Cincy loses Chiquita to Charlotte, now a merger with an Irish Company...

[PM Thor]

This is truly one of those "what if" moments...

Cincy was "outbid" by Charlotte to the tune of $22 million in tax incentives for Chiquita to relocate there. Now, Chiquita is merging with Fyffe of Dublin, another huge fruit supplier and moving its headquarters from Charlotte to Ireland. Per my brother in Charlotte, the city leaders are pretty perplexed, wondering if they can recoup any of those incentives, especially since they are moving with just over a year in Charlotte. Quite a weird scenario. Guess it shows that sometimes shilling a city for a business can backfire.

[LA Muskie]

This is truly one of those "what if" moments...

Cincy was "outbid" by Charlotte to the tune of $22 million in tax incentives for Chiquita to relocate there. Now, Chiquita is merging with Fyffe of Dublin, another huge fruit supplier and moving its headquarters from Charlotte to Ireland. Per my brother in Charlotte, the city leaders are pretty perplexed, wondering if they can recoup any of those incentives, especially since they are moving with just over a year in Charlotte. Quite a weird scenario. Guess it shows that sometimes shilling a city for a business can backfire.
Don't the tax incentives usually accrue over time? I have a hard time believing it "cost" Charlotte more than $2mm and frankly even with the move the city will probably have realized some benefits -- a bunch of Chiquita folks will have relocated there, and likely spent $$$ on that process. Now the empty real estate? That's another story...

[GoMuskies]

I assume they'll keep some staff in Charlotte? Perhaps have their U.S. HQ there? I doubt that Chiquita/Fyffe will cease to have a footprint in Charlotte.

[PM Thor]

Don't the tax incentives usually accrue over time? I have a hard time believing it "cost" Charlotte more than $2mm and frankly even with the move the city will probably have realized some benefits -- a bunch of Chiquita folks will have relocated there, and likely spent $$$ on that process. Now the empty real estate? That's another story...

Could you imagine that? Having to move your family, and then have the company merge with another within a year? Yeegawds.

And yeah, I don't know how the tax incentives are spread out, are they front end loaded or what? Nor how Charlotte will play in any future Chquita endeavors, just really noting how it's a mess to try to figure out, and I feel for the employees in this situation. It's a bullet dodged for Cincy I think.

[sirthought]

I don't know the deal Chiquita got, but based on how I understood what went down with Convergys, the city gives them a deal on taxes (annual + city fees just for getting set up), but there are conditions that have to be met over a period of time, such as X number of new positions and longevity of being there.

Convergys wasn't adding the jobs they promised and the city asked for their money back. It's a fair if a company doesn't keep their end of the bargain. I believe another recent case like this happened around Milford. They got tax breaks and set up cost reduced in exchange for more jobs and the company just didn't grow as they expected.

It's sad that cities have to fight for jobs like this.

[KabeX]

Not sure of the real impact yet. The global HQ will be in Dublin ostensibly for tax reasons. I assume they will retain a US based subsidiary and not a lot will change right away.

[blobfan]

One of the key reasons for choosing to move was the greater access to Spanish speaking employees in Charlotte vs Cincy. I doubt the Irish will fill that void. A few middle management positions may go but the personnel that get our bananas from Central and South America to North are likely to keep their jobs.

[boozehound]

I agree with Blobfan (and others) that this is probably kind of a non-story. Charlotte will lose some executive level positions I'm sure, but it's hard to imagine them being able to 'in-source' many of the day-to-day functions to Ireland. For example, Anheiser Busch got bought by InBev, but their United States presence hasn't really changed that much. The same has been true for many other US companies that have been purchased by foreign organizations.

[Kahns Krazy]

Who would have thought that Ireland was one of Chiquita's emerging markets?

[West is Best]

One of the key reasons for choosing to move was the greater access to Spanish speaking employees in Charlotte vs Cincy. I doubt the Irish will fill that void. A few middle management positions may go but the personnel that get our bananas from Central and South America to North are likely to keep their jobs.

I think this will hurt Charlotte quite a bit. Spain is about a 2.5 hour flight from Dublin and has 25% unemployement, so the talent pool isn't as bad as you might think.

I have a friend who moved from Cincy to Charlotte as part of the relocation. He said that a unexpectedly high percentage of Cincy natives gave up their jobs. I've also read that the whole process has cost the company a lot more than they expected. Cost cutting is a likely motive.

[xu82]

As a long time banker back in the merger-mania days, I have some idea what it's like for those families. It's rough to lose the "safe" day-to-day job you kind of feel will be there forever, as long as you do your thing properly. I know the world has changed and everyone has some idea it's dangerous out there, but you never think it will happen to you.

My real question (and it is a question, as I don't even pretend to have an answer) is how does the return on investment in a major sports team compare to the return on an investment in a major corporate presence like Chiquita? The tax benefits offered by Charlotte ($22 million?) seem almost petty compared to the typical stadium expense ($200-500 million?) absorbed by communities trying to keep their sports teams. I don't know what the stadium deal was in Cincy, but I do wonder. It seems like we get so emotionally wrapped up in our teams we are willing to spend more to keep them. I wonder what the better investment is?

[xu82]

Fortunately, in this case, I doubt you will lose the Bengals to Ireland.... (but maybe London on occasion).

