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Dallas commissioners hesitate over tax incentives to get 500 Nike jobs

Diversity concerns in Nike have put a pause on Dallas County’s tax break approval for a distribution center that would add $60 million to the county tax base.

Dallas County commissioners are hesitant to give Nike’s potential distribution center a 50% tax break after some of them challenged the company on its diversity.

The commissioners’ leeriness could jeopardize the athletic shoe and clothing company’s plan to bring a $60-million-plus distribution center to Wilmer along with 500 jobs in 2025.

The proposal would give Nike and its landlord, LPC Southport, a 10-year, 50% tax exemption, costing the county more than $68,000 a year in tax revenue.

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The promised 500 jobs would have an average salary of $37,000, about $7,000 more than most salaries in the inland port, Dallas County said.

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“Additionally, this project will increase the county’s tax base by at least $60 million,” the proposal said.

In meetings this month, commissioners have questioned whether Nike’s tax break request should be granted, due to the company’s reported leadership diversity data.

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In Nike’s most recent report on 2021 employee data and goals, women held 43% of leadership positions, and racial and ethnic minorities held just over 30% of positions as directors and higher.

Commissioner John Wiley Price, one of the most vocal members of the court on this issue, and Commissioner Theresa Daniel told The Dallas Morning News that they are waiting on more information before making a decision.

Commissioner Elba Garcia told KERA earlier this week that she was less inclined to support the tax break after reading Nike’s report.

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Commissioner J.J. Koch said on Sept. 6 that the county can afford to be selective in who moves into economically busy southern Dallas County.

Tax reductions can be granted by a government for a wide range of reasons, including the promise of increased housing production or created jobs and the long-term impact to the tax base. He said there is a lot of work to be done before commissioners can justify to taxpayers a Nike tax break.

“Definitely Nike can do more,” Koch said on the dais. “Looking at a lot of the stuff happening in South Dallas, we’re just not in a place to be desperate. We are just not. I don’t want to give off that message that we are just going to take whatever we can get.”

Nike did not respond to requests for comment.

Eric Geisler, president of Economic Incentive Services, a regional site and incentives consultant, represented Nike at the Sept. 6 Commissioners Court meeting. Geisler responded to Koch, saying that this site was “one of many they were looking at.”

“Whether we like them or not, incentives are kinda the way things are done these days,” he said.

Garcia said it was a “shame” to see this proposal from a company with a lack of diversity at the top.

“And they come to Dallas County and ask for a 50% tax abatement?” she said. “The only thing that is saving this ask is that it’s in the southern sector.”

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“I got you,” Price responded, agreeing with Garcia.

Jesse Crawford, the county’s director of small business enterprise, is involved with county bids and contracts. He said he was concerned about the initial diversity numbers Nike provided.

“It wasn’t very impressive and it was pedestrian,” he told commissioners.

But he added that Nike has a history of strong community engagement, particularly with minority communities, building homes, outreach programs, and refurbishing playgrounds with rubber from recycled shoes.

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Commissioners want more.

“If we go down this road, we go down this road begrudgingly,” Price said.

Nike employee Melissa Vaillancourt is working on the company’s plans in Dallas and told the commissioners on Sept. 6 that Nike has made strides in its diversity, equity and inclusion.

“In recent years, we have made some structural and organizational changes to help facilitate the work,” she said. “So we’ve elevated our [diversity, equity and inclusion] team to sit at the heart of Nike’s people and culture strategy.”

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Nike’s corporate board of directors of 12, three of which identify as African American, is composed of eight men and four women. None identify as Latino, Vaillancourt said in the meeting, after Garcia asked.

The U.S. Census Bureau reports that 41% of Dallas County residents are Hispanic or Latino and 24% are Black.

“Policies usually drive direction,” Price said at the Sept. 6 meeting. “I’m going to pull it down for two weeks and confer.”

The proposal was brought back on Sept. 20, but punted again for another two weeks. Judge Clay Jenkins said staff pulled it.