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A TNT article reveals details about the meeting between the ‘Tacoma Partnership’ and Russell consultants regarding their potential move in five years. The title of the article is telling,”Will Russell catch Tacoma’s Hail Mary pass?”

The first thing I noticed in the article is that the writer, Dan Voelpel, is probably shilling for the local politicians, comparing them to the heroes of an old western movie:

This Magnificent Seven, led by U.S. Rep. Norm Dicks, D-Belfair, represented a new affiliation that calls itself the Tacoma Partnership. They arrived early on this crisp morning for a 9 a.m. meeting.

The Magnificent Seven of the 1960 motion picture of the same name came together as underdog gunslingers aiming to save a poor Mexican farming village from 100 banditos who wanted to steal its food stocks.

Aside for the blatent butt-kissing by the writer, I think he tried to reverse the roles. He’s putting Russell and their consultants in the role of the banditos and making these politicians the heroes. But Russell isn’t robbing anyone. They have a business decision to make.

In my view, it’s the politicians who are stealing from the poor farming village by using our tax dollars, to the tune of $140 million or more (not all coming from local taxes), to fulfill their pie-in-the-sky pipe-dream of an ‘International Financial Services Area’ (IFSA) in downtown Tacoma.

Now the part that gave me a chuckle:
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And there’s the pitch…

Project Destiny, now known as the Tacoma Partnership, unveiled their sales pitch to Russell Investments Group to keep them in Tacoma. How much will it cost taxpayers? $140 million. That’s right. $140,000,000. Just to keep one company from moving down the road a pace or two, probably close enough that most of their employees might commute instead of move.

Those making the pitch included Congressman Norm Dicks, City Manager Eric Anderson and Bruce Kendall, CEO of the Economic Development Board of Tacoma. And I’m sure they had the blessing of the City Council as well.

Did it work? They don’t know. And they don’t know when they’ll know.

But let’s be honest. That money isn’t about influencing one company. It’s about keeping a political pipe-dream alive. A pipe-dream that has has been failing since it was first dreamed up. A pipe-dream that has shaped downtown Tacoma into what it is today: an Economic Empowerment Zone.
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I’m never satisfied with summaries like Forbes Best Places For Business And Careers. I wanted to see how Tacoma really stacked up against others and I also wanted to see if Tacoma had really improved, and in what areas.

Here’s a summary that I put together (Forbes Tacoma Ranking - 1999 to 2008 - PDF) to track Tacoma’s ranking from 1999 to 2008.

Some things gleaned from the summary. Note that these are rankings against other cities so they are not an objective measure of improvement or decline locally.
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Brace yourself, I’m about to oppose a tax cut. It’s a targeted tax cut that I think targets the wrong recipients. Don’t get me wrong, I want Russell to stay in Tacoma. I just don’t want to spend too much money to keep them here.

If you’ve been paying attention to the news the state legislature passed a bill to give a sales tax break to building projects of a large enough size for businesses with enough ‘qualified’ employees built in ‘empowerment zones’. As usual the bill is worded in such a way that it leaves out the name of the intended recipient (Russell Investment Group) and instead makes it sound very general, which is a load of garbage.

This really amounts to the State jumping in and helping the failed ‘urban renewal’ that politicians, bureaucrats and good old boys have been pushing for decades. They spent a bunch of money to keep Russell here in the 90’s and they’re doing it again now. Their hope is that Russell will attract other financial industry companies to the Tacoma area.
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While the growth of The TacomaAngel Network (TAN) is important, what I really want to point to is their efforts to make Tacoma a better environment in which to do business. Tacoma is a tough place to do business for many reasons, most of which I won’t go into in this post.

Tacoma has tried unsuccessfully for years to attract businesses from outside the area. So far the local successes have been local startups. Honestly, I don’t really see that changing very much in the near future. Unfortunately, Tacoma is so tough to do business in, once a business is capable of moving to another city, they often do.

Tacoma’s best bet is to work with people and businesses that started here. TAN is a good example of how that can be done. While venture capital will likely grow businesses to prominence more quickly, there’s generally not a lot of venture capital available in the early stages. Angel investing, while it is a form of venture capital, is much more hands-on and provides a lot more in the way of guidance and advice, along with the usual oversight that any venture capitalist will require.
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Gregoire contributes lottery proceeds to ‘Save the Russell’ fund

Pardon my cynicism, but it’s an election year.

Don’t get me wrong, I really want Russell to stay in Tacoma provided it’s good for them and good for us. They’ll take care of themselves. We, on the other hand, have to watch what’s going on so that we don’t get sold down the river by a bunch of bureaucrats and politicians.

If we have to sweeten the deal to keep them here then we should, as long as it’s still to our benefit to have them here when the cost of keeping them here is factored in. I’ll be really ticked off if we spend millions to keep them here then all we hear about from then on is how much benefit they give the city annually. I want to know that the cost of keeping them here is weighed against the financial benefit we get from their presence in downtown Tacoma.
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Wednesday’s Business Examiner Daily had an entry saying that 2007 was a banner year for tourism in Washington. New numbers were out from the Washington Tourism Office and the Department of Community, Trade and Economic Development (Washington State Travel Impacts & Visitor Volume 1991 – 2007p - PDF).

I’ve been interested to see how the city’s efforts to increase tourism have worked out, so I called around to find the report and downloaded it. The numbers looked pretty good but I didn’t see the comparisons that I was wondering about. So I copied the data to a spreadsheet and set it up to calculate the data that would tell me what I wanted to know, or at least give me a close approximation. Since I was most interested in Tacoma I looked for that. Nothing there so I went with the counties data, focusing on Pierce (of course).
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Tacoma City Council Prepares to Spend Big

The city council will be voting on a resolution tomorrow (Summary of Items for the Agenda for February 26, 2008 - PDF) that would designate an area in downtown Tacoma as an ‘International Financial Services Area’. I have no idea what that is, but the Business Examiner Daily describes its effect this way:

The designation would allow the city access to a deeper pool of resources and incentives to keep the company in town since it is not only one of the largest employers in the city, but provides a base of higher-wage jobs and serves as a base of the city’s downtown revitalization efforts.

Translation: the city is preparing to spend big money to keep Russell in Tacoma.
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As I listen to the rhetoric, marketing pitches and advertising programs that try to attract businesses to Tacoma, I realize that there’s more to making that happen than just saying that we want to (and paying marketing firms for their advice).

On the surface Tacoma seems welcoming with boards of this and committees of that all trying to convince business people that this is the place to be. But in the end their efforts are undone by others who, knowingly or not, are working against them, and in some cases the committees and boards are actually working against themselves.

A recent example of this that I mentioned in another post was a spokesperson for one of those board/committees who talked rather emotionally about the type of businesses that ‘we’ want here. I don’t know who that ‘we’ is, but she definitely wasn’t speaking for me.
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The legislature wants to raise license tabs up to $240 per year, this time based on fuel economy instead of the value of the vehicle.

Let’s start by getting to the real reason for this legislation:

The proceeds of this tax must be used for the design, construction, and operations of transportation facilities and services that provide alternatives to the use of single-occupant vehicles and for programs that encourage the use of these facilities and services. The allowable uses of these revenues include but are not limited to transit, high-capacity transportation, bicycle and pedestrian facilities, and transportation demand management programs.

That’s right. A back-door funding mechanism for light rail and all of the other pet projects. This bill is basically a repeal of I-695. The total cost to consumers is a mere $6 billion dollars over the next 10 years.

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