Corporate welfare will kill our economy.

The Business Journal scooped the Dayton Daily News with the news that NCR will be moving its C-Level suite to NYC. Dayton will lose maybe 100 employees- but all will be the 6 and 7 figure paychecks, taking a sizable bite out of Dayton’s income tax revenue.

However, the zinger is that the State of New York gave NCR a $1.5 million handout to suck our city dry. This kind of corporate welfare needs to stop. Why should Dayton suffe because NYC can afford to lure our highest dollar execs with their tax money.

Ohio should sue New York for this poaching. Of course, Mike Turner won’t step in to stop it- NCR is his largest contributor.

NCR to move executive offices into New York City facility – Dayton Business Journal:
NCR Corp. is moving its executive offices to the Big Apple after being wooed by New York officials with incentives.

For the past three years, New York State Assembly Speaker Sheldon Silver has pitched to Bill Nuti, New York resident and NCR’s chief executive officer, the merits of moving the company’s executive offices to Manhattan, which include $1.5 million in relocation assistance.

“Although NCR’s headquarters were located in Dayton, it was clear to me that Bill was and is a New Yorker at heart,” Silver said. “In the spring of this year, after little prodding — just a little — Bill informed me that NCR was ready to make the move. Now, this ‘New Yorker at heart’ will be a ‘New Yorker at work’ here in the ‘Business and Financial Capital of the World.”

New York officials held a press conference in October to announce the signing of NCR’s lease in the new 7 World Trade Center building, where the company will have 200 employees…

…The company maintains about 2,000 employees in Dayton.

New York Gov. Eliot Spitzer said the signing of this lease is significant because it demonstrates that Manhattan is the magnet for senior corporate decision makers.

“This lease signing is different because having a significant presence of corporate leadership here shows what we represent,” Spitzer said…

When Dayton is already suffering from drops in income tax, this is just another nail in the coffin, being driven by tax dollars from another state.

The annual lease payments in NYC for the 40,000 square feet will be $2.8 million- costing NCR shareholders even more money, just so the overpaid CEO can siphon off more cash, and live in NYC and not have to come to Dayton. How can this be a fiscally sound move for anyone involved? Shareholders, taxpayers, and the City of Dayton- all screwed in yet another instance of poor decision making based on our current lassiz faire attitude about CEO pay and corporate welfare.

Again- the only kind of corporate tax credit I believe should be allowed is one based on the number of employees that can walk to work.

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19 Responses

  1. Sammy76 December 22, 2007 / 8:46 pm
    Wow. I knew this was a possibility, but it still seems unbelievable that Nuti would go through with this. I wouldn’t be entirely surprised if this could eventually cost him his job — there will be a lot of backlash for retired NCR employees and stockholders. I can’t for the life of me see how this is going to be a profitable move for the company — not that stopped a CEO before.
  2. Jeff December 22, 2007 / 9:53 pm
    I am a native Chicagoan. If I was the CEO of a big Dayton corporation and Ritchie Daley gave me some good incentives to move my executive suite to Chicago I’d jump at that chance.

    Stepping back a bit from the obvious advantages to being located in a business & financial center like NYC (as well as the quality-of-life benefit), one of the best predictors of corporate HQ location is where the CEO lives.

    But it is interesting that they are keeping the rest of the NCR in Dayton, but moving just the top-level execs? Doesn’t sound too efficient. What else is left out there off Patterson?

  3. Sammy76 December 23, 2007 / 9:19 am
    That’s kind of my take — either move the entire operation or none of it. It would seem this could be a precurser to moving the whole operation. If Turner is smart, he’ll see that and start doing something. You don’t get large donations from corporations that have no physical presence in your district.

    I disagree, however, on the quality-of-life being better in NYC. Yes, if you have enough money, it is. But even for 6-figure employees to have the same quality-of-life in Manhattan as in Dayton, the pay is going to have to go way up. For the price of one of their large homes in West Kettering or Oakwood they’ll be luck to get a 2500 sq. ft. apartment in Manhattan. Furthermore, there’s the cost of the corporate real estate — to have similar amenities as to the current NCR location will cost way more.

