Archive for Wednesday, March 29, 2006

American Eagle to expand in Ottawa

March 29, 2006, 12:10 p.m. Updated March 29, 2006, 2:23 p.m.

Advertisement

American Eagle Outfitters Inc. will break ground next week on an expansion project at its distribution center in Ottawa, more than doubling the complex's size and promising to add 300 jobs within five years.

The company has scheduled an April 5 groundbreaking ceremony for the project, a 540,000-square-foot addition that is scheduled to come online in April of next year.

Back in 2000, Pennsylvania-based American Eagle, with more than 800 stores targeting teens and young adults, originally had planned to build a 402,000-square-foot, $42 million distribution center at the East Hills Business Park in Lawrence. But, later that year, the company dropped those plans amid public opposition to the project's anticipated tax breaks, American Eagle's wage scale and planned redevelopment of farmland.

American Eagle instead turned to Ottawa, opting to spend $31.5 million redeveloping an existing building with future space for expansion.

Comments

Shardwurm 9 years, 2 months ago

Nothing like being smoked by Ottawa on a business deal.

Well done Lawrence.

Richard Heckler 9 years, 2 months ago

I would say the $10.5 million dollar savings on building rehab was the big carrot. It would certainly alter my thinking. Cost of property is more expensive in this area as well so whose fault is that? Property owners could reduce land costs if they are so concerned about our economic future.

Jamesaust 9 years, 2 months ago

Wonderful. Lawrence's economic health depends on the health of neighboring communities. Thank goodness that in 'turning down' American Eagle the Lawrence development folks steered them to appropriate Ottawa.

speedykitty 9 years, 2 months ago

Just curious--who qualifies for "blue color jobs"? Someone who can't spell "collar"?

Danielle Brunin 9 years, 2 months ago

My husband would take offense to that. He considers himself to be a bona fide Lawrencian and works on the loading dock at Amarr Garage Doors. Not an easy job in the summer with air temperatures near 100 and air temperatures in the truck at about 130. He sweats plenty.

Noweigh 9 years, 2 months ago

300 jobs being added in Ottawa that could(and should) have been here from the start. Our arrogance continues to be mind-boggling. Hopefully, one day we'll learn that "quality jobs" don't have to be high-tech, six-figure careers. Those new Ottawa jobs are real jobs for real people with real bills and real families. Stop telling those that actually want to work what's good for 'em.

adky 9 years, 2 months ago

Is a blue color job like a blue movie? Mine isn't! : (

just_another_bozo_on_this_bus 9 years, 2 months ago

American Eagle is the one who decided not to build a warehouse here. No one ran them off. If they had wanted to build on land zoned for a warehouse and pay their taxes, they could have put the thing here. I'm glad it worked out for Ottawa. They need jobs, too.

brookcreeker 9 years, 2 months ago

Lawrence has a surplus of $10-15/hour manufacturing jobs. I'm glad AE didn't add to the supply in Lawrence. We need to attract higher-wage jobs in order to see any spillover effects.

Steve Jacob 9 years, 2 months ago

"Surplus of $10-$15/hour jobs?" What the heck? The only reason why we are not totally closing our boarders is because many companies DO NOT want to pay people $10-$15 a hour.

Linda Endicott 9 years, 2 months ago

Well, now, I'm gonna get offended if you trash my town, you know...

Downtown here looks a whole lot better than it used to, believe me.

just_another_bozo_on_this_bus 9 years, 2 months ago

Providing city services (fire, police, sewer, water, streets, etc.) to AE, and the same city plus school services to its employees without getting any taxes from AE would have a "spillover" effect, too.

Can't have both ways, Solomon

Godot 9 years, 2 months ago

Bozo, by your logic, we should kick out all the government agencies in town, too, because those employers do not pay any property tax, either, and, worse, yet, they don't produce any sales tax or corporate income tax.

I believe you have hit upon Lawrence's problem. Too many people living here who work for entities that don't pay taxes.

optimist 9 years, 2 months ago

merrill:

You may not like the truth but those close to the process know the truth whereas you simply speak out of ignorance.

American Eagle Outfitters pulled out because of opposition from the living wage proponents despite the fact that their pay scale was highly competitive for their business sector. They would have ultimately provided several hundred unskilled jobs to college students and second income earners. They offered benefits and flexible hours which were equally as attractive for this segment of the workforce. I believe some low paying businesses (such as restaurant owners) quietly supported the anti-development crowd in their opposition to American Eagle for fear that they would have to compete for the same pool of workers.

The company had a strong preference for Lawrence because of the availability of labor. It was for Lawrence to lose and we did a fine job of it. Ultimately the Lawrence worker lost the opportunity to have another party competing for their services. The $10m savings just made American Eagle's decision to abandon Lawrence and its anti-business climate that much easier.

optimist 9 years, 2 months ago

Godot:

You make a very good point in your statement. I'd like to go one further and suggest that just_another_bozo_on_this_bus consider taking a basic economics course.

