Well, Dunworthy may let the Sampson Inc. go but there are several consequences that will come with that decision, so I think realistically, Dunworthy does not have any choice but to recommend that the city should do anything to keep Sampson Inc. First, the flight of Sampson will result to the lost of thousands of dollars (as said on the case) from wage taxes and head taxes. Second, there will be a dire effect to the business community if Sampson will leave the city. Other businesses might say that “If the city government cannot maintain its second larger employer, what help would other businesses expect from them?
” As stated on the case, the city will lose economic “good will” and reputation. Also, the relocation of Sampson will result to a “domino” effect to other businesses that rely mainly from the consumption by Sampson Inc. employees. 2. How should Dunworthy handle the department heads in this situation, given the difference in opinion among them? Given the disagreements among the views of the department heads, Dunworthy should consider first the suggestions from each of them.
Then after carefully analyzing the effects and consequences of their respective decisions, Dunworthy should meet all of them and tell them the different sides of their ideas. From there, other suggestions could be voiced out that will ultimately result to a solution to the Sampson Inc. problem. 3 Assuming that a strategy will be developed to attempt to keep Sampson in the city, what principles should guide the city’s choice regarding (1) the development costs that the public sector should be asked to assume, and (2) the tax concessions that the city should consider offering to keep Sampson? What alternatives might be considered in each case?
What would you recommend? Given the fact that the city will develop a strategy to keep Sampson in the city, with regards to the development costs, they should consider the budget that they have. The Sampson Inc. will be spending $32 million more if they build its headquarters in the city instead on downtown. Economic impact should also be considered since Sampson Inc. plays a big role on Metropolis’ economy. If any decision will be made, the neighborhood should also be consulted. With regards to tax concessions, the city government should consider other businesses because they may complain.
Also, if tax concessions will be given, surely the income of Metropolis will be affected. So I think that a balance tax concession should be given to every business in the city. With this, there could be no protest or minimal. 4. What assistance should be sought from the federal government, and how? Well, the federal government has programs that give businesses low-interest loans to encourage urban development projects. Since the budget of the city government is just $30 million dollars, any financial help cannot be made by the city government to Sampson Inc, singlehandedly.
So to keep the Sampson Inc in Metropolis, the federal government should give federal grants to the Metropolis city government that will then help Sampson Inc. Even though the city government will spend lots of money on this project, in the long run, the money they had to spend will be returned to them from the taxes that will come from the Sampson Inc. 5. What can and should be done to prevent or minimize neighborhood opposition? What should be done to involve the neighborhoods in the process? Are there special benefits that should be offered to each neighborhood to allay his concerns?
With regards to any decision that the city government will implement, they should first consult the neighborhood. With this, each side will have a chance to express their points so that there will be an understanding among the two parties. I think that the city government should regard the neighborhood as an important parameter in every decision they are making during the whole development process. If the decision will be to relocate the Sampson site downtown, then incentives regarding relocation should be given to the families and businesses to be affected. They should be given a new place before any construction.
Courtney from Study Moose
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