The recession is over, let's spend money! Boston Development 2010

Considering the W just went bankrupt, and burned the city in the financing process, I can not believe anyone has the stones to ask taxpayers to subsidize another new hotel.
 
So, they raised taxes to built the BCSE.

And now they want to raise taxes again to expand it? Shouldnt the first round of taxes be enough?

Also:

"In the last 10 years, only two hotels with more than 700 rooms have been built in the United States without public assistance, according to PiperJaffray, one of several consultants advising the convention center?s study committee. Both were in New York City."

Ehm......what about Vegas?
 
I believe the area does need hotels to help the convention center. and with hotels will come entertainment and housing around it.

My problem (and the issue with development at large these days) is why do we need to subsidize a 1000 room hotel. Why can't the business environment support 4 250 room hotels throughout the seaport. boom 1000 hotel rooms, more diverse building and entertainment options. Why is this no longer possible anywhere?
 
I find it hard to believe that Vegas doesn't offer any public subsidies.

Regarding the hotel, however, I'm split. On the one hand, I'd love to see a big, beautiful, new hotel next to the convention center. Preferably, on the opposite side as the Westin, so as to flank the mega-portico thing. Not to mention, the argument that having a high concentration of hotel rooms within walking distance of the convention center will attract larger, more profitable conventions, is hard to deny. Plus, increasing the critical mass of people in the Seaport will no doubt lead to more street life, even if everyone is a visitor.

On the other hand, I can't believe they would ask for more tax money. I won't pretend to be a financial expert, but why can't the current taxes pay for it? Why can't the MCCA take out a regular loan to pay for this? I might be okay with a small fraction of government assistance, or maybe some other type of incentive, but is it truly necessary for the city and state to cover the entire bill? Maybe they should be making this same argument to private investors, developers, and hotel operators instead of citizens.
 
This same argument ("we need to build bigger" and "we need to subsidize") is exactly what you're going to hear in a couple years after casinos come to town. "We need more hotels" and "If only we had more slots" etc., etc., etc.

East Boston won't know what hit 'em.
 
Why not put the casino in this hotel and let it subsidize itself.
 
About public subsidies, here's how I feel about it (there's a similarity, if you think hard about it), courtesy of an old joke from Jay Leno (an actually funny joke).

(Okay, I just realized this joke is only funny if you read it in 1984 when things cost lots of money ...)

So when I started to do well in comedy I wanted to share my success with my family. I tried to buy my Mom stuff but she'd always say, "Oh, no, you save your money, don't spend any money on me," etc.

Her VCR broke down so I decided to buy her a new one. I gave it to her and she said, "Oh, no, this is way too expensive a gift, I can't have you using your money on this," so I made up a story, and lied "Ma, it's cheap, it only cost me $5." "Oh, okay then, I'll keep it."

A couple weeks go by and I go to visit her. She hands me twenty dollars. "What's this for," I asked.

"My friends want one, too."
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Once you start giving subsidies to public corporations, every public corporation will expect one.

The city of Boston, Massachusetts needs to beg companies to come here???
 
Perhaps begging can take a different tone? I like the word "inspiring," or at the very least, "enticing." Instead of straight-up paying for companies, we should be finding creative ways to make Massachusetts a better place to do business, economically and socially.
 
JohnAKeith said:
The city of Boston, Massachusetts needs to beg companies to come here???
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Yes, it does. Companies won't hesitate to locate wherever it's cheapest, however inhospitable the climate or insignificant the town. 50 years ago, no one lived in Phoenix, banks were headquartered here instead of North Carolina, etc.

In fact, I was surprised that even with the state incentives, JetBlue chose to stay in NY as opposed to moving (to Orlando, not Chicago). Similarly, I didn't expect Continental to move its operation to Chicago when they merged with United (they probably get quite a lot from IL as a result).

I'm not entirely sure where your haughty tone comes from, given that Boston hasn't gained a single major HQ in the last 20 years that I can think of and has lost quite a few. Other than Fidelity and Liberty Mutual, the herd is pretty thin (unless you count start-ups in Cambridge). As Philly, Charlotte and Dallas continue to grow at our expense, maybe its time for Boston to wake up to how business is done these days.
 
My haughty tone is based on my belief that it is foolish to race against other cities to the bottom, to get into a pissing contest with other cities over who can offer the most incentives at the highest cost.

It's a no-win situation.

I certainly see no reason to emulate Charlotte, Philadelphia, or (ugh) Dallas, thank you very much.

(You aren't under the impression that the reason Bank of America is in NC is because it chose to move there, are you? Do you know the history of the bank mergers?)

Where others choose to follow I prefer to lead.
 
JohnAKeith said:
You aren't under the impression that the reason Bank of America is in NC is because it chose to move there, are you? Do you know the history of the bank mergers?
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Bank of America could have relocated to Boston when it merged with Fleet, just like Continental moved its HQ upon merging with United or Fleet itself moved to Boston when it bought BankBoston/Shawmut (yes, I know the difference between acquisitions and mergers, but the concept holds) even as is, BoA is moving much of its NE operation to its new building in NY.

