government subsidising tech companies

Tue Dec 1 13:29:19 MST 2015

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 <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
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-- 
Keith Smith