Tilted Forum Project Discussion Community - View Single Post

joshbaumgartner · 09-23-2005, 07:01 AM

Round Rock, TX, a suburb of Austin, has decided to pay IKEA $5 million to move in. This struck me as worthy of question. This isn't a re-hash of the old debate about a Ford plant or a new sports team moving into town. What got me about this one was that it was a retailer, with unique economics associated. But the town officials were saying the standard old lines about bringing in new money and jobs to the city, and particularly hilighting the increase in property value added to the city's rolls.

While I find a lot of valid arguments in why a community should vie for a manufacturing entity, and while sports teams have their own unique arguments for and against offering incentives to them, I don't know that it makes sense with a retailer. My logic is that for example, a Ford plant will build cars that are sold globally, bringing that economic stream through the city, but a retailer doesn't really bring in money to the town from outside like that, but instead almost the opposite. Retailers offer goods and services to the town and take revenue from it. Local ones keep that revenue there, but larger ones distribute a good amount of it from the city to outside.

Does it make sense to pay a big retailer to set up shop in your town?

09-23-2005, 07:01 AM	#1 (permalink)
joshbaumgartner Insane	IKEA to be paid $5m to set up shop Round Rock, TX, a suburb of Austin, has decided to pay IKEA $5 million to move in. This struck me as worthy of question. This isn't a re-hash of the old debate about a Ford plant or a new sports team moving into town. What got me about this one was that it was a retailer, with unique economics associated. But the town officials were saying the standard old lines about bringing in new money and jobs to the city, and particularly hilighting the increase in property value added to the city's rolls. While I find a lot of valid arguments in why a community should vie for a manufacturing entity, and while sports teams have their own unique arguments for and against offering incentives to them, I don't know that it makes sense with a retailer. My logic is that for example, a Ford plant will build cars that are sold globally, bringing that economic stream through the city, but a retailer doesn't really bring in money to the town from outside like that, but instead almost the opposite. Retailers offer goods and services to the town and take revenue from it. Local ones keep that revenue there, but larger ones distribute a good amount of it from the city to outside. Does it make sense to pay a big retailer to set up shop in your town?