It isn't about lowering ourselves to the level of others (I'm no fan of Dallas or Phoenix either), its about recognizing that if our marketing strategy is simply: "we're awesome," we won't get very far these days. Theoretically, those cities have succeeded by offering pay-outs to compensate for their lack of a world-class, cosmopolitan atmosphere and reputation. Boston may not have to offer the bribes they do, but we do have to offer enough to even the balance, because we're losing big.

To make another analogy, I'm sure families have decided to send their kids to URI instead of Harvard (not that there's anything wrong with URI) because they got a better aid package. Harvard doesn't necessarily need to match that package, but if they value the student they should increase their offer until the combination of the lesser money and Harvard's reputation are too much to turn down.

We may be better than needing to bribe people and businesses to be here, but other cities aren't, and the bean counters and CEOs making the decisions certainly aren't.
 
Are Bostonians too proud to see that their market strategy is lagging behind those they deem "lower" than them? It seems like it. I think Boston needs to get rid of that image. How can you lead if your strategy is not efficient?
 
Improve your brand until it's simply irresistible. That should be the strategy, not this shameless spending into oblivion (like John said, a race to the bottom). Spend tax dollars on improving the city for everyone, not filling a corporations coffers. Instead of bailing out bad loans, the city and state should instead focus on attracting businesses into deals based on the amenities they might receive.

"Hey Liberty Mutual, we really think that you should stay here. We know it's more expensive, and we know that Charlotte is offering you all sorts of financing packages, but we can't do that. Instead, we'll help beef up city services in your area, build that new T stop, and repave the roads, and after some review, we'll see what we can do about tax adjustments."

Is there such a thing as a district in which taxes are lowered on land or property in order to entice companies to stay and/or build? Make deals based on an entire district, not with individual corporations.

Idea in progress, more to come later.
 
re: Vegas.

In 2007, Nevada gave "incentives" worth $570 million to 41 businesses.
http://www.expand2nevada.com/development.html

I am both curious and eager to learn of the unique values that Boston offers a business or company that sufficiently offset cost considerations, --values so great that Boston ought not offer incentives to attract or keep businesses.

One cost consideration to many businesses is energy cost:

A recent report [2007] by the Pioneer Institute emphasizes the competitive disadvantage energy costs pose to the Bay State: average industrial electricity rates in Massachusetts are 59 percent above the national average, and commercial electricity rates are 48 percent above the national average.
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Another is wages. Massachusetts fights with NJ as to which state has the highest per capita income after CT. So labor is not cheap.
 
kennedy said:
Improve your brand until it's simply irresistible. That should be the strategy, not this shameless spending into oblivion (like John said, a race to the bottom). Spend tax dollars on improving the city for everyone, not filling a corporations coffers. Instead of bailing out bad loans, the city and state should instead focus on attracting businesses into deals based on the amenities they might receive.

"Hey Liberty Mutual, we really think that you should stay here. We know it's more expensive, and we know that Charlotte is offering you all sorts of financing packages, but we can't do that. Instead, we'll help beef up city services in your area, build that new T stop, and repave the roads, and after some review, we'll see what we can do about tax adjustments."

Is there such a thing as a district in which taxes are lowered on land or property in order to entice companies to stay and/or build? Make deals based on an entire district, not with individual corporations.

Idea in progress, more to come later.
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A company's stockholders are not interested in amenities, they are interested in the bottom line, which is profit and dividends. A company's officers are beholden to the stockholders, not to a mayor, city council, or neighborhood citizenry.

Most states and some cities have economic development zones. Here's Colorado's.
http://www.colorado.gov/cs/Satellite/OEDIT/OEDIT/1167928191402

There is a lot of cheerleading in this forum for Boston needing more tall towers, yet when it comes to finding businesses to occupy the space in all these new towers that people want, the level of interest in bringing about that part of the equation drops off markedly, reaching even to the point of hostility. Remarkable logic.
 
Where are you finding hostility towards attracting businesses? I think people are just hungry for a better solution, rather than subsidizing businesses.

My comment about amenities may have been a bit of a stretch, but I think that an economic development zone is an idea worth analyzing in depth.
 
kennedy said:
Where are you finding hostility towards attracting businesses? I think people are just hungry for a better solution, rather than subsidizing businesses.

My comment about amenities may have been a bit of a stretch, but I think that an economic development zone is an idea worth analyzing in depth.
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A list of some of these zones by state.
http://www.hud.gov/offices/cpd/economicdevelopment/programs/rc/tour/index.cfm

Examples of employment incentives
http://www.fdcpa.com/taxnews-Credits-Incentives.htm

Customs-free zones:
http://www.miamifreezone.com/

Incentives list for a California county:
http://www.yubasutterez.com/Zone2007/Incentives1.html
 
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