I don't mean to specifically target this at Dennis' remarks so much as the idea shared by a number of people who believe that having the Allina HQ is going to be a big economic benefit to the neighborhood.
For example, one person mentioned the office supplies contract. Here's a perfect example of how fallacious this notion is: Allina like any other large corporation already has a contract for office supplies, company wide. It matters not one iota where any particular Allina office is located -- they all get ordered from the same company and delivered. Allina is not going to change their suppliers just because they moved.
Dennis Plante responds:
As a former CPM, I can attest to what Chris' is saying - to a point. Yes, all large corporations have purchasing contracts for things such as office supplies. Typically however, puchasing contracts only cover the majority of expenditures for items such as this. It is virtually impossible for a purchasing manager to forecast ALL of the requirements for an item. Subsequently, most corporations have a petty cash system that allow employees (with departmental authorization) to purchase needed supplies that aren't "in-stock". Will this allow ample opportunity for an office supply store near the Sears Building? Who knows. One thing's for certain, many of the employees (from Allina) will be running to the nearest office supply store for much needed items. These stores all pay taxes.
Chris Johnson writes:
Banking? Gasoline? Sure, the employees will buy where convenient -- like the corner gas station in their suburban neighborhoods, especially since gasoline prices tend to be higher in Minneapolis, and especially in places where there are few competitors, such as around the Abbott NW campus. (E.g. the lone over-priced Amoco station on Chicago.)
One of the reasons Allina and Wells Fargo wanted the 35W Excess Project is so that they could "beam" their employees right into their parking lots without them having to pass through "those" neighborhoods. How likely is it that Jane Suburbanite, who is afraid to drive down 2nd Avenue from the current exit ramp, is going to choose to bank or buy gasoline next to Sears, versus near her home in New Suburban Prairie Grove?
Dennis Plante responds:
Much more likely than if she didn't work in the neighborhood in the first-place. The whole point is that the area NEEDS more competition for things like options as to where one buys gasoline. The increased competition will only come with increased demand. Will a siginificant number of Allina employees buy their gasoline by the Sears building? Probably not. But it'll probably be enough of them will to warrant another gas station or two - hence more comeptition. These gas stations all pay taxes
Chris Johnson writes:
So in reality, the incremental increase in gasoline purchases will be tiny. Likewise the banking, and I'm not sure how banking introduces any new revenue or jobs into the local neighborhood. It's not like you spend much money at the bank.
Dennis Plante responds:
Banking introduces into it quite reasonably. How many Allina employees would work at the Sears Building? Don't you tink the 3-4 largest banks (in the area) are going to make sure they have a branch near by? Don't people work at these banks? They all pay taxes.
Chris Johnson writes:
Lunch? Now there's a real possibility. People do need to eat, and some adventurous souls will no doubt go out into the neighborhood and buy lunch -- maybe at Sunny's Restaurant and Liquors or Chi Lake Cafe.
Dennis Plante responds:
Or just maybe, other non-existent restaraunts will open close by. They all employ people and pay taxes.
Chris Johnson writes:
Many will use local care providers? A few might change from their current providers, but since they are Allina employees, I'd have to guess they'd use the Allina Clinics across the street, don't ya' think?
Dennis Plante responds:
This is still an incremental increase in the business these clinics are currently providing.
Chris Johnson writes:
A few might decide to move to shorten their commutes. Maybe some of them might even move into the city of Minneapolis. And a few of those might even move to a neighborhood near the Sears building -- or not. A fraction of a fraction of a fraction sounds like very few at all.
Dennis Plante responds:
One thing to bear in mind. Allina doesn't only employ middle to upper-class people from the suburbs. They have MANY entry level positions where the employees have to consider the cost/time associated with commuting to their job. In turn, this will enhance the property values of the surrounding rental properties. They all pay taxes.
Chris Johnson writes:
And when will all this economic gain take place? After the building is rehabbed, after Allina has consolidated all of its employees scattered in other offices and after the dust settles, in a few years.
Meanwhile we are dropping $750,000 in taxes and millions of dollars in 35W Excess development. Seems like it might be cheaper to just give money directly to those businesses and residents in the area that might marginally benefit directly from the presence of Allina employees.
Dennis Plante responds:
I think Minneapolis will benefit in more than a marginal manner from the Allina move. And you're right Chris, a balance sheet needs to be generated. But, on that balance sheet needs to be portrayed the subjective benefits to Minneapolis as a WHOLE.
Dennis Plante Jordan
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