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Could Nike leave Oregon?

February 23, 2010

Business News Note: A few years the Governor of Arizona invited Phil Knight for a visit which immediately started rumors that the Governor was luring NIKE to his state.  Now the rumors are awaking again in light of new Measure 66-67 taxes passed on Oregon business that Phil Knight opposed. Below is an editorial from the Idaho Statesman Newspaper.

By Dan Popkey , Idaho Statesman (Boise, Idaho)
February 20, 2010

Nike founder Phil Knight is hopping mad at $727 million in tax increases on corporations and the wealthy in Oregon. Idaho leaders long to catch their rich neighbor’s eye.  Idaho has wooed Nike before – a revelation offered by Lt. Gov. Brad Little, who salivates at the prospect of landing one of the world’s best-known brands.   “Phil Knight was up front: Don’t change the tax code, and if you do, we’re going to do something,” Little said. Knight hasn’t expressed interest yet, Little said. “But we’re gonna call him.”  Knight is No. 24 on Forbes’ list of richest Americans, with a net worth of $9.5 billion. He gave $100,000 to the campaign to defeat Measures 66 and 67. Both tax bills passed Jan. 26.

In a Jan. 17 guest opinion in The Oregonian newspaper, Knight called the measures “Oregon’s Assisted Suicide Law II,” writing, “They will allow us to watch a state slowly killing itself. They are anti-business, anti-success, anti-inspirational, anti-humanitarian, and most ironically, in the long run, they will deprive the state of tax revenue, not increase it.”

Knight then named 10 companies that have either left the state, shut down or become controlled by non-Oregonians. A philanthropist who’s given the University of Oregon Ducks more than $300 million, Knight wrote, in the third person, that Nike’s “founder and chairman is not merely an economic man. He has webs between his toes. But he, too, has some limits.”

Nike spokeswoman Erin Dobson wouldn’t comment on the company’s interest in Idaho in the 1990s. But she ruled out Nike moving its headquarters from Beaverton, writing in an e-mail, “Nike has no plans to relocate.”

How about expansion elsewhere? “Nike is a growth company,” she wrote. “When and where there is opportunity for strategic growth we will take advantage of it.”

That could simply be Knight venting. The 1990s search was driven by complaints about multiple taxing authorities in Oregon, said Jeff Malmen, Gov. Phil Batt’s chief of staff, who attended a meeting with Nike executives in Batt’s office. The visit likely occurred in 1997, according to the best recollection of several officials.

Nike also looked at Washington, Nevada, Colorado, New Mexico and British Columbia. In the end, the company resolved a dispute with Beaverton and expanded what is now a 193-acre campus with 17 buildings named for Nike-affiliated athletes.

Little takes heart knowing Nike seemed keen on Idaho. “They’ve got a high frustration level with governance in Oregon and they’ve been here before,” Little said.

He showed the company a 640-acre parcel he owned north of Eagle as a possible site for a satellite campus. Little’s land included a piece of Goodale’s Cutoff, a branch of the Oregon Trail. “These guys were going to spin it to Nike that they could go out and run on the Oregon Trail.”

Department of Labor Director Roger Madsen helped develop the pitch. “We created a beautiful video that showed a lot of people in athletic situations – golfing, skiing, tennis, running – wearing Nike apparel,” Madsen said. “It was very attractive.”

The psychological effect of landing such a big fish would do wonders, Little said. “Nobody’s going to headline that Joe’s Car Wash hired two more people. An Areva in Idaho Falls, an F-35 here or a Nike here would change the mental perception about the economic doldrums we’re in.”

Gov. Butch Otter also has Nike on the brain. He’s working on a legislative package to lure business. Though he didn’t mention Knight’s pique, he knows that plenty of Oregon business leaders feel the same way.

Otter said he seeks “incentives for folks to take flight from Oregon and come over here, because we’re getting a lot of phone calls about their tax increase.”

Department of Commerce Director Don Dietrich said he has strategies for businesses in Oregon, Washington and California, where taxes are higher and regulation more aggressive.

Dietrich has gleefully adopted Knight’s moniker for the Oregon law – “Suicide Bill” – saying, “Our phones started ringing when that bill passed, and we have aggressively been answering those calls.”

Idaho’s advantages include stable and competitive taxes, cheap power and an “accessible government,” Dietrich said. “We basically have a very friendly business environment. We are swinging pretty hard, particularly in the Western states.”

