AZ Job cuts demonstrate the weakness of conventional “economic development”
It sucks that AZ is leaving. And it is probably too tender right now for “lessons learned,” but here it goes… You can look like a hero for a few years by throwing a bunch of money at a large corporation to get them to locate in Delaware, as Tom Carper did with AstraZeneca. Or you can be more like Portland and Seattle and do the harder work of trying to invest in building infrastructure for new ventures and make the public investments in of quality of life factors that entrepreneurs look for when building companies.
Both methods cost money, but I think the Seattle model beats the shit out of the Tom Carper model.
And you’d be correct. Both my kids have said that they will factor in what states offer, and deny, when it comes to their careers. Both want to work in a state that provides a great city, culture, public transportation, great schools, gay rights, is pro-choice, etc.
Kids today aren’t their parents or grandparents. They are willing to be more transient, and while they’ll value a good job they don’t want to live in a Mississippi or Kansas or Arizona.
Delaware could offer so much more, if it wanted to.
Years ago, we didn’t consider job offers in Louisiana and Texas due to the fact that we didn’t want to raise our kids in those places – even though the money combined with the lower cost of living would have meant we would have lived like royalty. Yeah, that was tempting, but the school system, mindset and lack of culture and infrastructure made us say no thanks.
According to this map, Oregon and Washington (which I understand are not synonomous with Portland and Seattle) actually throw more state and local money at corporations on a per capita basis than Delaware does :
http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html?_r=0
Although, it’s an open question as to how reliable these numbers because the NYT compiled them from state and local records across the country and a lot may have been missed.
The underlying articles, which are linked above the map, are a must-read, esp. part I. It will all be familiar to anyone who follows economic development. I’d love to see a national law or const. amendment that banned differential tax treatment at the state and local level. Seems like the only way to put a stop to this stuff.
Although big business says they want to get government out of the way, they always want hand outs. Money would be better spent helping small local businesses. We ought dope slap anyone who says they built their business without any government help.
What is a dope slap?
I don’t want to miss on opportunity to recognize smart, common sense comments. Yes, it’s about investing in infrastructure and supporting organic business growth. Do Markell/Levin just not understand? Or is there a hidden agenda that benefits politicans at our expense?
Corporate Welfare rarely works and then only in the short term. As I understand it AZ is not leaving per se but is cutting around 1,200 jobs in Delaware. It will never happen but either corporate welfare needs to be banned or the voters punish the pro welfare politicians.
There’s a longstanding complaint that Washington (and the Feds) provide Microsoft with too many tax breaks. But one of the things that I think is true about highly desirable places to live is that those places keep investing in themselves to make sure that they stay highly desirable. It is easier to attract highly paid knowledge workers and the creative class when you’ve got he kind of amenities they look for AND when you can provide lots of good schools for their kids to be educated in. Delaware seems to want to attract retirees, which seems short-sighted.
So AstraZeneca took its 86 acres of public land, tens of millions in tax breaks, cash and whatever else it wanted, and Delaware got the promise of 4,000 jobs and $70 million in road improvements to Concord Pike, paid for by the taxpayers, of course. Barely a dozen years later, most of those jobs are gone, the public land is built on and likely up for sale (with AZ collecting the profit), and we didn’t even get a crappy T-shirt.
or a golf course….
Not even a hive of charter schools run by our wealthiest families?
It was classy of them to wait until the improvements to Concord Pike were finished.
The kicker is that when Carper made that deal he thought the AZ people living in PA, about 45 minutes away, would relocate to Delaware and become part of our tax base, that didn’t happen, either, most of them opted to commute.
I spoke with a friend at AZ and she said that the 1,200 is mostly from the R&D division, exactly what you want to do when you’re a pharmaceutical company in trouble, stop researching new drugs.
Wasn’t somebody from Alan Levin’s office just complaining businesses weren’t coming here because there wasn’t enough lab space in Delaware? Problem solved.
Dare we ask, what does AZ’s removal of its R&D activities from Delaware tell us about the state’s efforts to make itself a biotech research hub?
Will be interesting to see how Markell and Levin spin this one.
Dare we ask, what does AZ’s removal of its R&D activities from Delaware tell us about the state’s efforts to make itself a biotech research hub?
