From: bzs@ussr.std.com (Barry Shein)
Subject: Re: Lotus as a public charity
Organization: The World
	<BZS.92Sep10181505@ussr.std.com>
	<1992Sep12.194354.1198@miki.pictel.com>
	<BZS.92Sep12222436@ussr.std.com> <ART.92Sep12225102@world.std.com>
	<BZS.92Sep13004331@ussr.std.com> <ART.92Sep13115648@world.std.com>
Date: Mon, 14 Sep 1992 00:37:58 GMT


From: art@world.std.com (Al Thompson) [responding to me]
>   I don't believe that. I believe they are doing it only because they
>   believe they (Lotus) can get away with it, that they have leverage
>   (the threat of leaving.)
>
>Right.  So?  If they can make that leverage work, more power to them.

Would you feel so flippant if you were the one who had to pick up the
resultant tax bill?

Here's another idea, why don't you write Cambridge an $800K check and
ask them to please reduce Lotus' taxes by a like amount?

Silly, but in effect that is the issue, right? Someone has to either
pick up the tab or live with less (i.e. the rest of the taxpayers.) So
``more power to them'' is really the comment of an unaffected
bystander, right?

I know, for example, if this were going on in Brookline (and for all I
know something like it is) as a small business I'd be concerned.
Because I know what Brookline would do the day after their ``Lotus''
was granted a tax decrease, they'd send me and every other small
business (possibly via their landlords) a note saying ``sorry, but to
make up for this you will have to pay $XYZ more this/next/etc year''.

And moving would not be that easy due to multi-year leases etc. So I
would be looking for some other way to say ``go stick it in your ear''.

See, that's one problem, it opens up a battlefield if people (others)
perceive they are being treated unfairly. And in such a situation I
think people would feel that way. And hence use whatever leverage they
have, etc. I suppose we can shrug our shoulders and say ``that's
life'', which to some extent it is of course. But other than sleep and
sex I don't have to take it lying down :-)

>   Unless this sort of dealing for lower taxes is more common than I
>   suspect there is something odious about it, or at least the way Lotus
>   seems to be going about it. I wouldn't be shocked if Cambridge would
>   be better off in the long run telling Lotus to take a hike now, before
>   this becomes a disaster as a precedent.
>
>I don't see anything odious about it.  Cambridge might well be better off
>who knows?

Well, it's odious inasmuch as either their argument applies to more
than just Lotus (which I suspect it does, if it's justified at all) or
it doesn't apply, fairly, to Lotus or anyone else. It's framing it in
a peculiar demand of and for Lotus that I find odious.

For example, had they said ``Cambridge commercial property taxes are
too high, they are hurting our business (any tax that's too high hurts
your business of course), and we think it's only because we're being
unfairly forced to subsidize a ludicrous rent-control situation. Fix
the problem or we're out of here'', then I would be forced to say that
whether I agree with Lotus or not that's a perfectly valid opinion.

Certainly "fixing" rent-control as they might envision, and if it were
true (it may be, it may not, I'm just not forming an opinion here)
would help everyone unfairly burdened, including Lotus of course.

But thus far all we've been presented with is what amounts to a
troglodytian ``wanna pay less, gonna move out''.

Which of course is their right, but there's nothing that forces me to
respect them for taking such a view or to even recommend caving into
it, other than in kind (perhaps the trog will win this time due to the
size of his club.)

>A couple years ago one of the big Japanese companies (NEC????) wanted to
>put a research lab in one of the western burbs.  They were anticipating a
>$770Mbuck payroll.  They asked for tax concessions and were told to stick
>it.  Result?  No lab, no $700Mbuck payroll.  So who won that one?

I suppose it really depends on the exact numbers involved. Or can't
you envision numbers being demanded that are so ludicrous that we'd
have to conclude the burb won?

I think, in general, tax concessions are a fine tool for influencing
businesses. I think the tax concession that caused Digital to put a
large facility into Roxbury worked out quite well for the duration (I
don't know if it still exists.)

But, of course, there has to be give and take, a quid pro quo.

If it's merely caving into threats then, well, the benefit may be much
more muddied. Particularly in the extrapolation which is nearly
inevitable. At least in the DEC case such a concession was open to any
business willing to do the same. I believe Wang at the time took up
the same offer, in Chinatown.

But that doesn't seem to be the situation with Lotus, or at least no
one has clearly made that argument beyond some very generalized notion
that if any business leaves an area it can be a hardship (i.e. no one
has shown exactly why Lotus should be treated especially.)


--
        -Barry Shein

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