AE would not have paid property taxes to the city of Lawrence for a relatively short period. However they would have paid out over $8 million in salaries the first year to their employees excluding benefits. They would have infused the city with nearly $40 million dollars just for construction costs alone the first year. The taxes on these expenditures alone would have offset any burden they were to the city during the period the abatement would have run.

Like it or not this is a free market economy. Communities are competing for the attention of these companies. We don't have to like it we simply have to decide whether or not we want people in our community to have jobs.

My departing words on this issue are simply that the fact is corporations and businesses do not pay taxes. That is correct they don't. For businesses taxes are the cost of doing business and as a result they pass it on to consumers. That's you and I the working stiffs who buy manufactured goods and receive services. By taxing them more you simply make all things more expensive and it has a detrimental effect on the poorest citizens first.

just_another_bozo_on_this_bus 9 years, 2 months ago

My moniker is JUST ANOTHER bozo, solomon. And by that I'm referring to everyone on this board, especially you.

It's amazing how many times simple facts have to be repeated on this board. No one prevented American Eagle from putting their warehouse here. All they had to do was build it, move in, and pay the same taxes as everybody else who pays shi**y wages. If they had wanted to pay a "living wage," which is somewhere around $10 per hour, not $15, Solomon, they could have gotten the abatement. They chose to go to Ottawa instead.

And maybe we should start having KU and every other government agency pay property taxes. I bet that proposal would go far with every anti-tax legislator from districts that would have to raise their constituents' (and your) state taxes in order to fund that.

But here's another little fact you didn't factor into your simplistic little attempt at a "gotcha." I'll guarantee you that the average wages of all employees at state and federal agencies in this town, including the largest, KU, is WAY over the living wage that is required of businesses requesting abatements.

Here's another little tidbit-- 20,000 KU students who bring in cash almost entirely from outside of Lawrence, who require nearly nothing in the way of public school services.

Sorry to bother you with pesky little facts.

cowboy 9 years, 2 months ago

Ah Bozo , KU pays for crap , senior tradespeople start at 12-13 per hour , craftsmen at 11 , AE went to Ottawa because there already was an appropriate building at a great price , right next to an Interstate , with a freindly city gov't who will bend over backwards to make you successful.

Unlike Lawrence which is expensive , tirelessly complicated and with a huge dose of everybody in your business , complex and unhelpful.

Having located a biz in Ottawa 10 years ago Lawrence was entirely disinterested.

One only needed to listen to the Commish meeting last night to see why no one in thier right mind would attempt to put a new biz structure in Lawrence , you spend so much money to get a location you are building poor coming out of the gate.

Lawrence reminds me of the corporate wonks of the 80's who decided that you need a team or committe to decide every little thing. After ten years biz learned that fast , non-complex , and reactive leads to profits and longevity.

lunacydetector 9 years, 2 months ago

american eagle outfitters is the epitome of why lawrence is UNfriendly to businesses.

everywhere they turned, they had opposition. if it wasn't the wage thing, it was the city services, it was the property tax abatement, it was the Virginal farmland they wanted to build on, etc, etc, etc.

the bottom line is their workers would've had to buy goods and pay for services just like everyone else. the anti-growth people kept them away, you know, the anti-corporate america crowd.

ottawa saw the lawrence freak show giving american eagle outfitters a hard time, called them up and said, "Come on down. We love job creation. Lawrence is a difficult town, isn't it?"

just_another_bozo_on_this_bus 9 years, 2 months ago

"KU pays for crap , senior tradespeople start at 12-13 per hour , craftsmen at 11 "

I agree that's not great pay, but it is over the "living wage," and when averaged with all of the higher salaried positions you didn't mention, the average wage at KU is WAY over the living wage, just as I said. American Eagle wasn't going to offer anything close in the way of wages and salaries to its employees.

I'm personally glad that Ottawa is ahead of Lawrence in the race to the bottom. Why don't you move to Ottawa if it's so much more enlightened than Lawrence, cowboy and luny? I'm sure they love to have someone as willing as you to suck up to any corporation that comes to town seeking to suck it dry.

smackdaddy30 9 years, 2 months ago

First of all, as a resident of Ottawa, American Eagle has done nothing but good things for the economy and with the expansion will be helping it even further. I am sure that all of the people that are working there are glad to have good paying jobs. Sure it may not be DOUGLAS county money, but I think it proves that we don't need to be stuck up and make $25 an hour to live happily. Many of my friends work there and they get by just fine. So maybe before you run your mouth about how we are bottom feeders or something like that, think about the next 300 people that will get hired on there and their familes.

just_another_bozo_on_this_bus 9 years, 2 months ago

Unlike some of the whiners here, I have no problem with AE setting up shop in Ottawa. Glad it's working out for you.

Linda Endicott 9 years, 2 months ago

The race to the bottom? Move to Ottawa?

Exactly what is wrong with Ottawa?

