3 Things That Might Have Kept Steve Wynn in Philadelphia
Many people were surprised earlier this week when casino-mogul Steve Wynn announced he was backing out of his plans to build a gambling resort in Philadelphia’s Fishtown section. It’s really not that surprising. Wynn thinks big. He’s building a $4 billion resort on the tiny island of Macau. His casino in Vegas makes the word “opulent” seem understated. He’s after big money, big fame, big publicity. And Philadelphia is not the place for this. It’s not that big a market. There’s already a lot of competition. And most importantly, it’s not New York.
New York is the place for Wynn. So when New York’s voters last week approved a resolution that could potentially allow gambling in the city, I’m sure Wynn’s mouth watered. I mean, c’mon, if you’re a big-thinking, big-playing kind of guy like Steve Wynn, why in the world would you waste your money investing in Philly when you can make a splash in New York City, just 90 miles up the road. It’s New York. It’s not Philly.
Could our city have done anything to save the deal and keep him here?
I really doubt it. Even if the mayor wasn’t wasting his time this past week trying to make a national name for himself as an ambassador in London and Tel Aviv, there was still little to be done. And even though a guy like Wynn will always lean toward the glamour and wealth of New York, there are still things that the city could have been doing that would have at least given him pause for concern. Or at least provide a better environment to attract other companies to the region. The mayor can travel all he wants, sip champagne with dignitaries and CEOs around the world and talk himself blue in the face to try and entice them to move operations to this town. But without these three core things, most businesses will likely go the way of Wynn.
1. A lower tax base. For starters, please give the mayor credit. The Pew Charitable Trust just released their report on the finances of American cities between 2008 and 2011 and Philadelphia found itself in the middle of the pack, which isn’t so bad. By raising taxes and cutting expenses, the mayor navigated us through what could have been fiscal disaster. But he still faces enormous pension liabilities. And taxes in the city, both for business and individuals, are among the highest in the country. Why would you move your company to this environment? How can you tell your shareholders and employees that now they’ll have to pay more taxes (if not immediately because of some abatement “deal” then in the future). Business people don’t do this. They move to places in the world (see: Ireland) where taxes are as low as they can be. To cut taxes the mayor will need to courageously face entitlements, particularly pensions. I’ll write some other day about the city’s pension liabilities and my gist will be this: Cut them for the people who don’t need them, even if you have to go to court. The goal is to reduce taxes in the city. That will attract businesses and provide a much stronger revenue base for decades.
2. A better educational system. If Steve Wynn moved his family to Philadelphia, do you really think he’s sending his kids to a Philadelphia public school? Could he stand up in front of the key people he’s moving here and tell them to do the same for their kids? Could he attract great people from the region and from around the country by dangling our great public school system in front of them as an enticement? You know the answer. The city has to continue to change the way our schools are run. I’ll write some other day on this too and my gist will be this: More charter schools, less pensions to those who don’t need it, better treatment of teachers, more partnerships and promotions with corporations, and more segregation based on behavior (give the kids and their families who want to succeed a place to succeed). If your job moves you to another city, aren’t you looking to live where there are the best school systems? Aren’t property values higher there? Aren’t more businesses attracted there? A great education system attracts great things. It’s not just about teaching our kids. It’s about building a good infrastructure for the future.
3. Security. Fishtown is kind of safe. But it also borders some pretty rough areas of Philadelphia. In fact, there are a lot of rough areas in the city. Our police force has done a good job with the limited resources it has. But Philadelphia, like many major cities, suffers from enormous blight and crime. People want to feel safe going to work and being at home. A larger, better-equipped police force is a key component of this. I’ll write on this in the future as well and my gist will be: More investmentment in police, tougher rules on policeman who abuse their responsibilities and more time off for everyone, less pensions to those who don’t need it, more outsourcing, more partnering with corporations and more no-crime zones. Who would want to relocate their company to an area where their employees are at risk? Who needs that liability? With all the headaches that come with running a giant resort/casino, why would Steve Wynn want to worry about the safety of his guests the minute they want to take a walk around the block?
Not that these three things would’ve kept Steve Wynn in Philadelphia. A guy like that is more of a New York guy. And that’s fine. There are plenty of other fish in the sea, plenty of other companies both in this country, England, Israel and elsewhere who would seriously consider opening up operations in the city of Philadelphia. But geez… what a tough sell it is right now.
Follow @genemarks on Twitter.