As reaction continues to flow in response to Raleigh’s spending $1 million to assist a white tablecloth, fine dining establishment, open in Downtown, I asked some people rhetorically, if you were the owner of an already existing restaurant in Raleigh, wouldn’t you be a little bit peeved that the City was using your tax dollars to subsidize your competition. Where was the City Council when Nana’s Chophouse closed or when Fins relocated from North Raleigh to downtown?
Well, a loyal RCC reader sent a long this article from the N&O from just about two years ago, and yep, the other restaurant owners were pretty upset, as well they should be. "I’m funding someone else’s restaurant," said Kevin Jennings, who owns
Frazier’s and Porter’s on Hillsborough Street. "I’m funding my
And later in the article: Business owners downtown noted that they took the same gamble. "I was
surprised to learn that the city is funding my competition," said
Parker Kennedy, who owns Caffe Luna.
But part of the conditions for receiving the funding was that the restaurant has to be open for lunch and make take-out available. Geez, thanks. I’m sure most people working downtown can afford the $11 Iceberg Wedge and the $30 Seared Scallops (pdf) on a lunch break. How will Chic-Fil-A and Subway ever compete?
But so is the folly of government subsidies and distortions to the market. What’s going to happen one year from now when the owners of The Mint come back to the City Council and threaten to shutter their doors due to lack of customers? The City does know the failure rate of new restaurants, right? Will the Mayor and his cronies (well, except Isley) pony up some more cash to keep them afloat? Once you start the pigs eating at the trough its hard to ween them off.
(HT: JES III)