I must be nuts.
I’m actually writing an article that might be perceived as negative about the most popular and respected man in Alabama—maybe in Alabama history.
This story broke January 9th; about the same time Nick Saban and the UA football team won the National Championship—but wanting to show sensitivity to Saban worshipers (which include me), I waited until this week to publish.
I want to make it clear that Coach Saban and his business partners are not doing anything wrong, illegal, or immoral. What they are doing is every bit as smart and clever as Saban’s decision to execute an onside kick against Clemson that ultimately led to Alabama winning the National Championship.
Here’s the story
Mercedes Benz of Birmingham, a car dealership co-owned by Alabama football coach Nick Saban, is located in Hoover. The city council of Irondale recently voted to offer the dealership $13 million to relocate to Irondale.
I think you will agree that Saban and his partners would be crazy to turn down $13 million.
Did Irondale doing anything wrong?
Irondale is fighting for its financial survival.
It’s standard practice for Birmingham area municipalities to pay huge incentives to steal local businesses from one another.
Irondale snatched Tom Williams Buick from Birmingham. Then Birmingham pilfered Wal-Mart from Irondale with $11 million dollars in incentives; Irondale tried to snag Trinity Medical Center from Birmingham, but the City of Birmingham offered Trinity $55 million to remain in the city limits.
I could overwhelm you with examples of tax payer funded multi-million dollar payoffs. I write about them all the time…
- Let’s spend $125 million stealing from one another
- Let’s flush $5.27 million dollars down the toilet
- How to extort money from the City of Homewood
I estimate municipalities in our region have spent close to $150 million stealing businesses away from one another—with absolutely no economic gain for our region.
We get no more companies and no more jobs. We’re only burning tax payer dollars that could be better spent to recruit out of state companies, help our schools, or provide critical services.
Meanwhile we continue to lose our large public companies–having squandered incentive money. We lost three more public companies in 2015…
- Walter Energy
- Protective Life
Nashville is flourishing because Nashville City and Davidson County are one entity. Nashville doesn’t have to waste dollars enticing businesses to move from one side of town to the other. Nashville uses its incentives to bring in new corporations.
The City of Boston just gave $50 million in incentives to entice General Electric to move to Boston from Fairfax, Connecticut. I’m certainly not saying we could recruit GE to Birmingham, but with a $150 million war chest—we could be kicking butt!
What happens if Mercedes Benz of Birmingham goes to Irondale?
If the City Council of Hoover is paying attention, which I’m sure they are, they might consider upping the incentive to keep Mercedes Benz of Birmingham in Hoover or find incentive money to steal a business or two from some other municipality in our region.
A simple fix
We actually don’t have to create a new government structure to solve this problem. We could follow the example of Denver, Colorado.
In August 2000, five counties and 25 municipalities in and around Denver voluntarily came together to sign the Mile High Compact. The Compact is an intergovernmental agreement not to compete with each other for companies. This has been very effective…and is a simple solution.
Let me summarize
- Nick Saban and his partners are not bad guys.
- The folks on the City Council of Irondale are not bad guys.
- We spend precious tax dollars recirculating the same companies in our region with no economic benefit.
- We are suckers!
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David Sher is 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).