Monday, January 28, 2008,5:47 AM
Where There's Smoke ...
Regarding yesterday's news that Advance Auto Parts (a Fortune 500 company) may be considering a move of its headquarters from Roanoke to Minneapolis, Ms. Elenaeous thinks there is a very good possibility that might just happen. And a big reason for it seems to center around the difference in airports, Minneapolis having a real one, of course.

I'll say this: I live about the same distance (in terms of driving time) from Roanoke, Charleston, Greensboro, and Tri-Cities (and just a half hour further away from Charlotte). As often as I fly, I've used the Roanoke airport once. Once. (To the tune of $1700; a round-trip flight from Roanoke to Chicago to Cedar Rapids to Charleston to Roanoke). Admittedly, that was four years ago, and prices change, but is Roanoke a good deal for air travellers? You decide.

The fact that Minneapolis is a hub for Northwest Airlines is a big deal as well. No business traveller wants to spend a sizeable portion of his working day sitting in a terminal, waiting for a connecting flight to somewhere. Direct non-stop, baby. All the way. A hub affords that opportunity.

Knowing that, will Advance move its headquarters? I seriously doubt it. In terms of the big picture, there's nothing to gain. And lots to lose. If nothing else, I'm sure these guys are looking at tax implications. Assuming there'd be an incorporation change involved (AAP could incorporate in Delaware and dodge the issue), Minnesota has a much higher corporate tax rate than does Virginia (the extremely high federal rate being equal). 9.8% compared to 6.0%. That's nothing to sneeze at.

More important to these executives, individual income tax rates favor Virginia. The top rate in Minnesota is 7.85%. In Virginia, it's 5.75%. This alone should sway these guys. That 2.1% difference is going to save these gentlemen a wad of cash each year, enough to send their kids to Aruba on spring break.

Yes, the fact that several of the new corporate heads now live there is distracting. And sillier things have happened. But my guess is they are looking forward to a move south.

Still, it's interesting speculation.
 
posted by Jerry Fuhrman
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