If that wacko Ellen Barrosse and her “Rose and a Prayer” group can stop Delaware from doing embryonic stem cell research, it’s not going to become a biotech research hub, ever.
http://www.christiannewswire.com/news/155563545.html
In an 11th-hour vote Saturday night, Delaware’s General Assembly overwhelmingly defeated Senate Bill 5, which would have authorized the use of human embryos in medical experimentation. Despite intense lobbying by aides to Congressman Mike Castle, whose stem cell bill in the US Congress is similar to SB 5, the bill was defeated by a margin of 4 to 1.
@puck AZ announced a year ago that they weren’t going to be using two of their labs at the 202 site and they’d be torn down. This caused shock in the biotech community – these were new and very expensive buildings. But attempts to get AZ to ‘share’ etc. were futile. They didn’t want anyone else in those buildings on their campus.
One of the weirder things that happened at AZ this past year was the news that the AG had finally moved on circulating rumors that someone high up in their company was committing fraud and theft with a local company – DiSabatino – that had a lock on their construction projects regionally. That must have dampened their enthusiasm for working with people in NCC.
http://news.delaware.gov/2013/02/26/biden%E2%80%99s-office-arrests-project-engineer-foreman-in-scheme-to-defraud-astrazeneca/
The Attorney General’s Office opened its investigation after receiving a report last year from AstraZeneca of questionable financial transactions. During the time period during which the fraud was committed, DiSabatino Construction company and AstraZeneca had entered into a Master Services Agreement under which DiSabatino was the sole source contractor for construction activities at the AstraZeneca Fairfax campus. Under this arrangement, Guard initiated construction projects on-site through Ragolia, who assigned the work to DeSabatino employees and sub-contractors.
AstraZeneca target of fraud as 2 charged in billing scheme Feb 26, 2013 – Attorney General Beau Biden on Tuesday announced the arrest of Mitchell E. Guard, 45, and David Ragolia, 55. Guard was an AstraZeneca …
@Cassandra I may be wrong but my take on why we set out to attract retirees is because that is the kind of housing that developers could still get plans recorded for without having to submit traffic impact studies.
The idea being ‘sold’ in the mid 2000’s in NCC was that an age restricted community which houses at least 80% of people 55 and over and allegedly therefore ‘out of the workforce’ wouldn’t be driving in and out of the neighborhood at peak hours. DelDOT and the county land use dept. exempts those development plans from the burden of traffic impact mitigation. There was extra density built into these plans as well, making them more lucrative for the land owners.
The smaller footprint of that kind of development is also the ‘new’ popular kind of housing people were buying. At that point, the market was beginning to crash and sprawling mcmansion cookie-cutter etc. housing wasn’t selling and was much more expensive to provide with supporting infrastructure (note the APPO school district’s struggles).
The formula for building for retirees sold big under the perception of reduced infrastructure demands but also because we happily placed ads in NJ NY to come to DE for the lower than dirt property taxes.
The great divide needs to be fixed between what state taxpayers supply in terms of bonded debt for infrastructure that supports new residential development – especially on rural agricultural lands in the three counties – and what the counties are allowed to do unfettered as far as this costly development planning.
BTW – Markell is speaking to the key state pro-development lobby group – Committee of 100 – Tuesday night. Pam Scott serves on their executive committee still as Secretary, a position she took after a decade chairing their land use committee. I doubt they are letting the press in the door.
To bring it back to Jason’s post content…..we have allowed the development community and large tract land owners run the show rather than have supported sound politics that led the way on sensible planning.
Now we have a state congested with high density rural sprawl – no transit support – a fake Neighborhood School Plan system and increasing traffic jams and lowered quality of life. But we have tax free shopping.
Looking forward to the Astra Zeneca chapter in the Ed Friel ‘history’ of the Carper Years.
Something tells me that any relationship to fact will be purely coincidental.
Next time the self-appointed grown-ups tell you that they know best, laugh at them. They don’t.
This type of disaster is the result. TC, ya done got took. As did we all.
I’ll tell you what. If I’m Beau Biden, I am in contact with corporate litigation experts throughout the country today looking for every possible way that we can recoup any of the taxpayers’ dollars that were flushed down the toilet by Carper and Astra Zeneca.
No, you’re not, because if you’re Beau Biden you know that AZ has fulfilled all the requirements on its end of the deal with Carper. At least that’s what I was told by a former administration official.
I agree with Geezer here — if there were not specific clawback provisions in the deal with AZ, the DE taxpayer got the short end again.