Crony Capitalism in Robbinsdale?

July 13, 2012 at 3:05 pm 5 comments


We’ve talked about it before, noting especially the Crystal Medical Center’s deal with the City of Crystal worth $400,000, but Robbinsdale refuses to be outdone. The Robbinsdale City Council recently agreed to give local hipster joint, Travail, a $300,000 loan to move into a bigger building.
Now, I’m no hipster. I’d rather be getting my fingernails full of dirt and grease than manicured. I’d rather drive a F150 than a Prius. Get me away from high rise condos and lattes in favor of a few acres and home-brewed coffee. I’ve been to Travail, and they have great food. The atmosphere is really fun. The whole staff quit working long enough to sing Bohemian Rhapsody with the restaurant’s in-house music system. How cool is that? Maybe an $80 meal-for-two’s-worth of cool, but that’s pushing it.
So, if $80 worth of hipster street cred is equal to the experience, what about $300,000 of your money? Last time I checked, businesses that want to expand go to the bank for a loan. When did the City of Robbinsdale become a bank? This is a lesson straight from George Bush’s TARP bailouts. Travail is too big (to Robbinsdale) to fail. I’m sorry, but this just doesn’t make sense. You are using the people’s money to help Travail grow. Now, if Travail should fail in their new building…. (say, for example, the new environment loses all its current charm) who pays back the remainder of the loan? You thought this was an acceptable risk? $300,000 is approximately $25 for every man, woman, and child in Robbinsdsale. $25 can’t even get one person a full meal at Travail.
Once again, we see a City coming to aid a single business within its borders. Why give money to Travail and not The Lodge, or Broadway Pizza… or Dairy Queen? When governments prop up certain businesses, it affects those that do well, based on business alone. Crony capitalism is not true capitalism. It’s distorted. It rewards those that provide value to the government, not consumers. This is the system that everyone is sick of, not true capitalism. It is this perverted version of something good that has tempted some to throw the baby out with the bathwater.

If Travail is so sound an investment that this loan was a good idea, why didn’t the Council urge that they approach a bank? If they tried and couldn’t get the cash from a traditional lender, then was it a good idea for the Robbinsdale City Council to finance this? I guess you can chalk this decision up to another thing I’m just not hip with.

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Entry filed under: City Government, Robbinsdale.

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5 Comments Add your own

  • 1. communitysolutionsmn  |  July 13, 2012 at 3:27 pm

    I forgot to source my claim: http://www.twelve.tv/news/newsitem.aspx?newsitemid=19474

    Reply
  • 2. Tom Mathias  |  July 13, 2012 at 4:44 pm

    If I had still been on the council I would have been a vote against this. First of all it was the Economic Development Authority (EDA) that gave the loan. If you follow me on Facebook you already know that the EDA is the same people as the City Council, which always made me uncomfortable. Second, there’s A LOT more to the subsidy than giving a popular business a $300,000 loan. A bank could do that and Travail would probably get such a loan, being the third most popular new restaurant in the US. What they got was the EDA buying 2 existing buildings and tearing them down to make room for a new building that will hold Travail and another restaurant by the same owners, creating a new Tax Increment Finance(TIF) district, and loaning the money. Of course a new TIF requires City Council approval, but…they’re the same people do it isn’t a problem.

    Reply
  • 3. Matt Rothchild  |  July 13, 2012 at 5:00 pm

    The Sun Post should be all over this. Instead, they’d rather dedicate pagespace to “disibility” programs.

    Reply
  • 4. Baldwin  |  July 19, 2012 at 11:15 am

    Bullsh!t. Do more research. Travail would spend 3/4 million dollars or more building the new restaurant. Their current landlord is a weasel who is going to triple their rent if they stay in the current building. They want to stay, but not pay triple their current rent (for being popular). They approached the city with their dilemma and their desire to stay in the city, and this is a long term solution for everyone. The $300,000 will be paid back with taxes over the years. They will keep Robbinsdale on the map and bring in traffic to the city, while providing a much better product. Please explain how this deal is bad for anyone except their current greedy landlord?

    Reply
    • 5. communitysolutionsmn  |  August 3, 2012 at 5:09 pm

      Baldwin, I appreciate your emotional connection to Travail, but that doen’t change the fact that city governments are engaging in behavior that they have no business in. Leveraging the taxpayers’ money to float a business where it makes political sense is crony capitalism.

      Case in point, Robbinsdale Farm, Garden, and Pet Supply was a thriving business that brought people from Crystal, Brooklyn Center, and other cities. They were practically run out of town by the Robbinsdale City Council because it was politically expedient. The business interfered with the County’s plans for light rail, and had to go. I didn’t see Robbinsdale rushing to their aid.

      This is what I’m talking about. Cities are picking winners and losers with The People’s money. The People should be picking winners and losers with their own money by their patronage. If a business can get the money from the bank to upgrade, then do it. I find it hard to beieve that the only place in all of Robbinsdale is this move into a bigger (and more expensive) place. I’m sure there are places they could have gone that would be more of a lateral move, or one within their means. Traditionally, business have had to build over time. It’s just not good business for anyone to get ahead of yourself.

      Lastly, if the landlord is crooked… he’ll go out of business eventually (and he deserves to). All of his tennants will leave. This is a civil disagreement between two private businesses and the City has no business getting in the middle of it.

      Reply

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