The CRA Shouldn’t Fund Private Businesses At All

This piece originally appeared in the Tallahassee Democrat.

Last week, local brewery Proof was denied Community Redevelopment Agency funding by a 3 to 2 vote. Proof was going to use the money for renovations at its new facility but some members of the CRA board didn’t think the renovations were a proper use of CRA funds. The CRA got it right this time but often it doesn’t.

Businesses routinely go to the CRA for money and Proof was playing by the rules. The real problem is not that Proof requested money, but that the CRA is able to hand out money to businesses in the first place.

In his critique of Proof’s request, Commissioner Scott Maddox stated the CRA shouldn’t pick winners and losers. That’s a great point, but picking winners and losers is a big part of what the CRA does.

In 2016, the CRA spent $22,483 to help transform a former gas station into a carry-out BBQ restaurant. That same year, it spent $205,000 to help turn an old supermarket into a Piggly Wiggly. Similar projects were funded in other years, and these are the types of grants that unfairly favor their recipients.

CRA grants to businesses like Piggly Wiggly are typically put toward façade improvements, and one justification for them is that such improvements improve the look of the surrounding area and thus provide a public benefit. But customers are also attracted to businesses that look well kept, and firms that get some of their façade-improvement costs subsidized by CRA grants get an advantage over their competitors who must make those improvements themselves.

Other CRA grants help fund public events such as concerts or festivals, or help build affordable housing. While these uses are easier to defend than grants to private businesses, it still isn’t clear they represent the best use of taxpayer money.

One of the main functions of local government is to provide goods and services the private sector has a hard time providing. If the CRA wants to invest in the community while remaining neutral with respect to businesses, it should focus its resources on things like street and sidewalk improvements, building and maintaining parks, or upgrading water and sewer infrastructure. These improvements benefit everyone in the impacted area rather than just the businesses that receive grants.

Of course, maintaining core infrastructure is a job of government in general, not just a special entity like the CRA that only operates in certain areas. If the CRA can successfully provide infrastructure upgrades, then it should be free to operate throughout the city.

If the CRA isn’t supposed to pick winners and losers, its decline of Proof’s funding request was the right decision. For the sake of consistency, the CRA should stop giving grants to any business for any purpose. Instead, it should focus on investments that provide widespread benefits. And if it can’t do that, then perhaps it’s not needed at all.


Adam A. Millsap, Ph.D. is the assistant director of the L. Charles Hilton Jr. Center for the Study of Economic Prosperity and Individual Opportunity at Florida State University.




The feature image is from the Tallahassee Democrat.

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