Another Taxpayer Subsidized Grocery Store In North Dakota

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Last year a small grocery store in Buffalo, ND got a big, fat check from the federal government to stay in operation. It was justified by suggesting that saving the grocery store from going under was, in turn, saving the community.

I’m as nostalgic about small-town North Dakota as the next guy, but how in the world can we justify putting private businesses on the taxpayer dole? Especially given our fiscal crisis in Washington DC? Is this really an appropriate use of our tax dollars?

Apparently state leaders care very little for that question because now they’re taking a turn at subsidizing a grocery store. A member of the Richardton, ND economic development corporation has secured a loan through a Bank of North Dakota program with the interest rate bought down with tax dollars appropriated through the Richardton and Stark County economic development corporations.

That’s right, a member of the Richardton Economic Development corporation is using the tax dollars that organization gets to buy down the interest on a loan through the state-owned bank to build a new business. And it’s all reported without anyone asking…is this appropriate?

The store is coming to the rural community through the Flex PACE program, which allows municipalities and other entities to buy down interest on loans, making them as low as 5 percent. Richardton and Stark County Development Corp. are providing the funds to buy down the interest.

“The community decides where they want to use their dollars and what type of businesses they want to attract,” Senior Vice President of Lending Bob Humann said. “So in Richardton’s case, they’ve made the decision that they want to use their community dollars to be able to get a grocery store built in Richardton.”

PACE was created to help promote manufacturing jobs in the 1990s, he said. Traditional PACE funds would not be available to someone wanting to open a retail operation, so the Flex PACE program was created.

“It’s done a lot for the Class B towns to be able to help their retail people stay alive or to attract those types of businesses to those areas,” Humann said.

Richardton Development Co. member Ambrose Hoff is building the store, which has been in the works for more than two years. He would not comment on the project timeline or the size of the store.

Just as we’ve seen with the “green energy” investments made at the federal level, businesses and projects that can’t secure private financing are usually pretty marginal. Which is to say that businesses and projects that have a good chance to be profitable usually have no problem finding private capital.

It’s bad business ideas which need taxpayer subsidies and bailouts.

People don’t want to shop in small town grocery stores any more. Heck, people don’t want to live in small towns any more. Sure, people talk romantically about small-town values and small-town living. But actions speak louder than words, and with their actions people are voting against the small towns. They’re moving away. They’re doing their shopping elsewhere, and for a lot of good reasons having to do with price, service and selection.

If Richardton has the customer base to support a new grocery store, wonderful. Let some entrepreneur build one and profit. But if the community doesn’t have enough customers to make it work, why should the taxpayers be on the hook for the development?

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Flamejob5

    Ahh yes… more “free-market” capitalism.

    Makes me so happy to live in such a “conservative-minded” state which opposes redistributive Socialism.

  • awfulorv

    Once there was a culture of entrepreneurism in America which filled this need, to a good extent. I do recall farm ladies eagerly welcoming the Watkins, and there was another whose name escapes me, trucks, which sold many household items, at fair prices. And , try as I might, I cannot recall the word government being used, by either housewife, or vendor, during these transactions.

  • Captornado

    I believe there is/was a similar taxpayer subsidized store in Hague as well.

  • badlands4

    If it is a good risk, they should have been able to get a loan through a local bank. There was just a story about western ND banks being *too* flush with cash. I wonder if they even tried to get a local bank loan first, or if they ran to the BND w/o trying anything else.

  • JW-American

    Rather than operate an entire free standing grocery store, why no just gather the community to help support expanding the Cenex Convenience store, they could add a metal building to the west and the store could be expanded without having to staff, insure and pay utilities for grocery store. Plus you cannot beat the hours of a convenience store,, very convenient!

  • jimmypop

    so the town is disappearing but they cant find and empty building to remodel?

    and the bank of north dakota needs to be closed, not expanded.

  • Waski_the_Squirrel

    The reason Richardton does not currently have a grocery store (or much other business) is its proximity to Dickinson and Bismarck along a nice interstate. I’ve lived in two different communities that size and they each had a decent Main Street (one more decent than the other). The reason was that they were just remote enough that people shopped locally.

    This is a silly use of tax dollars. Were I a business owner, I would be terrified of this: too much risk of failure.

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