Wednesday, January 10, 2018

Discovery move is all about why Knoxville beats MoCo in business climate

Discovery Communications is moving from Silver Spring to New York City because it is a content company? Not quite. Unless you believe they film their Shark Week programs in giant water tanks on the seventh floor of their Silver Spring headquarters - as many embarrassed Montgomery County elected officials apparently do. Put aside the spin in Discovery's press release, and carefully study their public statements to media yesterday, and you'll find the real story here is A) why Knoxville has a better business climate than Montgomery County, and B) the big Discovery "move" may actually be a big layoff of extraneous workers, as the company merges with Scripps.

The County's spin, of course, is that there "was nothing Montgomery County could do to retain Discovery." Discovery is a content company! They need to be near other content and advertising companies in New York! Aren't taxes terrible in New York City? Isn't the cost of living even higher in New York City?

Ah - but there's the key point. Discovery's move isn't about New York in the end. Analyze Discovery's public statements, and you find there's no certainty as to how many jobs are going to New York City. Some key high-level positions had already been moved to Discovery's current New York base of operations. Some positions at Scripps in Knoxville will also be moved to New York in 2019.

Scripps already has over 1000 employees in Knoxville doing a lot of the business and administrative jobs that many Discovery employees are doing now in Silver Spring. Again, read Discovery's statements carefully - they don't mention x-number of jobs moving from Silver Spring to Knoxville (or to New York). It could be that Montgomery County not only suffers the shame of losing one of its few Fortune 500 companies, but almost certainly also winds up with hundreds of unemployed Discovery workers as a result. Knoxville will gain all of the jobs Discovery needs from Silver Spring, but not likely all 1300.

Knoxville has everything Montgomery County's elected officials keep telling us we don't need - lower taxes, suburban living, and highway infrastructure. Discovery's press release noted "infrastructure" as a key reason they chose Knoxville. It's very easy to see why:
Discovery's new HQ in
Knoxville is right at an
interchange with I-40
The new Discovery campus in Knoxville is right on Interstate 40, a major cross-country route from California to North Carolina. In fact, they've got an on-ramp right next to them.
Discovery's new Knoxville HQ
is only 18 minutes by car from
the airport
Discovery's future Knoxville campus is also only 18 minutes by car from McGhee-Tyson Airport. Try getting to an airport in 18 minutes from Montgomery County (Hint: You can't).


Tennessee has no income tax. Property taxes are about half of what they are in Montgomery County, even on a million-dollar home. The Volunteer State's sales tax rate is 7%. There is no estate tax, and after a recent change in Tennessee's tax law, the "Hall Tax" on interest and dividend income is being phased out by 2021. The latter change is simply the capstone on why Tennessee's tax structure is so business (and worker) friendly. Robin Ficker was absolutely correct yesterday when he cited taxes as a factor in the Discovery move.

When you consider that neither Discovery, nor New York Gov. Andrew Cuomo, cited any specific number of jobs moving to New York yesterday, the picture becomes more clear. Some key positions may well move to New York, and Cuomo and Mayor Bill Blasio can celebrate winning the "global headquarters."

But Discovery is the real winner here. By moving the real nuts-and-bolts of their company to Knoxville, they and their employees (however many actually get moved) will both save bigly on their annual tax bills. Significant layoffs that would have been bad publicity for the company in Silver Spring now get hidden and deodorized by a "big move" and merger.

Montgomery County, as usual, is the real loser. Not only has no major corporation relocated its headquarters here in twenty years, but now we've lost one of the few Fortune 500 companies we had.  We've lost the taxes Discovery and many of their employees paid.

This is a major financial blow to Silver Spring, as well. Residential buildings continue to replace workplaces in downtown Silver Spring at a rapid pace. There are now fewer workers eating lunch at restaurants as a result. Residents of new apartment buildings in Silver Spring are dining out for lunch in downtown Washington, Tysons, and other growing job centers in Northern Virginia. Turning the Discovery HQ into an apartment building won't help matters.
Discovery's new low-rise,
suburban office park campus
in Knoxville (Google Maps)
If you look at the new Discovery national headquarters campus in Knoxville, it's just that - a suburban office park campus. Nearby are roads and commercial strips that look like Rockville or Gaithersburg. Much like Apple, Google and other successful corporations, Discovery has traded urban for suburban.
It looks more like Rock Spring
than downtown Bethesda -
adjacent water bodies included
Just beyond either side of the suburban commercial area where Discovery will be are single-family home neighborhoods along tree-lined streets. Sure, certain companies are willing to take a financial hit to be "downtown" on a transit station. Discovery obviously isn't one of them, and neither is Apple or Google. Montgomery County's office parks aren't the problem - it's our anti-business County Council, taxes and gridlocked transportation system that are the problems.
Single-family homes on
tree-lined streets near the
new Discovery HQ in
Knoxville (Google Maps)

