By Gregory Korte
The Cincinnati Enquirer
Cincinnati City Council gave Convergys the red-carpet treatment Friday.
Seats in the front row of the council chambers were marked "Reserved for Convergys." Undercover police officers provided security for CEO James F. Orr. Community leaders, armed with Convergys talking points, spoke of the company's good corporate citizenship.
Except for one councilwoman's 52-minute filibuster, city officials were unanimous in their support for the company. And after three hours of debate, Convergys executives walked out of City Hall with a $52.2 million commitment of tax incentives and grants over the next 15 years.
As they left, a dozen protesters marched in front of City Hall, demanding that City Council vote no. They were a half-hour too late.
The vote was 8-1. Vice Mayor Alicia Reece was the dissenter.
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WHAT CONVERGY GETS
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Terms of the $52.2 million package for Convergys Corp. approved Friday by City Council:
• $22.4 million in job retention tax credits over 15 years. Convergys will get an 80 percent refund on the earnings taxes paid for each new job it creates.
• $10 million in business development grants in 2003.
• $18.8 million in "matching" grants over the next five years.
• $1 million bonus grant if Convergys creates an additional 675 jobs.
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"This decision is good for Convergys, for downtown, for the neighborhoods and for the city of Cincinnati and its people, the region and the state," Orr said after the vote. "But perhaps most important of all, Convergys will continue to invest and do business where our employees live, work and raise their families."
With a compromise plan emerging late Thursday, the incentive package was all but assured of passage going into Friday's vote. City officials put together the deal - which adds to Gov. Bob Taft's $144.2 million package of state tax breaks grants and loans - to keep Convergys from moving its world headquarters elsewhere, taking 1,450 skilled jobs with it.
Instead, Convergys will buy and renovate the 20-story Atrium One building at 201 E. Fourth St. The company promises to invest $125 million, double its downtown workforce over 15 years, and to make "good-faith" efforts to hire minorities and city residents.
The vote ended two weeks of the most heated debate over downtown development that has occurred since the vote on new stadiums for the Reds and Bengals. The saga featured a bitter political battle over competing incentive plans, the last-minute cancellation of a prior vote and a recurring question: If City Council approves millions for Convergys, who's next?
Each of the eight council members voting "yes" gave different reasons for doing so, but most had two common threads: The city can't afford to lose Convergys and its 1,450 jobs, and City Council can't continue to do business this way.
After voting to approve the Convergys plan, Councilwoman Y. Laketa Cole proposed a resolution - co-sponsored by six others - asking the city manager to establish strict criteria for future corporate subsidies.
"I am tired of corporations coming to us and the only criteria we have to work with is give us the money or else we're leaving," Cole said.
Mayor Charlie Luken said the Convergys plan does not set a precedent. And he said he would resist efforts to craft a one-size-fits-all policy for economic development incentives.
"When there's something on which we disagree, the first thing people attack is the process. What we really have is a disagreement on the merits," Luken said. "Each one of these situations is different. Each one requires us to act differently and perform differently."
Even as consensus carried the day, the morning was not without its drama.
Reece pelted city officials with questions - sometimes accusatory in tone - about the deal. Why, she wanted to know, didn't the city insist on seeing a competing offer from Northern Kentucky? Why was the minority hiring requirement set at 10 percent (the proportion in Hamilton, Butler, Warren and Clermont counties) rather than the city's 43 percent? What happens if Cincinnati Bell comes calling, asking for assistance to keep 750 jobs that must be relocated from the Atrium One building?
"If I was watching this on TV, I would be disappointed if I didn't see City Council asking questions," Reece said. "Why am I doing this publicly? Because it's the public's money."
Dramatically punctuating the neighborhoods-versus-downtown rhetoric that has permeated the debate from the beginning, Reece held up a stack of unfunded neighborhood development plans - and tried to call for a special session to vote on those as well.
Luken did not cut the vice mayor off.
"I believe, despite reports to the contrary, that the debate has been healthy," the mayor said. "It is simply democracy, and it works this way so people can share their different views, and we have many of them here today - at least 10 - about how to proceed."
"To those members who were flexible and did not draw lines in the sand, I thank you."
That last remark was aimed at Councilman David Pepper, whose maneuvering killed Luken's incentive plan 10 days earlier and almost sent Convergys packing.
Pepper said his plan was better for neighborhoods, by funding the Convergys subsidy out of downtown property taxes instead of the citywide income tax. It included $29.8 million in cash grants over six years and $22.4 million in job creation tax credits over 15 years.
"I know there are comments that this will rob from the neighborhoods. This will not. We've actually created a wall between the neighborhoods and downtown," Pepper said.
Convergys brought support from all quarters - from the arts community to minority groups - to make its case Friday.
"How many companies around the United States, or around the world, would love the opportunity to steal this company away from us? I hope one of my kids or grandkids work for Convergys 10 or 20 years from now," asked Alfonso Cornejo of the Hispanic Chamber of Commerce of Greater Cincinnati.
"It is companies like Convergys that pull our fabric together downtown, from social services to community development to economic development. Convergys is a role model," said Arlene Herman, president of Family Service of Cincinnati, which gets support from Convergys.
But an equal number of people showed up to protest what they saw as "corporate welfare."
To them, even the seating arrangement became a symbol of the company's ability to get special treatment.
Marilyn Hyland, an erstwhile candidate for public office, held up a sign saying "Reserved for Convergys" and complained, "I've never seen such a hijacking of public chairs in Cincinnati City Council."
E-mail gkorte@enquirer.com
