Omaha World-Herald. Oct. 2, 2015
Despite ConAgra decision, Omaha will keep moving ahead.
Yes, it hurts. After nearly a century in Omaha, ConAgra Foods announced Thursday that it will move its headquarters to Chicago.
The company is eliminating 1,000 corporate jobs in Omaha and moving at least 300 others to Illinois. It’s part of an effort to achieve cost savings of $300 million as the company remakes itself under pressure from investors. About 1,200 employees will remain here.
News such as this is never easy to hear, especially when it involves an old friend. But this reflects more on the company than on the city.
ConAgra was born in 1919, when four central Nebraska grain mills came together as Nebraska Consolidated Mills. It moved to Omaha in 1922. In the coming years, we hope ConAgra’s managers and their successors remember the company’s roots and record of citizenship in Omaha so the ties can remain strong.
For Omahans, our first thoughts are for our neighbors and friends who are losing jobs, as well as those who must relocate. Those disruptions in their lives are difficult, and we want them to know that the Omaha community is ready to assist them.
At the same time, Nebraska has long lamented the shortage of qualified workers to fill open jobs. So this moment offers Omaha employers a rare opportunity to make valuable additions to their workforces with an infusion of proven, top-notch employees who have strong regional ties. Such a supply of intellectual capital is not available often.
State and local officials need to do all they can to help keep that talent, too. A rapid response to help the affected find work is vital, from both the Nebraska Department of Labor and local and state Chambers of Commerce.
It’s not clear what might happen to ConAgra’s downtown riverfront campus.
City and state leaders need to engage with the company as it decides where to house ConAgra’s remaining Omaha operations. Those discussions must include the best future uses for that valuable land ConAgra now occupies.
They needn’t be shy about advancing what’s best for the city. There aren’t many communities of Omaha’s caliber that have a potentially available corporate campus in such a prime location. If some or all of the campus were to become available, that real estate provides Omaha with a serious recruiting weapon.
Relocations of corporate headquarters aren’t uncommon. Boeing left Seattle; Cadillac left Detroit; Rubbermaid left northern Illinois for Atlanta. “It doesn’t necessarily create a black eye for Omaha,” said John Boyd Jr., a principal with the corporate site selection firm Boyd Cos. Inc. “It’s specific to the dynamics of what’s going on with ConAgra.”
Despite this loss, Omaha is well-positioned to remain on its upward trajectory.
ConAgra and other companies have benefited from the Midlands’ work ethic and the strength of the region’s schools, colleges and universities.
An irony of ConAgra’s move is that the company is relocating part of its workforce at a time when Omaha and Nebraska have achieved an impressive ag- and food-science infrastructure and talent pipeline. Ongoing efforts by the University of Nebraska and the Greater Omaha Chamber of Commerce will strengthen things even further. Omaha has a bright future when it comes to food science. It makes sense, then, that ConAgra is maintaining research facilities here.
What’s more, the Omaha area earns high marks nationally for its pro-growth business environment, talented workers and low business costs.
In addition to the four other Fortune 500 companies who call our city home, five more are in the Fortune 1000. It takes revenues of about $5.2 billion to make that list, which includes Green Plains Inc., TD Ameritrade, Valmont Industries, West Corp. and Werner Enterprises.
For those large firms, for the region’s many smaller companies and for those just starting up, their vibrant hometown remains a great place to prosper and grow.
Today, we mourn the departure of a great corporate citizen’s headquarters. Tomorrow, we roll up our sleeves and get to work on the next chapter for metropolitan Omaha.
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The Lincoln Journal Star. Oct. 1, 2015
A tech ecosystem takes root.
Hometown boosters of Lincoln’s burgeoning tech scene found outside, independent validation recently in the form of reporting by Bloomberg.com.
Felicitously, the story appeared just in time for Startup Week in the Capital City.
“What some people on the coast refer to negatively as fly-over country is going to be the epicenter of the next wave of innovation,” Steve Case, founder of AOL and now CEO of a venture capital firm, told Bloomberg.
Reporter Prashant Gopal followed the quote with: “Nowhere is this more evident (than) in Lincoln, which from the inside of some offices could be mistaken for Palo Alto.”
Figuring prominently in the Bloomberg story was Lincoln’s biggest startup success story, Hudl, which provides video analysis tools for coaches and athletes. In just five years, the startup has blossomed into company with 360 employees in 14 countries and plans to move into a new $32 million headquarters in the West Haymarket.
Sharing the spotlight was Firespring, a communication and marketing firm that offers software to nonprofits and small businesses. A photo with the story featured a giant slide that workers at the firm’s Lincoln office take to the daily 11:11 a.m. meeting that lasts exactly 11 minutes. The point is to create a dynamic work environment that keeps 20-somethings interested, founder Jay Wilkinson told Bloomberg.
The story also mentioned a couple of firms that moved from bigger cities to take advantage of the low costs in Lincoln. Bulu Box founders Paul and Stephanie Jarrett moved their health supplement subscription service to Lincoln from San Francisco in 2012. David Chait, 30, who co-founded the group-travel app Travefy, moved from Manhattan to Lincoln to start the business.
One of the advantages that new tech hubs offer is affordable housing and office space. The median price of a home in San Jose, Calif., for example, is $980,000, compared with $158,700 in Lincoln.
