Waste Management President and CEO Jim Fish just took his company on a nationwide quest for possible new sites for the headquarters of the $15-billion North America industry leader.
The company ended up staying in Houston, where it has some big leases coming up for renewal next year. But Fish and his colleagues picked up some strong insights along the way about what it would have been like to move Waste Management to another city.
Among them: Fish believes that Nashville, Denver and Chicago are generally among the most attractive places to base a company these days, and so is Austin, Texas. But he’s really down on New York and California because of their overall unfriendliness to business. And he’s meh about Boston, where he says the “tax structure isn’t terrible. But New England isn’t centrally located for us.”
Nashville finished No. 2 to Houston, which Waste Management ultimately selected for a number of reasons ranging from the business advantages of Texas to the cultural diversity of Houston itself.
“It made sense for us to go through the process,” Fish tells Chief Executive. “We evaluated a bunch of different criteria that are really important to us, such as overall business friendliness – and how receptive a city would be to our business, not all business. It’s not so much about waste, but a heavy-industry business with a lot of trucks as opposed to, say, pharmaceutical labs.
“We also looked at tax structure – individual tax structure is important to our employees here, because Texas is one of nine states without a state income tax. There’s the cost of living and the cost of rental space in downtowns. And access to culture – diversity and inclusion.”
After investigation, Nashville placed high on Waste Management’s list based on all of those criteria. But Fish downgraded the rising urban star of Tennessee because “it didn’t have great air service” and is behind other fast-growing cities in automotive infrastructure. The critical mass of its colleges and universities was found wanting. Plus the city didn’t offer Waste Management any financial incentives to move, Fish says.
Chicago was a surprisingly strong possibility because “it’s got a ton of culture” and millennials like it. “It’s also got top-tier universities and a ton of air service” Fish says. And while “it could use a little revitalization, the infrastructure is good.”
Fish even got along well with former Mayor Rahm Emanuel. “We spent a lot of time with him and his team,” Fish recalls. “I told him, ‘I wasn’t crazy about you when you were in the Obama administration, but now I really like you.’ He laughed … So I think Chicago is very business-friendly.
“What hurt Chicago in our minds was its tax structure, and the cost of living,” Fish says. “You’ve got to be able to attract employees.”
Austin got a peek from Waste Management because of its increasing allure for millennial workers and its diverse culture. But the cost of living there is relatively high for Texas, Fish says, and its infrastructure hasn’t kept up with growth.
Fish gave California a glance long enough to confirm he would be right to look away. “California is a great place to visit, but we had some real issues” with its basic unattractiveness for doing business, Fish says. “Except for tech, California isn’t very business-friendly, and that’s tough. The tax structure obviously is a major issue.
“And especially in the [San Francisco] Bay Area, the cost of living is off the charts. It’s really attractive to millennials but they’re going to have to pay $4,000 a month for a 1,500-square-foot apartment. There were zero incentives for us to move out there.”