Saturday, January 10, 2009

Bailoutistan: Akron's Wish List

From the nice, neat, and organized US Conference of Mayors shopping list (at 1400 or so pages for the PDF, I'd recommend using the handy search features).

The total Akron list is some 220 projects, with an estimated cost of $925 million. Given the nature of the short descriptions in the list, it's tough to separate the wheat from the chaff, but here's some likely suspects in complete waste of time and money category:

Project

Cost

Jobs

Cost / Job

New Station by Bus terminal

$15,000,000

100

$150,000

Construction of a 100 to 110 room hotel next to the Akron/Summit Convention and Visitors Bureau to assist in attracting more conventions

$14,000,000

25

$560,000

Solar Panels at Triplett

$1,000,000

8

$125,000

Installation of solar array at METRO facilities

$1,000,000

10

$100,000

State Expressway Vegetation

$15,000,000

15

$1,000,000

City of Akron Service Center Rehab service center on Market St. to be LEED certified

$10,000,000

40

$250,000

Muni Building green restoration

$8,000,000

40

$200,000

Municipal Service Center Renovation Renovate Service Center to be LEED certified

$20,000,000

50

$400,000

Municipal Building Green Renovation Renovate City building to be LEED certified

$20,000,000

100

$200,000

Totals

$104,000,000

388

$268,041

An Amtrack Station by the new bus terminal? That's likely to get a lot of use. More on Amtrack later.

A new hotel for the convention center? Guess that's what happens when you let the University buy up the Quaker Square hotel. And the downtown Raddisson is doing so well, there's clearly lots of demand for hotel rooms in the city.

$2 million for solar panels. Akron may not be the cloud capital of the world, but it's a far cry from anyplace that could be described as “sunny”, even on the level needed to reliably generate value from solar cells. Solar cells probably need to increase in efficiency by a couple orders of magnitude – along with batteries for storage of electricity – before they become feasible in Akron.

$15 million bucks for “state expressway vegetation”. One word: Weeds. Mow once a year to keep out the trees, and you're done.

$58 million dollars for “green” enhancements and restorations. There's absolutely no way that these can be cost justified. Even assuming that the renovations result in significant cost savings over standard heating, cooling, electrical, and maintenance costs, it's unlikely that they can generate sufficient savings to offset this huge expense.

In order for these costs to be economically justifiable, the savings associated with the total cost of the renovation to “green”, including all operating and maintenance costs over the useful life of the project have to exceed not only the $58 million, but the interest costs as well. To have these kinds of marginal cost savings, even at today's next to non-existent interest rates, seems unlikely.