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Biden ‘Stimulus Project’ Is Still Stalled

We almost missed this all too typical story from the Cincinnati Enquirer:

Northside stimulus bogs down

Feds OK’d $1.6M; 100 new jobs promised. So what happened?

By Gregory Korte February 7, 2010

Last July, Vice President Joe Biden stood in front of a hulking, five-story abandoned factory in Northside with good news: The federal government had approved $1.6 million in stimulus money to help transform the American Can Building into new stores and apartments.

The project would create 100 construction jobs – proof, Biden said, that the stimulus was putting people to work.

Seven months later, the project remains stalled, and has yet to make good on that promise.

The problem: While $1.6 million in federal money will help the developer clean up the site, the project still needs more than $4 million in private capital to get going, and so far, banks have been unwilling to lend it.

The vice president’s office conceded that the project has not moved as quickly as hoped.

"The Recovery Act has provided the funding that will make construction of the American Can Building project possible. We share everyone’s frustration that this has not gotten under way sooner," Jim Gilio, the White House spokesman for the stimulus program, said in a written statement to The Enquirer.

"But we didn’t get in this economic mess overnight, and we aren’t going to get out of it overnight. This project will happen, and will create jobs – and until it gets under way, jobs are already being created by more than 350 Recovery Act transportation projects in Ohio, and 2,500 small business loans in the state," Gilio said.

Economists say a single project – especially one that represents a minuscule fraction of the $787 billion spending plan – doesn’t define the success or failure of the entire stimulus.

But the American Can building is a case study in how the financial system is still broken and slowing the economy’s ability to create jobs…

City officials and the Obama Administration had a more optimistic view of the timeline.

"Once the private financing is in place, the project can begin almost immediately," City Manager Milton R. Dohoney Jr. told City Council in a memo last May. "Construction would likely start in the summer of 2009."

Mayor Mark Mallory, introducing Biden in Northside on July 8, called the project "a perfect investment" for stimulus money. It was "an opportunity to get a stalled project moving again," Mallory said. "The investment of stimulus money into this project is going to make it a reality."

Biden alluded to the problems in getting banks to lend money to such projects. He said the Obama Administration had added liquidity – "a fancy word for saying ‘money,’" Biden explained – to the banking system.

"Because everything comes to a halt when there’s no lending, as you saw here in this site, as I understand it, Mr. Mayor," Biden said, looking over his shoulder at Mallory.

City officials thought those problems were in the past tense. Now, that date has been pushed back at least a year.

But the stimulus-funded work could begin sooner.

The stimulus money – funneled through a special round of community development block grants administered by the city – is earmarked for site-preparation work. So Bloomfield said he’d like to begin work on restoring the external masonry, paving the parking lot and hooking up utilities while he waits for the financing to make the rest of the project work…

As of last week, the developer and the city were still finalizing the agreement for the $1.6 million in stimulus. Once that happens, the first jobs could begin as soon as this month – "weather permitting," Bloomfield said. Still, the work will create just a handful of the 100 jobs anticipated

Meanwhile, construction trades wait for jobs, and the neighborhood waits for development…

It sounds like someone is messing with Joe.

After all, isn’t he the man Mr. Obama put in charge of over seeing the stimulus spending to make sure such things would never happen?

Still, despite his watchfulness, we can’t help but wonder how often this same story is being repeated in communities all across the fruited plain.

This article was posted by Steve on Friday, February 12th, 2010. Comments are currently closed.

2 Responses to “Biden ‘Stimulus Project’ Is Still Stalled”

  1. JohnMG says:

    Only the Government would be stupid enough to put $1.6M into a project in that neighborhood. Contrary to popular belief, just because you build it doesn’t mean they will come.

    If this turkey-necked geek, Gilio had a brain he’d realize that the reason $4M private-sector money can’t be found is that nobody will sign on to a sure loser. How many housing projects have we built only to raze them a few short years later? Nobody wants to go near those shit-holes for fear of their life, and although P.T.Barnum was correct, it’s getting harder to coax them out into the open.

    And how would you like to be a bank? You’re being excoriated by the government for making risky loans at the same time you’re being bitch-slapped by the government for not making risky loans.

    More community organizing.

  2. proreason says:

    “And how would you like to be a bank? You’re being excoriated by the government for making risky loans at the same time you’re being bitch-slapped by the government for not making risky loans.”

    At last, banks and ordinary white guys have something in common.

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