    The board of trustees should never have let Nuti have an office in Manhattan.

  4. Greg Hunter December 23, 2007 / 10:02 am
    I find it interesting that the DDN did not pick it up. Are they feeling guilty for fostering this type of abandonment of Dayton.

    Mike has done a great job helping Dayton become more reliant on Tax payer dollars as all of his private employer donors have ripped jobs out of the Valley.

    National City to India
    Lexis Nexis to India
    NCR to India

    Well his big benefactor MTC is still here. NOT – Sold to BAE – Shocking, but his retirement fund is now flush and he will never have to worry.

    Mike better get to work bringing more WPAFB jobs here so he can fill up all of the empty houses at Austin Road and now a great deal of Oakwood homes.

    Oh well there is nothing new under the sun. New York drained the Midwest with the Erie Canal and they are continuing to drain this area with the Stock Market.

    An Oakwood mansion and an empty Schuster Center – Nice work!

  5. Jeff December 23, 2007 / 11:25 am
    “I disagree, however, on the quality-of-life being better in NYC. Yes, if you have enough money, it is.”

    NCR could always up compensation to make up the difference in income. But seriously how can one not say NYC (or Chicago, or San Francisco) would not have a higher quality of life (beyond the high housing costs and congestion issues)?

    One of the benefits to locating in world citys for global corporations is that there is access to a talent pool, which reinforces itself as talented people migrate to the world cities.

    The assumption is that for provincial cities like Dayton anyone with get-up-and-go has got up and went, thus a weak talent pool if one wants to recruit staff. That might be another rationalizing for relocating corporate HQ.

    As for Turner, does fund raising really matter much after a while? Incumbency kicks in and as Turner becomes entrenched he can continue to win elections without having to spend a lot of money. Turner has some pretty strong built-in GOP majorities in his district who will just pull the lever for the elephant.

  6. Jeff December 23, 2007 / 11:32 am
    “New York drained the Midwest with the Erie Canal”

    I could have a lot of fun tearing this statement apart, but It is the holidays and I will be kind.

    Have a Merry Xmas (or Hanukah or Kwanza or Eid or solstice) and Happy New Year!

  7. k December 23, 2007 / 12:35 pm
    The interesting part is that Nuti was required to relocate to Dayton by his original contract, with a deadline of August 2006. That did not happen, and now the executives are moving to New York …

    Read the details on NCR to move executive offices to New York, including SEC filings.

  8. Mark Markarian December 23, 2007 / 7:35 pm
    Give me a break with your socialist bs about corporate welfare.

    It’s called competition.

    So this guy was enticed by Sheldon Sliver and decided to go back home and he pulled his suits out of Dayton to NYC – big deal.

    That means there’s a hundred offices and a hundred homes that will be coming on the market in the next year.

    And maybe there’s a Swiss firm or a Canadian Firm or an Italian Firm whose looking for a home in the US & now is your Cities opportunity to go out and get em and when they come in they’ll probably develop even more jobs and a larger tax base than NCR just pulled.

    And as for New York draining the Midwest with the Erie Canal nothing could be further from the truth.

    The creation and existence of the Erie Canal gave the Midwest a cheap route to ship it’s goods and resources to the easterners and on to Europe- Midwesterners took this opportunity and made a ton of money on it, so much so that your state built it’s own canal called the Miami and Erie Canal that went from Toledo on Lake Erie to Cincinnati with a stop in Dayton.

    Yes the Erie Canal make NYC and NYS rich – but it also made the entire nation richer including your home town.

    Life is a dynamic game – you lose here and you win there. Cities like my hometown of NYC have advantages and disadvantages – so does Dayton.

    What your towns leaders have to do, just as any towns leaders have to do is GO OUT AND SELL YOURSELVES.

    So stop crying in you’re spilled milk and go out and make something happen for your town!!!!!!!!!

