Adventures in Capitalism, part 2

The Houston City Council recently announced that it was considering selling naming rights to city buildings as a source of revenue. This has drawn predictable derision, but this article in the Chron explores the ways that other cities, notably San Diego, have formed partnerships with business for goods and services. In tough economic times, it makes sense to see what can be done to stretch limted municipal budgets.

I’m ambivalent about this. Put aside issues of good taste – one can certainly hope that we never have the Dynegy City Hall building or some such – it’s hard to argue against finding innovative ways to increase municipal services without increasing taxes and fees. For example

In perhaps the most unusual marketing marriage, San Diego is partnered with a defibrillator company. Cardiac Science will pay that city $225,000 over three years to be San Diego’s official partner.

The city also will get a cut of the company’s defibrillator sales in San Diego during the contract term.

The deal came after the city bought defibrillators for its municipal buildings. Teaming up on a public-safety campaign for defibrillator training seemed a natural, said Mary Braunwarth, director of San Diego’s Corporate Partnership Program.

“It’s not just designed as a revenue (generator),” Braunwarth said. “It was tied with the city’s desire to provide a new level of service that we did not have the money for in our regular budget.”

In addition to getting free publicity, Cardiac Science gets its brochures distributed by city fire officials during commercial building inspections. The fire department also provides defibrillator training.

I have no quibble with that, and I applaud San Diego for the initiative.

The problem, of course, is that there’s a nontrivial potential for corruption when you start throwing around millions of free dollars. It’s just a matter of time before some city official is accused of taking kickbacks in return for steering a deal to a particular company. Any city that pursues this line of revenue needs to keep its eyes wide open for that possibility.

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