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Government must cut cyber venture capital losses now

Two ships up and pulled anchor this, leaving even more tattered the credibility of economic development promises made by Bossier City elected officials, and to a lesser degree their Bossier Parish counterparts.

Sports fans also tuned into the world of politics may have realized that the looming demise of the most successful non-baseball franchise in the area’s history, the Bossier-Shreveport Mudbugs minor league professional hockey team, also creates a big hole for Bossier City. For the CenturyTel Center to have any chance at all to pay its operational expenses, the 40-plus (because they reached the playoffs so often and sometimes went far) home game dates of the Mudbugs were crucial. With this anchor tenant gone, the gains unrealized from using the $56.5 million that the city blew on the arena for other purposes – roads work that could have been finished years ago, not having to raise water and sewerage fees on residents, etc. – now will be compounded by actual annual operating losses perhaps into the millions of dollars.

Maybe a last minute deal will keep the franchise alive (the tentative deadline being today), reviving the joy of area fans and relieving those in Bossier City government who were around to stump for the arena from more egg on their faces. But you would have had to been much more attentive to have learned that an even riskier gamble by the city, and parish and state, essentially blew up in the faces of Bossier politicians with the announcement that the U.S. military will place its cyber command headquarters at Ft. Meade, MD.

Bossier City had committed about $35 million, and Bossier Parish about $15 million with the state throwing in $57 million, into the startup of the Cyber Innovation Center the lion’s share of which would be to create a campus for computer-related activities. But the main stated impetus for these sudden appropriations last year was because of a desire to get the Air Force to base an incipient cyber command at Barksdale Air Force Base where some cyber-related activities already were taking place. Having that there would serve as an anchor to attract many other such related entities to the area, it was argued, and creating this Center to service them, it was breathlessly promised, would help haul in thousands of high-tech high-paying jobs.

As was pointed out many times in this space and elsewhere, anybody with some knowledge of these kinds of decisions knew this was a long shot. Eventually, the familiar pattern took hold: lots of different entities began to angle for the new command which meant either it would be fragmented among many sites or a place with superior existing infrastructure and political clout would land the command. The latter now has transpired with the decision to consolidate all military cyber activities next to Washington, D.C., meaning little such activity will transpire at Barksdale, if any.

The military branches still hold out hope that each individual service will still have its own cyber component, but the final blow for Barksdale and Bossier elected officials (and state officials all the way up to the governor) was when the Air Force said if there was going to be such a component for the Air Force it would be started up at Lackland AFB in San Antonio. So just how much economic benefit will $107 million of taxpayers' money now bring; clearly not nearly enough to justify this entire cost.

(Curiously, until this last event none of the local media reported on these with such a huge impact for local economic and political fortunes. Other jilted areas took the event far more seriously. For example, the Omaha World-Herald ran an extensive next-day story on the implications of the decision to Bellevue, NE’s Offutt Air Force Base, and it was widely reported by national media. In fact, the news informally came out Apr. 23 in a Defense Department draft memo reporting that the National Security Administration would lead such efforts from its base at Meade. The Shreveport Times, however, failed to mention that in its report, rather pondering on other matters. It failed to follow up at all on the formal announcement May 5 in congressional testimony. One wonders whether local media are just extremely inattentive or if they had another agenda that mandated suppression of the news. Finally, when word came that not even the Air Force version, if it will be allowed to exist, of a cyber command would be located at Barksdale, did the local media publicize the fact that it would get little of this activity.)

Even as all of this was playing out, the Cyber Innovation Center’s permanent headquarters continues to rise, estimated to cost the city $36 million (which was a subject of a Times article a week after the draft memo, right before the testimony, wherein the article only stated that current cyber command plans were “in flux”). Those taxpayer resources are gone. The duty of elected officials now is to safeguard the remainder.

No doubt useful things potentially could come from the Center. But the fact is, the costs will far exceed such benefits, as this latest development only makes even clearer than ever. Governments need to construct an exit strategy along the lines of finishing the building and then put it on the market. Maybe it would fetch half its building cost and still bring some jobs to the area, so that taxpayers are out only $18 million (plus land acquisition costs). Or try to lease it out, if there are no buyers, which will realize at least some savings. It’s all too obvious now that this experiment in venture capitalism must end so local and state taxpayers can have their precious resources in times of tight budgets appropriated for more pressing matters. Any additional monies spent past this point will just be throwing good money after bad.

This will take political will rarely seen in these parts, but after having betrayed the citizenry on so many levels in this matter, Bossier City and Bossier Parish politicians at least owe us this much.


JIm said...

Bossier politicians are in total denial, claiming that this will not affect the CIC at all.
I think your idea of putting it up for sale is probably the most logical at this point.

Anonymous said...

Maybe we could make it the 'cornerstone' of a "new Bossier Strip". Those fancy spires & 'B' Science Fiction movie architecture remind me of some of the bars on the old strip. Just need to add a little neon, & lease it to one of the mobbed-up locals, & the money will be rolling in!

Anonymous said...

You are exactly right and I'm glad you have the guts to stand up and say it like it is. If I mention the facts as you state them, I am held up as anti Shreveport/Bossier and represent the negative, old attitude that has held back our area for decades.
This tax payer funded gamble competes with and will result in the depression of private development in the commercial office market...

Anonymous said...

Your right Jeff, in fact several prominent elected officals retained my company, (based in Bossier City), to investigate High Speed Rail. We invested almost 2 Million Dollars,the last year and a half of my life, my entire capital cushion...only to have those same elected officials tell me last week that they are truly sad, but they will just have to pay later.
Those same officials explained behind closed doors how they would pay for it...and these were not commitee meetings by the way. Now I am destitute, being forced to lay off employees, and scale back operations on our new developments. I can assure you, this will not go unheard of, and will greatly impact Shreveport and BC.