We have a little game us business people play in Birmingham—and we’re darn good at it.
When it’s time to renew the lease on our building—we go to our home city or surrounding cities and demand money.
And it’s so easy to do. There are 35+ municipalities in Jefferson County and if you are large enough or important enough—some local government will throw money at you.
John Archibald, a columnist for The Birmingham News/al.com, wrote a piece last week chastising ServisFirst Bank and its CEO, Tom Broughton, for extorting about $700,000 from Homewood by threatening to move its headquarters.
Actually, it would have been unconscionable if Mr. Broughton on behalf of his shareholders didn’t make an effort to grab the money—his competitors sure would have.
Corporate extortion from our local municipalities is standard practice here.
It all started when Irondale snatched the Tom Williams car dealership from the City of Birmingham years ago. But don’t feel sorry for Birmingham. Birmingham got even by paying Walmart $11 million to move its Irondale store to Birmingham and recently $55 million to Trinity Hospital not to move to Irondale.
The City of Homewood, the focus of Mr. Archibald’s article, has been stung by these raids. The City of Birmingham gave $500,000 in incentives to Gus Mayer to relocate its Brookwood store to the Summit Shopping Center in the City of Birmingham.
So it’s not surprising the City of Homewood was not willing to take the risk of losing ServisFirst.
However, not all Homewood City Councilors were in favor of the payoff. According to Archibald, Homewood City Councilman Peter Wright was quoted in the Homewood Star that he was against the large payoff to ServisFirst. He said it creates a “dangerous precedent and sends the wrong message to current Homewood businesses.”
Councilor Wright’s comments, though well meaning, don’t ring true because in 2010, The City of Homewood gave more than $10 million in incentives to Target to build its new store on Brookwood Shopping Center property. Homewood Mayor Scott McBrayer at the time boasted, “What the new Target will do is draw in shoppers from other cities, namely Mountain Brook and Vestavia Hills.”
Yes, we have created a free-for-all.
We are getting our butts beaten by cities like Nashville. Nashville doesn’t have to pay extortion to businesses who want to move from one neighborhood in Davidson County to another because Nashville and Davidson County are one in the same.
Nashville can accumulate cash and offer meaningful incentives to companies like Under Armour for its $100 million distribution hub that will likely employee 1,500 people, Starbucks, Amazon, Saks Fifth Avenue and, yes, even ServisFirst.
Nashville targets new companies and new jobs while we steal from one another, squander our tax dollars, and get no economic benefit.
Kind of makes us look stupid—doesn’t it?
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David Sher is the publisher of ComebackTown, a co-founder of Buzz12, a division of Intermark Group, and co-CEO of AmSher Compassionate Collections. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).