Why? Why are taxpayers continuously placed on the hook for the development costs of private businesses?
The latest episode in a long line – that promises to grow – of government forcibly turning taxpayers into venture capitalists involves RDC of Green Tree, owner of the Braddock building once home to a much-ballyhooed vertical greens farming operation.
As the Post-Gazette reported it:
“RDC constructed the building in 2019 for Fifth Season, a Carnegie Mellon University spinoff that created the vertical farm inside, one that grew about 500,000 pounds a year of spinach, lettuce, and other leafy greens at its peak by utilizing robotics, artificial intelligence, other high-tech equipment, and data analysis.
“But after starting operations, Fifth Season abruptly shut its doors in October 2022, leaving RDC with a very sophisticated growing facility and no one to run it.”
Simply put, investors bailed on the very expensive Fifth Season business model and operations. And as Fast Company reported a year ago, vertical greens farming has failed, and failed miserably, in just about every attempt worldwide. “Far too expensive” has been the operative phrase.
“(D)espite taking in more than a billion dollars in venture capital investment, most companies in the industry seem to be withering, unable to turn a profit on lettuce,” the magazine noted.
By the way, the very same magazine once awarded Fifth Season an honorable mention in its “World-Changing Ideas” awards. Ahem.
Now comes RDC, hat in hand, seeking a $3 million state Redevelopment Assistance Capital Program (RACP) grant to help with the plant’s conversion to a “state-of-the-art” food manufacturing and cold-storage facility.
Do tell.
The P-G reports that Shawn Fox, RDC’s president, declined to give any additional details about the company or the status of any discussions.
Yet he wants $3 million in public money?
Ever hear of a bank, buddy?
Fox tells the P-G that “from what we have learned and from what we have researched, there is such a need for food production and cold storage facilities, not only in our region but in our country.”
Like there was a need for pricey, “vertical-grown greens”?
“The overall redevelopment is estimated to cost nearly $17.5 million, including $3 million being requested of the state,” the P-G reports.
Well, if “there is such a need” for such a facility, such a marketplace demand, sounds like Fox and RDC should, risking their own money in totality, stand a good chance of making money, does it not?
What claim should RDC have on taxpayer money? Absolutely none. And what business does “The State” have giving RDC taxpayer money. Again, absolutely none.
RDC gambled once, on “vertical greens,” and lost. Why in the world should we think RDC, with taxpayer help, will pick a “winner” this time with some other kind of “food manufacturing” and “cold storage”?
In its application for $3 million RACP grant, the P-G says Fox and RDC claims repurposing the former Fifth Season operation “would create manufacturing jobs for as many as 200 people — a big increase over the 30 who worked inside the building when it was a vertical farm.”
“’I’m really excited about what this facility can create for the Mon Valley and the food industry in Pittsburgh,” Fox said.
It’s easy to be excited when you’re socializing the risk, offloading part of the redevelopment costs that you – or in this case, the secret client that’s interested in the facility — alone should bear.
We’re sure taxpayers aren’t as gleeful.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
