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November 10, 2010

2

“Giant sucking sound” of Perot jobs headed to India; Journal Star rushes to Perot’s defense

by Deena Winter

It happens to journalists all the time: They write a story, and then another reporter picks up on the story and points out an angle they completely missed, and so the original reporter defends himself by saying, “Well I knew all about that, but it wasn’t important because of X, Y, Z.”
I believe I may have employed this very defense myself a time or two during the past 20 years as a journalist. And now, the good ol’ Lincoln Journal Star is doing it.
Last weekend, the LJS broke a good story about how according to a state Labor Department filing, Perot Systems’ Lincoln office has shipped 250 jobs to India. The only thing missing in the story – a major omission – was the fact that two years ago, the city of Lincoln gave Perot $3.5 million in TIF to help consolidate its seven Lincoln offices into one and eventually expand their Lincoln operation.
For whatever reason, whether they forgot about the TIF or didn’t think it was important, the Journal Star didn’t mention the $3.5 million carrot. So I blogged about it.
Now business reporter Matt Olberding (who didn’t write the original LJS story) has responded with his own blog, in which he wrote, “I’m not in the business of defending people or businesses that the Journal Star writes about — that’s not my job — but I do feel the need sometimes to correct incorrect information.”
And then he proceeded to do exactly that: defend Perot and the city for giving $3.5 million worth of tax incentives to Perot right before they (allegedly) shipped off jobs. This has to be embarrassing for city officials, but Olberding rushed to their defense by saying Perot “hasn’t received any tax incentives – at least not from the state.”
Well, this “local blogger” didn’t say they got tax incentives from the state – although apparently they may yet receive some, according to Olberding’s own reporting. I said they got them from the city. Which makes the LJS headline “No tax breaks for Perot” inaccurate.
Olberding’s point is that Perot never promised jobs in exchange for TIF. They promised to build a new building. So by this logic, the city wanted to help Perot build a new building and that’s it? Really?
But in reality, when the Perot TIF was being debated by the City Council a few years ago, city and chamber officials said Perot planned to add 150 jobs in Lincoln. I specifically remember them saying these were $50,000 a year jobs – not piddly call center jobs.
Although Perot won’t confirm the number of employees it now has in Lincoln, it’s pretty clear there are fewer now than before the city kicked in $3.5 million in tax increment financing to help them move.
I guess if that was just idle talk and wishful thinking, the City Council had better look more closely at future TIF agreements, because new jobs were clearly a motivation for approving the TIF.
Even though the cost-benefit analysis prepared for the project “mentions” a “potential” increase in jobs, Olberding quotes the city’s Urban Development Director, David Landis, saying, “There is nothing in the Perot (TIF) agreement that promises jobs.”
In my experience, the City Council pays close attention to those cost-benefit portions of redevelopment agreements. But maybe some council members really thought they were giving Perot a $3.5 million tax break just so they could build a new building. And then ship jobs off to India.
In which case, no harm done.

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2 Comments Post a comment
  1. Jeff Poley
    Nov 11 2010

    Deena:

    It would be interesting to know what specific improvements the $3.5 million in TIF funds paid for. It seems that the city is starting to play a little loose with the kinds of improvemnets that are allowed under the TIF enabling legislation.

    Jeff…

    Reply
  2. Marilynn Burbach
    Nov 16 2010

    Deena, You are so good. Keep up your watch on City Hall. We never read anything in the paper on whats going on since you are not there.

    Reply

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