Crony capitalism alive and well in Richmond

Richmond’s city council has approved a deal that will bring the woeful Washington Redskins training camp to town. There are a number of moving parts to the deal. The city will fork over taxpayer dollars to get construction started. The Bon Secours Health System will build a sports medicine facility at the new site and get naming rights (a neat trick for a nonprofit — even one as wealthy as Bon Secours).

But what is proving especially irritating to some in River City is another part of this deal, in which the city will lease to Bon Secours the building and grounds of the old Westhampton school on Patterson Avenue. The city will lease the property to the hospital for $5,000 per year. For 60 years. That’s quite a sweetheart deal. And it has Del. Manoli Loupassi (a former city council president) a bit put out:

These concerns are beside the point, miss the big picture, and much else according to this piece by the Mayor’s point man on the project, one-time Genworth executive Michael Frazier. The spin from the top is that the millions that would have gone directly to the Richmond Public School system by law aren’t what matters:

Sure, the city could sell the Westhampton site to the highest bidder for a few million dollars, as some suggest. But the proposed agreement instead yields over $40 million of investment, expands health services, and generates new jobs and taxes at three locations in Richmond. The city will continue to own the site, protecting future interests.

For a self-professed expert in finance and real estate, Frazier exhibits a shocking lack of understanding about opportunity costs. But such basic economic concepts count for little when a marquee “get” is at stake.

As for the law…well. That money would only benefit the school system and its students. Under the approved scheme, the money will flow into other city accounts and pockets. For years to come.

And isn’t that what “protecting future interests” is really all about?

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