Poll: Should We Buy Southern Dallas Another Grocery Store?

Should government money be spent directly on private projects?

The Richards Group told Dallas in 2013 that without a tax break, they couldn't put their new headquarters in Uptown.
The Richards Group told Dallas in 2013 that without a tax break, they couldn’t put their new headquarters in Uptown.

This is a tricky one. On the one hand, living in a free-market-loving country and state as we do, it’s hard not to experience cognitive dissonance when we hear about the government having to pay money (or grant big tax breaks) to bring businesses to town.

Did Dallas really need to give the Richards Group $1.8 million to subsidize the building of its parking-garage-with-an-office-on-top in one of the most desirable, walkable neighborhoods in the city? Or $450,000 to Zale Corp. to move to a segment of the city so remote that most of the economic benefits will likely spill into the suburbs? Or $3 million to a multibillion dollar big-box retailer to set up shop in North Dallas?

There are obviously many, many other examples that might be cited, even without wading into the debate over whether funding mechanisms like tax-increment financing are a net benefit to the city. If market forces alone weren’t enough to make these deals worth it to these companies, why does the government have to step in?

However, we can also make the case that these sorts of incentives are necessary to give a jumpstart to underdeveloped portions of the city, as with the City Council’s stated willingness to spend $3 million to bring a grocery store to a “food desert” in southern Dallas. This isn’t the first time the city has ponied up a significant chunk of change to lure a reluctant grocer to town. It’s plain that it doesn’t make economic sense for some retailers to open in low-income areas otherwise. (The question is whether government money might be better spent addressing other problems in these neighborhoods, so that they become more desirable places to live and can then support a store without any cash needed to grease the wheels.)

Not to mention, of even more possible benefit to that portion of the city: If a few million dollars could bring a significant new employer offering good jobs to southern Dallas residents, it’d be hard to argue against that investment.

The trouble is that we end up with an arms race of freebies. Local governments get played off each other in these deals by corporations that are (naturally) happy to take whatever handouts they can get. Perhaps the only way out of this vicious cycle is to outlaw such incentives entirely?

What do you think?