Macy's to Open Distribution Center - 1,500 jobs

[rdj]

Guido, I believe the debate is centered on the tax payers subsidizing those jobs.  If you gave me $21,000,000 I could easily create some jobs.  The debate is fair. At $10 an hour mostly part time the jobs will largely be occupied by people who qualify for government assistance ($15k a year).  If we had 10000 such jobs pop up it probably wouldn't actually help the overall standard of living in our community.

Dillard's operates 2 stores in Tulsa and via rent, pays property tax.  They are being forced to subsidies Macy's new distribution center.

Im not saying we got q good deal or we got hosed, but Since when is extorting tax payers a conservative ideal?  The tax extortion racket needs to be shut down at the federal level. It is a form of bribery and is a zero sum game for US taxpayers.

They aren't giving Macy's $21MM.  They are not charging them for $21MM in taxes they would normally have to pay.  Big difference in my opinion.

[nathanm]

They aren't giving Macy's $21MM.  They are not charging them for $21MM in taxes they would normally have to pay.  Big difference in my opinion.

What's the difference? Either way they will have $19 million(ish) at the state's expense and another couple of million from other government entities in the area.

[Vision 2025]

What's the difference? Either way they will have $19 million(ish) at the state's expense and another couple of million from other government entities in the area.

Or they could have selected TEXAS that way you'd never have to worry about the incentives granted or the jobs generated or the long term increased tax base for that matter... incentives are how the game has been played for many years, don't like the game, great then change the rules (I'm all for that) for everyone but in the meantime it's long overdue that we finally fielded a team with a chance and it looks to me like they scrathed a pretty good win.  All my personal opinion of course.

[nathanm]

Or they could have selected TEXAS that way you'd never have to worry about the incentives granted or the jobs generated or the long term increased tax base for that matter...

Once again, claims are being made with no supporting evidence. Show your work. What will the total cost of having this facility here, including incentive payments, and how much will it bring in? Is the net more or less than plowing $20 million into local businesses? If the wages are low enough, it will be a net drain on our economy, as most Wal-Marts are. Uncritically assuming that any and all development is good and any and all jobs are good is a large part of how the has-been cities of our nation got where they are. We're also assuming they won't pack up and move to Coffeyville as soon as the incentives expire, or even before if they're offered more elsewhere.

It's also philosophically repugnant to me that we force existing local businesses to subsidize their larger competitors, thus shipping their tax money out of state, but that's a completely separate question from whether or not these kinds of deals make financial sense.

[rdj]

Once again, claims are being made with no supporting evidence. Show your work. What will the total cost of having this facility here, including incentive payments, and how much will it bring in? Is the net more or less than plowing $20 million into local businesses? If the wages are low enough, it will be a net drain on our economy, as most Wal-Marts are. Uncritically assuming that any and all development is good and any and all jobs are good is a large part of how the has-been cities of our nation got where they are. We're also assuming they won't pack up and move to Coffeyville as soon as the incentives expire, or even before if they're offered more elsewhere.

It's also philosophically repugnant to me that we force existing local businesses to subsidize their larger competitors, thus shipping their tax money out of state, but that's a completely separate question from whether or not these kinds of deals make financial sense.

That is my point, they aren't "plowing" anything into the business.  You can't loan or invest money in something without the money to invest.  The public sector via the tax payer isn't putting money directly into the deal.  They are forgiving future tax revenue.  This happens with local companies regularly, though programs like the V2025 revolving housing fund, payroll tax rebates from the state, etc.

[TheArtist]

That is my point, they aren't "plowing" anything into the business.  You can't loan or invest money in something without the money to invest.  The public sector via the tax payer isn't putting money directly into the deal.  They are forgiving future tax revenue.  This happens with local companies regularly, though programs like the V2025 revolving housing fund, payroll tax rebates from the state, etc.

Forgive my future tax revenue and I will hire more people too.  Except I am a local company so there will be larger benefits, and you just gave my out of state competitor an edge cause I will still be paying my "future tax revenue" and have to account for that as I invest and move forward. Not saying, don't do it, just saying, "Why not me? lol".

[Rookie Okie]

I think that whatever unfair tax advantage one national retailer may over a competitor in one state is likely to be offset to their advantage in the form of similar incentives in another.  It would stand to reason that Dillards has recieved some similar tax advantages over Macy's in states where they have distribution centers and Macy's has only retail outlets.  So no crocodile tears from or for Dillards. 

