Local Action, National Microcosm?

In Wichita, Kansas (pop. roughly 3-400,000) an interesting request has come before the local City Council: a loan. Local business man, Bill Warren, is asking the City of Wichita to grant him and his movie theater chain, Warren Theatres, for a six million dollar loan to help him offset the loses of his destination theater in the middle of a recently redeveloped section of downtown Wichita. The City of Wichita approached Warren early in the stages of redeveloping what is now called "Old Town Plaza" requesting that he build a theater there to be the main tenant of the new area hoping that the theater's local popularity, and relatively high caliber would attract other tenants to the area. It has been about five years since the "Old Town Warren Theatre (LLC)" opened for business and, along with other tenants in the area the theater claims to have been losing money since day one.

The money Warren hopes to borrow at a low interest rate (no interest for the first five years, 1.25 percent for the remaining five) will be used to renovate the Old Town Warren. Removing the "Oscar" bar which has done poorly due to many other more accessible drinking establishments in the area and putting an additional auditorium in its place. Thereby cutting the loss of the bar in favor of a potentially increased variety of movies that the relatively small (currently only six screens) downtown destination can offer. The six million would also go to pay for digital projection and sound equipment as well as expanding the food services offered to include a banquet room. The Warren family of theaters and restaurants (located within the theaters) have been good to Wichita and its citizens. Providing many diverse jobs, and top rate theaters for years now, and Wichita has been good to Warren. Warren started in Wichita and has since expanded to neighboring states Missouri and Oklahoma. Is it the duty of the taxpayers to take on the burdens of a local business man?

While most see the Warren theaters as an asset to the city and a great place to see a movie, and maybe get a bite to eat. Others see it as a locally grown monopoly. Many "small" theaters have been forced to close or be purchased by Warren simply because his theaters were able to very successfully dip in, way in, to their customer base. Now this type of rise and fall is simply free market economy, but people, and economies, almost always tend to be at loss for the passing of a local "ma and pa" run business.

The whole situation begs the question of who the responsibility for this should fall on. Should the city handle what could be seen as a poor development move in encouraging the wrong kind of business(es) in the wrong part of town? Should the businessmen assume the loss they befell their investment? Should the taxpayers and patrons have a say? First things first, as a country partially founded on the outrage of taxation without representation it should be no question that the taxpayers should have some say. Is simply picking a city council member to stand behind adequate representation? Or should the loan go to a general vote so that taxpayers are given a chance to either decline or support a single company's request. In the free market a consumer is given the choice of which product to buy and from which company. If one does not like a product for any reason or a company for its actions or investments they have the right to take their money elsewhere.

In Wichita there are many opposed to the Warren because of their relative control of price and content over locally shown movies, and these opponents who are unwilling to give their money freely may also be unwilling to give it via council approved spending even if they support their council member. It could be that the movie goers have chosen to boycott the Old Town Warren for one reason or another. If this happens to be true can, and should the City override what its citizens have already decided? The City has spent nearly ten million to develop the area this theater is in, and did as the theater to build their. If the theater is forced to close, and presumptively the area fails with it, the city will likely be unable to retrieve their investment to repay the bonds used for the development meaning a huge loss for taxpayers. Not only is the money lost, the area is as well.

Considering the City's initial ten million dollar investment maybe they have done all they need to in making the area welcome to these business men and women and it should now be their responsibility to save their own loss. No one forced the theater to build there. I am not certain but I do not believe that any incentive was offered other than a public plaza and improved public streets and parking for the theater to build. The investors took a risk and lost. That is the investment game after all. Maybe they should take this all back upon themselves and try to find a solution not involving tax dollars. However, if the City does award the loan the theater would agree to stay open in its current location for at least ten years, the life of the loan. Also the City will be first on any foreclosure or bankruptcy claim should the loan fail to stymie the decline.

A further question to ask is, "What if National Government worked this way?". Well what if? What if a failing national, or international company could ask the federal government for a loan to supplement their profits or the lack thereof? In a few situations this is the case. Take "Big Oil" for instance. Congress has been fighting for months over whether or not to remove the tax cuts and levy additional taxes on oil industry leaders. Are the current tax breaks, which the companies claim they need to compete globally, anything like the six million dollar loan that Bill Warren and his business partners are asking for? In what is supposed to be a free market economy, where success or failure is in the hands of the American consumer, should the government, local or federal, be awarding money to individual companies to help keep them afloat? Or should our governments simply be setting general economic guidelines like taxes on industries and companies that harm the health or security of our nation and planet; laws against what can and cannot be in food, clothes, or children's toys; incentives for companies that help America become more independent in more than just energy but natural resources as well; tax breaks for companies that increase our standard of living by keeping jobs here and the nation and our planet clean? The days of laissez faire economics are over.

People have demanded safeguards for food and medicine (the FDA), a clean world to live in (the EPA), safe places to work (OSHA) and many others. This does not mean that a free market is, or should be, out of the question. The government does the work of the people, all of these agencies and the rules they have laid out we, as voters and consumers, have asked for in one way or another, or at least we accept them. These organizations keep corporations making better, safer, cleaner, more efficient, easier to use products. Progress that, if were left totally up to the laws of demand, may take years. The government's role in the free market should be to lay the ground rules. Encourage what we the people want, and discourage what we the people are sick of. It is hardly a free economy when a company's loses are being bought off by a city, or a corporation's profits not subjected to the same taxes as others. The consumers should decide what the profits and loses of any given company look like. The government need only assure that the products brought to market are in the best interest of the nation and the world. ...Read more