  9. Jeff December 23, 2007 / 9:48 pm
    “Midwesterners took this opportunity and made a ton of money on it, so much so that your state built it’s own canal called the Miami and Erie Canal that went from Toledo on Lake Erie to Cincinnati with a stop in Dayton.”

    …rather cool to know a New Yorker is aware of the Miami & Erie Canal. DeWitt Clinton of Erie Canal fame was the honored guest at the groundbreaking.

    Small historic correction. Miami & Erie oringally was built only to Dayton. It took a second act from the Ohio Leg. to extend it to the Maumee & thence Toledo.

    So there was a classic break-in-bulk situation happening in Dayton for a few years, which really punched up economic activity here in the 1830s.

  10. Juan December 24, 2007 / 12:02 am
    And, “Grand Lake St. Mary’s” was used as a resevoir for the canal system.

    I was up in that area a few years ago on the way to a prospective customer’s site. The state route that I was on paralleled the old canal. I was amazed as I drove along that there was still water in that part of the canal and even more amazed when I saw an aquaduct in the canal OVER a creek! It thought it was pretty amazing that something built 175 years ago was still holding up! Of course, the Romans built aquaducts over 2000 years ago that are still standing. Anyway, it was cool enough that I stopped on the way home to get pictures…

  11. David Esrati December 24, 2007 / 12:04 am

    Mark-
    It’s not about going out and making something happen- it’s about tax dollars being used to “entice” business. It’s not necessary- and it should be illegal.
    If a City or a State wants to invest tax dollars in a business- it should buy stocks or bonds- not hand over “enticements.”
    This isn’t socialist BS- its about keeping the playing field level. We’ve got one suburb battling another- as well as NYC.This energy, effort and money should be used to make our community more hospitable, not broke.

  12. Juan December 24, 2007 / 8:03 am
    If those tax dollars are being used to bring jobs to the community, isn’t that a sound investment of those tax dollars? I would argue “yes” although I’m not really crazy about it either. But, it shouldn’t be illegal.

    This happens all over the country with all sorts of business. Just recently, Georgia, Alabama and N. Carolina were all competing over a new auto assembly plant. NC eventually won because they had the best tax incentive package for the company.

    And it happens here to KEEP jobs. Just recently Moraine gave GM some concessions for the assembly plant.

    Although one of the most creative ideas I did see locally was where the leaders of the municipalities in which Delphi has plants all got together and decided to “pool” the tax revenues from Delphi. If I remember correctly, they decided that they would divide the “pool” pro-rata as it shrank when Delphi made plant closing so that none of the cities would be completely hit.

  13. Mark Markarian December 24, 2007 / 9:01 am
    David,

    To control competition through government fiat is socialism and so is the concept of leveling the playing field.

    Remember in the City to City, State to State, Nation to Nation battle the correct corollary is Major League Baseball competing with the National Football League competing with the NBA competing with the NHL for the interest and dollars of fans – NOT ensuring the Yankees don’t drain the Indians of their talent.

    While I personally don’t like it either – it is part of the game of life and government and a necessary evil, a law of nature just like gravity is, you can’t legislate it away, because if you attempt to you only fool yourself because the competition you attempt to control only morphs into a slightly different form outside of the legal construct that you created.

    Instead what we need to do is to use this natural selection of the fittest process to ensure a healthier city, state and nation.

    Additionally living in Dayton or Los Angles you see this condition less than if you live in NYC.

    NYC is physically in a strange location.

    20% of the population of New Jersey is closer to the Empire State building than 60% of the population of New York is to it.

    Connecticut’s Greenwich – quite possibly the wealthiest town in the nation is one of NYC’s premiere bedroom communities.

    NYC is constantly having World Class and Working Man’s Jobs being stolen by the Jersey Cities/Towns of Jersey City, Newark, Fort Lee, Secaucus & Elizabeth – with the Connecticut City/Towns of Greenwich and Stamford stealing their share.

    Then there’s the loss of guys and gals like you and I. Everyday somewhere around 500,000 people from outside of NYC enter NYC to work.

