Time for a tough talk with Homewood

Homewood City Hall
Homewood City Hall

Homewood is hot!

Homewood has great schools, beautiful neighborhoods and friendly people. It’s convenient to just about everything and has a booming downtown. It seems like a new restaurant opens there every month.

The draw of many Homewood neighborhoods is so strong that some buyers and developers snatch up older homes, knock them down, and then build their dream home. Some developers are replacing single homes on a large lot with two, three or more houses.

Homewood may not appreciate its appeal

Homewood is in great demand, but doesn’t seem to know it. It wants to give away assets when it really doesn’t have to.

Take the case of Milo’s Tea* who is receiving incentives from Homewood to move about 50 of its executive and administrative staff from Bessemer to Homewood.

I have absolutely no information on Milo’s decision to move its executive and administrative staff to Homewood– so what I’m about to say is complete conjecture.

But my guess is the decision making process possibly went something like this…

Milo’s executives:  We’re growing and running out of space in Bessemer. Some of our top executives live over the mountain and it would be more convenient if we could move our offices nearby. It would also probably make it easier to recruit executive and administrative employees. And as a bonus, we can probably convince one of the over the mountain communities to help pay some of our expenses.”

Then Milo’s probably identified a good location in Homewood and then asked the Homewood City Council to subsidize some of its moving and construction costs.

And, as predicted, the Homewood City Council did approve a modest incentive package and the designated employees relocated.

Milo’s, however, has done nothing wrong.

Milo’s is a hometown hero–creating opportunities and growing jobs for our region.

What company would turn down free money?  If Milo’s thinks it is best to move its administrative offices to Homewood, then it should do so.

But why should taxpayers subsidize its move?

Heck, I’m a business person. I wish a municipality would send some money my way.

Prosperity in Homewood at the expense of Bessemer

But most importantly, the incentives come at the expense of Bessemer. Bessemer is losing those better paying jobs.

This is suicide for our region.

Homewood and other municipalities that offer incentives to steal businesses from their neighbors are driving a wedge through the trust of our cities.

Homewood needs a regional champion like Hoover

Hoover recently was in discussion with UAB Medical West Hospital to move from Bessemer to Hoover. An incentive package of $20 million was discussed, but thanks largely to the objections of a regional thinking Hoover City Councilman John Lyda, the process was terminated.

Councilman Lyda wrote, “Will we boldly stand and be the long awaited catalyst for change that illustrates how regional collaboration can work, or will we be conspirators in theft, paying a multi-million dollar bounty to steal from our neighbors?”

And it’s a good thing the process was terminated.

I understand that Bessemer and the other Western Jefferson County mayors were considering bringing a lawsuit to stop the process. We are already not working together–suing one another is worse.

We can’t keep stabbing one another in the back and prosper as a region.

The New York Times article about Birmingham

The New York Times recently published a piece comparing Birmingham’s malaise to Nashville’s successes.

Ben Casselman, the reporter, described how Nashville “…made some smart decisions like merging the city and county government in the 1960s, allowing Nashville and its suburbs to work together rather than at cross-purposes.”

He contrasted Birmingham’s recruitment of an Amazon fulfillment center offering jobs for about $15.00 per hour to Nashville’s recruitment of an operations center that will eventually employ 5,000 people at salaries averaging $150,000 a year.

He also pointed out “that Apple said it would invest $1 billion in Austin, Tex., and could eventually employ 15,000 people.”

Imagine metro Birmingham’s possibilities if we worked together and pooled individual municipal incentives to recruit job rich new companies to our region.

Money down the drain

Over the past two decades our local municipalities have paid incentives of over $200 million dollars to companies to move across town or to stay where they are.

The result: No new businesses—no new jobs.

Let’s work together rather than against one another–we will all win.

*Milo’s Tea and Milo’s Hamburgers are two separate corporations and Milo’s Tea continues to expand its operations in Bessemer)

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David Sher is Co-Founder 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).

Invite David to speak to your group about a more prosperous Birmingham. dsher@amsher.com

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6 thoughts on “Time for a tough talk with Homewood”

  1. I understand your point about Bessemer ‘losing ‘ jobs to Homewood. But did they really? The main facility that actually makes the tea products is staying. The executive function is going to Homewood. How many executives actually live in Bessemer? I’ll bet hardly any so where is the job loss?

