Editorial

Bidness is Bad for Business

The bad money of bidness, which thrives on secrecy and cronyism, drives out the good money of innovative industries that try to addres some of our long-term problems.

By Ryan McGreal
Published November 23, 2006

(This article has been updated)

There's business, as they say, and then there's bidness. The former represents voluntary agreements among individuals and organizations to exchange goods and services. The latter is an all-too-common perversion of the former, and represents the collusion of money and politics to benefit a few at everyone else's expense.

At its best, business is a form of free exchange that provides opportunities and incentives for people to pursue their interests rather than be forced into a given trade on the basis of lineage or caste.

The Sky Dragon Centre, for example, is a wonderful example of how to do business. It's agile, open, incremental, financially sustainable, and alert for opportunities to explore and niches to fill. The Chamber of Commerce folks could come by and learn a few things.

Business Can't Self-Regulate

Of course, business cannot self-regulate. It makes sense to regulate the various aspects of business to ensure that exchanges are fair, safe, and equitable. Unrestrained business has a nasty tendency to degenerate into bidness, where people with money buy political influence.

In Hamilton, too many political decisions are driven by bidness. Here's how it works: property speculators finance friendly candidates, propelling many into council seats. They also bankroll paid advocates to attend city-sponsored study groups and push their agenda.

Further, bidness interests conduct backroom deals with politicians, bypassing city procedures. Consider the original Lister deal, worked out between Mayor Larry Di Ianni and LIUNA, a union that made illegal donations to Di Ianni's mayoral campaign and then hosted a fundraiser to help cover Di Ianni's campaign debts.

In the deal, council would permit LIUNA to demolish a designated heritage building (contrary to the King William Secondary Plan) and pay double the market rate to lease office space in a new building constructed on the site: bidness at its finest.

Bidness Framework

Ultimately, bidness transforms how the city is run, fostering a regulatory framework that serves the interests of the property speculators. Council approves requests to rezone farmland for residential development; grants discounts and service charge reductions; sets artificially low property taxes; and even launches infrastructure megaprojects to connect those far-flung subdivisions to the rest of the city and its existing highway system.

A canonical example is the billion-dollar Summit Park development. Multi-Area Developments, owned by the DeSantis family, needed the Red Hill Expressway to make their investment viable.

According to the Hamilton Spectator, company president Aldo DeSantis said Red Hill "'will be the lynchpin' that will open 'Summit Park to a large group of potential new homeowners through increased accessibility.'" (Mark McNeil, 'Summit Park will outbuild Ancaster's Meadowlands', The Hamilton Spectator, Apr. 21, 2004)

The DeSantis family donated $6,900, much of it illegal, to Di Ianni's 2003 election campaign, plus another $18,000 to other pro-expressway candidates for council. With a billion dollars at stake, $25,000 was a bargain.

Citizen Questions Not Wanted

Sometimes, citizens notice all this bidness going on and start asking questions. The inevitable response is to accuse those citizens of being "anti-business", which really means "anti-bidness". This tendency is so ingrained that most people don't notice it.

In a recent Spectator column, for example, Andrew Dreschel wrote, "Though he's seen in some quarters as environmentally greener than Di Ianni, it's important to remember one of [Mayor-elect Fred] Eisenberger's other campaign promises is to run the city like a business." (Andrew Dreschel, 'Was it pro-Fred or anti-Larry?', The Hamilton Spectator, Nov. 14, 2006) This implies environmental awareness is somehow anti-business.

Ironically, bidness is bad for business, which thrives on openness and fairness. The bad money of bidness, which thrives on secrecy and cronyism, drives out the good money of those forward-thinking, innovative industries that try to profit from addressing some of our long-term problems.

The property speculation bidness is simply not a viable model for a city, especially when every sprawl house that is built actually increases the city's deficit.

Nor does it diversify the tax base or provide high quality employment, two obvious business goals. Property speculation actually does the opposite: it drains the tax base and drives away high quality employment, by sending the message to investors that Hamilton is not serious about providing fertile ground for innovation.

Real business opportunities

The biggest problems facing cities over the next several decades stem from climate change and diminishing energy supplies, both of which will exact a major toll on urban centres (and an even bigger toll on sprawl development, which depends entirely on the high energy flow-through of automobile transportation).

As Richard Gilbert argued earlier this year, Hamilton's most promising business opportunities are in finding innovative ways to produce and conserve energy. Industries clustered around this goal will be in hot demand over the next few decades.

If Hamilton welcomes the investors and early adopters of that industry, we will enjoy the benefits of that growth even as we insulate our own city and its residents from energy supply shocks.

That means diversifying our transit system, cleaning up our brownfields, protecting our farmland (some of the most dependable land on the planet), intensifying our built environment, adaptively reusing our legacy real estate, and creating a vibrant, liveable city along the way.

Smart money will recognize and pursue these investment opportunities. If the property speculators, those champions of bidness, can't change their thinking, then the best we can hope for is that they pick up their toys and go home.

Update: the sixth paragraph originally read in part, "Consider the original Lister deal, worked out between Mayor Larry Di Ianni and LIUNA, a union that made illegal donations to Di Ianni's mayoral campaign and then hosted a fundraiser to help cover Di Ianni's legal costs." An alart reader pointed out that the fundraiser was actually to pay for Di Ianni's campaign debts. Jump to the changed paragraph.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By Kevin (registered) | Posted November 24, 2006 at 08:45:10

Hey Ryan, The LIUNA fundraiser you mentioned was actually to eliminate Di Ianni's campaign debt from the '03 election, not to cover his legal costs -which had not been incurred at that point.

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By Ryan (registered) - website | Posted November 24, 2006 at 14:58:45

Hi Kevin,

Thanks for noticing my mistake. I confirmed your point and corrected the sentence.

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