Raise the Hammer

There are two factors at work here which tend to reinforce each other.

The first is a fairly open class-based prejudice that people who aren't "rich" (and these guys have a fairly pricey definition if they reject people like Gary Santucci) aren't capable of owning or running establishments which are good for the area. Buildings are better off vacant and owned by big well-connected developers than individuals, because then they'd be opened as something silly and it would be a real pain to evict them to put the building to a proper use. And if the local elites can't do it, we're better off importing failed real estate tycoons like Harry Stinson than opening up the process to people who make $800 000/year or less.

The second is an institutional culture which tends to believe that the process is more important than the product. The assessment of a new project is based far more on how they "play the game" than the actual pros and cons of the situation on the ground. An enormous number of petty, personal politics come into play here. There's little if any real assessment of whether the process itself is hindering startups, or whether people who were rejected "deserved it". Likewise, there is little or any assessment of the effects of such laws and departments in past generations.

When combined, we have a bureaucratic atmosphere which really only trusts strip mall and condo developers, out of a perceived fear that all hell would break loose if they started to allow innovative projects. They hold out hope, while neighbourhoods crumble, that some big cash cow project will appear to "save the day". This then translates to an open fear and disdain for the people of these "decaying" neighbourhoods, blaming them for the problems, and further reinforces the need for some big investment project to rescue the area.