Yesterday, Governor McAuliffe was in town to announce that Nestlé USA is moving its corporate headquarters to Arlington in September of this year. Finally, the long-vacant 1812 building will have a major tenant, which is certainly good news for Arlington’s commercial vacancy rate.
The move is touted as a $40 million investment by Nestlé USA. However, it does not come without a cost to Arlington taxpayers. The company will receive a $6 million grant from the Commonwealth Opportunity Fund, a $4 million grant from Arlington, and a commitment to $2 million in Arlington spending on infrastructure as well as “extensive relocation assistance” from Arlington County.
The last point also serves notice that while the county’s press release claims it will “create 748 jobs,” these are not new jobs for our regions. Some of those jobs — exactly how many we were not told — will be filled by people relocating with the company from California.
Granted, a thriving employer in the county helps everyone regardless of how many new jobs it creates. And in this day and age of states in a bipartisan fashion offering huge financial incentives to employers looking to relocate, it is understandable that Virginia is playing in the economic development sweepstakes.
However, it once again raises the question of whether we should take a different approach, one that helps existing businesses and new businesses looking for a better economic environment.
California has seen thousands of businesses leave the state over the past few years. One study indicated businesses could see operating cost savings of as much as 35% due to the unfavorable business climate.
Virginia is consistently ranked in the top 10 to 15 places to do businesses by those who rank these things. However, our ranking is moving in the wrong direction. In CNBC’s rankings, Virginia slid from 3rd to 13th over the past four years.
Arlington, and Virginia as a whole, should have one goal — make us the number one business climate for creating and operating a business. It will not only make us more attractive to businesses looking to move, but will allow our current businesses to grow and thrive.
Unfortunately, Democrats praising the $12 million of taxpayer money given to Nestlé today would almost certainly demonize any moves to simplify and reduce taxes and regulations as “giveaways to the rich and powerful” tomorrow.