Yellow flag
Seven Guilford County commissioners heard a strong warning today on the subject of economic incentives:
There likely will be consequences if they pull out of the game.
Back in June, commissioners set a 90-day moratorium on economic incentives. They wanted a time-out while they studied their policy, and they appointed a committee chaired by Linda Shaw to take on the task.
The committee met today with local and regional economic develop officials, an assistant secretary of the N.C. Department of Commerce and with Mark Sweeney, who earns his living helping businesses make relocation decisions.
Sweeney told the commissioners that news of their moratorium raced across the country. "It created the beginnings of a little yellow flag about Greensboro," he said.
That yellow flag signals that "maybe this community is not so friendly to business anymore."
OK, OK. We all hate the idea that, in order to "be friendly to business," you have to give them free land or tax breaks or some other sort of "corporate welfare."
But, as Sweeney explained with absolute clarity, that's business these days.
It's not that companies come into town demanding giveaways first thing. The community has to be attractive for all the right reasons: geography, site availability, work force, transportation, taxes and services, education, quality of life and so on.
If you score well on all those things, congratulations, you're still in play.
So are lots of other places.
Now it's time to negotiate.
Sweeney posed a rhetorical question: Does the community that coughs up the most in incentives always win? No. But incentives provide part of the mix that tells the corporate decision-makers where they can get the best deal.
Someone asked Sweeney how many of his clients choose to locate somewhere without incentives.
None.
Several Guilford County commissioners oppose providing incentives, no matter what. A majority of them? Not quite.
This is something they need to think about very carefully.
Sure, Greensboro and High Point are still committed to the incentives game. But that won't help when a company is looking to build outside city limits. And even when a development is considered inside High Point or Greensboro, a little help from the county can make the difference between winning the deal and losing it.
Sure, incentives policies have to be sensible. Even Sweeney said don't offer cash up front. Deals should be performance-based: provide this many jobs, get this much of a tax break. Everyone is supposed to win.
Increasingly, not playing means not winning.
Even a timeout can cause companies to lose interest.
Comments (2)
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Once you get them here, they'll extort more millions later on by threatening to relocate. Many do just that.
As municipalities have had to increase property taxes on individuals, and school bonds get passed into the stratosphere, what's to stop all these big business thugs from continuing to shakedown state and local governments? It's a game of musical chairs to them, but they always get a seat free of charge, while the taxpayers are left paying the piper. We ahve become so desperate for makework and callcenters, trucking and packaging, we in Greensboro will become known as the Home of $10/hour.
I don't see Dell moving their design and development branches here. I don't see any major new high-tech hotbed growing here. It'll be all about putting one piece of stuff into one other box, and shipping it. But we are willing to let the CEOs and upper-level management take obscene bonuses while the business pays nada in taxes.
Posted on August 11, 2006 2:51 PM
Even a timeout can cause companies to lose interest.* Doug
Not really Doug! Timeouts is rest time to regroup against the corporate Bitiz defense. Corportations can be future draft choices or simply traded to another State leaque for real jobs and real choices for the people on your own tuft.
Posted on August 11, 2006 8:25 PM