[Kahns Krazy]

I think this will hurt Charlotte quite a bit. Spain is about a 2.5 hour flight from Dublin and has 25% unemployement, so the talent pool isn't as bad as you might think.

I have a friend who moved from Cincy to Charlotte as part of the relocation. He said that a unexpectedly high percentage of Cincy natives gave up their jobs. I've also read that the whole process has cost the company a lot more than they expected. Cost cutting is a likely motive.

A relocation in conjunction with an effort to cut costs followed by a merger with a foreign company? My guess is that the Cincy natives that didn't make the move were a highly expected outcome of that strategy. Who makes the most money from this merger, and who was instrumental in the relocation? I'd be very surprised if those were different sets of people.

[xu82]

A relocation in conjunction with an effort to cut costs followed by a merger with a foreign company? My guess is that the Cincy natives that didn't make the move were a highly expected outcome of that strategy. Who makes the most money from this merger, and who was instrumental in the relocation? I'd be very surprised if those were different sets of people.

It speaks well of Cincy if people didn't feel desperate to keep the job and chase the move. They felt they had options. I doubt the merger plans were know to Charlotte or that offer wouldn't have been made, but still it seems to me, as an outsider, like a good bet. In black jack you hit on 12. Just know there can be repercussions... (But you'd better do your homework or be ready to face the music)

[XUFan09]

My real question (and it is a question, as I don't even pretend to have an answer) is how does the return on investment in a major sports team compare to the return on an investment in a major corporate presence like Chiquita? The tax benefits offered by Charlotte ($22 million?) seem almost petty compared to the typical stadium expense ($200-500 million?) absorbed by communities trying to keep their sports teams. I don't know what the stadium deal was in Cincy, but I do wonder. It seems like we get so emotionally wrapped up in our teams we are willing to spend more to keep them. I wonder what the better investment is?

I doubt it's worse than stadium "investments."

http://deadspin.com/detroit-scam-city-how-the-red-wings-took-hockeytown-fo-1534228789

And cities need to learn they can say, "No," and still win (http://deadspin.com/dolphins-offer-to-pay-majority-of-sun-life-stadium-upgr-1540748237).

*derailing thread*

[Kahns Krazy]

I think it speaks to the DNA of Cincinnatians, who don't generally pick up and move. I know several ex Chiquita employees who chose not to move, and they are all native Cincinnatians. If Chiquita was blindsided by this, then they didn't do their homework. They had expensive space in downtown Cincinnati which was not a great geographic fit in the first place, a lot of high paid executives, and a city willing to pay them millions to relocate, and now a multi-billion dollar merger after streamlining their payrolls? I do not believe the timeline is a coincidence.

[GoMuskies]

No one wins with the Dolphins stadium situation. The only good thing about that place is that it's across the street from Calder Race Course. Whoever decided they should move the stadium there should be shot and then hanged. And then shot again.

*contributing to derailing*

[Kahns Krazy]

I doubt it's worse than stadium "investments."

http://deadspin.com/detroit-scam-city-how-the-red-wings-took-hockeytown-fo-1534228789

And cities need to learn they can say, "No," and still win (http://deadspin.com/dolphins-offer-to-pay-majority-of-sun-life-stadium-upgr-1540748237).

*derailing thread*

Not at all comparable. Cincinnati has already landed larger employers since Chiquita left. The supply of NFL teams is far more scarce than the supply of Chiquita size companies.

[xu82]

I doubt it's worse than stadium "investments."

http://deadspin.com/detroit-scam-city-how-the-red-wings-took-hockeytown-fo-1534228789

And cities need to learn they can say, "No," and still win (http://deadspin.com/dolphins-offer-to-pay-majority-of-sun-life-stadium-upgr-1540748237).

*derailing thread*
I sincerely doubt the investment equality too. I bet the corporate thing is a FAR better investment. I seems dirt cheap to keep all those corporate jobs and full office space and on and on. I'm sure the multipliers are very different (I hope beer sales are better at a football game) but I've never trusted that crap. We seem to be moved by "sports team" emotion but lack "corporate" emotion. Hell, they're the ones who fill the suites where the money is made! Yet I still want my teams to get what they need, on an emotional level, to stay where they are. But you have to draw a line somewhere.

[xu82]

Not at all comparable. Cincinnati has already landed larger employers since Chiquita left. The supply of NFL teams is far more scarce than the supply of Chiquita size companies.

There is no arguing scarcity. NFL teams are scarce. WNBA teams are also scarce, Exxon Mobile is valuable. (Hyperbole, I admit.) I am just wondering about the economic impact. Not arguing, but wondering. How many jobs, total economic impact, tax revenue generated, etc. I wonder about the numbers, but I don't trust the numbers people provide. So I guess my point is moot. I want very much for my Bills to stay in Buffalo, but I wonder if they don't need an investment in economic viability more. If they had that maybe they could afford to support the Bills.

[Snipe]

I think that government incentives should be against the law.

[Kahns Krazy]

I think that government incentives should be against the law.

So every state and locality should be required to have the same tax structure, regardless of the relative operating costs of that area? What about personal tax deductions? What about volume based discounts in private industry? Should farmers in north central ohio pay the same business taxes as P&G in downtown Cincinnati? I'm not sure that you have fully thought your position through.