Questions & Concerns With Handing Over $375,000 to Anyone

First and foremost, I applaud Stephanie Hoffart and her team at MADC for developing a prospect as exciting as Skyscopes. Between the Air Force, the oil and energy industries, and the ag business, the Unmanned Aerial System (UAS) industry is a great fit for Minot. It would be awesome if our little town can carve out a niche inside this growing technology-based industry.

That said, I have some questions about the proposal that’s been brought forward. If you don’t know about the package MADC created for Skyscopes, you can learn more about here; basically, MADC is requesting $375,000 in the form of a forgivable loan if they meet job-creation benchmarks. It’s up for consideration at tonight’s City Council meeting.

So, yes — I hope Minot can land Skyscopes. But I also hope Minot can land other companies like just like Skyscopes. And I also hope Minot can land UAS manufacturing companies and  UAS data-service companies that are partners in the industry.

In other words, what would be even better than landing a single drone company would be creating a hub for the commercial market players in the UAS industry. However, I’m not sure we can afford to incentivize them all to the degree we’re proposing to subsidize Skyscopes. Plus, I’m worried that by incentivizing one company in such a big way, we’ll discourage potential UAS companies and Skyscopes competitors from settling in Minot.

In essence, by giving Skyscopes this money, we’ll be giving them a monopoly on a new and emerging market. And those aren’t my words, here’s the quote from Skyscopes President Matt Dunlevy from last Friday’s MAGIC Fund Screening Committee meeting.

Our presence here — I would say —  isn’t necessarily contingent on the MAGIC Fund. Espcially through the hospitality of Stepanie [Hoffart, MADC], we feel like we’re part of the family. But once we get here, we want to be the company that’s in lock step with City officials and other industry partners to the point where we can streamline operations where no one is going to want to come here.

— Matt Dunlevy, President, Skyscopes

Now, I get how that would be good for Mr. Dunleavy and Skyscopes. I also acknowledge that the UAS industry overall would be great for Minot.  But what I don’t understand is how giving one company a monopoly in a growing industry is good for Minot as a whole.

There’s also another important question hidden inside those comments. It’s that Skyscopes locating in Minot is not contingent on MAGIC Fund dollars. So, if the opportunity is big, and they already plan on coming, then why do we need to give them tax dollars to come?

Ultimately, my concerns are the concerns of unintended consequences. They’re concerns born from the “equal and opposite reaction” that we seem to be terrible about considering on the front end of these deals. Because when we make it easy for one company, we’re always making it harder on another one.

A Different Way to Incentivize

If we’re going to make incentives available, then they should be available to everyone in the UAS industry, and the ground rules for winning those incentives should be available, out in the daylight, where everyone can see them.

And if I had my way, they’d be back end incentives. MAGIC Fund dollars would be there once a business delivered the jobs. In other words, the incentive would serve as a reward for a job well done, not an incentive to try and do it. Because when we incentivize the ‘trying,’ sometimes we end up with those who are not all that good at the ‘doing.’

And on a Cynical Note about Process and Towns with Money

Since news of this request first hit the Minot Daily more than a week ago, I’ve done quite a bit of digging. I’ve gone through the application thoroughly, I’ve reviewed MADC meeting minutes, I even listened to the MADC’s February Board meeting in which this application was discussed.

From what I’ve read, heard, and witnessed, there’s clearly a sense that the UAS industry and Skyscopes represents an opportunity. And beyond that, I believe we’ve had more front-end due-diligence on a MAGIC Fund request than we’ve ever had in the past. Ms. Hoffart and her team have clearly made improvements to the process by which we seek to spend these dollars.

But in all of those pieces (reading, listening, watching) I picked up a note that had me concerned. At times, there was an urgency to the request — kind of a “we have to or someone else will” piece. That type of high-pressure sales pitch makes me nervous. That type of presentation makes me want to say no out of general principle. But that’s just me.

Here’s why I think that way: good salespeople are great at getting prospects excited, but the things they are selling are not always as good for the buyer as they are for the seller. That’s not what I’m saying about Mr. Dunleavy or Skyscopes. I agree they look like a long term player in a new game that’s a good bet to get bigger. They look like a good bet for Minot.

But when we’re talking about giving away money, cynicism is a healthy default setting. Because if we aren’t cynical and suspicious, we could easily become Lyle Langly’s next victim. And we don’t have to look too far back to see a couple of examples that are an unfortunate reminder of Minot’s history with the MAGIC Fund.

Plus, Minot’s not the only town that’s been bamboozled. The Simpson’s and Springfield caught a whiff of a trend back when monorails where the next big thing.

Josh Wolsky

Editor and Publisher of TheMinotVoice, Developer of the #ForMinot Network,  Co-Host of #GoodTalk Minot, Advocate and Friend of the Souris River, Former City Alderman, and clearly -- all things #MakeMinot. Go ahead, don't wait for permission!

Leave a Reply

Your email address will not be published. Required fields are marked *