THE FINANCIAL HELP CENTER: Strand Businesses Lose Most at Special Events!

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Strand Businesses Lose Most at Special Events
by David Stanowski
19 February 2008

This article originally appeared in the Galveston County Daily News on 19 February 2008. The text version of the article appears below.

There are three groups who have a stake in how special events are staged in downtown Galveston: residents, City government, and downtown merchants.

Many residents have a definite opinion on how events should be managed based solely on their personal preferences, because they have no money at risk in the outcome. The City has its own set of criteria such as security, minimizing their expenses, and maximizing earnings for City employees.

Even though the City owns the streets and sidewalks, it is the businesses that line them that make downtown Galveston a desirable location for special events. What is often lost in this process is the fact that this is how downtown merchants earn their livings, which should give them the most prominent voice in how these events are staged, because the events have a major impact on how they can operate.

It was easy for a resident to go downtown during the recent Mardi Gras, and draw the conclusion that it was a “big success”, because they see thousands of people in the streets having fun catching beads. But in what sense are large crowds catching beads an accurate measure of success? Likewise, the City government can point to a lower number of arrests, and/or below-budgeted costs as evidence that the event was a success, but what about the merchants?

Since many business owners see sales drop, during special events, it is difficult to see how these merchants would rate them as a success. But does anybody care about the impact of special events on downtown businesses? Apparently not, but everyone should care for two reasons.

First, it is just bad manners not to. How would the residents of Galveston like it if someone commandeered the street, where they live, to stage special events, and set the terms and conditions without their consent and approval? In addition, the effect of an event in a residential area would primarily be the inconvenience to everyone’s personal activities; not the loss of income.

Secondly, the way events have been staged is potentially unlawful! There is a "minor technicality" in the 5th Amendment called the “Takings Clause”. It says that if the government “takes away” someone's property, for the good of the community, the government must compensate them for their loss. In this case, the government temporarily "takes" the use of downtown property, so they should be reimbursing business owners for any lost revenue.

Sooner or later, downtown businesses are going to start demanding "just compensation" for their losses. This will have a negative impact on the City treasury, which is why it is time to consider a better alternative.

If special events are managed with the full consent and approval of downtown merchants, then the City will no longer face potential liability, under the Takings Clause. This could be accomplished by allowing the Historic Downtown Galveston Partnership to define how these events should be staged.

Only after all of us remember and acknowledge that downtown buildings and businesses are privately owned can events be produced so that they respect the property rights of the merchants, which will then allow a truly accurate assessment of whether an event is successful.

Also see Who Really Owns The Strand?

For more information on the Galveston Economy: CLICK HERE

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