Montgomery County can lower its taxes. After throwing record amounts of money at Montgomery County Public Schools in recent years, and the results only getting worse by the year, we know spending money is not the solution to the decline in our public schools. Wasteful spending was epitomized last year by the Council spending over $20000 on a security camera system I was able to find for less than $1000 online - including installation. Imagine how many other un-itemized expenditures like this one there are in the operating and capital budgets, and the potential for cuts becomes crystal clear.

Attempts to blame Gov. Larry Hogan for the Discovery debacle only open the door to blaming our County Council for the loss. "The first County Council to lose a Fortune 500" certainly has a nice ring to it. When apologists say, "We were going to lose Discovery no matter what the incentive package was," they are actually correct. Without a business-friendly tax system, without a new Potomac River crossing to provide an 18-minute trip to the airport, without a functioning and complete master plan highway system, and without elected officials who understand international business in the 21st century, Montgomery County is always going to be the loser.

63 comments:

Anonymous said...

Wow there's so many grossly inaccurate statements in this post I don't even know where to begin...

Anonymous said...

At least you got to use your favorite BETRAYED photo again. Good on you, boy.

Anonymous said...

George leventhal is asking us to stop talking about the anti business climate in MoCo.

Anonymous said...

If you really think Knoxville is a better place to live than Montgomery County:
A. Lol
B. Why don't you move there?

Your Streetviews* just show how crappy it is. None of the executives who got decided to move the lower-tier staff to Knoxville is actually moving there, which says a lot.

It sucks that the current lower-tier Discovery employees and their families who had no say in the process will either have to suck it up and move to middle-of-nowhere Appalachia (taking a pay cut in the process) or lose their jobs.

After being accustomed to the best schools in the nation, live-work-play, quality retail, direct flights to everywhere, Knoxville is clearly a downgrade.

*Fun Fact: Montgomery County's "high taxes" pay for things like sidewalks.

Robert Dyer said...

6:47: I've never heard anyone say they were moving somewhere for the "sidewalks." LOL Montgomery County schools are in decline. The kids can't even pass the tests, and then they got rid of the tests. High taxes here are paying for less square feet of parkland in Bethesda than there were in 2010. Humiliating!

6:46: Understandable, when you look at economic development in MoCo since he took office eons ago. I wouldn't want to talk about it either.

6:35: All facts.

Anonymous said...

Dyer the Dotard. You are so entrenched in your attacks on the MoCo elected that you fail to see the errors in your logic. Leave it to your readers to point out the FACTS, since you are as incapable as the other Dotard at discerning reality.

Robert Dyer said...

6:59: What are these "errors in logic?" Last time I checked, the "MoCo elected" just had their [briefcases] handed to them by Discovery and Knoxville, Tennessee. Yee-haw! What was that about "reality," again?

Anonymous said...

probably trying to save costs because can anyone remember the last time they watched the Discovery Channel? Even Shark Week was a thing 10 yrs ago but not as much anymore, and that was one week where kids watched.

Discovery is dying so they are just being picked apart. Expensive MoCo wasn't worth it anymore.

Anonymous said...

@6:35 AM You can not accept the Facts that he is pointing out...

Anonymous said...

@6:46, f--- that Maryland hating Scumbag!!!

Anonymous said...

@6:47, Pure 100% Bull S---, because of NoVirginia the Maryland Suburbs economy is drying up due to Democratic anti-Maryland trolls jacked up property taxes and denied Highway projects resulting in Jobs leaving Maryland and Fortune 500 Businessrs choosing Virginia over Maryland to build their HQ's...

Anonymous said...

@6:59AM, spoken like a true Maryland hating Confederate Flag suporting Virginia tax paying Troll....

Barwood Sucks said...

