create.

Further, because there would be apartments that people will be living in, the city and state as a whole will see increased economic activity. And apartments seem to be one thing in demand in the city right now as several apartment complexes in the downtown area have waiting lists.

I also find it disconcerting that people are attacking the project by attacking Highrock’s representatives—some of which worked on House Speaker Gordon Fox’s re-election campaign last year. The project is either worthy of tax credits or not based its merits—not who is pitching the message. Besides, did people expect Highrock executives to hire individuals who the Speaker dislikes?

All that being said, I certainly would not support handing over $39 million in state tax credits to the developers with no strings attached. If the state has been backed into a position where it has to act as a venture capital company, then the state should act like a private sector venture capital company. And that means taking an equity position in Highrock as a result of its investment. That way, when the project becomes a successful money-making operation, the state’s taxpayers will profit on the back end of the investment.

With that approach, the state’s taxpayers will make money instead of losing it, while simultaneously benefitting from the economic expansion as a result of the project. The end result, as long as the project is a success becomes a win-win-win situation for everyone involved—most importantly, Rhode Island residents.

A native Rhode Islander, Russell J. Moore is a graduate of Providence College and St. Raphael Academy. He worked as a news reporter for 7 years (2004-2010), 5 of which with The Warwick Beacon, focusing on government. He continues to keep a close eye on the inner workings of Rhode Islands state and local governments.

 

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Comments:

I don't understand how these geniuses are allowed to spout off without knowing the facts. First of all, Curt Schilling put over $50 million of his own money into 38 Studios. How do you suspect it existed prior to being "lured" (Rhode Island's description) to Providence? Gordon Fox also endorsed the 38 deal from the first meeting in Curt Schilling's house, so he must be one of Carcieri's cronies too. Although Mr. Moore again shows his convenient ignorance by not mentioning this connection. Will a tax credit deal for the Superman building be hamstrung by the state by forcing the hiring of unneeded people to meet hiring numbers? I doubt it, but as usual, any idiot can put a story out without knowing the facts, and nobody checks the accuracy. Like 38 Studios, FOLLOW The money, let's see some sunshine on who makes the money here.

Comment #1 by Don Brewer on 2013 05 06

not much substance in this article. sounds like a bill fisher\nick hemond press release.

mindsetter?

Comment #2 by jon paycheck on 2013 05 06

If it's worth investing in, private investors will do so.

Comment #3 by Mike Govern on 2013 05 06

@Mike Govern

Bingo

Comment #4 by Redd Ratt on 2013 05 06

no, no and no.

Comment #5 by Odd Job on 2013 05 06

Odd Job says it all.

An emphatic NO.

If you like the idea of supporting the building owners Mr. Moore, please feel free to invest YOUR money, not ours.

Comment #6 by John S Smith on 2013 05 06

The proposal is to turn it into luxury apartments in an area with a glut of unsold luxury apartments.

If an idea is a good idea it will fly without government incentives.

High Rock has a history of asking for government support to stretch out its large but finite investment fund.

You cannot blame them for asking... but you ought to throw anyone who says "yes" down a flight of stairs... preferably all the stairs that lead from the top of the superman building to the basement.

Comment #7 by Caroline Evans on 2013 05 07

Mr. Moore, you've had a whole day to retract your intentionally false claim that Curt Schilling had none of his money in 38 Studios. I'm waiting for your proof or retraction, if you have the courage to not merely slide away. BTW, if it's like 38 studios, the Superman building will realize around $34million based on a $48 million tax credit. Nice little finders fee don't you think?

Comment #8 by Don Brewer on 2013 05 07




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