Maryland sits dead in the middle of a vigorous business-stimulating corridor: the East Coast megalopolis.
We benefit from the flow of ideas and goods that emerge from the region. But too often our leadership ? mainly political, but sometimes civic ? tries to erect walls around our state boundaries that push business elsewhere.
The Maryland legislature regularly chases out industry. In 1983, it escorted the credit-card industry to Delaware with rate caps and annual fee prohibitions. And in the same year, by introducing an eminent domain ordinance to seize the Colts? assets (as negotiators from football team and state officials worked to resolve the problem) the legislature prompted the club?s midnight flight to Indianapolis.
Examples abound of our Baltimore-dominated region?s blind parochialism and small thinking. Many here will tell you that the NFL purposefully excluded an expansion team from coming to Baltimore in 1993 to protect the Redskins and Jack Kent Cooke.
But the main reason is that the Baltimore expansion effort leaders mindlessly followed the league?s recommendation to not back a single ownership group.
The other candidates ignored this dictum and supported a prominent individual who lobbied hard alongside the civic types to win a team. Baltimore did not. We lost. One of the groups the Baltimore committee chose not to back now has a Super Bowl trophy as NFL owners in another town, and it owns the most valuable franchise in all of pro sports ? the soccer team Manchester United.
But it was not qualified enough to be backed by the Baltimore expansion committee?
Why are there so few publicly held company headquarters here? Why were such local stalwarts as Alex Brown, Noxell Corp. and USF&G Corp. sold to out-of-town interests?
Sometimes flight can?t be stopped. CEOs and chairmen owe their allegiance first to shareholders whose interests they are legally bound to maximize ? which can mean moving or closing headquarters. But how civic and political leaders behave impacts whether businesses choose to locate or expand here.
When Constellation Energy?s joining with Florida Power and Light was announced, local politicians naively wailed about losing the last Fortune 500 stalwart. Legislators made it worse by hurting the company?s public-markets position with the rate fight, treating the company leaders as if they were pirates. If Constellation?s top man Mayo Shattuck III saw an opening to maximize his shareholders? value and did not take it, shareholders would have sued him and his board. The legislators lose the big picture in all of this. In the end, Maryland credit-card holders are still paying annual fees, and no interest rate caps exist.
All that resulted was a massive loss of jobs and an entire industry segment. Utility rates still are going up ? with interest charged even for those who would prefer to pay the full increase now rather than defer it.
As for sports, the NFL was replaced here through the efforts of local leader John Moag, who coincidentally spent a lot of time outside the “walls” in D.C. with the Washington lobbying firm of Patton Boggs.
It is time to knock down those walls and see what happens elsewhere. Otherwise, the Baltimore region will morph into a total back office with less philanthropy, fewer services and a toxic climate for new business.
Bob Leffler is the owner of The Leffler Agency, a Baltimore- and Tampa-based advertising agency, whose clients include NFL teams and The Examiner.
