When healthy, government entities focus primarily on serving their constituents, and private entities focus on their investors. This is called incentive; if an elected official does NOT focus on the public good, they should be voted out of office. Likewise, a private entity, which ineffectively represents the shareholders, goes broke. The incentive in both cases is for effective behavior.
In some cases, both incentives are needed. A government entity needs a specialized building, so they hire a qualified contractor, and negotiate a fair price to serve the public, while allowing the contractor a reasonable profit. Win/win.
In more complicated situations, sometimes it is necessary for a public entity to invest in a project owned privately, to promote the public good, and allow for the private corporation to have the control they need, within reasonable boundaries. One of the common examples of this is a Land Bank, created by a government entity to act as a connector between owners, who no longer have a viable plan for a property, and investors, who have a profit incentive, to take on the property development. The public is saved the spectacle of a dilapidated building deteriorating before its eyes, and the investors make a reasonable profit.
Bourbon County is in need of expanding these types of opportunities. We have dozens of situations in which it does not make sense for a private entity to buy a property, absorb all the costs to reverse the years of deterioration, and make all the necessary investments to turn the project into a viable income producing property. This is where government has the opportunity to step in.
Additionally, local charities have an opportunity to enhance these partnerships. Donation money invested in these permanent improvements to our community may make as much sense as routine handouts. Government, businesses, and charities need to think outside the box, get creative, and look for ways to make our communities better.
Grant money and advantaged loan programs can help. Some of these opportunities are geared to the private sector, some to government, and some to not-for-profit entities. These possibilities need to be sought out, and structures put in place to effectively deploy the resources.
The key in all these opportunities is to keep the incentives where they belong. Asking a business to only serve the public good, or for a government to produce a profitable real estate venture, is a losing strategy long-term.
Let’s all get creative, and look for ways to work together to improve our communities, while keeping everyone operating in their lane. Bourbon County REDI (formerly BEDCO) will be looking for ways to build together county-wide.