Did anybody really think that electing a Democrat governor with one of the worst economic voting records in the whole Louisiana legislature wouldn’t result in the loss of a big chunk of the state’s job creators? Maybe that wasn’t too important to the state’s voters – after all, there were hookers in the woodshed.
Well, here’s your reward, folks…
Smoothie King, a Louisiana company for almost 45 years, was coaxed with up to $2.4 million in taxpayer funds to drop its plans to move to Dallas in 2012 and stay in the state for at least five years.
But now, with Smoothie King’s commitment to stay in Metairie expiring at the end of December, CEO Wan Kim, the South Korean businessman who owned more than 100 Smoothie King franchises in his home country before coming to New Orleans to purchase the fruit-drink maker in 2012, is reportedly looking once again to move Smoothie King’s global headquarters to Texas.
A source connected to Smoothie King confirmed the possible move to WWL-TV on Thursday, shortly after the Dallas Business Journal reported the same thing based on sources in North Texas real estate. Those sources told the publication that Smoothie King Franchises, a subsidiary of SK USA, planned to move its corporate offices to a new development called The Sound at Cypress Waters, in Coppell, Texas, a Dallas suburb.
Smoothie King Chief Development Officer Kevin King told the Dallas Business Journal the company had no plans to relocate to the Dallas area, but the firm’s corporate communications group sent a more detailed statement to WWL-TV on Thursday that acknowledged it was “considering options” and promising to expose more details later:
“The company has no definitive plans to move at this time but is considering options that will support our franchise system and fuel our future growth plans. Similar to the process five years ago, we are not legally able to discuss any details pertaining to ongoing discussions. We have informed our 50 corporate team members about this exploratory process but no decisions have been made. Once we are able to legally discuss this, we will disclose the details.”
Back in 2012 Louisiana Economic Development put a package together for Smoothie King to keep the company here which included a maximum of $2.4 million in incentives based on the number of jobs the company grew – at the time its Louisiana payroll was $4.1 million and to hit that $2.4 million bonus they needed to have it reach $8.5 million in Louisiana salaries. But the last couple of years have seen business stall out a bit, so Smoothie King’s slow growth cost it about a million bucks out of the $2.4 million.
And now Texas beckons with a lot better business climate and a greatly superior tax code. Et voila.
LED and local economic development agencies GNO Inc. and Jefferson Parish Economic Development Co. are in the process of trying to convince Smoothie King to stay.
“We value Smoothie King’s corporate headquarters in Metairie as an important contributor to our state economy,” LED Secretary Don Pierson said. “Born in Jefferson Parish, Smoothie King now operates nearly 1,000 global locations through company-owned and franchise units. The company supports important causes through its community mission, and sponsors naming rights to the New Orleans NBA and concert venue, the Smoothie King Center. Throughout our engagement and relationship with the company, we have always worked toward retaining and expanding Smoothie King’s presence in the state.”
But hey – no matter what happens it’ll still be Smoothie King Arena the Pelicans play in, so there’s that.
You can make the argument that this company is holding out a hand for corporate welfare, and Louisiana’s taxpayers ought not be paying them. We won’t challenge that argument; it’s valid. But here’s the truth about that – truth you will not hear from our governor, his party or his friends in the state’s legacy media: what everybody calls corporate welfare in this context is more like an admission and an apology.
It’s an admission that our tax code, which was born out of Longite socialism and raised in Edwardsian corruption and has never been truly reformed, sucks. It’s completely uncompetitive with our neighbors to the west, among others – but of course when Texas is to your west and your tax code is punitive, it’s going to be Texas who poaches all your job-creating companies – and yet the governor and his party are too stupid and lazy to allow anyone to do anything meaningful to change that.
It’s also an apology, in the case of the Tom Bensons, Smoothie Kings and other Louisiana companies whose in-state headquarters jobs LED scrambles to save. Because in the cases of those companies everyone knows they’d be better poised for growth elsewhere, and we hate to see iconic Louisiana brands bring economic growth to some other state due to our own stupidity and poor treatment of them. Ruth’s Chris Steakhouse has its corporate HQ in Orlando. Delta is in Atlanta. And so on. They’re in those other places because they were so poorly treated by the politicians and bureaucrats here, so LED does what it can to keep the fences mended and stanch the bleeding of our private sector.
To Bobby Jindal’s credit, he did a relatively good job in stopping the exodus of companies and jobs out of the state and for a while Louisiana was actually seen as a business-friendly state. For his efforts, the morons among us spread the word that Jindal “destroyed” Louisiana, because a number of the state’s bloated government agencies and institutions had to deal with the horrors of slow or stagnant budget growth. Quel Dommage!
Now we have a governor who is more hostile to business than any in the state’s history, with a record to show it, and Louisiana’s economic performance in his first year was at the rear nationwide. There is little indication that’s going to change – in fact, the strong economic news nationwide which seems to be gathering steam is actually bad news for Louisiana, comparatively speaking. It’s one thing when you grow at 1 percent when Mississippi and Arkansas are growing at 1.5 percent. When you’re at 1 percent and they’re at 5 percent, all your kids and grandkids start moving to Mississippi and Arkansas.
Or Texas, if they work for Smoothie King’s corporate office. There’s no mistaking which way the wind is blowing right now. And you can remember this when John Bel Edwards once again confuses “tax reform” with tax increases as he fumbles about in an effort to solve Louisiana’s never-ending budget deficit.