Dietrich is realistic enough to know that dislodging Nike from Oregon presents astronomically long odds. “People don’t just pick up and move to move. It’s expensive, it’s disruptive.”

That’s especially true for a company so closely identified with Oregon and a single institution, the U of O.

But Knight also is friends with Boise State’s Chris Petersen, who coached Duck wide receivers from 1995 to 2000. His Broncos wear Nike gear. As unlikely as it is, the prospect of a bigger Nike presence in Idaho has real appeal in a state battered by a poor economy, dwindling tax revenue and its own loss of corporate titans in recent years.

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Discuss this article

Bennie February 23, 2010

Look at what happened to Washington and Boeing. Nothing says they can’t move the headquarters to Idaho and leave a large presence in Oregon. Then slowly but surly, move a department at a time.

Alpha Dog February 23, 2010

Peopel say it is impossible but when it does then people say — we couldn’t see this coming.

Tom Kihs March 1, 2010

If Nike does move it would not surprise me one bit!

robert March 7, 2010

nike’s not leaving oregon. and boise state’s still irrelevant and chris petersen needs to hop to a decent job and a better program soon. idaho is a desparate state, for sure.

james March 7, 2010

Nike will not leave Oregon..for all of Knight’s complaining, Oregon and the City of Beaverton have heaped tax breaks on his company for keeping their world headquarters there. Besides, Idaho’s corporate tax is worse than Oregon’s.

I could see Phil Knight personally leaving the state for somewhere with no state income tax because he’s getting close to cashing out billions in stock and probably wouldn’t want to pay personal income tax on it.

Michael March 7, 2010

Dream on, Idaho. Maybe Microsoft and Bill Gates will be next.

Pat Summerall March 8, 2010

Catchy article, but NIKE is never going to leave Oregon for Idaho. Corporate taxes in Idaho are worse than in Oregon.

Jim March 8, 2010

Nike and Phil Knight are well informed on all ramifications of every States’ tax liabilities. Nevada is far superior to Idaho. I recently moved my company from Oregon to Nevada. Nike will move, but it won’t be to Idaho.

Richard2 March 11, 2010

Oregon’s lunatic progressives would not care in the slightest if NIKE left Oregon. Just as they do not recognize any detriment they cause.

The Democrat Party of Oregon is a poster child example of middle school fools and political sleazbags using every stunt in advocating every left wing cause.

From Portland to counties to the state level these buffoons have taken over every institution. Funded by the steady stream of public employee union money and aided by media the entrenched left wing has Oregon in severe trouble.

Post NIKE, Oregon will continue the trajectory following the California model and be celebrating all the way.

Winston_on_Truth March 11, 2010

Folks, we’re experiencing what happens across the nation and globe when socialists (liberal progressives) take control of government and our lives. It’s destroying this nation and its ability to grow to support jobs for the common man. If you love Freedom, the Rule of Law, Liberty and provide appropriately for your selves and loved ones, then it’s time to vote a fiscal conservative as Governor and another fiscal conservative with practical business experience as a CPA to be State Treasurer.

Merrill Haddon March 11, 2010

I have to laugh at some of the idiodic statements being made that include how freindly Oregon is to business.
The one I really like is the one where Pat Summerall tells us how Idaho Taxes are more than Oregon. This is plain BULL. After 36 years in Oregon, we moved our company to Idaho Falls in July of 2005

Pat, you are wrong. Not only do we have lower taxes in Idaho, we enjoy a much more conservative life. We cry when we see what the lefties are doing to Oregon. Taxing on the gross sales. How dumb can one get.

Richard Hoverter March 16, 2010

Here in Washington, another “pro-business” state, we also tax gross sales. This B&O tax (I’m not kidding) averages about 1/2%. If you are profitable, it’s great, as we have no income tax. But when you are in the tank, like now, it is offensive.

Wile E Coyote “unintended consequences” Award « Finding Ponies… March 30, 2010

[…] Measure 66/67 and Kulongoski’s “Please don’t leave me…I’ll never do it again” tour with executives running companies in Oregon being wooed by Idaho and…CHICAGO??? […]

Chase Riepl April 2, 2010

I don’t see any new business coming into Idaho for quite a while, especially the Boise area. The economy here is just terrible. However, getting Nike would be just what Boise needs after losing so many corporate giants over the recent years.

Press Release Services July 19, 2010

I never see any business started into Idaha .Really the economy is in very poor condition.

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