Boeing Deal Update: The Nonsense Continues

The Boeing deal continues its trek up "Crazy Mountain," as communities coast to coast dig deeper in their pockets to lure the companys' proposed new 7E7 plant.

As Boeing hones the list of cities contending for its 7E7 assembly line, its search for the most generous incentives has renewed a debate over how far a bidding war should go.

Boeing already has been offered tax breaks, low-interest loans, employee training and bargain-priced land. But sources close to the bidding process say the company has upped the ante, asking some sites to arrange for a small fleet of modified 747s to bring in oversized parts.

Even experts in corporate incentives found that novel. Greg LeRoy, head of the D.C.-based nonprofit Good Jobs First, said the average state has more than 30 types of incentives at its disposal to lure companies.

Yet economic developers say even generous corporate incentives tend to pay off in the long run with jobs, expanded tax base and an improved regional image, in turn attracting more business.

"When requests are made, each entity or each company making a proposal has got to evaluate their situation — how badly they need the investment made there, how badly they need the jobs," said Billy Joe Camp, an economic-development consultant in Birmingham, Ala. "I don't know if there are many large projects that, historically speaking, have not paid off."

One thing everyone agrees on, according to a recent Seattle Times article is that: "Companies willing to be nomadic — which now includes Boeing — stand to score big when they offer communities prizes like the $900 million 7E7 assembly line, which will employ roughly 1,200 workers."

Economic developers do sophisticated analysis of financial costs and benefits, claims Ray Gilley, head of the Metro Orlando Economic Development Commission, who says some communities useeconomic impact analysis models, like "REMI," or Regional Economic Models Inc., to assess potential impacts and costs and benefits of major projects.

What do I think? In my work with these models, I find that they show pretty much what you want them to show since they are heavily based upon the assumptions you make about the future.

But Stephen Roulac, author of the upcoming book "280 Corporate Real Estate and Place Mistakes and How to Avoid Them," thinks cities shouldn't engage in what he calls "place prostitution," or selling themselves and their futures. Place prostitution, eh? Maybe the name for a future International Economic Development Council (IEDC) conference?

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