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Nuvasive's eastward expansion

Spinal surgery device–maker swoops on fat subsidies in Ohio

San Diego–based NuVasive, maker of spinal surgery devices, revealed Thursday that it has selected a site in West Carrollton, Ohio, in the Dayton area, for a manufacturing facility.

NuVasive will move almost 100 jobs from a current facility in Fairborn, also in the Dayton metro area, to West Carrollton. The company is

expected to add 195 more jobs in the next few years and have an estimated payroll of $14.2 million by 2018. NuVasive will spend about $45 million in the next two years to improve and equip the facility, previously occupied by another company.

According to Dayton area media, West Carrollton is giving NuVasive a generous package: complete property-tax abatement for a dozen years; waiving of city permit and application fees; a $100,000 forgivable loan upon purchase of the property; a 35 percent rebate of payroll taxes for five years; and a $2500 property-improvement grant.

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San Diego–based NuVasive, maker of spinal surgery devices, revealed Thursday that it has selected a site in West Carrollton, Ohio, in the Dayton area, for a manufacturing facility.

NuVasive will move almost 100 jobs from a current facility in Fairborn, also in the Dayton metro area, to West Carrollton. The company is

expected to add 195 more jobs in the next few years and have an estimated payroll of $14.2 million by 2018. NuVasive will spend about $45 million in the next two years to improve and equip the facility, previously occupied by another company.

According to Dayton area media, West Carrollton is giving NuVasive a generous package: complete property-tax abatement for a dozen years; waiving of city permit and application fees; a $100,000 forgivable loan upon purchase of the property; a 35 percent rebate of payroll taxes for five years; and a $2500 property-improvement grant.

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Comments
24

Is this machine a competitor of Mazor Robotics of Israel?

Dec. 13, 2015

Ponzi I have no idea. Best, Don Bauder

Dec. 14, 2015

Dayton probably should stick to what it knows about, namely, making tires. This "roll over and play dead" and "pick my pocket, please" strategy is sickening. I really have a misgiving with them offering a loan that doesn't have to be repaid. Doesn't that add up to putting taxpayer dollars right into their corporate treasury? And doesn't that also violate all sorts of legal doctrine and law that prohibits giving public funds as a gift? Tell me that these aren't gifts given. How long after these disguised bribes expire will the company head elsewhere? A few months or a year? Yep, having cities and the politicians that run them buying jobs is odious, but more important, they don't stay bought.

Dec. 13, 2015

I think you need to research your regional specialties a little better...AKRON is known for tires in Ohio....Dayton never was and was known for NCR (cash registers) and General Motors Cars among other things....but never a tire industry. You should understand that OTHER states and cities can be Pro-Business...not everyone is like California who discourages and punishes businesses at every step....

Dec. 14, 2015

Maryanne: Yes, Akron was the center of the tire industry, although it has lost the headquarters of General, Firestone, and Goodrich. Goodyear remains there. Mansfield, Ohio once had Mansfield Tire & Rubber. That is gone, along with other companies, and Mansfield is depressed. Findlay, Ohio, still has Cooper Tire, which is prospering.

In my opinion, you are confusing corporate welfare with a pro-business environment. I find cities' and states' bribing of companies to relocate to be ethically repugnant and economically futile.

One thing that happens is that a town spends so much money subsidizing a company that schools and infrastructure deteriorate. Once the company's contract ends, it looks for another location, because its employees are displeased. Best, Don Bauder

Dec. 14, 2015

I look forward to Maryanne's response.

Dec. 14, 2015

Flapper: Yes, I hope she replies. Best, Don Bauder

Dec. 14, 2015

Visduh: You make excellent points, but first I want to clarify some things. Dayton was not known as a tire maker. Akron used to be the center of the tire industry, but it has lost the headquarters of Firestone and Goodrich, although Goodyear has expanded there.

I covered Dayton in the late 1960s and early 1970s. National Cash Register (NCR) was based there. It recently moved its headquarters to Georgia -- a disgusting move based on the fact that a new CEO was from Georgia. Dayton also had several divisions of General Motors, including Frigidaire. Dayton lost thousands of jobs at NCR and General Motors. Still, Dayton has a workforce that can handle high tech at least reasonably well.

What you say is right on. This is corporate welfare on steroids. A loan that doesn't have to be repaid is repugnant, although there may be some wrinkles in there that I don't know about. The company no doubt committed itself to remaining in West Carrollton for X number of years.

What often happens with such deals is that the donor city or town loses so much tax revenue that the schools and services deteriorate, and the company leaves as soon as its contract expires. A Washington D.C. group, Good Jobs First, has done excellent work on these corporate welfare-based relocations. I have quoted it several times and interviewed officials there. Best, Don Bauder

Dec. 14, 2015

OK, OK, I was wrong about Dayton and tires, although there is a tire brand called "Dayton." Yes, it was the home of NCR, which had operations here, too. But to me, Akron, Findlay, Dayton, Wadsworth, et. al., was the rubber belt of the nation. While I generally don't like the hackneyed flavor of the term, what the nation needs in relation to jobs, is a "level playing field." The current business climate in California is rotten, and on that Maryanne and I agree. But two wrongs don't make right, and other areas that subsidize certain favored employers are misusing public funds in the name of job creation and being business-friendly. The friendliness is aimed at out-of-town corporations and organizations, meaning that the existing businesses end up subsidizing their competitors in many cases.

