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<br /> Tyson announced it would spend $44 Hattiesburg, Mississippi:
<br /> governors also go the
<br /> million to build a 425-employee plant When Sunbeam-Oster, based in Fort extra amile onyer attract companies--liter-
<br /> to make its Mexican Original product Lauderdale, Florida, was casting about ally. Texas governor Ann Richards
<br /> line in Portland, Indiana. (Kentucky for a place to locate its new factory, it flew to Intel's Santa Clara, California,
<br /> was the runner-up.) State incentives solicited proposals from several states, headquarters to pitch her III
<br /> included EDGE tax credits valued at and then culled the hundreds of possi- site for Intel's new computer chip fac-
<br /> S3.1 million and training grants worth bilities to about a dozen. Consideration tory. Indiana's Evan Bayh called
<br /> 5420.000. Localities got into the act, of incentives didn't enter the picture MascoTech Sintered Components
<br /> too. Jay County proferred a $5.5 mil- until the final stage, when
<br /> from
<br /> lion county tax abatement and funded negotiations were conduct- presidenthWhiteeph se to help
<br /> a S21.000 topological study. The city ed primarily by the corn- the the au to ts
<br /> of Portland kicked in 535.000 for pang's site consultants. coax auto-parts
<br /> • water and sewer work and S10.000 for Other finalists included .r .. ( maker to Indiana.
<br /> a new rail spur. San Antonio, three sites
<br /> These last inducements, of course, in Tennessee, and two "`' TAILORED
<br /> are chicken feed for a company like in Kentucky. : • r`s' LEGISLATION
<br /> -
<br /> Sometimes, the entire
<br /> mechanism of govern-
<br /> James Clegg, Sunbeam-Oster Co.: men[ is mobilized on
<br /> "The company has the upper hand. The states 1behalf of a single company.
<br /> realize there are many places we can locate." In March, Ipsco Inc., the
<br /> Regina, Saskatchewan-based steelmak-
<br /> er, committed to build a S360 million
<br /> Tyson, which had revenues of 54.7 bil-
<br /> Under Mississippi's Rural Economic minimill in Muscatine County, Iowa.
<br /> lion in 1993. But every little bit counts. Development Act, Sunbeam-Oster was after the state legislature passed a law y
<br /> entitled to S40 million in investment tailored to Ipsco's needs. The law
<br /> TO THE HIGHEST BIDDER tax credits. But the discretionary
<br /> any
<br /> The proliferation of such incentives incentives proved crucial, particularly p nvthad t1pledged breaksajor tax w th nt30 days,o t to
<br /> has altered the dynamics between 1 an S8.3 million grant to reimburse the provide a capital investment of over
<br /> business and government. Companies 1 company for any training courses. $250 million and more than 300 jobs
<br /> can place all kinds of demands on Local businesses chipped in, too. that pay $15 an hour. The law also
<br /> 1111
<br /> gates. cities, and local businesses. Mississippi Power agreed to build a $2 waived a restriction on foreign owner-
<br /> Intel sent out a 100-page request for million substation for the plant, and ship of farmland. (Ipsco needed to
<br /> proposals regarding its new plant. ask- South Central Bell kicked in S200.000 buy about 2,000 acres for the site.)
<br /> ing states and communities for specific worth of phone lines. The University Ipsco ultimately received a package
<br /> details on. for example, the number of of Southern Mississippi even conduct- worth S73 million over 20 years,
<br /> locals available for every different job ed $25,000 worth of consulting free. including S3 million in forgivable
<br /> description. States comply because Over the past several years. states loans or grants. an exemption from
<br /> companies have a commodity they have been rethinking the way they property tax on machinery worth 536
<br /> desperately need—jobs. After Tyson attract business. Oklahoma commerce million, an 58.5 million state tax credit
<br /> Foods announced it would build four secretary Greg Main likens himself to for investments in machinery, and a
<br /> new poultry complexes in the a car dealer and companies to buy- S1.2 million saies tax exemption on
<br /> United States. "about 25 states ers. "You never in
<br /> �o without building materials.
<br /> and 100 communities. from ^.. bickering and asking for all Not all Iowans—were—thrilled—Peter
<br /> :-
<br /> \en,• York to .1rizFrc3a. ,.a,-
<br /> contacted us and the discounts." he says. 1 Anderson. vice president and general
<br /> Many states now have manager of competitor North Star Steel.
<br /> offered either formal _ marketing st
<br /> proposals or letters of x managers. based in nearby Wilton. says Ipsco's
<br /> lTjr "We're a sales organize- incentives put his company "ata signif-
<br /> y.' says Archie tit tion," says Indiana's icant competitive disadvantage." But
<br /> Schaffer
<br /> III. Tyson's .3'
<br /> David.Perlin(. "We mar- Iowa Department of Economic
<br /> director of media affairs.
<br /> And those are just the . '.
<br /> opening bids. Companies ,ler' Greg Main, Oklahoma Commerce Secretary:
<br /> Companies "never go in �^.eith;ut bickering
<br /> have ample leverage to haggle
<br /> with states over discretionary incen- and asking for all the discounts."
<br /> rives. "During these negotiations,
<br /> clearly the company has the upper ker. we advertise, we offer rebates, we Development division administrator,
<br /> hand. The stales realize there are dropthe
<br /> price." And the bigger you business development. Bob Henning-
<br /> many places we can locate." says are, the bigger the discount you get. sen is willing to face the heat. "When
<br /> James Clegg, president of Sunbeam- "In cases where it is of a specific size. I you're looking at the investment of
<br /> Oster Co.'s household products clivi- I get personally involved," Pennsyl- 5250 million vga 111
<br /> rare
<br /> sion, which recently received a hefty vania governor Casey says. "I give opportunity in termsoolf economic
<br /> incentive package to :)uild a plant in j them my phone number." development possibilities." he says.
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