More From the Venture Marxist Files
We’ve chronicled the adventures of Maryland’s own particular brand on entrepreneur, the venture marxist, beginning here. In a nutshell, venture marxists are government bureaucrats who fancy themselves astute businessmen who venture your tax dollars on improbable enterprises and then appear gobsmacked when basic economics latches onto their fourth point of contact.
The latest report on failed state enterprises appears in today’s Washington Post in a story headlined Subsidized Projects Struggling, Audit Finds. (complete report here) They are struggling in the sense that a felon on the end of a rope is struggling. And with the same prospects of success.
Rocky Gap Lodge & Golf Resort, the state-subsidized retreat built for $45 million a decade ago to revive an economically depressed area, has operated in the red for years and is $27 million in debt, the auditors said.
Chesapeake Hills, a golf course that the Maryland Economic Development Corp. took over from Calvert County five years ago, is running a $1.3 million deficit and cannot pay its operating costs without help from the county, the auditors said.
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Also, two Baltimore nursing homes defaulted on payments to bondholders last year.
Someone should ask the venture marxists who come up with these ideas what they were thinking:
“The biggest difficulty has been that we built a hotel where there was no market,” said Robert C. Brennan, the agency’s executive director. “Our task has been to create a market.”
With an improving economy in Allegany County and some recent capital investment, the resort is on track to take in $12.5 million in operating revenue this year, compared with $7.7 million in 2004, Brennan said. The project is not in danger of foreclosure, he said.
“We built a hotel where there was no market.” Wow.
Even this alleged increase in revenue means little. Rocky Gap has operating expenses in excess of $14 million annually and the increase, if it materializes, only slows the bleeding.
But the issue and the story here aren’t about state subsidized enterprises floundering. Anyone vaguely familiar with the modern history of Eastern Europe or Latin America has seen that movie before. Someone really needs to decide if Maryland needs to be in the business of owning and managing nursing homes and golf courses under the guise of economic development.