Like everyone else who went to college, I took Economics 101 and read Adam Smith. I guess I got the wrong idea about the meaning of the “free market”—at least that is what I am learning from the current attempt to bring Nvidia to the Sobrato building in downtown San Jose. Apparently, it means the cost of operating these profitable businesses is passed on to the taxpayers.
John Sobrato, a gazillionaire developer who owns 110 buildings with 10 million square feet of real estate, and Nvidia, a $3 billion company located in a Sobrato-owned building (!) just up the road in Santa Clara, want to execute a long-term leasing agreement for Sobrato’s never-occupied, 2002 building on Almaden Boulevard. According to reports, Sobrato has lowered his asking price as far as he can, but it is still not low enough to get Nvidia to sign on the dotted line and make the move. The proposed solution: more corporate welfare from the Redevelopment Agency—another handout from the people of San Jose.
Why should the working stiffs of San Jose subsidize multimillionaires? Residents aren’t getting the city services we need now. In the past week, we have learned that we have the worst city streets in the nation. Add that bit of good news to the lack of a much-needed hospital downtown, the decrepitude of our public pools, the unfinished state of Guadalupe River Park, the financial troubles at the Rep Theater, etc., and the absurdity of asking the citizens to pay for Nvidia’s lateral move hits you head-on.
If Nvidia can’t pay the asking price, and Sobrato is not willing to take less, then why is it our problem? None of the arguments that will be made to try and get citizens to support a subsidy will hold water. There will be no new jobs for San Jose, just people already employed in the area driving to a new nearby location. The workers will park in the bowels of the building, eat in the company cantina or drive somewhere else where they can park for free, and go home away from downtown at night—just like they do at Adobe. The city council should politely turn this worthless deal down, but, given the history of the current body, don’t hold your breath. This is the council that has already thrown $4 million in the toilet for a doomed car race and given $11.5 million of corporate welfare to Norcal. And please don’t worry about poor John Sobrato; when he can’t afford to keep his 380,000-square-foot building empty any longer, he will find some tenants.
Legions of unemployed, uninsured people are ridiculed everywhere these days for trying to get welfare or public assistance amounting to a few hundred dollars to help pay their rent or feed their families. Yet, mega-profitable behemoths like Chevron, Enron, Exxon and Halliburton can jump on the corporate welfare gravy train—The Free Market Limited—anytime they want. Today, it’s Nvidia and Sobrato. Who will be next? All aboard! Step right up—no ticket necessary for overpaid multibillionaire CEOs, corporate war profiteers and real estate barons.