Perhaps the most positive thing about the story is that it really only scratched the surface.
Opendorse, led by former Husker linebacker Blake Lawrence, matches athletes with brands to create endorsement campaigns. The company attracted $1.75 million this year in venture capital. In fact, Lincoln has a list of sports-related startups, including RaceNote, which offers software for auto racing; Powderhook, which helps people find access to hunting and fishing opportunities; Lockr, which provides tech tools for coaches to be better organized and measure their effectiveness; and others.
It’s becoming increasingly clear that an ecosystem has taken root in Lincoln that provides a nurturing environment for tech businesses. Playing a role are a welcoming Chamber of Commerce and City Hall and proximity to the University of Nebraska-Lincoln. Most important, of course, are the success stories that are being told during Startup Week and will be retold again and again in the future.
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The Kearney Hub. Oct 2, 2015
Tax reform more urgent as ConAgra exits Omaha.
If the resounding pleas for tax relief from Nebraska farmers, whose property bears the bulk of school support and many other governmental costs, hasn’t gotten our state leaders’ attention, then perhaps the move of ConAgra’s headquarters from downtown Omaha will. Nebraskans are looking for tax relief, and so are the companies doing business here.
The food giant - one of five Fortune 500 companies headquartered in Omaha - is moving its head offices to Chicago, where efficiencies and a host of incentives helped ice the decision.
Nebraska’s business-minded Gov. Pete Ricketts has issued a call for a serious review of tax rates and incentive programs to ensure Nebraska remains competitive. We can’t help but believe that when companies are recruited to move or expand into Nebraska, some serious reservations arise about property taxes.
The state’s tax and incentive situation also comes up in trade talks. Ricketts has led a couple of missions overseas to promote Nebraska’s investment opportunities, but we get downgraded on the desirability scale because of our high taxes.
While lawmakers and political leaders discuss reforms this year, we hope they also look closely at how Nebraska doles out incentives.
Jim Vokal, CEO of the Platte Institute for Economic Research, reacted to ConAgra’s relocation announcement on Thursday by complaining that, “For too long, Nebraska has played the special interest tax break game, and today we have lost to a higher bidder in Illinois.”
The task that faces Nebraska lawmakers is difficult, and it’s complicated by the entrenchment of our state’s system of incentives and tax exemptions.
Policies and ideas that were born years ago to promote growth in agriculture and on main street now may be working against Nebraskans.
Although change inevitably inspires resistance, most Nebraskans accept that something must be done, and our unified attitude should carry over as our state tackles its property tax problems and updates its business incentives.
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The Grand Island Independent. Sept. 30, 2015.
Property tax cut not an easy task.
Most Nebraskans would agree that property taxes have become burdensome for Nebraska’s farmers and ranchers. With incomes down due to lower corn and soybean prices, farmers are working hard to break even. Unfortunately, property taxes have become one of their higher expenses.
However, as a special legislative committee has found out, lowering property taxes without greatly diminishing school funding and hurting the quality of education isn’t easy to do.
There’s no “silver bullet” that will lower property taxes while preserving the quality of schools, said Sen. Kate Sullivan of Cedar Rapids.
“There’s no wiggle room in the system (for a change) that’s meaningful to everybody,” said Sen. Paul Schumacher of Columbus. “We could screw this up a lot easier than we could fix it.”
That is why it is wise for this committee to take a cautious approach to the issue of property taxes and school funding. The wrong change could mess up the state’s schools (which are doing a good job according to test scores and measures) and that could take years to undo.
Some senators argue that it’s a perception problem. The state has worked to lower property taxes, but most Nebraskans don’t realize it. For example, the state put $408 million in a property tax credit fund that gave the owner of a $150,000 home a $141 tax credit. However, to those with high property tax bills, the credit seems like a meager amount.
Without that “silver bullet,” committee members brainstormed a number of ideas. According to the World-Herald News Service here are some of them:
- Providing basic state aid funding for every school district or student, regardless of the property tax resources.
- Eliminating a requirement that school districts charge a minimum property tax levy or lose state aid.
- Charging sales taxes on food, with some type of income tax credit for low-income Nebraskans.
- Putting a sunset on sales and income tax exemptions so that legislative approval would be needed to continue the exemptions.
- Holding state spending growth to 3 percent annually and putting any state tax revenue above that level into property tax relief.
- Taking 1 cent of sales tax authority away from cities, increasing state sales taxes by 1 cent and dedicating the revenue to property tax relief.
- Freezing the growth of school spending for a period of time.
- Sending checks to property owners rather than providing property tax credits that show up as a line on their annual property tax statements.
- Providing vouchers for students attending private and parochial schools, to reduce public school numbers.
Many of these ideas, such as charging a sales tax on food or taking tax authority away from cities, would face a tough road and are probably politically unfeasible.
Some of the other ideas, though, are intriguing. The amount of property tax relief they would provide is questionable. But they are a place to start.
The public should keep an eye on what the committee ends up recommending. The committee has scheduled a Nov. 12 public hearing in Lincoln to get feedback on its recommendations. One can imagine that there will be a lot of interest in that hearing and in what will go before the Legislature in January.
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