Gimmicks Won’t Spark Business Activity

The Economic Development Corp. is limited in the scope of the activities in which it can engage (and its board members are appointed by local politicians), but I didn’t want to let this article slip through the cracks as I catch up with things because it so well illustrates the futility of usual practice in the face of Rhode Island’s problems:

… Businesses are fighting over space in Massachusetts, prompting Babineau to tell those people to take a look at Providence.
“And they said, ‘Really? We didn’t know,’ ” Babineau said. “I said, ‘That’s our fault.’ ”
Board members kept returning to that idea. Daniel Sullivan Jr., president and CEO of Collette Vacations Inc., said the EDC and state must market and sell what Rhode Island offers. Referring to Babineau’s encounter, he urged, “We’ve just got to get in front of them.”

Somehow, I don’t think businesses would be flocking to the worst-bar-none business environment in the United States but for the failure to market to them and hold conferences. At this point, the EDC’s singular focus should be… let’s say… educating Rhode Island’s political class about the damage that it has done and continues to do to the state.

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Warrington Faust
Warrington Faust
10 years ago

“Businesses are fighting over space in Massachusetts, prompting Babineau to tell those people to take a look at Providence.”
I think this news should be communicated to commercial property owners in Massachusetts, they are currently in despair. Rents are so low that commercial property is being converted to use as doggy day care centers. This is not quite the same as being rented out as Karate Schools, or Spanish music stores, but it does show that rents have declined.
It goes without saying, that there are “pockets” which are able to attract commercial tenants at rents which will pay the mortgage, but the situation is not general.
In near by Attleboro there is a proposed 180 acre business park which is floundering, it seems likely it will saved from foreclosure by the taxpayers. So far it has attracted one business, only after substantial subsidy by the city. That occupant is from Rhode Island.

Tommy Cranston
Tommy Cranston
10 years ago

Can’t imagine why the state has flatlined economically.
Don’t these businesses know we have beaches?

Patrick
Patrick
10 years ago

Well we have a lot, a lot here. There’s a lot of culture here. We have the Liberty Bell, cheesesteak, cheesesteak, cheesesteak.
At least that’s what I see on the TV commercials.

Russ
Russ
10 years ago

At this point, the EDC’s singular focus should be… let’s say… educating Rhode Island’s political class about the damage that it has done and continues to do to the state.

This is what passes for the big ideas of the fringe-right? Hard to see how folks aren’t flocking to that economic development “plan.”
Meanwhile back on planet Earth, Hasbro announced plans to move a division downtown in part due to …
http://www.golocalprov.com/business/new-hasbro-to-open-new-location-at-old-blue-cross-building/
We can assume in part because of efforts of the EDC…
http://www.pbn.com/Hasbro-granted-up-to-163M-tax-break-by-EDC-for-284-new-jobs,57641

Dan
Dan
10 years ago

Rhode Island has nothing to offer businesses except harassment and high costs. Russ – Your solution is more corrupt tax breaks for those who kiss the ring? What do you think got Rhode Island into this mess?
New Hampshire is successfully courting businesses from Massachusetts. Not based on gimmicks, they actually have something to offer, unlike the progressive welfare state to the Southeast.

Russ
Russ
10 years ago

“Russ – Your solution is more corrupt tax breaks for those who kiss the ring?”
Um, actually, no. Tax cuts are the snake oil sold by the corporate shills of the right. I support them in some cases and oppose them in others.
My solution is the build on our strengths in areas such as biotech and technology/digital media and to ensure small business have access to capital (the horror!).

Russ
Russ
10 years ago

btw, I don’t have any problem with the tax break offered to Hasbro in this instance.

Pawtucket-based toymaker Hasbro Inc. was granted up to a $1.63 million tax break by the R.I. Economic Development Corporation on Monday if it creates 281 new full-time jobs over the next three years…
The EDC board approved “project status” for Hasbro to renovate or construct and furnish the offices, which the company estimated would cost about $24 million. The designation gives Hasbro a sales-tax exemption for purchasing building materials and other items.
The tax break is based on how many “higher-paying” positions – jobs that pay more than $36,691 annually, or 105 percent of the median wage – will be created.
Hasbro said it will create 284 jobs, 281 of which will meet the criteria.

Max Diesel
Max Diesel
10 years ago

“A “tax break” is an implicit admission that taxes are too high.”
Warrington Faust
http://www.anchorrising.com/barnacles/013052.html
Nicely put and to the point.

Russ
Russ
10 years ago

“12 companies eyeing 38 Studios-type loan guarantees from EDC”
http://www.pbn.com/12-companies-eyeing-38-Studios-type-loan-guarantees-from-EDC,60035

A dozen companies – half of them out-of-state businesses looking to relocate to the Ocean State – are lining up to take advantage of the same controversial loan-guarantee program that drew Curt Schilling’s video game company, 38 Studios LLC, to Providence.

Out of state? Guess those folks don’t read fringe-right blogs or is it a think tank again this week?

Russ
Russ
10 years ago

“A ‘tax break’ is an implicit admission that taxes are too high.”
I didn’t bother rereading the link, but to reference that here is to admit that you don’t really understand what the EDC offered Hasbro. They offered Hasbro a “sales-tax exemption” on building supplies needed to upgrade the LaSalle property. That is, finding a suitable building in a good location was an important factor.
Notably the EDC didn’t have to offer property tax or income tax reductions. Not to mention that the amount promised from the state is small enough that it could be a rounding error on Hasbro’s balance sheet.
You guys let a fixation on taxes cloud your vision, even when these things are directly in front of you.

Dan
Dan
10 years ago

Russ – These stupid case by case tax breaks are a fumbling attempt to compensate for poor public policy, otherwise they wouldn’t be necessary. Besides being dangerously corruptible, they have an overall destabilizing effect because companies can’t plan long-term. Have you even considered the effect these tax breaks have on less politically connected competitors? Again, the seen and the unseen.

Max Diesel
Max Diesel
10 years ago

“I didn’t bother rereading the link, but to reference that here is to admit that you don’t really understand what the EDC offered Hasbro.”
So a sales tax break is not a tax break nor an incentive in your book. That’s some real double talk Russ. Why don’t you use that argument in reverse to raise taxes. Oh that’s right, you progressives already did by slipping it into our gas and electric bills and then called it the “Low Income Home Energy Assistance Program Enhancement” charge.

Justin Katz
Justin Katz
10 years ago

Russ,
I find it very telling that your two success stories are:
1. The fact that a large company that’s been in the state for nearly a century isn’t leaving.
2. 12 companies, 6 out of state, are willing to request loan guarantees of millions of dollars.

Russ
Russ
10 years ago

“The fact that a large company that’s been in the state for nearly a century isn’t leaving.”
Hasbro is planning to relocate a division here from MA. For those that don’t realize it, that’s good news.
“12 companies, 6 out of state, are willing to request loan guarantees of millions of dollars.”
So ignore that the EDC is doing some good (would that we’d restore funding to the Slater Technology Fund as well).
http://www.rifuture.org/funding-cuts-impact-ri-techscience-ranking-.html
I didn’t expect that the glass is half empty folks to care about actual economic development. Meanwhile techies like me keep working to actually create businesses and jobs in the state. btw, here’s what I call (the seeds of) success…
http://www.rifuture.org/stahtup-fevah-in-new-england.html

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