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Monday, January 5, 2009

Steakhouse Socialism in Delmont: Town Raises Money to Resurrect Business

Ross Dolan reports in Friday's Mitchell Daily Republic on a public effort to revive the Delmont steakhouse and bowling alley. The Delmont Non-Profit Development Corporation is trying to raise $100,000 through various events, the latest of which was a New Year's Eve raffle and South Dakota tasting event. (So how does South Dakota taste?) The Delmont NPDC is also selling shares in the business, which I assume means that if the NPDC succeeds in reopening or selling the steakhouse, you can get a cut of the take.

I'm intrigued by what looks like a voluntary form of socialism. The free market couldn't support the business, so the community as a whole is trying to fund it. It's not a totally new idea: Delmont borrowed the concept from their Highway 18 neighbors in Menno, who saved the town grocery store this way.

Now I do have some pessimism about Delmont's plan:
  • Delmont, population 263, has a per capita income of $12,385.
  • Raising $100K locally would require every man, woman, and child in Delmont to hand over 3% of one year's income.
  • Delmont has a poverty rate of 19.6%.
  • If there wasn't enough business to keep one private owner in the black, the dividends for public shareholders will be minute at best.
Delmont may not have a big enough investor base to make this project fly. The steakhouse also isn't the kind of classy, sturdy old building that might attract the attention of an outside investor. (Compare the 1985 building to the intriguing Opera Block building that most recently housed the grocery store.) Still, I admire them for rejecting the judgment of the free market and trying to pool their resources to revive a local business.

Might the Delmont NPDC have a lesson here for Madison's economic development outfit, the Lake Area Improvement Corporation? Delmont's development corporation certainly has a lesson in openness for our LAICs: the Delmont NPDC website makes clear that "The material contained herein belongs to the citizens of Delmont"—no sign of charging $250 for housing studies.

If $100K is enough to reopen a steakhouse, how many downtown businesses might the LAIC support with the $2.3 million the community raised for the Forward Madison fund (a fund we haven't heard much about lately, have we?)? The Miller Construction office on Main Street is available for just under $60K: a creative application of our money to that building could bring some much-needed retail downtown. Anyone care to form a Main Street development corporation?

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