It's time for an update on this game of musical chairs."State Farm's move to Richardson will leave behind big blocks of empty office space." That was the headline to a story in The Dallas Morning News revealing the ugly secret behind the big win for Richardson. ... It turns out that many of the 8,000 employees moving into those new State Farm office towers will be moving from just down the road, where State Farm is currently leasing space in five office buildings in Richardson's Galatyn Park. That will leave a huge hole behind that will need to be filled, perhaps with the city trying to lure other big tenants to move.
Source: The Wheel.
Last week it was announced that RealPage plans to move 1,400 employees into a 400,000 square foot office building near Richardson's Galatyn Park.
"Compelling." For whom? Playing this form of musical chairs is expensive to taxpayers. To the direct cost of $117 million in tax breaks given to CityLine we can now add an indirect cost, the unknown financial incentives to be given to RealPage to backfill the space vacated by State Farm. Who knows what the total cost will be after this latest round of musical chairs?The company and the Richardson Economic Development Partnership are working on an economic incentive agreement, which has yet to be finalized. RealPage's Winn declined to comment or share the details of the economic incentive package, but called it "compelling."
Source: Dallas Business Journal.
The game of musical chairs won't stop there. After RealPage's move to Richardson, it will leave behind 250,000 square feet of newly vacated office space. But it will be the taxpayers of Carrollton who will be asked to pony up financial incentives to lure someone else to move into that space.
Unlike the children's game where all but one player has to lose, this form of musical chairs can be a never-ending source of revenue for businesses. Although the dealmakers are quick to point out the increases in projected tax revenues from these deals, no one seems to be keeping track of the total cost of these tax expenditures. No one seems to be doing the what-if analysis that shows what the results would be without such deals. Maybe the buildings would sit empty a little longer. Maybe the building owner would have to reduce his asking price. But maybe the city would come out ahead by letting the free market work. Instead, the city, the chamber of commerce, and their joint creature, the Richardson Economic Development Partnership, all are focused on swinging big economic development deals. The taxpayers pick up the cost. The long-term impact on the city is not examined. The dealmakers on both sides make themselves look good in the headlines of Dallas Business Journal. And the game moves on to the next big deal.