Credit where it's due on the Tastykake loan
An IOM editorial in the Daily News:
Credit where it's due on the Tastykake loan
An IOM editorial in the Daily News:
Many people have a certain snack that reminds them of childhood, and for the city of Philadelphia, that snack is a Tastykake (we can argue over whether the Krimpet or the Kandy Kake is the true object of our collective nostalgia).
That's one reason why it's good news that the baking company, which is being bought by Georgia-based Flowers Foods, won't be closing its ovens and ceasing production.
A more tangible reason to celebrate is that we taxpayers are invested in the company. Tasty Baking is operating out of a new facility at the Navy Yard, which was financed in part by $31 million in state money.
The company still owes $25 million of that, and for a few weeks there it wasn't at all clear whether the state - that is, we taxpayers - would get it back. In January, Tasty failed to make a debt payment. Flowers, however, has agreed to assume the debt, and to keep Tasty's baking jobs in the city.
This by no means vindicates every investment of public money in a private interest. We're still worried, for instance, about the heavily subsidized Aker shipyard. But file this under Credit Where It's Due: This is $25 million the state didn't blow.
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Tell that to the stockholders whose investment was ravaged by that debt. Every banker could see the move to the Navy Yard didn't make economic sense. Only the economically challenged in Harrisburg thought it was a good investment of public money. And what will be the taxpayer's return on that debt? My guess is the deal is similar to the Victor Apartments in Camden. The taxpayers only gets there money back when certain cash flow targets are met. Good deal my u-know-what.
