The Ingles loan doesn’t add up

Math — arithmetic we called it back then — always made my head hurt, so I try to stay away from the stuff. But my eighth-grade math teacher, Mrs. Sears, always told us, “If you can’t figure something out, round off the numbers.”

And that’s what I did when I read about how [Buncombe County Commissioners] approved a $99.74 million loan to the Ingles grocery chain to build a new warehouse and distribution center, which would create a whopping 190 local jobs [“It’s the Economy Stupid,” Dec. 15 Xpress].

Well, those are numbers I don’t divide well. But, recalling Mrs. Sears’ dictum, I just rounded it off: $99.74 is almost $100 million; 190 might turn out to be 200. Even I can see that each job will cost [roughly] $500,000. Where I come from, half a million dollars is a lot of money. I figure each job will make about $30,000 a year — normal for this area. It will take 16.3 years to pay off each created job, not accounting for interest fees, etc.

I modestly propose the following money-saving modification: The federal government, the source of the loan, should simply give a $250,000 check to the first 200 applicants (I intend to apply). This money can be spent anywhere, in any way, as an economic stimulus package. Pay off the house, go to Vegas, buy a Mercedes — the list is endless.

I doubt that the [commissioners] would do this. Like me, I am sure they aren’t rocket scientists, either, speaking mathematically. And, well, the story did have “stupid” in the title and … oh dear. I’m getting confused again. Head is starting to hurt …

— John Nation

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4 thoughts on “The Ingles loan doesn’t add up

  1. LOKEL

    I questioned this “loan” of taxpayer monies myself.

    What needs to be considered as well (that is not included in your calculations) is the number of construction jobs that will/may be created to actually build the facility.

    Even with these jobs thrown in, the numbers don’t seem to add up …

  2. travelah

    A couple things should be pointed out here. It is a loan and not a grant and as such will be repaid. The benefit to the county is considerably more than 190 employees. Wages create a ripple effect in the local economy. Triple or quadruple the direct wages added and you have a better indication of the economic effect of those additional wages. On top of that, the country will gain new property tax revenues once it is operational (assuming there was no granted tax deferrals).
    On the other hand, the government should not be in the business of making business loans. They didn’t have the money to loan in the first place.

  3. nathan ramsey

    Remember, this is a loan. Ingles must pay the money back with interest. They are going to spend around $100M to over double their warehouse and cold storage space in Swannanoa. The commissioners did the right thing by supporting a local business in helping them expand and make one of the largest investments in the county’s history. Probably the federal government shouldn’t be in the business of making low interest loans to a publicly traded company, but since they are the county should help local businesses take advantage of such programs.

  4. I agree with Nathan. In fact, I think the government should do MORE to help local businesses. If they’re printing enough money, how about making the same kind of loans available to small businesses?

    Hell, loan me a fraction of that sum — say a modest $100,000 as a round number — with the same loan conditions — and I promise to create a permanent job with a living wage right here in Asheville. Given that the Ingles loan works out to almost $525,000 per job created, my deal would save taxpayers money. And create a job! Plus, if more people got these loans, we could potentially create almost 1000 new jobs for the same money Ingles is using to create 190.

    The Ingles loan is the sort of action politicians (and former politicians, it seems) love to love: they claim to create jobs out of thin air! Everyone wins! Right? Well, Ingles certainly does.

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