The giant paint company Sherwin-Williams has had its headquarters and its main research facilities in the city of Cleveland since its founding in 1866 and has often boasted about how proud it is to be there and what a good corporate citizen it is, donating to the arts and charities and the like.
But like all major corporations, it has decided to shakedown the city it has long called home and which is under financial stress in the usual way, by threatening to move its headquarters elsewhere unless it gets a good deal in the form of tax and other incentives. And in a familiar move, the city and the corporation are not divulging the details of the deal being worked out.
The administrations of Cuyahoga County Executive Armond Budish and Cleveland Mayor Frank Jackson will not rule out trying to keep secret the details related to negotiating incentives aimed at keeping Sherwin-Williams’ headquarters in the county.
Eliza Wing, chief communications officer for Budish, told cleveland.com that the administration is committed to making public “as much work product as we can,” but declined to guarantee a full disclosure.
The Jackson administration also declined to commit to publicly sharing all details related to its negotiations with the Cleveland-based paint manufacturer, which is shopping for a site to build a new headquarters.
Cleveland.com asked for pledges of transparency this week after learning that both administrations had retained law firms to assist them in negotiations with Sherwin-Williams and have signed non-disclosure agreements.
The hiring of law firms is sometimes used by governments and other public institutions in an attempt to keep negotiations secret from voters and taxpayers by claiming all workpapers and correspondence are protected by attorney-client privilege.
While it may be acceptable to keep the negotiations confidential, the question is whether the details of any agreement will be available for public comment before it is voted on by the City Council.
Cleveland was one of the cities that failed in its bid to attract Amazon but even after the deal fell through, the city refused to reveal what it had offered but was forced to reveal them after a successful lawsuit was filed. What it had offered Amazon was huge.
Those documents revealed that the city, county and state had offered unprecedented financial incentives worth up to $3.5 billion that included the city and county offering to give Amazon much of the new income and property taxes that would have been generated by the project.
It was this kind of deal that Amazon’s chosen site in Queens, New York was forced to abandon after public outcry.
Perhars the city should offer free garbage trucks to help them move. A shake down is a shake down. S-W must be watching Trump.
I don’t understand how a city can justify any sort of secret deal. They don’t have spy agencies. They don’t have armies. They’re not fighting wars or engaging in espionage with the next county over. I’m sure the representatives of the city either individually or in a group have some rights to employ lawyers to get legal advice but I don’t see how the negotiations and the products of those negotiations could possibly be covered by it.
One of the founding principles of the country was no taxation without representation. How can you tell if you’re being represented if you’re just supposed to pay without knowing what you’re getting for it? And getting cutesy and saying it’s not paying them, it’s allowing them to not pay taxes is ridiculous too. The city still takes money to run so if they’re being scumball billionaires that means everyone else has to pay their portion for them. They certainly don’t get less service from the city than an average citizen would. They tend to get far, far more from it.
The negotiations are secret, the result of the negotiations will be public if an agreement is reached that the council needs to vote on.
Why are negotiations secret? Often it’s part of the requirement made by a company to even start a series of negotiations, not the decision of the government. Companies pay a lot of money to municipalities as part of their property taxes, to the point where companies will use the threat of leaving an area, and leaving a huge hole in the tax revenues of a municipality to request tax breaks.
Further, by abandoning a factory, warehouse, distribution center, they create a ripple affect of other people and businesses leaving and likely even creating a center for blight. Losing tax revenues alone is bad enough for a struggling municipality, but blighted areas require a higher level of services and municipal monies to help clean them up. There are grants which states and even the federal government hands out to help combat blight, but those funds have been drying up.
So why do the companies making these threats try to keep the negotiations secret? There are a number of reasons, one is that they don’t even want their employees to know the executives are considering moving the facility. They don’t want bad local press or a bad reputation. They don’t want their negotiations interrupted, by protesters or even lawsuits. They don’t want citizens to urge the council members to call the companies bluff.
There are a few possible solutions. One I like is national legislation which requires companies to pay for re-location insurance.
This would work like other insurance programs, a company would pay a premium every month/year and should a company decide to move the municipality gets so x millions of dollars for y number of years to help municipalities retrain discharged workers, maintain a facility in good condition to attract other businesses (or start ups), and combat any of the effects of blight. It would have to be a national requirement, otherwise there would be incentives for companies to move to states which did not enact such legislation. If all companies are required to pay into it, at a rate determined by the value of the business, it would keep the premiums fairly low.
Such re-location insurance would significantly reduce the power a company has to threaten municipalities with leaving if they don’t get tax breaks from the municipality.