So what is the solution? Is there a way to make this sustainable?
On 2015-12-01 13:11, David Schwartz wrote:
Have you called the organization and looked into their charter?
The general idea is to invest a little up-front in tax abatements of
various sorts to encourage companies to set up shop here. The theory
is they’ll create a lot of good jobs and their employees will boost
the overall tax base of the community, while the local economy will
expand.
It’s great in theory, but these folks often don’t think things through
very well.
About 30 years ago, the good folks with our State / Country / City
decided they wanted to steal business from Wyoming or Montana or
wherever and become the credit card processing capital of the nation.
So they passed laws and provided tax incentives to draw these
businesses — and jobs — to the Phoenix area.
After a few years they realized the error of their ways because it
created a flood of minimum-wage jobs with high turnover rates. From
what I’ve read, these companies have enjoyed lower taxes and higher
profits, most of which went to headquarters located in other states
(mostly Delaware), while the jobs they created did nothing to boost
the ecoomy.
Bringing in high-tech companies is a much smarter plan. The jobs tend
to pay much higher than minimum-wage, although what I’m seeing is a
lot of those software jobs are paying awfully low relative to other
cities. I guess their argument is the cost of living is lower;
relative to SF and Silicon Valley, yes. But not in comparison to other
cities with large tech hubs (eg., Atlanta, D/FW, Houston, Austin,
Denver, Portland, etc.)
Then there’s the obvious fact that AZ ranks 48th out of 51 in terms of
school quality and funding, so who in their right mind would want to
move here with school-age kids to take a job that pays a below-average
salary in a state that protects businesses over consumers? (We’re a
lot like Texas in that respect, these days.)
For as long as I’ve lived here (I’m a native and lived here most of my
life), I’ve never seen much in the way of “smart policy” when it comes
to business development here. It’s run by an Old-Boy’s Network, and
the same Old-Boys get the benefits most of the time.
Exceptions are mde now and then for encouraging corporations, but they
can be fickle. Intel bought a huge chunk of land along I-17 and
Beardsley way back in the 80’s, looking to build a huge campus. Then
the City planners decided to run a freeway through the middle of it to
appease some local (long-term) land-owners.
One thing has become painfully clear to me over the years: Govt
planners like to bend over backwards to attract NEW business, but once
you’re here, they don’t really give a rip. They spend money to woo new
companies into an area where existing companies are going bankrupt,
then just move on to lure the next one.
That area of Chandler is mostly NEW development.
Take a look at MetroCenter, Fiesta Mall, and some other areas where
business has died for lack of investment and support by the community.
I remember when these places were built! They were buzzing with all
kinds of efforts by local politicians to attract new businesses. Now
you’ve got the same handful of bottom-feeders who move in to these
areas, like burrito vendors, payday loan places, thrift shops (that
are tax-exempt), and other scrappy service providers. Fiesta Mall is
turning into a huge office complex while buildings around it are being
razed. There’s a new apartment complex going in South of Southern
around Extension (E of Alma School) but …. where are the jobs and
other services?
That’s what the Chandler Price Road Corridor will look like in 20
years!
That’s just how things roll here.
I was going to add that the only small-biz incentives I’ve heard of
are focused on two groups: vets and the “disabled”. I put the latter
in quotes because it refers to individuals who are served by
non-profit entities that pay them a pittance to keep busy and
supposedly learn some skills while employing lots of other
“volunteers”, and ultimately sending the vast majority of their
proceeds to a handful of executives.
There’s always money somewhere to do something to benefit vets,
although most of it never ends up doing much good for anybody but the
business founders. (Ask Univ. of Phoenix about that!)
I tried for years back in the 90’s to get any kind of funding I could
find. Nobody was interested. I founded what might have been one of the
first co-working tech spaces in the valley; at our peak, we had 6
businesses or so and about 15 employees there. Nobody would give me
the time of day. (The building we were in at 16th St and Coulter was
torn down last year. It’s still an empty lot. Some developer will
probably buy it and put up more high-end luxury apartments or condos,
which seems to be the rage in town right now.)
-David Schwartz
On Dec 1, 2015, at 11:38 AM, Keith Smith <[email protected]>
wrote:
Hi,
I'm doing research on government subsidising tech companies to entice
them to move into a community. In this case I'm wondering about the
Chandler Price Road Corridor. I know someone on the list must work in
that area.
I discovered the Chandler Price Road Corridor existed a couple months
ago. Normally I would not be a fan of government spending millions a
year for multiple years to build a business environment. In this case
I am intrigued and am wondering if this is a case where local
government can create a sustainable high tech business environment.
I am wondering what ingredients will cause this environment to survive
after the initial contract period.
Some of my thoughts are housing, shopping, entertainment, and a
workforce that can be brought together to do things like build chips
at Intel.
Does ASU aid this? What about skills learned at the Maricopa
Community College network of colleges?
At present the City of Chandler is only working with large companies
like eBay, Wells Fargo... etc. The City Council is looking at this
and may modify this requirement so smaller companies can build and
occupy within this corridor.
One thing I have not read about is venture capital. Given the cost of
doing business in Silicon Valley, I would think a tech rich
environment might pull some from Silicon Valley.
What about Chandler Gang Plank? Could this come into play?
Please help me discover what I should be looking at and how to look at
it.
Your thoughts are much appreciated.
Keith
--
Keith Smith
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