City interference had predictable results for Tiara Rado restaurant

One has to get up pretty early in the morning to get the jump on some of the newshounds at The Daily Sentinel. I had just heard last Friday that the city’s latest contractor for food service at Tiara Rado golf course had pulled the plug on the operation, citing the mysterious reason of “wasn’t able to make a profit.” Then, bam ... it’s in the paper.

A translation for government management types is that the former vendor was unable to make someone else pay his salaries and overhead. He needed to be able to deliver a product people wanted, at a price they could afford. This is practically gibberish to some bureaucratic functionaries, as it involves the puzzling theorem: When costs exceed revenue, businesses disappear.

We should review the situation involving the original vendor, the Piñon Grill and the ensuing debacle of trying to remove that vendor with dubious methods by the city, imaginatively dubbed “Grillgate” by this column.

In a city far, far away (Fifth and Rood) headed by a manager whose name is now lost to antiquity (in less than a month) a peculiar review was conducted of the Piñon Grill, which was leasing space at Tiara Rado.

This started with a “survey” conducted with the assistance of some unusual characters and city staff to sample the grill’s products as compared to other vendors, who might be interested in the space. To make this tale shorter, let’s just say significant questions arose concerning the manner in which the survey was conducted, the scoring being altered and the fact that the city itself decided to also bid for the work.

This last bit gave some Doubting Thomas types concern that the city was trying to commandeer a private company’s business for a flailing Two Rivers Convention Center operation.

By the time the City Council got around to questioning this set of circumstances, sacrificial employees were paraded before the council to announce that upper management had been clueless, clueless I tell you, regarding Two Rivers bidding against a private company.

Council members, who were apparently busily engaged in buying interest in various New York bridges and underwater Florida real estate, seemed to be the only persons wrapping their heads around that pronouncement.

As public interest climbed, more possible shocking examples of perfidy on the part of the Piñon Grill owner were suggested by the city manager — with even vague accusations aimed at the cuisine itself.

Later, the most potent weapon available was brought to bear by conducting an audit to ensure the city had been paid its proper revenues, amid vague and dark allegations that perhaps it had not.

All this, of course, amounted to nothing more than the equivalent of cowboys dragging tumbleweeds behind their horses to cover their tracks.

Since one of the complaints suggested by city administration was that the owner of the Piñon Grill had been indulging in too many banquets and other events to make up for the golfing demand at night and in the dead of winter, a new contract, constructed under the glare of public scrutiny, must include a limitation on such serious problems.

As a result, the next vendor was not able to show anything like a profit, just as the prior operator had said would be the case. Moreover, in a marvelous bit of understatement ferreted out by The Daily Sentinel’s Amy Hamilton, the interim period in which the city-owned Two Rivers concessions ran the restaurant resulted in an $11,000 loss.

The lesson here is the same as farmers are learning in Iowa, where the prices of their corn fields have doubled since the government has mandated and incentivized corn ethanol from a failed scientific experiment to a vote-buying scheme.

The lesson is that any time government deforms the economic system through artificial incentives or constraints, traditional market forces will go haywire, but they eventually spring back with a vengeance.

When the city stops dictating the Tiara Rado business model, someone will be able to make money.  When politicians stop buying votes with ethanol incentives, small farmers may be able to buy land again in Iowa.

Rick Wagner offers more thoughts on politics at his blog, the War on Wrong.


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