12 April 2012

Big Business Deals Don't Mean Much

Story first appeared in AnnArbor.com.

Tax incentives, like the one Ann Arbor gave to Pfizer in 2001, often don’t result in the economic benefits local governments think they will, reports Michigan Capitol Confidential, a publication of the Mackinac Center for Public Policy, a free market think tank.

The article notes Pfizer got the $84 million tax abatement after suggesting it might leave town if it didn’t. Six years later, Pfizer announced it was leaving anyway.

As the Ann Arbor area struggled with the job losses at Pfizer as well as others wrought by the faltering economy, jobless rates rose from 5.5 percent in 2007 to 10.3 percent in 2009, the article notes. But the jobless rate now stands at 5.9 percent.

Community leaders say a coordinated response helped soften the blow of Pfizer’s leaving. The economic development organization Ann Arbor SPARK and its then-CEO played an integral role in organizing that response, local leaders said.

Eventually, the University of Michigan bought the site and has said it plans to have 1,700 workers employed there by the end of the year.

For more local and Michigan related news, visit the Michigan Business News Blog.

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