We lost Silver Spring's signature employer, have a revenue short fall in a booming economy and violent crime is up.

And these guys want promotions or re-election? Lol.

Are Councilmen required to have psychiatric tests annually? Serious question. Uncomfortable to bring up, but necessary.

Anonymous said...

No Dyer, Zaslav is a Long Island Jew and wants to go back home. It's that simple.

Anonymous said...

"Without a business-friendly tax system, without a new Potomac River crossing to provide an 18-minute trip to the airport, without a functioning and complete master plan highway system, and without elected officials who understand international business in the 21st century, Montgomery County is always going to be the loser."

Lol the distortion of the truth is so bad it's actually funny.

None of above has any relevance to Discovery Communications leaving the county. Knoxville's airport has regular direct flights to like five metro areas. It doesn't matter if they're 30 seconds away or not.

Anonymous said...

I think your point is stronger if they moved the offices to NoVa (ok, I guess some are moving to Sterling). It's part of the same area, with similar costs and infrastructure.

Knoxville is just a low-cost backwater. Their airport is a joke -- no international service AT ALL and no service to major US cities like Los Angeles.

Anonymous said...

"Attempts to blame Gov. Larry Hogan for the Discovery debacle only open the door to blaming our County Council for the loss"

Nonsense. Governor Hogan is the one who claims to be for "business" and he's the one who promised to lower corporate taxes.

Anonymous said...

An 18-minute trip to the airport would be helpful for nearly everyone. It's a worthy longterm goal. It is no short-term task, and I suspect that may be one reason our current politicians have not touched it: Where is the glory, the instant resume booster? No, if someone is going to tackle the infrastructure necessary for a painless, efficient means of airport commute, that takes a kind of selfless tenacity that seems needed in our government. Robert, no one could with good conscience expect anyone to build a bridge in a day, a year, even a decade? But when it is all said and done, you are the one that quietly has your eye set on how this county will look in 60 years, and how well it will be functioning economically. If you could manage to even set a few foundational key stones in place with the infrastructure of Montgomery County--so that decades from now, we are attracting and creating more profitable forms of income and efficiency for international travel, you will have done enough.

Anna said...

Facts? For heaven's sake, it's full of opinion.

You act like MoCo ever had a chance. You gotta realize this was decided before any acquisition went thru...costs, costs, costs. The only question was would they keep any kind of presence here at all. It looks like they're trying to keep a foothold here, where they were founded.

Anonymous said...

A lot of fake news earlier last year when folks falsely reported that Discovery was staying...even while they reduced their space in Silver Spring.

Anonymous said...

The entire cable TV industry is shrinking - that's what the Discovery/Scripps merger was all about. People are "cutting the cord".

Discovery's staff at their DTSS HQ shrank from 2,300 to 1,500 - that didn't just happen in the past year, it happened over the past decade.

Anonymous said...

AOL
Sprint
Nextel
MCI
UUNet
PSINet
ExxonMobil

NoVa has lost all of these Fortune 500 companies.

Anonymous said...

This isn't the first time Montgomery County lost out to Knoxville. Many years ago, Marriott moved it's accounting operations (A/P, A/R, Payroll, Credit Card Processing, etc.) to Knoxville. That was several hundred jobs lost to Knoxville. Some people moved, some were forced to find other jobs locally. Eventually, Marriott outsourced those jobs in Knoxville to Accenture, so those jobs would have been lost anyway.

Anonymous said...

Someone dropped the ball and wasn't in sync with Discovery.

Anonymous said...

"Knoxville has everything Montgomery County's elected officials keep telling us we don't need..."

"...suburban living..."

Still plenty of suburbs here. No single-family homes have been torn down to make way for our infill development in Chevy Chase, Bethesda, Silver Spring, Wheaton, North Bethesda and Rockville.

Also, there is a reason why housing costs so much more here than in Tennessee.

"...and highway infrastructure"

Are you kidding? Montgomery County has much more highway infrastructure than Knoxville. Did you even look at that map you posted?

Anonymous said...

"Single-family homes on tree-lined streets near the new Discovery HQ in Knoxville (Google Maps)"

Looks like you haven't spent much time in DTSS. Plenty of "Single-family homes on tree-lined streets" within just a few minutes walk of the current Discovery headquarters.

But it's good that you are crediting your photos from Google Street View, for a change.

