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Monday, November 25, 2013

Bizarre New? Business Model Sighted In Beloit Area

According to a story in the Beloit Daily News, Beloit city manager Larry Arft, claims to have spotted what is either a bizarre new business model for economic development or what appears to be the once-thought extinct animal known as government-get-out-of-the-way "free market enterprise." Possibly.

BDN Excerpt:
City Manager Larry Arft said there has been a “paradigm shift” in Beloit in that more businesses are coming to the city without incentives, wanting to build a location in Beloit.

“While there are a number in here that the city worked very hard to recruit...there are also a lot of the primarily commercial projects that we really did not recruit,” Arft said.

How do they do it? Why do they do it?

Without knowing more details, it's not clear what Arft means by "without incentives." Like Janesville, Beloit is a state tax credit enterprise zone and has so many TIF Districts that it would be difficult, but not impossible, to build new outside of one. Plus, some would think those "incentives" are not incentives at all but just part of the existing framework of regular perks for economic development. In other words, tax credit zones and/or TIF slush funds are not necessarily formalized incentive "packages," they just go with the territory.

But, assuming these private businesses are coming here (Beloit) and setting up shop without engaging in those activities for state or local hand-outs - my hat is then indeed off to them! Bravo! and Welcome! Thank you!

If true, I do however have some concern for their survival as they don't share the same collectivist hand-outs and advantages other businesses and insiders of the area business cartels have leveraged for themselves. Once the tables are tilted, it's pretty hard to compete no matter how honorable or well you play the game.

Again, without knowing the details, it's difficult to elaborate any further on Arft's observation.

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