Our View: Yes, get rid of 2050

“I’d rather get rid of the whole thing …”
Joe Barbetta,
Sarasota County Commissioner,
discussing 2050 and the county comprehensive plan

That had to be one of the best things Joe Barbetta has ever said as a county commissioner.

The rest of that sentence was “but I don’t have the support.”

And that’s the pity of it.

It appears none of the five county commissioners has the moral conviction and courage to declare the county’s 2050 plan — the county laws governing development — an abject economic failure, destructive to the economic welfare of the county’s citizens and that it should be rescinded and burned at the stake.

That would be going way too far on the “out there” scale. It’s much easier to do what they did: express their irritation at how long it takes the county “staff” to respond and push paper through the bowels of the planning department python.

That’s a subject in itself. Government planning departments are always going to act like what they are — bureaucracies — because there are no market incentives that require them to behave otherwise. They compete with no one, and they bear none of the financial burdens or risks of developers. While time is money for a developer — paying interest on his notes, government planners get paid the same whether they work fast or slow.

If Sarasota’s county commissioners really and truly wanted to change response times and make it easier for everyone to have his development projects reviewed, they would fire the planning department and outsource the work to private specialists.

Yeah, well, that’s a dream, too, because new County Administrator Randall Reid has made it clear he’s a government guy — he doesn’t like “privatization.”

Alas, we digress. Back to 2050.

Addressing response times in the county bureaucracy is putting on a Band-Aid when radical surgery is required.

Just look at what 2050 has wrought. Dan Lobeck, Mr. Controlled Growth Now, must be smiling like the proverbial cheshire cat. The 2050 plan has done exactly what he hoped, albeit unintentionally. It has blocked virtually all growth east of the interstate in northeast Sarasota County for the past decade.

Egregious case in point: the Villages of Lakewood Ranch South.

Schroeder-Manatee Ranch Inc., the company that brought this region its most significant economic engine in more than a quarter century, proposed this residential “village” concept back in … well, let’s make the point this way. Asked if he remembers when SMR started the application process on the Villages, Rex Jensen, SMR chief executive officer, told us: “Gosh, I don’t remember. I forced the date out of my head.”

From concept to now, the Villages project is 12 years in the making. It received development approval from the county two years ago — May 2010 — but SMR and the county are still wrangling over details concerning roads.

Construction was supposed to begin this year. It likely won’t. Asked when SMR actually will begin construction, Jensen says:

“That’s the $64,000 question. I’m afraid to start that project unless I know I can complete it. But they (the county) have so many ways to stop it along the way, it wouldn’t make sense to try to finance it.”

Jensen said, for instance, the county staff wans the project to be approved in phases, conducting traffic analyses every couple of years. “You can’t do that,” he says. “Can’t I get an agreement that gives the project long-term stability?”

Those of you who have little pity for developers may not sympathize with Jensen’s above statement. But put yourself in his shoes. If you borrow tens and hundreds of millions of dollars to complete a project that received the county’s approval, what happens if some traffic bureaucrat comes along halfway through your project and shuts it down? No developer would take that risk. No bank would take that risk.

Now, take that scenario further: If SMR withdraws from developing the Villages of Lakewood Ranch South because it is unable to obtain the assurance it can complete the project, it’s highly unlikely other developers would want to venture down that same road.

While this may please all of the anti-growth residents in Sarasota County, remember the consequences of no growth. We’re living it: 9% unemployment in Sarasota County and no population growth, which, by the way, is essential fuel to having a healthy, growing economy.

When you talk to Jensen, you always know where he stands. His experience with Sarasota County’s 2050 plan has been exasperating and unpleasant (his description is more colorful).

“The attitude of the county is it hasn’t learned its lesson — of how people suffer. I don’t think they care,” he says.

And if that’s the way it is going to be in Sarasota, Jensen isn’t going to fret. SMR continues to add hundreds of new housing units each year to its Lakewood Ranch development in Manatee County. “That’s fine,” he says. “They won’t get the property taxes, but they’ll get the cars.”

Translation: While Manatee County will benefit from property taxes generated by new housing, the residents who live in those homes still will drive in Sarasota County, leaving Sarasotans the losers — carrying the cost of the traffic without the windfall from taxes.

+ Bernanke taking your wealth
In the wake of Federal Reserve Bank Chairman Ben Bernanke’s announcement that the Federal Reserve will engage in monthly purchases of $40 billion worth of mortgage-backed securities, eyes glazed over mainstream America. Such monetary-policy announcements are quantum physics to many. But they have big consequences on us all.

Within hours of Bernanke’s announcement, the economic blogosphere and analysts were humming with criticism.

One of the best and most understandable interpretations of how the Fed’s new policies will affect all of us came from Peter Schiff, CEO and chief investment strategist for Euro Pacific Capital, based in Connecticut.

In his commentary a day after the Fed’s announcement, Schiff said, “Going further than he has ever gone before, (Bernanke) made it clear that he will be permanently binding the American economy to a losing strategy. As a result, Sept. 13, 2012, may one day be regarded as the day America finally threw in the economic towel …

“The set of policies announced yesterday will do so much more damage than ‘Operation Twist,’ they should be dubbed ‘Operation Screw.’ Because, make no mistake, anyone holding U.S. dollars, Treasury bonds or living on a fixed income will have his purchasing power stolen by these actions.”

As Schiff explains, the Fed’s purchases of mortgage-backed securities (i.e. bundled groups of mortgages and the same investments that led to the housing meltdown in 2009) is expected to push mortgage rates even lower than they are now, supposedly encouraging people to refinance their existing mortgages or buy homes.

This in turn is expected to help generate enough demand to increase home prices and values, making consumers feel wealthier and thus more willing to take out new home-equity loans that will be used to make more consumer purchases.

And these purchases are then expected to translate into employers hiring more people to fill the consumer demand.

At the same time, the Fed hopes that cheap money will push up stock prices so investors feel wealthier and also begin to spend more freely.

It sounds so rosy and plausible.

But as Schiff notes: “(Bernanke) won’t admit this directly, but rather than building an economy on increased productivity, production and wealth accumulation, he is trying to build one on confidence, increased leverage and rising asset prices. In other words, the Fed prefers the illusion of growth to the restructuring needed to allow for real growth.

“The problem that went unnoticed by the reporters at the Fed’s press conference (and those who have written about it subsequently), Schiff says, “is we already tried this strategy, and it ended in disaster. Loose monetary policy created the housing and stock bubbles of the last decade, the bursting of which almost blew up the economy.”

VILLAGES OF LAKEWOOD RANCH SOUTH
• 5,144 total dwelling units; 390,000 square feet of commercial and office use
• 5,400 acres
• Build-out date: 2027
• Phase I — 2,032 dwelling units; 292,000 square feet of commercial and office space; from 2012 to 2017
• May 12, 2010 — County approved development orders for Phase I
• Construction to date: None