Baloney Concrete said...

@9:25 -- That's just it: Discovery isn't talking about highways and airports when they refer to "infrastructure." They're talking about the HQ building itself. As usual Dyer is simply shoe-horning is preferred narrative into the story however he can.

Mr. Dyer is also very incorrect in his assertion that companies have a natural preference for suburban office parks. If that were true, vacancy rates at suburban office parks wouldn't be so high. Here's a New York Times article on this phenomenon -- citing Bethesda as ground zero! Numerous office buildings are under construction in downtown Bethesda; meanwhile 6116 Executive Boulevard has boasted 98.7% vacancy for years.

Discover is moving to Knoxville for one simple reason: MONEY. Not for highways, not for airports, and not because they just looooove strip malls.

Anonymous said...

7:10/12/19 - You are retarded.

8:08 - Things change. That doesn't mean previous reports were "false".

Anonymous said...

A "Second Crossing" would not change the driving time from DTSS to Dulles in the slightest. In fact, using the Second Crossing to go from one to the other would double travel time.

"Knoxville's airport has regular direct flights to like five metro areas. It doesn't matter if they're 30 seconds away or not."

^^^This^^^

Anonymous said...

Chickens come home to roost. Moco treats everyone poorly including the small shopkeepers trying to get a permit. County employees do what they can to make the private sector miserable. Instead of being helpful the morons just turn wellmeaning folks away. All the county people are interested in are unwarranted salary increases from the exec on down the line to the liquor idiots. Soak the the rich and enrich themselves. Anyone question their retirement benefits? In the pocket of the unions. No wonder Va is decades head of moco. Disgusting!

Anonymous said...

"I'M A TAXPAYER, WHAT ARE YOU?"

Oh, that is such Chutzpah, Dyer. You've never paid taxes other than sales/excise taxes on your Twinkies and bumwines.

Anonymous said...

"No wonder Va is decades head of moco"

Decades ahead in Confederate flags and white supremacist rallies...

So tired of hear people (blig author included) whine about how great life is South of the river, which begs the question, what's stopping you from moving???

Anonymous said...

10:08am Dyer never paid a tax? Lol...yeah, right.

Anonymous said...

"There are now fewer workers eating lunch at restaurants as a result. Residents of new apartment buildings in Silver Spring are dining out for lunch in downtown Washington, Tysons, and other growing job centers in Northern Virginia."

Do you have ANY actual data to back up these wild claims?

Anonymous said...

This has absolutely nothing to do with the way the county or state treated Discovery (or what deals were/not offered) and everything to do with the fact that Scripps bought Discovery and wants to consolidate it's resources. Yes, it's sad that we're loosing them, but this is absolutely to be expected.

Anonymous said...

10:20 - Given that Dyer has never held a job and never owned a house, the only taxes he has paid would be sales/excise taxes.

Anonymous said...

"Residential buildings continue to replace workplaces in downtown Silver Spring at a rapid pace. There are now fewer workers eating lunch at restaurants as a result."

The staff needed to run those new apartment buildings easily exceeds the number of jobs that existed in the one-story commercial buildings that were there previously. And that's not even counting the new retail in the ground floor of the new apartment buildings.

Anonymous said...

10:27am that is false. Why lie that Dyer has never had income? Invalidates any points you're trying to make.

Anonymous said...

8:22 - Also USAirways. NoVa is the Valley of the Dinosaurs.

Anonymous said...

10:57 - What jobs has Dyer had?

Anonymous said...

11:01 AM Dyer has a wonderful "about us" page.

Anonymous said...

...yes, TN employees are cheaper than MD employees. You didn't need 3000 words to point that out. Makes sense from Discovery's point of view - the industry is struggling and this merger buys them some time w/cost-cutting measures.

Not every company can afford the DC/MoCo employee premium; we all know and accept that. Sucks, but it's better than the alternative: if I woke up tomorrow with a TN salary then THAT would be worth a 3000 word rant!

Anonymous said...

Lets make SNN a Fortune 500 company people. Where are the Venture Capitalists in MoCo to fund Dyer's brilliant business model? Or did all Venture Capital money move away from MoCo as well.

Anonymous said...

I’m glad to see the 50-year olds virgin’s temper has been in check in the New Year. Haven’t seen Robert call anyone a moron or hobo yet.

