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A summary of the reasons that I think Tacoma’s offer to Russell is bad for the city:

• It’s too expensive - Keeping one company in town for $140 million ($65 million of which has to come from a city struggling to rebuild its downtown) is just too much to pay.
• There was no apparent consideration of alternatives - That money could be used to attract a number of smaller businesses to downtown Tacoma.
• It was poorly negotiated - Public showmanship is not how you negotiate this type of deal when your competitors are keeping quiet.
• It appears to be politically motivated - None of the current city council members want to be the next Gary Locke.
• Building a financial district around Russell has already failed - There’s nothing to indicate that this deal can change it. Tacoma’s problems are systemic and need a systemic solution, not a flowery trim and better drainage in this imaginary ‘International Financial Services Area’ (IFSA).
• The decision was made while consultants were still gathering data that would be used to help determine if it was the best course of action (that is, assuming there was ever any question in their minds when they hired the consultants).
• The deal came from a policy that wasn’t discussed openly by the city council, nor was there a public vote of a quorum of council members. According to this thread at a TNT blog, there was only a ‘tacit approval’ by city council members, whatever that means in this situation.
• The deal depends on some money that is set aside for an Empowerment Zone, but will be used in an area that is being set aside for wealthy financial services companies (the IFSA).
• The financial district pipe-dream is probably responsible for the rejection (or hindering) of numerous viable companies that might have moved in downtown. I think it’s time for its proponents wake up from that dream and smell the coffee roasting (if they allow roasting in Tacoma).
• There’s no guarantee that all Russell employees will choose to relocate to be nearer to a Seattle or Federal Way Russell headquarters. Employees who choose to stay and commute to the new HQ would keep their personal portion of their ‘economic impact’ where it currently is, in Tacoma and environs.
• The B&O portion of Russell’s economic impact, as I understand it, is under $10 million, yet the city will spend many times that to keep them here.
• The deal includes a targeted tax cut for Russell for the city’s B&O which is being justified by saying, ‘if they leave we’ll lose it anyway’. But that doesn’t change the fact that it’s nothing more than corporate welfare. The city should consider a broader cut or even a repeal of that tax to help bolster smaller businesses, including those who relocate downtown.
• Russell’s desire to relocate isn’t a big surprise. They’ve considered it at least once before (in the 90’s) and they have already revised their leases to expire in the same year. Even this huge deal might be too little, too late.
• Most anyone who is honest about it will admit that Russell and Tacoma are not exactly a good match (for Russell). There are many other companies that are a good fit with Tacoma that could use a boost from the sources cobbled together into this Russell deal.
• I think that it’s time for Tacoma to rethink its goals for downtown. I believe that the current plan has become more of a problem than it’s worth. Maybe some of the people who won’t let go of it need to step aside, or be voted aside, so that something new and viable can come together in our city.

My personal opinion is that this offer should be withdrawn and revised to exclude the IFSA and the goal of building a financial district downtown. It should be done in such a way that it doesn’t damage the Haub or Ilahie proposals.

Keeping Russell here is a good idea as long as the price isn’t too high and the offer to keep them here is above-board in all aspects, including the motivation behind it.  This offer doesn’t even pass the smell test.

Feel free to check back.  I might think of some more reasons.

This entry was posted on Wednesday, April 9th, 2008 at 2:59 am and is filed under BlogNetNews.com, Business, FeedTacoma.com, Tacoma Contradictions, Tacoma Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.