Wednesday, February 15, 2012

Attracting Kohl’s

It is just stunning how much of the taxpayers’ money that city officials were willing to spend to lure Kohl’s.

City, county and business officials cooperated on a strong effort, including over $100 million in public financing assistance, to try to draw Kohl’s Corp.‘s headquarters to downtown Milwaukee’s Park East strip, Mayor Tom Barrett said Wednesday morning.

[...]

The Menomonee Falls Village Board in August approved plans to spend up to $41 million in village funds to help finance new development, including a possible Kohl’s headquarters, at Woodland Prime Business Park. It is located north of Good Hope Road between Appleton Ave. and Highway 45, about five miles northeast of the current Kohl’s complex.

Let’s be clear… this is outright corporate welfare for a private, profitable business. We can all sit around and bemoan that this is how the game is played nowadays, but it is. And frankly, $41 million from Menomonee Falls to keep a company like Kohl’s headquartered there is probably a bargain. And $100 million from Milwaukee taxpayers for Kohl’s to build a massive new office and move thousands of higher-income earners into downtown was probably a bargain too. The economic impact of a corporate headquarters like that is huge and Wisconsin needs more of them. I can’t blame city leaders for throwing in everything and the kitchen sink to attract Kohl’s.

It is illustrative, however, to look at the likely decision factors, because there are a lot of pieces to the puzzle. The tax and regulatory climate of the two cities was a factor. The incentives were a factor. The location of the majority of Kohl’s existing corporate personnel was a factor. I’m sure there were other factors, like could Kohl’s even sell its current massive headquarters to anyone if they completely abandoned it?

The key is that these decisions are extremely complex and government officials can only do so much to influence them. For example, I’m sure Mayor Barrett was willing to be very accomodating when it came to things like permits and building contract clauses, but the Milwaukee Common Council has a horrible reputation in these things. Kohl’s is making a 20-30 year decision and can’t rely on the good graces of a single politician. And there’s nothing either city could do about Wisconsin’s overall business climate, but I’m sure the location of the current workforce and the risk and expense of moving out of state were all weighed. But politicians can, and should, do what is tithin their power to help businesses grow and thrive - read: make a crapload of money - because the money flowing into Kohl’s from all over the country flows right into Menomonee Falls and surrounding communities.

(5) Comments
Posted by Owen at 1244 hrs
Economy + Politics + Politics - Wisconsin

  1. Just goes to show the power held by good employers today, although I am concerned with the long-term implications of the ability to hold state & local gov’t to ransom.  Of course, if we had an economic system that encouraged new business startups and job creation through non-Gov’t funding we’d not be here, but I digress.

    Posted by .(JavaScript must be enabled to view this email address) on February 15, 2012 at 1549 hrs


  2. Menomonee Falls should give Kohl’s a scratch off coupon. They can get 15%, 20%, or 30% off their taxes and $10 tax cash for every $50 they spend.

    Posted by .(JavaScript must be enabled to view this email address) on February 16, 2012 at 0846 hrs


  3. I wish there was a ‘Like’ button for Wendy’s comment.  =)

    Posted by .(JavaScript must be enabled to view this email address) on February 16, 2012 at 1004 hrs


  4. Another reason why the gap between rich and poor expands.

    Posted by Northern Pike on February 16, 2012 at 1231 hrs


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