More on the Seagirt deal
A couple other quick thoughts on the Seagirt lease, the subject of today's column.
The column notes that there are no guarantees if Ports America doesn't produce the promised 5,700 jobs. The state and its consultants will argue that corporate projects never come with job guarantees. Not true. The economic development deals crafted by the Department of Business and Economic Development come with "clawback" clauses that give the state recourse if a business getting subsidies doesn't hire the specified number of people.
Also: The state is making much of the "multiple" of present Seagirt profits being paid by Ports America. Over 50 years this is virtually meaningless. The first thing they teach you in business school is that the worth of any asset is the discounted present value of the future cash flows, not what something is earning now. I have seen no analysis that suggests Ports America is paying a fair price based on what it will earn from the port of Baltimore over half a century.
Comments
Jay,
Thanks for reporting this story. One would hope our political delegates will ask and receive a full disclosure of the risks and benefits of this deal.
Posted by: Dan | December 16, 2009 8:52 AM
Kudos! On your analysis, Jay. It recalls the superb work of late, brilliant Dr. W. Edwards Deming...
Use of CPI on its face value is a game of the foolish and ignorant. Much the same as the theme of a long running TV program, it doesn't mean much of anything.
The Ports News here is somewhat overblown. It is not completely in touch with the realities on the game board, recognizing the other, removed Ports players, and their strategies....
Alas! We've had any number of other overstated, grand plan projects around here. (Will the Red Line car go to the piers, hon? ) Why break the streak?
Posted by: Baffled In Bel Air | December 16, 2009 10:06 AM