government subsidising tech companies

[Steve Litt]

I agree with pretty much everything David Schwarz said, and will
comment further in a later email.

SteveT

Steve Litt 
November 2015 featured book: Troubleshooting Techniques
     of the Successful Technologist
http://www.troubleshooters.com/techniques


On Tue, 1 Dec 2015 13:11:29 -0700
David Schwartz <newsletters at thetoolwiz.com> 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
> > <techlists at phpcoderusa.com> 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
> > ---------------------------------------------------
> > PLUG-discuss mailing list - PLUG-discuss at lists.phxlinux.org
> > To subscribe, unsubscribe, or to change your mail settings:
> > http://lists.phxlinux.org/mailman/listinfo/plug-discuss  
> 
> ---------------------------------------------------
> PLUG-discuss mailing list - PLUG-discuss at lists.phxlinux.org
> To subscribe, unsubscribe, or to change your mail settings:
> http://lists.phxlinux.org/mailman/listinfo/plug-discuss