Score Another One for the ‘Red Team’ : Public/private effort, after convincing Lego of California’s appeal, wins over Taco Bell
In the end, perhaps the key factor in Taco Bell Corp.’s welcome decision to keep its headquarters in California was a super-sweet deal on rent from its landlord. But the Legislature’s smart moves to make the state friendlier to business did play a part, and demonstrated a lovely change in the climate in Sacramento.
The fast-food giant announced Friday that it had decided to stay in Irvine rather than move to a Dallas suburb and pocket $10 million in tax breaks there. Texas tales of a state with less regulation, cheaper land and no personal income tax were alluring, but ultimately unpersuasive.
Taco Bell’s chief executive, John E. Martin, said the high cost of moving and the cheap rent in the new lease were more important inducements than California’s recent reform of workers’ compensation and other attempts to keep companies from relocating out of state. But he did praise those steps and urged lawmakers to provide tax incentives for companies interested in moving to California or expanding in the state.
That’s a good idea, and legislation to do that is up for reconsideration next month. True, the state is in a fiscal bind; but a compelling argument is that new companies and firms that stay generate enough in taxes and revenues to make up for the tax dollars spent to appeal to them.
Even before Taco Bell’s decision, the Danish toy maker Lego cited Sacramento’s actions as one reason it picked the San Diego County community of Carlsbad over a Virginia site for a proposed $100-million theme park. Both Lego and Taco Bell were wooed by “red teams,” ad hoc groups of public and private officials dispatched to retain companies already in California and bring in new ones. Such full-court presses proved a welcome departure from the indifferent attitude of past decades, when too many seemed to believe that year-round sunshine, nearby beaches and the magic of the Golden State were all the attractions that were needed.
The state does have genuine delights, as was evident in the glee of Taco Bell’s 1,000 workers at learning they would be staying. But sun and sand are not enough automatically to tilt the scales California’s way. That lesson appears to have been learned the hard way by state and local government officials.
One “red team” member noted that the first phase of Taco Bell’s new lease expires in 2000 and promised to keep paying attention to the company. That’s smart. Government cannot provide everything a company wants, of course, but it says a lot when it shows businesses they are welcome.
