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Corporate handouts are easily seen when it comes to national politics and legislation with huge subsidies going to large corporations such as Solyndra, General Electric and General Motors. In the case of General Motors the government actually nationalized it! But the handouts are more difficult to see at the local level.
Last year Prince William County, Virginia announced a public-private deal to build a brand new baseball stadium for the local Potomac Nationals owned by Art Silber. The new stadium would replace the current Richard Pfitzner Stadium. Originally Mr. Silber had committed $25 million for construction of the stadium, but recent estimates have brought the price up to $30 million. The stadium is to be built at Roadside Development’s Stonebridge at Potomac Town Center. Roadside Development has said they will provide $30 million as well for the project. Another $15 million will be coming from the Virginia Department of Transportation (VDOT) specifically for a new 1,200 space commuter parking garage. VDOT believes this commuter lot will help facilitate their Hot Lanes project and according to Sean Connaughton, Virginia Secretary of Transportation, the commuter lot “would cost almost double in public funds to construct a similar lot.”
Just taking a quick glance at this plan it looks like an absolutely fantastic deal for both the county, state, Mr. Silber, and Roadside Development. However when government begins subsidizing businesses and individuals these deals usually lead them down a dangerous road. Politicians can become beholden to those businesses and businessmen. There is already a possibility of this happening. Chairman of the Board of County Supervisors in Prince William County, Corey Stewart, has had his bid for Virginia’s Lieutenant Governor and his run for county chairman heavily bankrolled by Mr. Silber and the Potomac Nationals who donated $20,000 in 2011 and $10,000 in 2012.
Instead of fostering an environment of corporate handouts, government should instead offer a different type of incentive as an alternative to providing direct cash infusion. Government should lower taxes and regulations for businesses to begin construction, as well as make it easier to obtain the proper permits and zoning licenses. By fostering a business-friendly environment, businesses will begin to relocate to those areas without direct incentives from government.
Virginia has done a good job by moving in a more business-oriented direction with this deal, but they can do better and not rely on taxpayer’s dollars to fund a baseball park that only a certain portion of the state will see the benefit. Let businesses succeed or fail on their own without government influence and the trap that corporate handouts can set off.