    But because they live outside of NYC – their families spend most of their money outside of NYC – not a good thing but something that the City has to live with.

    So should NYC pass a law that says if you don’t live in NYC you can’t work in NYC to end this injustice?

    They could, but then those people would turn their backs on the NYC and work closer to their home.

    The only answer is to realize that life is the riding of a bucking bronco and you need to learn to hold on for dear life and have a blast doing so.

    And there was a time that NYC wouldn’t compete because we had the parochial view that hey, we’re NYC if they don’t want us, we don’t want them.

    And we lost

    The Dodgers to LA
    The Giants to SF
    The Football Giants to NJ
    The Jets to NJ
    The Nets to NJ
    We gave rise to Stamford, CT, Jersey City and Newark.

    So in the end we learned to “Compete or Die”

  14. David Esrati December 24, 2007 / 9:26 am

    Mark,
    Even the pro leagues have salary caps.
    The reality is- the tax incentive game is a sham. That money should be going to public works, not as a corporate handout.
    We’ve had two taxing districts next door to each other (Dayton and Kettering) playing games with a company called Reynolds and Reynolds for years- with both communities spreading their legs for jobs, only to see the jobs go back and forth. In the mean time, the CEO sells the company- and pockets the millions and walks.
    I’ve suggested, had you read the rest of the site- that the only tax credit/bonus/incentive is for employees who walk to work. This would lower our dependence on foreign oil and encourage smart growth. I would also add it for those that utilize public transit to get to work- so NYC firms would do quite well.
    And as to your “Socialism” smear- I can’t help but say that when Government involves itself in where business locates- it’s more like “Communism” with the government decides what business should go where.
    This isn’t a democracy or a free market when tax dollars are being siphoned off in a ruse of “economic development” when the prime beneficiary are those who put the most money into the pockets of the politicians.
    Go back to your junior high social studies class.

  15. Greg Hunter December 24, 2007 / 10:09 am
    I could have a lot of fun tearing this statement apart, but It is the holidays and I will be kind.

    I never asked for kindness only information or a perspective on information. Mark certainly provided it, but he also backed up the theory as NYC was in competition with NOLA for skimming off the cream shipping resources to Europe, which was settled with the War between the States.

    Yes the Erie Canal make NYC and NYS rich – but it also made the entire nation richer including your home town.

    There is no doubt that the forces aligned to provide Dayton an opportunity to be a City on par with San Francisco or Chicago and that history is what a great deal of people that post about Dayton, lament. The point about a great deal of what I post is recommending not to follow the whims and tenets of the idiots elected in DC or boardrooms in NY. Is NYC stock market making America richer or the Midwest richer? Or is the Market enriching those of NYC at the expense of Midwest? The ownership society would dictate that Midwesterners should own stock so American companies can transfer labor and environmental problems to China while bringing the profits back to America via the stock market, enriching the owners. This short sighted view of globalization always gets the response of “it is part of the game of life and government and a necessary evil, a law of nature just like gravity”. I say I am mad as Hell and I am not going to take it.

    What your towns leaders have to do, just as any towns leaders have to do is GO OUT AND SELL YOURSELVES.

    I have been in this town a long time and it’s leadership is the major problem as Dayton is still filled with talent, but talent that is overlooked by the shortsighted elected officials. Many people that are in Dayton make a great deal of the income and prestige from out of state and out of country ventures. We have premier engineers, scientists and software designers living and working in the Dayton area. Are these individuals used by the local fortune 500 firms, Hell No. Standard, NCR and other firms have had a shot at us, but we are too local and too innovative to be trusted. It is always easier to trust an NYC or DC firm, even if the do fuck it up time after time. So Mark, you may say it is easy to go out and lure another firm to the area that has a bigger tax base; I would contend that once the cancer or the core has become so rotten it limits our ability to entice these firms to take a chance on Dayton.

    God Bless the United States where we can Corporatize the Profits and Socialize the Costs. Repeal the 14th Amendment.

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