Governors in New Mexico and California barely took time to lace up their sneakers last week before sprinting to court Nike following the shoe manufacturing giant’s dustup in Arizona over, of all things, its decision to discontinue marketing a product featuring a Betsy Ross flag.
When Nike-backed activist and former NFL star Colin Kaepernick raised the issue of racial insensitivity associated with the flag, which has been co-opted by some exclusionary groups, the company pulled the shoes from circulation out of an abundance of caution. Instead of remaining focused on important issues facing Arizonans, Gov. Douglas Ducey immediately threatened the company’s handsome manufacturing plant tax incentives in that state. He was essentially asking the sports shoe king to leave.
His tweet: “Nike has made its decision, and now we’re making ours. I’ve ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here.”
And, swoosh, that immediately set New Mexico Gov. Michelle Lujan Grisham’s Twitter thumbs tapping “Hey @Nike, let’s talk” in an unsubtle invitation to consider moving its game just across the state line into “The Land of Enchantment.” New Mexico continues to land major movie production studios such as NBC Universal and Netflix, which promise to pump billions into the state’s economy.
On July 2, California Gov. Gavin Newsom jumped on the issue with both feet, yet again on Twitter: “Hey, @Nike — we’re just a quick jaunt over the border … Thank you for doing the right thing. CA is open for business and welcomes those that represent the best of our American values.”
Let’s not dwell on the genius at work that determined Nike’s world of customers had secretly been pining to purchase $150 sports shoes with a Thirteen Colonies theme. Just listen to the crowd chant, “Go, Delaware! Beat the Commonwealth of Massachusetts!”
Nothing like those Revolutionary War era kicks to intimidate the ballers on the playground. I can almost hear the smack talk now: “One if by land, two if by sea, there’s nobody here who can handle my 3!”
The stinky shoe controversy aside, should Nevada’s Gov. Steve Sisolak be weighing in on this subject?
A check of his Twitter account has him retweeting Independence Day safety tips from the state fire marshal and pictures of him walking in the Summerlin patriotic parade. (I think he’s wearing Nikes in the picture. Does that count as a subliminal message?)
At one level, chasing Nike seems like a natural move in a state forever attempting to diversify its economy. And it’s not as if the Nevada Governor’s Office of Economic Development has so much success it wouldn’t be thrilled with landing Nike.
With 56 million visitors a year, and positioned a day’s-drive-away from 60 million potential customers and five major ports, Nevada starts to look even better. Add the fact it has no corporate income tax, no personal income tax — take that, California! — no inventory tax, no inheritance or gift tax, and no estate tax, and we’re starting to look like a good place to make sneakers. In all, we’re “a business-friendly state, with state and local governments committed to streamlining approval processes and remaining a very low-regulation environment.” (This advertisement brought to you in part by the Nevada Governor’s Office of Economic Development website.)
It’s also true Nevada has a mixed economic track record when it has rolled out the red carpet for business and showered corporations with tax set asides. While the largesse fattens corporate profits and produces some jobs, such deals also can hurt public education funding and small business growth.
Just what kind of deal has Nike been getting in Arizona?
The company has agreed to bring a manufacturing plant that would create 505 full-time jobs to Goodyear, a Phoenix suburb. The jobs would pay an estimated $48,500, including overtime and health insurance benefits. Ducey’s threat made a great sound bite, but the state’s commerce authority had only $1 million on the table.
Goodyear has also been waiving fees and making reimbursements to the shoe giant. If its estimates are sound, it will reap four times its $2 million investment within five years and nearly $500 million in long-range economic impact.
That may be a good deal for Goodyear. In my mind, it shines like a treasure chest next to the $750 million room-tax diversion used to help build the new Raiders football stadium on the Strip.
To put the shoe controversy in perspective, Ducey’s decision isn’t the dumbest move an Arizona governor has made on a racially sensitive issue. That dubious distinction is held by Evan Mecham, who prior to his impeachment decided to cancel the state’s paid Martin Luther King Jr. holiday. When Arizona voters failed to swiftly correct his mistake, the NFL yanked the 1993 Super Bowl out of Phoenix. The controversy cost the city economy an estimated $200 million.
When it comes to public investment in private business, the figures can be arranged to make any argument. In the end, it’s the political clout that usually determines whether a deal goes through, or up in smoke.
With a low unemployment rate and an economy that at least for the moment appears to be humming along, for now it probably makes sense for Sisolak to, ahem, hold his tongue.
John L. Smith is an author and longtime columnist. He was born in Henderson and his family’s Nevada roots go back to 1881. His stories have appeared in Time, Readers Digest, The Daily Beast, Reuters, Ruralite and Desert Companion, among others. He also offers weekly commentary on Nevada Public Radio station KNPR. His newest book—a biography of iconic Nevada civil rights and political leader, Joe Neal—”Westside Slugger: Joe Neal’s Lifelong Fight for Social Justice” is published by University of Nevada Press and is available at Amazon.com. Contact him at email@example.com. On Twitter: @jlnevadasmith