Anonymous said...

11:44 AM If you've seen Dyer's troll/former blogger, you'd be on board with "hobo".

Anonymous said...

I love that driving map on Image #5 of 11.

Looks like Dyer got lost after he left the Scripps HQ. He made a right turn when he should have made a left turn. Did he stop and ask for directions?

Anonymous said...

"The Volunteer State's sales tax rate is 7%."

That's HIGHER than Maryland/MoCo, you innumerate birdbrain.

Robert Dyer said...

11:56: No kidding! And guess what - you would still pay less taxes than you do here with that 7%. That's why I listed. All. The. Taxes. for Tennessee.

Anonymous said...

"The Volunteer State's sales tax rate is 7%."

That doesn't include the local sales tax. Knox County (Scripps location) has a 2.25% local rate on top of the 7% state rate, for a combined 9.25% - over 50% higher than MoCo. Way to do your research, Robert. You're so uneducated on these topics you don't even realize when you're undercutting your own argument.

Anonymous said...

Discovery Channel went way downhill years ago. It used to be a good channel, but now all I see are fat rednecks with Z.Z. Top beards gettin' drunk & shootin' possums for dinner, while their obese wives & bratty kids yell at them. Their idea of "highbrow" culture is a channel where all you see is Adolf Hitler walking around Bavaria in the winter with a scowl on his face.

Anonymous said...

11:20 - where does that page list any actual jobs that Dyer has had? Who were his employers? Who were his customers or clients? How many people actually read his blogs? Have his blogs gotten any positive reviews outside of anonymous comments posted on his own blogs?

Terpsucka said...

Why are you so concerned about the personal life of someone who writes a blog? WTF cares?? Jesus MoCo is populated by some pathetic losers.

Anonymous said...

Robert did a terrific job of laying it all out. Tough medicine. Denial is so much easier.

Anonymous said...

#UnsgnedDyer giving himself Attaboys at 2:34 AM. LOL

Anonymous said...

Did Redwood ever reopen?

Anonymous said...

Only recent Left wing progressive would sing praise to Merryland. Those of us 2nd Generation native MoCo residents have watched it slip in to a cesspool of Carpet Baggers, such as Hans. MoCo is not Maryland, it is a bonafide satellite of DC now. MoCo, the Salvadorian sanctuary, it's a joke now. The tax base is leaving while they welcome their core of voters that are free riders.. will work until it doesn't.

Anonymous said...

Come to Knoxville, see our SunSphere!

Knoxville is a dumb, filled with low cost rednecks happy to be paid close to minimum wage. MoCo is not in competition with Knoxville.

Question, Robert - what company wouldn't consider moving backoffice work to a low cost center?

With all that said, Tennessee is a beautiful state... once you look past the obesity, smoking rates, low graduation rates, etc.

Anna said...

8:34AM - I really doubt anything will change that will make you happy. Maybe you should re-think staying in the county. All the anger and hate must be taking quite a toll on you own health. This area may have become so toxic to you, you may not be able to thrive in this horrific environment.

I understand Knoxville is hiring.

Anonymous said...

How about Beretta Firearms a staple in Accokeek, MD moving to Tennessee. Businesses move where they are welcomed. MoCo sure doesn't welcome business. Just a matter of time till Medimmune bails out.

Anonymous said...

9:51 - OK, Beretta left because MD instituted tougher handgun laws. TN doesn't give a crap about gun laws. Even though I support gun ownership, I also support gun laws. Beretta decided to flee to a state who embraces weapons. It's that simple. That is SO different than almost any other scenario. MedImmune? Where is MedImmune gonna go, and why? They need a highly educated workforce. Guess what, there's only a handful of cities that can supply what MedImmune needs.

Anonymous said...

ExxonMobil, AOL, Sprint, Nextel, MeadWestvaco, MCI, PSINet, UUNet, MFS... all USED to be in Nova.

MAGA! said...

It's hilarious how Robert is able to live rent free in the heads of the trolls who relentlessly stalk him. Just like how President Donald J. Trump does in the heads of every liberal.

Anna said...

Maybe for the few minutes a day, as they read, people see things to mention. They may check back in later to see the resulting discussion, only to find any intelligent discourse decimated by deletes.

Nah, it's Mr Hans Riemer who lives rent-free in Mr. Dyer's head 24/7.