Mermaid Bar Floats Rebuttal

Mermaid Bar Floats Rebuttal

Katy Grimes: The owners of the “Dive Bar,” also known as the Mermaid Bar in Sacramento, are apparently feeling a little testy about all of the criticism they are receiving because of the several million bucks in redevelopment subsidies they used to build the bar on the K Street Mall.

The big splash being made coincides with Governor Jerry Brown’s budget proposal to eliminate redevelopment agencies in the state — just as the 7,500 gallon fish tank bar was being completed, and mermaids were auditioning.

In Wednesday’s Sacramento Bee, a half-page paid advertisement appears along with a cartoon that ran last week, depicting the mermaid bar and pizza joint receiving $6.8 million in subsidies.

Appearing to be paid for by the owner of the Mermaid Bar, the ad states that the bar and restaurant did not receive $6.8 million in subsidies as the cartoon depicts, but only received $3.1 million “derived from the sale of the Sheraton” and “invested $2.8 million of our own money.”

The bar’s owner is San Francisco nightclub owner George Karpaty, who has owned and operated several dance clubs and bars in and around the San Francisco Bay area.

But as the Sacramento Redevelopment and Housing Agency proudly proclaimed on its website in a puff piece titled BENEFITS OF REDEVELOPMENT IN SACRAMENTO, “Projects in Sacramento including the Pyramid Brewery building, the Maydestone Apartments, the Sheraton Hotel, the Elks Building, the Elliott, and the Citizen Hotel, as well as numerous projects in Old Sacramento that have been revitalized as a result of these funds.

City residents already know that the sale of the Sheraton benefitted the Sacramento redevelopment coffers as well as a local developer. And now some of the money has gone to helping a new bar open.

The ad claims, “after 30+ years of blight, they are drawing 7,000 people every week to K street.” They also state in the ad:

  • “180 local people received jobs
  • We use over 35 local vendors, suppliers and services
  • 5 million was spent with local companies and suppliers”

The owners have no doubt made an investment, which is commendable — $2.8 million is a great deal of money. And the bar owners state “annual payroll will exceed 3 million.” But it was the city’s subsidy that hired the local people and paid the local vendors – property tax money that didn’t go to support of city services, schools, fire departments or police, and instead went to help build a bar that may employ a couple of bartenders, waiters and mermaids.

A $3 million payroll would support 50 employees each making $60,000 annually, and highly unlikely for a bar and restaurant.

What the ad does not say is that the Sacramento redevelopment agency is also handing over ownership of the land the bars are located on – parcels that the redevelopment agency paid nearly $5 million to acquire and prepare for transfer. So who cares if the bars succeed – it’s the land that will eventually be worth something, and particularly if the city ever succeeds in turning this section of downtown Sacramento into an arena and entertainment facility.

The redevelopment subsidy is looking a little larger than just $3.1 million. Some estimates place the total subsidy at nearly $11 million, with the land included.

For the owners to express feelings of unjust criticism is… unjust.  Righteous indignation over criticism for city subsidies, during one of the worst economic downturns in state history, is thin-skinned. Karpaty should have just kept quiet.

I wonder if the bar and restaurant would have been built without a helping hand and large financial incentive from the city of Sacramento — and was the deal just so good that he couldn’t pass it up. It’s difficult to believe that he would come to Sacramento and build on the nasty K Street Mall, without the handout.

“Seems like a pretty good investment” was how the ad ended. It’s a nice “investment” for the owner who has been hand-selected by the city.

MAR. 2, 2011

5 comments

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  1. EconProf
    EconProf 3 March, 2011, 06:56

    Subsidies and incentives like this–often including stadiums and convention centers–provide the additional push to build a bigger and fancier project than would have been built in their absense. But they never ask what would have been done without the taxpayer help. Undoubtedly the private sector would still have invested, jobs would be created, albeit fewer, and the land would be used. Instead of counting ALL the new jobs and development as coming from the subsidy, only the ADDITIONAL, incremental jobs should be counted. Then an accurate cost of each additional job could be discovered–and the cost to the taxpayer would be huge.

    Reply this comment
  2. Bob
    Bob 16 June, 2011, 21:25

    When you speak of Redevelopment, you can’t get away from:
    1. Bonded Indebtedness.

    2. Eminent Domain, Kelo-Type (for Private Projects, not public use).

    3. Tax Increment Financing: All property tax increases from the base year are taken by the Redevelopment Agency to finance their debt. Look at some of the crazy-long term Project Areas such as Bunker Hill in Los Angeles (established 1959).

    4. Corporate Welfare: Developers are given preferential treatment with taxpayer subsidies that doesn’t occur in an open and competitive market.

    Anyone wishing to “reform” RDAs cannot get away from these key issues. Even if you take away Eminent Domain from RDAs, you are left with the other items listed above.

    There is no excuse for Republicans to support, in any way, Redevelopment.
    From the California Republican Platform:

    PRIVATE PROPERTY RIGHTS
    We stand for the principle that condemnation
    and government restriction on private
    property must only occur for public uses.
    One of the purest forms of tyranny is government
    confiscation of its citizens’ private property.We reject
    condemnation or government restrictions on property
    without full compensation for such condemnations or
    restrictions.We also reject condemnation by governments
    of private property to be used for non-public
    uses.

    Bonded Indebtedness: “We oppose additional bonded indebtedness”

    Reply this comment
  3. Bill W
    Bill W 20 July, 2011, 23:15

    I was just there tonight. The only thing good about the place was the doorman Mike who had a great sense of humor and a good personality.

    It took 15 minutes to get a freaking drink standing at the bar while the three bartenders played grab-ass behind the bar. When we tried to order food they told us we had to use the “pizza phone” so we ordered a pizza then the girl came to collect the money before it was delivered which we declined to do. then she said it would take about “ten Minutes” which ended up to be about 20 minutes. So what I am saying is this place is run just like the government. Save your money and drive somewhere that you can get waited on!

    Reply this comment

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