Some retailers (Nordstrom, Von Maur, Cotsco, and I bet Dillards and Macy's too) are receiving TIF and/ or other advantages for opening retail stores that provide far fewer jobs and community economic benefits.  Now one could more seriously argue that it's not fair for them to receive benefits over competitors that may even reside in the same mall or center.   

[Conan71]

367 jobs at $60k per year plus 1020 FTEs at $10.50 per hour ($22k per year) averages out to $15.35 per hour.

Is that what's been reported or are we all still speculating?

[cannon_fodder]

Again, I'm not arguing that we necessarily got a bad deal - but Vision 2025 makes a great point:

Fear mongering works. 

Same as every car salesmen or other high pressure BS tactic.  If you don't do it, someone else will! ZOMG!  Texas!

Someone "wins" every auction. Sometimes the "winner" over paid grossly and a rival sits smug in "defeat.". We need someone to make sure we aren't that kind of winner.

[Gaspar]

May not be happening.
The department store operator said Wednesday that it was laying off 2,500 workers and closing five stores. The company is also consolidating its regional management and restructuring its retail and merchandise planning staff.

http://money.cnn.com/2014/01/08/news/companies/macys-job-cuts/

Perhaps a Tulsa dist center is part of the restructure?  Hopeful.

[Conan71]

May not be happening.
The department store operator said Wednesday that it was laying off 2,500 workers and closing five stores. The company is also consolidating its regional management and restructuring its retail and merchandise planning staff.

http://money.cnn.com/2014/01/08/news/companies/macys-job-cuts/

Perhaps a Tulsa dist center is part of the restructure?  Hopeful.

I'd heard the story on KRMG and the reporter questioning whether or not it could affect their expansion to Tulsa apparently didn't read the entire report before saying that on air.  

Reading KRMG's link, the TDC actually fits the business model of what they are doing in trimming down their brick and mortar costs by closing under-performing units while investing more in on-line retail.

While Macy's will cut jobs, it is also planning to reassign or transfer some workers. It's also adding positions related to online shopping, a growing area for the company, and warehouses. That will leave its workforce level at about 175,000.

http://www.krmg.com/ap/ap/business/macys-cutting-2500-jobs-in-reorganization/ncgYF/

[rebound]

Reading KRMG's link, the TDC actually fits the business model of what they are doing in trimming down their brick and mortar costs by closing under-performing units while investing more in on-line retail.

I did some asking around and the word I'm getting is that all these changes and cuts are well planned out and are part of a corporate-wide restructuring that aligns well with the addition of the new TDC.   I may get a chance to speak to Macy's directly early next month, and I'll post any relevant info.  Also, in terms of market forces driving Macy's (and all Retail) to an Omni-Channel distribution model,  this is a decent quick-read article from Aug 2012:

http://apparel.edgl.com/case-studies/Macy-s-Omni-channel-Strategy-on-the-Move80122

[DTowner]

Forgive my future tax revenue and I will hire more people too.  Except I am a local company so there will be larger benefits, and you just gave my out of state competitor an edge cause I will still be paying my "future tax revenue" and have to account for that as I invest and move forward. Not saying, don't do it, just saying, "Why not me? lol".

There are programs in Oklahoma, such as the Jobs Programs, that provide financial rewards to existing companies for hiring more employees.  Additionally, there are many state programs that help with technology and research issues, etc.  The numbers may not be as eye popping or grab headlines the way landing a new company does, but they exist nonetheless.

[Conan71]

Forgive my future tax revenue and I will hire more people too.  Except I am a local company so there will be larger benefits, and you just gave my out of state competitor an edge cause I will still be paying my "future tax revenue" and have to account for that as I invest and move forward. Not saying, don't do it, just saying, "Why not me? lol".

Keep in mind the people the national chain will employ will spread that money throughout the local economy and possibly through your cash register. They can do so at a much faster rate than local businesses hiring one or two people here and there.

[Gaspar]

Keep in mind the people the national chain will employ will spread that money throughout the local economy and possibly through your cash register. They can do so at a much faster rate than local businesses hiring one or two people here and there.

I'm kinda with the Artist on this one.  If a city or state wants to incentivize businesses to come here they ought to do so by providing across the board benefits. If a tax break is going to get Macy's to come, why not extend that break to everyone and watch everyone benefit?

How many other large companies would move to Tulsa if they received the same benefits we are extending to Macy's?  Even better, how many SMALL businesses would move to Tulsa or incubate in Tulsa if they had those same incentives?

It's unfair for a community to say "I'm going to tax you less because you are so big."  It's also insulting to the very people that are working hard to support that community.