Policy change to boost local businesses right move
(Last updated: 10/22/09 7:00pm)One of the best indicators of a thriving local economy is when businesses are prospering. Local businesses often are the first to close their doors during a recession or economic slump. They can act as canary in the coal mine that signifies a larger, more devastating economic collapse.
Thankfully, in order to keep those canaries happily chirping, the East Lansing City Council approved a resolution Tuesday that amends the city’s purchasing policy.
The policy now favors local businesses in the bidding process for city projects. Under the approved resolution, if a local business places a bid 7.5 percent above the lowest bid, it could bid again to match the lowest bid. Regional businesses need to be 5 percent above the lowest bid. Professional services will be exempt from the preferences.
We have a long way to go until our area even is close to thriving, but taking steps to help boost local businesses is a good start. That the city has shown its concern about keeping local businesses afloat and put in the effort to help them in substantial ways is encouraging. Without a resolution such as this, smaller businesses otherwise would have little chance of winning a bidding war with a national corporation. Although economic activity of any kind is welcome, we always would favor local and regional business first. We’re glad the city sees things this way as well.
Even though strong national corporations and chains have and might continue to do well in East Lansing, it’s the small, locally owned businesses that add character to a small city such as ours. And a city that has a more distinct flavor and character is more likely to attract citizens.
Many MSU students were heartbroken when Flats Grille went out of business late last year, but they have several other options. Brother’s Grill, 403 E. Grand River Ave., is a great example of a local business that offers unique food options for students in the area. Menna’s Joint, 115 Albert Ave., is another great locally-based chain that some students might not frequent, and Espresso Royale, 527 E. Grand River Ave., is a great alternative to the behemoth that is Starbucks.
But countless students never will set foot in these businesses, if for no other reason than they simply are more comfortable with the chains they know. There’s nothing wrong with enjoying a Chipotle burrito every now and then, but those Brother’s Grill weekly specials are to die for — take our word for it.
Our only concern with this new resolution would be favoritism and preference on the part of the council. We would caution the council, as well as East Lansing citizens, to take special care to ensure that this resolution in no way serves to benefit any sort of private interests of members of the council.
The city always can do more to encourage and support local businesses. This resolution, while helpful, only pertains to the bidding process. Any other incentives to local businesses would be welcome. Additionally, we would encourage the students on campus to seek out and browse some local businesses on Grand River Avenue that they might not have thought about before. Who knows — they could find a new favorite hangout.
This resolution hopefully will bring about its intended goal and encourage those who are contemplating starting their own local businesses but have been dissuaded because of the current economic conditions. Any little bit that the city can do to encourage growth helps.
Because when local businesses benefit, we all benefit.
Originally Published: 10/22/09 7:00pm
Todd
10/22/09 10:43pmIs the editorial board of the SNews made up of complete morons, or did you all just decide to drop some acid on deadline tonight?
WTF do restaurants and your “to die for” food reviews have to do with a city council resolution that (wrongly) gives preference to “local” and “regional” businesses in bidding for city projects? (Which any logical person knows will drive up costs.)
Will Menna’s Joint or Espresso Royale suddenly start bidding on city projects to pave roads or plow snow?
MaximumBob
10/23/09 9:18amTodd,
Excellent response.
If this is such a good idea, why doesn’t EVERY city do this? Stop shipments at the city/county borders. Impose tariffs on all “imports”.
Again, nothing more than feel-good legislation that sets a dangerous tone and proves the intelligence of the council.
Logical Fallicy
10/23/09 9:36amThe idea of “buy local” and other likeminded concepts appears solid at first glance. This should help local business afterall and that’s great!
the idea start to fall apart however, when one look at what happens if Lansing adopts the same thing, and then Okemos, and then Haslett, Grand Rapids, Detroit, Chicago, etc.
This is classic game theory, if EL is the only city to promote “buy local” it’s potentially a win. Unfortunately, this incentivises Lansing to follow suit which would be very harmful to a number of EL “local” business, probably far more so(as lansing is far bigger)than the benefit of EL’s provision.
MSUAlum2001
10/23/09 9:47amTodd, I’d go with the former. Have you seen all the dumbass completely moronic editorials this semester?
Although, I suppose they could have taken acid the first day and are just continually having flashbacks.
Milton
10/23/09 10:44amI always get a kick out of the State News commenters who have taken one economics class and think that makes them Milton Friedman. Maybe before trotting out some canned criticism of the policy you should read the policy itself (or even just the description printed in the paper here). Then again that wouldn’t be nearly as much fun as just spouting off.
RE Milt
10/23/09 2:20pmWhat exactly are you referring to Milt? Yes, this policy isn’t as bad as direct subsidies or iron clad nobid contracts, however, it does directly encourage local companies to not cut costs as low as possible to achieve the very best bid when they know they can be 7.5% over the low bid with zero negative ramifications. Zero.
Why would any business not submit a slightly higher bid to ratchet up profits in that situation?
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Milton
10/23/09 4:12pmAs I understand it, all the 7.5% (or 5% if it’s not an EL company, but is in the region) is is a qualifying standard. That company will still have to match (and then re-bid at) the low bid. Even if they inflate their bid to “ratchet up profits” they will never realize those profits because they will still have to match the low bidder. This would also seem to encourage other firms to innovate and lower their bids to eliminate the possibility of a local match bidder. If the city just paid 7.5% more you’d be right. But that does not appear to be what is proposed here.
Re Milt
10/24/09 12:23amThat would be true, except this is the City of East Lansing, so they’re not always going to have massive amounts of bids coming in. That means that this policy has a high potential to result in higher costs.
That is not the main problem however, the main problem is this incentivizes other cities such as Lansing, to adopt similar measures which will result in making business in both EL and Lansing poorer overall.