Chester Stans, who operates a hot dog stand on Euclid Avenue, agreed to an incentive package worth $400,000 in exchange for his promise to stay in Cleveland. Officials say the handouts were necessary to keep Ohio competitive.
"With Kroger, Wal-Mart, and now Chester Stans, the state has demonstrated its eagerness to throw money at anyone even thinking of doing business here," Governor Bob Taft said during the sidewalk ceremony outside Cleveland State University's Main Classroom Building, where Stans parks his cart.
The Stans deal was yet another coup for the Ohio Department of Development. Last October, the DOD gave Wal-Mart, the nation's second-largest corporation, $10 million to build three facilities in Ohio. The handouts were criticized because construction was already under way at one facility -- a food distribution center in Fayette County -- when the state came through with $3.7 million in tax breaks, roadwork, and grants.
"Sure, the thing was already half-built when we signed off," says David DiManna, an Ohio Tax Credit Authority board member. "But we wanted to make sure that a corporation recently sued for pressuring employees to work off the clock felt welcome. Nothing says 'Hey, neighbor!' better than cash."
The Kroger Co. is awaiting final approval of a $1.3 million tax break for consolidating its cookie and cracker distribution center. The new facility is located in Delaware County, all of 10 miles from the old ones in Columbus and a nearby suburb.
"Kroger needs the center to deliver snacks to its stores in Ohio and northern West Virginia," says Tax Credit Authority member Michael Lally. "We couldn't rest on the fact that central Ohio was the only logical place to build. El Paso might have swooped in and made a sweet offer."
Officials say the state will not only subsidize companies for the promise of jobs slightly above minimum wage; it will bribe them simply not to fire people, through the Job Retention Tax Credit.
"I challenge corporate America to degrade me," the governor said as he assumed the posture universally recognized for taking it in the rear.
The DOD also announced that Director Bruce Johnson will appear in an advertising campaign touting Ohio's business-friendly climate. Director Johnson, officials say, has created the persona "Crazy Bruce," offering incentives so insane, you have to see them to believe them. In one ad, "Crazy Bruce" rolls around on an Ohio-shaped mattress with $100 bills and two scantily clad women.
With the approval of Stans's package, the only business in Ohio not receiving some kind of state assistance is a Toledo head shop. Development officials say they approached the Bong Show, but proprietor Stu Gill refused to believe they weren't narcs.
Stans came to the attention of state officials last week, after he casually told a Collinwood bartender that he "was thinking about moving to Erie," where his eldest daughter lives with her husband and two children. "There ain't much keeping me here," he told the bartender, before the conversation turned to C.C. Sabathia.
Stans, a divorced father of three, bought his stand after retiring from LTV three years ago. He's open for business from about 10 a.m. to 2:30 p.m., except for days "when it's too damn hot."
Stans says the move to Erie would have brought him closer to his daughter, as well as the casinos around Niagara Falls he periodically visits. "But Jesus Christ, I'm getting $100,000 just for switching to Ballpark Mustard," which is made in Cleveland.
Stans had been using Heinz condiments.
At the ceremony, the governor praised Stans for "putting the relish on Ohio's economy." The state estimates that the stand generates $6.8 million in economic activity annually, though Stans says he grosses about $1,100 a week. "And that's if I bust my ass."
Greater Cleveland Growth Association Vice President Charles Webb explains the methodology behind the $6.8 million figure: "One day, Mr. Stans sells a Polish boy and a Coke to a student on his way into the building. That student passes a math test he would have failed, if not for the nourishment provided by Mr. Stans's delicious products. Thanks to Mr. Stans, that student might one day invent the next Internet."
Officials are also trying to allay fears that the state wouldn't be able to function without any tax revenue from businesses. "Income taxes, sales taxes, property taxes, gasoline taxes, cigarette taxes, the lottery," House Speaker Larry Householder says. "Our goal is to place the entire burden on the individual. Do you have any idea how much blood we leech from the average sad sack?"
Moments after the governor's motorcade pulled away from the ceremony, Stans popped the top on a Sprite and lit a Marlboro. He said that his moving to Erie was "really just a bunch of talk," like his previous vows to quit smoking, get in better shape, and fix up the boat that's been in his backyard since 1986.
"I was born here, and I probably would have died here," he says. "But the $400,000 really cinched it."