I will assume that all Lawrence residents aren't as elitist as you are. You seem to think that anyone who doesn't live in Lawrence is somehow inferior to you.

I know many people who live in Lawrence and yet work here in Ottawa. So I guess our jobs are worth something, huh?

You're just mad because a good company got away and went somewhere else to set up shop.

speedykitty 9 years, 2 months ago

Amen! The Bingo Dog Food buildings are all cleared away, and the scrapers are rolling. Bingo was a great family business, in its day, but with passing generations, this is good.

just_another_bozo_on_this_bus 9 years, 2 months ago

American Eagle was only going to set up shop in Lawrence if they got pretty sizeable corporate welfare and were allowed to ignore zoning regulations.

If Ottawa enticed them by giving them what they couldn't get in Lawrence, then I'm glad you all won that race to the bottom. If they came in and played by your rules, then that's even better. Regardless, if the people of Ottawa are happy with the deal, then that's all that matters, isn't it? Don't get your panties in such a bunch over what I think about it.

Linda Endicott 9 years, 2 months ago

I don't really care what you think about it...that's a good thing.

American Eagle here is in our industrial park, which didn't require any zoning changes. It's employing a lot of people, and those jobs were needed in this community. Maybe Lawrence didn't think they needed them at all.

I'm just curious as to why you think a company coming to Ottawa is "a race to the bottom"? Do you think Ottawa is at the bottom?

smackdaddy30 9 years, 2 months ago

Lawrence should be jealous of Ottawa.......I mean look we got the Wal Mart DC and the American Eagle DC. Both of whom have done wonders for the economy and the community. I know for a fact that AE is a great company to work for. Their benfits are awesome and they treat their employees great.

just_another_bozo_on_this_bus 9 years, 2 months ago

AE wanted to build outside of the industrial park in Lawrence, and they wanted a tax abatement for wages and benefits that didn't justify it. If it meant giving in on those things to get them here, I'm glad they went elsewhere. It's up to the folks of Ottawa to decide whether they are happy with the deal they got, and whether they want to make any more like it in the future.

just_another_bozo_on_this_bus 9 years, 2 months ago

I don't know what deal Ottawa has with AE, or whether that is actually good for Ottawa, or whether someone else is just picking up the tab for taxes that neither AE nor their employees are paying to cover the costs of their presence in Ottawa.

I doubt that you do, either, but it's part of your religion to ignore little details like that.

just_another_bozo_on_this_bus 9 years, 2 months ago

As near as I can tell, none of those posters has any idea of whether AE is a positive thing for the city of Ottawa or Franklin County, and neither do you.

Who is paying for the streets, sewers, water lines, police and fire protection, schools, hospitals and countless other services if AE and its employees are paying in less that they are using in the way of services?

If the city and county officials there can't say that it's at least a break-even proposition, then they have done a disservice to the citizens there, especially the ones who will have to pick up the slack as their taxes go up.

It's called fiscal responsibility-- something the "bidness-friendly" Republican party only pays lip service to.

just_another_bozo_on_this_bus 9 years, 2 months ago

You proved my point. Someone working at AE might be getting by OK, but his neighbors all around may be picking up the slack for the taxes he and his employer aren't paying, either in higher payouts, or a government that doesn't have the funds to maintain the infrastructure or provide vital services.

Godot 9 years, 2 months ago

"Who is paying for the streets, sewers, water lines, police and fire protection, schools, hospitals and countless other services if AE and its employees are paying in less that they are using in the way of services?"

Bozo seems to be under the misconception that people without jobs use fewer services than people with jobs.

Let me explain: There are many people in Ottawa and the surrounding areas who already live there but don't have a good job with benefits like they will be able to get at AE. Jobs don't cause problems; not having jobs causes problems.

I realize this is a difficult concept for you, Bozo, but try to concentrate.

Congratulations to Ottawa and Franklin County for this great addition to your community.

Godot 9 years, 2 months ago

Like I said, try to concentrate, Bozo. People with jobs pay taxes; unemployed people don't.

Linda Endicott 9 years, 2 months ago

And what's so wrong with a company getting a tax abatement for a few years, as long as they set up shop here and provide much needed jobs for people?

People who have jobs tend to spend money. People who don't have jobs don't have any money to spend. Perhaps that was the most important thing to Ottawa.

Besides, tax abatement is a very common thing anymore. I'm sure even Lawrence has used it a time or two.

Godot 9 years, 2 months ago

The difference between the Bozos and the Optimists of the world is that Bozos judge businesses and jobs by their ability to produce taxes, whereas Optimists look at them as a way to generate money that people use to make their lives better, to become self reliant, and to create more business.

just_another_bozo_on_this_bus 9 years, 2 months ago

By your logic, Godot, Lawrence should cancel all taxes to all businesses, and eliminate all zoning requirements.

Yea, that'll keep the streets paved.

Godot 9 years, 2 months ago

Right, Bozo, just keep over-reacting. It is a great way to get your point across.

Commenting has been disabled for this item.