FedEx to Have Executive Address City Commission After Controversy Over Tax Breaks

In response to criticism (from myself and others) over a more than $600,000 tax break given to FedEx by the Fargo City Commission for a facility they’re moving to that community from Grand Forks, Mayor Tim Mahoney has announced that a FedEx executive will speak to the commission at a meeting later this month.

Tu-Uyen Tran reports:

The vote on the 10-year incentives worth $618,000 was close with two of three commissioners objecting, one because the company had said it didn’t need incentives and the other because it appeared Fargo was poaching business from Grand Forks.

Commentators have seized on both arguments.

“I think the point that has been missed, and that needs to be considered, is that FedEx coming to Fargo is not simply a relocation of an existing operation,” Mahoney said, reading from a statement. “It is an expansion of operational services, which will positively impact the entire region, including Grand Forks.”

“I think it’s important we all hear directly from their decision-makers on what factors led them to choosing to expand their business by coming to Fargo,” Mahoney said in a statement today.

Which sounds like the sort of thing commissioners should have asked the company before they put a big, fat dollop of economic incentive dollars on their plate.

There also seems to be some blame shifting going on here. Mahoney is posturing himself as though he’s calling FedEx to task for the incentives, but it was Mahoney himself and two other members of the city commission who voted to pass them.

It will be nice to get some clarification from FedEx, however. The company is on the record both saying that the incentives from Fargo were a factor in their decision to move and that they’d have made the move even without the incentives.

These are contradictory statements. Either the incentives mattered, in which case Fargo used them to lure a company away from Grand Forks, or they didn’t in which case the Fargo City Commission gave away a significant tax break frivolously.

If we’re going to have these sort of economic development policies – personally, I wish they didn’t exist – it is incumbent upon local leaders to exercise some discretion in when and how they’re used. Otherwise this is what we end up with: