Knoxville's Eonstreams wins $40MM judgment against Clear Channel

According to the Knoxville News Sentinel, a Knoxville business formerly known as Eonstreams (now a division of Internap) won a $40MM breach of contract suit against Clear Channel. The company provides ad inserts for streaming radio broadcasts over the Internet.

Chattanooga's Clark Center Endures Foreclosure

According to the Chattanoogan.com, the Clark Center on the Southside is set for foreclosure, but on reading the complete story, it appears that the developer still owns two of the condos, and those condos are being foreclosed upon, and perhaps some of the retail space, owned by the developer, as well. Saying that the center is being foreclosed upon is a little sensational, but it does not appear (at least from the Chattanoogan's story that the restaurant, coffee shop, or other retail spaces in the center will close. Nor does the story address the status of the development's residents, but it does not seem likely that the foreclosure will affect tenants who already own residential units.

Opinion: The Economic Development Dilemma

According to The Chattanoogan.com, the Chattanooga City Council questioned the use of tax incentives in a situation where although there was going to be substantial capital investment, no new jobs were to be created. In an environment where companies looking for new locations, the logic in recommending the incentives is eliminating options a company might have to relocate. That is the logic used by Steve Hiatt of the Chattanooga Chamber of Commerce in his appearance before the council advocating the tax break, and it is increasingly compelling logic.

The company requesting the tax break is Chattanooga Coca-Cola Bottling, and their commitment is to spend $2.5MM on equipment, and $9.0MM on real estate while "retaining" 386 jobs for the six years during which the requested breaks occur. It is unlikely that the company would leave Chattanooga, so the council questions how the tax breaks could be incentives, and if they are not incentives, then why are they offered if the purpose of the tax break is to spur job creation?

On the other hand, the company could move and take their jobs with them. Shouldn't the council offer tax breaks to keep jobs? Should a company be denied tax breaks when the city would offer the similar tax breaks to another soft drink manufacturer bringing the jobs to town in order to compete with Coca Cola? To deny them a tax break would penalize them relative to other companies in the same market.

There are no easy answers. The council is right to worry about setting a precedent for tax breaks without new jobs. And they should listen to the economic development voice warning of companies taking jobs elsewhere, or penalizing those companies, in effect, for already being in Chattanooga.

The council deferred decision for a week. The Parties wish them luck in developing policies for addressing to a complex question in very a short time.

Atlanta Trying to Lure College Football Hall of Fame

Knute Rockne is probably turning in his grave. The Indianapolis Business Journal cites the Atlanta Business Journal as reporting that Atlanta is trying to lure the College Football Hall of Fame to its Centennial Olympic Park from the museum's current home in South Bend, Indiana. There are few if any places more closely identified with college football than South Bend, Indiana, but the museum would probably get more exposure in Atlanta.

The Indianapolis Business Journal