The boosters mislead by talking gross impact

Extra jobs is at the new hotel are a great subject of happy talk.  It is misleading political salesmanship. Hype. What matters is net extra jobs. If local people dine at the Trolleyhouse Grill restaurant of the DHCC rather than at the Wine Kitchen on Carroll Creek or another established restaurant the money spent on dining in Frederick is unchanged. 10 jobs may indeed be created at the Trolleyhouse Grill when it operating but other things being equal about 10 jobs will be eliminated at the Wine Kitchen and other competing restaurants.

The number of jobs generated in the restaurant business is a function not of the establishment of a new restaurant but of aggregate spending at restaurants. Even if the Trolleyhouse Grill is successful it can only lead to a net increase in restaurant employment in Frederick if there is an aggregate increase in spending on restaurant eating in Frederick. That requires higher incomes or a greater propensity to spend your money at restaurants, or people coming from the outside who wouldn’t otherwise visit.

In the case of one city it can be achieved if the establishment of the Trolleyhouse Grill leads more people to come from Montgo Co or outside of Frederick. That may increase revenues and jobs here but much will be at the expense of spending and jobs elsewhere in the state.

That’s fine healthy competition, I’m all for it, but it doesn’t help state revenue or jobs in the state. They remain unaffected after netting out. State funds and state jobs only benefit to the extent of people coming from out of state…  you get the drift, (gawd I’m reverting to my first fulltime job back in 1964 teaching Ecos 101 to first yr undergrads.)

CONCLUSION: spending impacts, job impact, revenue impacts at the site of the DHCC get net-ted away via substitution the further you get away from the establishment itself.

MY STANCE: as a consumer the more restaurants the better I say. I want to see the opening of the Trolleyhouse Grill at the DHCC or whatever they call it. But it won’t create extra net jobs except to the extent it gets outsiders to come here and spend on restaurants who wouldn’t otherwise.  And it won’t help state revenues except to extent it attracts spending from out of state.

ANOTHER THOUGHT: The best single measure to get more visitors to Frederick would be to upgrade the highways to Montgomery Co (toll lanes added to 270), and Loudoun Co NoVA so they have a smoother trip here and back. And that would benefit people here too, and to travelers through. That’s a clean use of public funds for a public purpose.

FoFC hotel Watch FB page 2016.02.13

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