Dec. 14, 2015

Visduh: You make good points, as always. Yes, existing businesses may wind up subsidizing their competitors. This is especially true with retailing. Cities and towns will subsidize, say, a Wal-Mart store. Then Wal-Mart steals revenue from local businesses. (China is the big winner.) Shopping centers get huge subsidies to relocate in a certain area, and, again, steal business from local, taxpaying stores.

In subsidies for shopping centers, retail stores, auto complexes and the like, the rationale is usually to get more tax revenue -- and also provide jobs. But the new tax revenue leads to a decline in such revenue from existing stores, and employment may not go up much; people just leave an existing store to go to work for the subsidized big box import. Best, Don Bauder

Dec. 14, 2015

Visduh You are correct that the existing business are subsidizing the competition. Walmart started this trend by targeting stupid local politicians by getting them to give them reduced tax rates, etc. and bought the "jobs" crap thus destroying local businesses and replacing those jobs with low wage/low benefit part time jobs and then teaching their new employees how to collect welfare.

Dec. 15, 2015

AlexClarke: Good point that should be repeated: Wal-Mart teaches its employees how to maximize government welfare/transfer payments such as food stamps. So when you think you have saved money shopping at a Walmart store, you may be wrong. Your taxes are paying for those transfer payments. Best, Don Bauder

Dec. 15, 2015

I look forward to Maryanne's responses to both/all of Visduh's responses.

Dec. 14, 2015

Flapper: Ditto. Best, Don Bauder

Dec. 14, 2015

This story doesn't seem to have a San Diego component unless headquarters is moving too.

OTOH, the 'bribe for jobs' king is Nevada which recently claimed Elon Musk's huge battery factory. Then (from NYT) "Faraday Future, an electric car company backed by a Chinese entrepreneur, said on Thursday it would invest $1 billion to build a 900-acre factory in a suburb of Las Vegas."; "...the plant in North Las Vegas would bring 4,500 jobs to the state"

Also in recent days Boulder City NV is now home to the world's first droneport, open now but still under construction by Aerodrome. Nevada has long been tempting California companies to move there. I'm not sure local taxpayers are paying the bill however; do they pay local taxes at all?

More important to me is this - San Diego is the 8th largest city in the US; how many Fortune 500 companies do we have here? How many were here and went somewhere else? Why?

Dec. 14, 2015

swell: San Diego is the 8th largest city, but in most instances that is meaningless. What is important is the size of the market. San Diego is the 17th largest U.S. market with a population of 3.2 million. San Diego County is one of the few defined markets that is the same as its market.

Qualcomm is number 113 on the Fortune 500 and Sempra is 270. Yes, San Diego has lost some through the years, but I can't remember their names. Best, Don Bauder

Dec. 14, 2015

I think we have Qualcomm, the largest exporter of jobs and importers of foreign "engineers" in San Diego. And Sempra (enough stories about that bad dog can't be listed here).

Compare us to the Seattle area where there is Microsoft, Amazon, Nintendo, Costco, (once Boeing was HQ'd there before moving to Chicago), Alaska Airlines, Weyerhaueser (lumber and paper), REI (the outdoor goods retailer), Qwest Communications, Nordstrom, Starbucks, Trident Seafoods, Safeco Insurance, Paccar (trucks), Holland America Line, Eddie Bauer, T-Mobile, and then a long line of internet companies like RealNetworks, Zillow, Zulily and more.

Dec. 14, 2015

Ponzi: I have never figured out why Boeing moved its headquarters to Chicago, other than the subsidy must have been gigantic. I am speaking as someone born and raised in Chicago. Best, Don Bauder

Dec. 15, 2015

"San Diego County is one of the few defined markets that is the same as its market."

Please explain.

Dec. 14, 2015

Flapper: Explanation: a stupid typo by an old man. What I meant to say is that San Diego County is one of the few federal government-defined markets that is the same as a political boundary (San Diego County). Best, Don Bauder

Dec. 15, 2015

You mean a bunch of overpaid yo-yos get to do sphere-of-influence "studies" on our dime/billions?

Dec. 15, 2015

Flapper: The federal government's identification of markets is very important, particularly to the business world. Best, Don Bauder

Dec. 16, 2015

Quacks like a subsidy.

Dec. 16, 2015

Flapper: I suppose you could argue that the federal government's identification of markets is corporate welfare. However, the information is used by many nonprofits and governments, as well as corporations. Best, Don Bauder

Dec. 17, 2015

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