Sunday, April 12, 2009

Shake Down Economics

The Dallas Morning News has an outstanding report on the unfortunate way that racial politics has delayed the development of a project that could eventually bring as many as 60,000 jobs to south Dallas, the neediest part of Dallas County. Richard Allen, a California developer who approached local leaders with a plan to develop an enormous inland port on unused land in south Dallas, ultimately had to apologize to a group that he accused of attempting a "shakedown." The news report doesn't take a position on the accuracy of that accusation, but readers can judge for themselves.

Mr. Allen initially approached a local leader to whom he had been recommended. The developer wished to hire him, or someone he might recommend as having an understanding of the local scene, to shepherd the project through the zoning projects and other local matters that would need to be resolved. Instead, the man,, who was black, ultimately offered Mr. Allen a group he could hire under a contract for $1.5 million and a 15% ownership stake in the project. Once Mr. Allen rejected that proposal, a group of allied black leaders began throwing one roadblock after another at the project, frequently on the basis of alleged failures to make promises regarding the hiring of minority contractors.

While this group has used racial politics to oppose the project, that is not to say that black sentiment is united against Mr. Allen. Congressman Eddie Bernice Johnson (D-TX) has been a strong ally, and the local black contractor's association voted the company "corporate newcomer of the year" 2 years ago.

While the project has been delayed, it appears that it will eventually be completed. In the short term, the primary losers are the people of south Dallas. Even before the current recession, the region desperately needed jobs and economic development. The region has been poorly served by self-appointed leaders pursuing their own interests at the expense of those they represent.

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