Small Target, Big Subsidy

Something has gone wrong when, to get a tenant to move into an empty space in your prime-​location building, you need a $4 million subsidy.

And when I say “prime location,” I’m not engaging in Trumpian over-​statement. The downtown Denver, Colorado, property location sees over 35,000 pedestrians per day … and that’s with the primo slot empty.

But to get that slot filled, the owners have negotiated with the city government to nab a $2 million “incentive” to fix the place up for Target, which is thinking of leasing the location to put up a smaller-​than-​usual “flexible-​format” store. Oh, and another $2 million for “operational” costs, which seems to be some kind of a loan to be paid back from taxes to be collected — and shared by the city for 20 years with the owners.

In other words, it’s the darnedest business deal you’ll ever see (and never get): up-​front money not from a bank or investors, but from Denver’s city government “BIF” — Business Investment Fund — which is obviously part of a convoluted scheme fed by taxes and devised by … people I wouldn’t trust with my money.

Structuring deals like this is how modern cronies — er, cities — operate, I know. Am I alone in judging it corrupt on the surface and corrupting in the details?

If prime commercial property has gone unused for about a decade — as this three-​storied mall space has — I’d think that maybe the owners have set the rents too high or the city has been a bit too greedy with taxes.

Or both.

This is Common Sense. I’m Paul Jacob.

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