Tuesday, September 27, 2011

Who foots the bill when economic development deals fail?

State of Missouri officials and the city of Moberly spent a lot of money to lure Mamtek, a Chinese-American company that promised to bring 600 jobs to town to manufacture its groundbreaking new sweetener.

Mamtek laid off its few employees earlier this month. It left behind an unfinished manufacturing facility built with about $39 million in city bonds. The company missed its bond payments and now the the bondholders are on the hook to pay the balance.

This article highlights the mess that can be created by a lack of due diligence and points the finger at politicians "who are too eager to take credit for creating jobs and who are equally quick to wash their hands when complicated deals go bad." More here.

No comments: