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t't `s 4r N f-•^iV i�'K il,�lF - + '.aL .,J.Ns.•. r
<br /> figured in corporate reloca- 1989 and 1992, from 5,686jack uptheir
<br /> tion decisions. In 1988, ;� payrolls to S2.5 million
<br /> to 3,865. Although the by the third year can receive up to 5
<br /> k few incentives on
<br /> il
<br /> table, Wall Street
<br /> r i .� .' 4,161 in 1993, times are in cash over a 10-year period. But
<br /> erage I'aine�Ychber ` number rebounded to percent of their new-job payroll back
<br /> still lean. "The days of only certain kinds of companies are
<br /> Inc. moved its retail
<br /> the big relocations, welcome: back office, manufacturing,
<br /> marketing and back •,.:.r` where the take office divisions from •``_ y eve rY- and distribution businesses that con-
<br /> New York City to • ,
<br /> Weehawken, New Je rsey. * Robert P. Casey, Governor of Pennsylvania:
<br /> The costs over there were so ""In cases of a specific size, I get personally
<br /> cheap that the state almost didn't have involved. I give them my phone number."
<br /> to do anything, and the City of New
<br /> York really didn't offer us any conces- one from one place and shift them to duct at least 75 percent of their sales
<br /> sions," recalls Rodger Parker, who another, are over," says Katie Burdorf, out-of-state.
<br /> was then a senior vice president at a managing director at Morristown,
<br /> PaineWebber. Last year, BMI Systems Corp., a $14
<br /> New Jersey–based site consultant The million copier company based in
<br /> Fast forward to 1993. Parker was Wadley-Donovan Group. Oklahoma City, and Chicago-based
<br /> now a senior vice president at Also, state and local taxes consti- bookstore chain Follett Corp. (1993
<br /> Prudential Securities Inc.. which had, tote a larger share of the corporate tax revenues: S750 million) decided to set
<br /> decided to move its headquarters to bill-45 percent on average, accord- up a joint custom-publishing venture.
<br /> Jersey City. But New York City ing to a 1993 Coopers & Lybrand sur- Executives were choosing between
<br /> stepped in with an incentive program. vey of 375 companies with revenues Chicago and Oklahoma. "Our half
<br /> including state-supplied electric of S30 million and above. As a result, wanted it in Oklahoma, so we went to
<br /> power, municipal-bond funding, and businesses are more aggressive about work with the Department of
<br /> _ , _ j - ..4. Commerce to find out whatbenefits
<br /> i
<br /> `' M,,, ;', • , • K � • r,_¢� were available here," says Thomas
<br /> . . .,-,•,.,.�., . `., '"' -....,,,-*--% ' Russell, resident of BMI
<br /> P Systems.
<br /> ar Company .Project Location In entives Oklahoma agreed to help the compa
<br /> `a4 Ipsco Steel minimill Hies design a curriculum to train
<br /> Iowa $73 million potential employees and then recruit .
<br /> '4 Sunbeam-Oster _ Factory Mississippi $66 million students to take the courses at state
<br />_93 Mercedes-Benz _ Auto plant Alabama $300 million vocational and technical schools. That
<br />'J3 Intel . Factory New Mexico $114 million offer. combined with the state's
<br />'3 Dofasco/Co-Steel Steel minimill KentuckQuality John Program tax rebate,
<br /> Y $140 million
<br /> BMW Auto plant South Carolina $130 million eased the decision. "There overe just a
<br /> 1 United Airlines Maintenance facilityIndiana lot of factors that weighed in favor of
<br /> $291 million Oklahoma: Russell says.
<br /> tax incentives. That was enough to seekingabatements. "The big In some states, incentives are doled
<br /> g change out at the discretion of state economic
<br /> convince Prudential to stay put. "We is that before, you would look at the development officials. Indiana's EDGE
<br /> •
<br /> would have definitely left xvithout the general statutory provisions that were (Economic Development for a
<br /> incentives," says Parker. available," says James P. Sweeney, a Growing Economy) program, which
<br /> While state incentives to businesses partner at Arthur Andersen & Co. in kicks hack inc,,nhc tats to companies
<br /> arc nothing new. there s a consensus New York. Now. you have individual for up to 10 years, is used exclusively
<br /> among economic development companies proactively approaching as a competitive tool. "There has to
<br /> experts that their size and freghency state and local officials" to obtain be a documentable. verifiable gap in
<br /> •
<br /> have increased in the past few years. favorable tax treatment.
<br /> the cost of doing business between us
<br /> Largely. it's the result of the lagging
<br /> and a competing state." says Indiana •
<br /> national economy.' says Jay Kayne, ci�"1TLcivici�T PROGRAMS `
<br /> director of policy studies at the Some incentive rc��T • entitBusiness Development director David � c
<br /> National Governors' Association.-'With ments. for which all•tfi m are
<br /> meeting it will
<br /> "We use it when ce think that
<br /> it will make the difference in a loca- (
<br /> fewer jobs being created. theri has certain requirements are automatically don decision."
<br /> been more competition." According to eligible. Under the Oklahoma Quality The program made a difference in i
<br /> Site Selections magazine. the number of Jobs Program, which started in luring Tyson Foods Inc.. the
<br /> new industrial facilities and expan- September 1993, new businesses that Springdale. Arkansas-based food pro-
<br /> sions plunged 47 percent between pay employees' health insurance and 1 censor• to the Hoosier State. In April,
<br /> • I
<br /> 11,
<br /> state and iota: taxes mai.-zinc u a iarer portion o' the corporate
<br /> - ax bill, companies have become more aggressive in seeking abatements. t
<br /> I
<br /> iG �—
<br /> JULY 1994•CFO t
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