Nike’s Shoe Flap in Arizona Spurs a Factory Grab by New Mexico

(Bloomberg) -- Arizona’s loss may become New Mexico’s gain.

After Doug Ducey, the Republican governor of the Grand Canyon State, said he’ll rescind up to $1 million in financial incentives offered to Nike Inc. for a new factory, New Mexico officials confirmed they’ve reached out to the company. Nike had agreed to build a new multimillion-dollar facility in the Phoenix suburb of Goodyear.

New Mexico Democratic Governor Michelle Lujan Grisham’s office contacted Nike shortly after Ducey’s comments. A spokeswoman for the governor said Wednesday the state would love an opportunity to snare a project that adds jobs and expands its economy.

“It seems illogical to jeopardize hundreds of employment opportunities over some political virtue-signaling, but we’re happy to jump at the opportunity to bring those jobs here,” said Nora Meyers Sackett, the New Mexico governor’s press secretary.

Ducey potentially put the factory location in play after criticizing Nike’s decision to recall commemorative Fourth of July shoes that featured a U.S. Revolutionary War-era flag known as the Betsy Ross. The flag, with 13 stars, has been taken up as a symbol by some far-right groups, and Nike pulled the shoes after Colin Kaepernick, who endorses the company’s products, said it’s offensive to some people.

Nike said Tuesday it remains committed to building a new manufacturing center, but didn’t specify Arizona. A company spokeswoman didn’t immediately respond to questions about New Mexico’s outreach. Town officials in Goodyear also said they hadn’t heard anything to indicate Nike’s plans have changed, but intend to honor their part of the deal.

Goodyear’s contract with a wholly owned Nike subsidiary says the company will invest $184.5 million in the project’s first phase. The 500,000-square-foot factory is expected to create as many as 505 full-time jobs. An independent firm estimated it would bring in $7.6 million in direct tax revenue in the first five years.

To seal the deal, the city agreed to waive up to $995,000 in plan review and permit fees. It also agreed to pay Nike as much as $1 million as a result of the job creation. The contract specifies Nike will repay those benefits should it breach the agreement.

To contact the reporter on this story: Randall Williams in New York at rwilliams407@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum, Susan Warren

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