Monday, September 21, 2015

Huzzahs all around as Mayor Gahan finally delivers jobs ... to Charlestown.

Was there a finder's fee?

I mean, the car salesmen pay it. Maybe lunch at Hooter's?

Earlier, I mentioned the "local economy solution."

I'm reading Michael Shuman's "The Local Economy Solution," primarily because David Duggins isn't.

"In his tenth book, Shuman, who was instrumental in designing the crowdfunding JOBS act as well as in the founding of the Business Alliance for Local Living Economies, introduces his concept of “pollinator” enterprises. These are “self-financing entities that stimulate and strengthen other local businesses,” and Shuman presents a range of these successful economic-development programs from around the world, laying out a strong alternative to the usual top-down economies dependent on taxpayer subsidies."

With this thought as backdrop, consider one of the more bizarre stories to come down the pike in a while, wherein the mayor of New Albany is thanked profusely by the mayor of Charlestown for providing providential assistance in the latter's successful use of top-down corporate welfare subsidies to attract a company even after the former's offer of the same incentives failed to entice it.

UPDATE: Auto supplier coming to Charlestown portion of River Ridge, by Elizabeth Beilman (N and T)

CHARLESTOWN — An automotive company that originally had eyes on New Albany announced Thursday it will locate in Charlestown at River Ridge Commerce Center.

Magnolia Automotive Services LLC, a minority-owned joint venture between Toyota Tsusho America Inc. and James Group International, plans to invest $4.4 million to establish a new facility and create 26 new jobs in the Southern Indiana community by 2017.

As David Duggins would say, it's all just "boilerplate" crony capitalism up to this point, but Charlestown's Mayor Hall provides ironic further context. Turns out he had an ace in the hole.

The Japanese company had tentative plans in December to locate in New Albany. The plan commission there approved preliminary plans for Toyota to locate two 62,000-square-foot distribution centers on a 20-acre site at Grant Line Industrial Park West before it pulled out.

Charlestown Mayor Bob Hall attributed some of the success in nabbing Magnolia to New Albany Mayor Jeff Gahan.

“I also give a lot of credit to Mayor Gahan and the city of New Albany for keeping Southern Indiana in the hunt for this project when company leaders were on the verge of going in another direction," Hall said in a news release. "Had Mayor Gahan not kept the dialogue going with company leaders, this project would have landed in an entirely other region or state."

There is an opportunity cost to the city of New Albany's top-down approach to economic development, and it is amply illustrated in this instance. Toward which other outcomes might City Hall have used this time and money?

As it stands, we're left with no new industrial park tenants, but the adulation of One Southern Indiana and Mayor Bob Hall.

And this isn't even sufficient return to buy a pumpkin spice latte at Starbucks -- all of it for only 26 jobs, anyway.

I agree with Michael Shuman, whose simplified overarching point is this: Use the same time and less money to target needs within the existing local economy and help it to grow, with the probablle results being the same number of jobs created, which in any event would emanate from existing local businesses tied more closely to the local economy, whose presence contributes more to ongoing local job creation than Magnolia Automotive Services ever could.

As Jeff Gahan expended time and money placing a tenant at River Ridge, Indatus got away. It's worth repeating this reader comment from yesterday.

I'll say it again - if Indatus had had access to real high-speed internet service and been encouraged to expand in New Albany, then the investment by out of town businesses, the spin-off businesses, and the growth heralded by the White House would have happened here, not in Louisville.

New Albany lost a great deal when they let that business go…

How many businesses have been sought out and encouraged to move here in the past twelve years?


w&la said...

River Ridge has a fiber optic trunkline for state of the art data networking… New Albany? Not a single drop of photon driven data.

Wonder why Magnolia didn't want to locate in New Albany, right next to two of the most heavily traveled freeways in America? Could it be there's no fiber optic?

SBAvanti63 said...

Not to mention the 25 jobs at StemWood, most of which are gone as a 110 year old local company continues to wind down its business. Four months after the announcement and seven weeks after my job ended, our mayor appeared absolutely clueless about the whole situation. Back in May, a friend commented that if Pillsbury was worth $7 million, Gahan should have stopped by StemWood with about $475,000. It may not have made a difference, but no one tried either. Maybe I need to call Mayor Hall for a job?

ecology warrior said...

Another failure by Lame Duck, maybe he is trying to line up a political appointment in Charlestown.