  2. Thanks for providing this example regarding regional economics, cooperation and civility. I didn’t learn this basic principle growing up in Birmingham. The point made in this commentary is well documented by thriving regional communities across the Nation and globe. A more important question than how many executives live in Bessemer, might be whether it is safe for them to commute through my neighborhood, or need gas as they drive from Bessemer to Homewood, or to the airport.
    The point is that everyone wins directly and indirectly when we thrive as Neighbors who are concerned with mutual best interests. No, I didn’t learn this basic principle at Parker High School, but as Regional Urban Development Manager at the largest financial institution in the world.

  3. Arguing Bessemer is entitled to ‘those higher paying jobs’ is an argument for municipal entitlement and privilege and your failing to consider how possibly being able to attract stronger executive talent by being in Homewood can result in more and faster job growth for Milo’s in Bessemer.

    If the incentives are reported accurately – I don’t see Bessemer allowing that dollar level to be the factor driving 50 exec/admin current jobs (and future exec & admin growth) out of Bessemer from their corporate citizen Milo’s. In other words I doubt the issue here was as you say, “free money” for Milo’s. This was a strategic move mindful of the preferences of executive talent (securing and retaining) and there was probably nothing Bessemer could have done to keep the executive jobs there.

    “Homewood and other municipalities that offer incentives to steal businesses from their neighbors are driving a wedge through the trust of our cities”.

    Criminalizing Homewood in language is a bit much as is not understanding it may be sensible and shrewd for businesses to locate different functions in different locations (executive, manufacturing, warehousing, etc.) for different reasons.

    You do realize Bessemer is going to do exactly what you accuse Homewood of doing to other municipalities further down stream, right?

    1. Lance, I absolutely agree that Milo’s has the right and responsibility to locate their employees where ever they want. But why should Homewood taxpayers have to subsidize their move? I’m an owner of a business in Hoover and there are thousands of businesses in Jefferson County. Milo’s received incentives of $146,000 for relocating 50 employees. Proportionately, I should get incentives of $200,000 for relocating our employees. It makes all the other businesses in town feel like ‘chumps’ for not asking for handouts from the government.

      1. Depends and perhaps you should be the belle of the ball. However the word “jobs” does not carry equal weight nor is it a universal metric. If you can argue the prosperous and benefcial trickle down effect of your jobs to a municipality, go for it. If Homewood aims to be an executive regional hub in both residence and offices, luring Milo’s is a smart and strategic feather in Homewood’s cap in making the case for Homewood, no? The branding recognition is built in, Homewood can talk to other businesses in Alabama and say, “Learn why Milo’s has come back home to Homewood” to attract other executive offices.

        Homewood now has a great story to tell other businesses and getting them to follow suit and place their executives in Homewood. There is value in that, the narrative, for Homewood on a promotion and marketing level.

        A fact you omitted from your article is Milo’s original plant was located behind Barber’s Dairy, just off West Oxmoor Road in Homewood. That’s important and relative mindful of how you’re ripping on Homewood. Milos did not relocate to Bessemer unti 2002. Hence David I can easily script this in a romantic narrative of a company “coming home” and a community, Homewood, welcoming back one of their own, no? Or in other words, “you can go back home again”.

        Disclose the whole story to your readers….and it kind of paints a charming and attractive narrative of Homewood, does it not?

  4. This article makes a point, but the problem is more insidious for the tax payers in HWD and many of the long-term businesses that have been in HWD supporting the community for decades. Unfortunately, the same is also true for many of our surrounding cities.

    There is no question businesses wants to locate in HWD for all the right reasons and recognize the opportunity. The fact is they will move here without incentives. We should be engaged in selling the difference when a business is considering a move. Not offering incentives picking winners and losers. Especially business that competes with long time businesses who operate without the incentives.

    You certainly can’t blame the businesses. It’s like the CEO of ServiceFirst Bank stated when they were given a massive incentive package to move their corporate headquarters and I am paraphrasing: “I would not be performing my fiduciary responsibilities if I did not ask.”

    The combination of government largesse, spending, and debt – then increasing taxes on residents and business to pay for it while providing tax breaks and incentives to business who are in competition with existing long-term businesses in HWD is a pending disaster.

    Solutions to this problem have been presented and discussed in the past, but our elected officials have not had the will to change the current process. Let’s hope the New Year will bring enlightenment to our Elected Officials, and a new direction for the benefit of Citizens and Taxpayers in HWD.

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