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Arizona Gov. Ducey Axes Funds For Goodyear Factory After Nike Pulls Flag Shoe

The state of Arizona may withhold up to $1 million in economic development funding from a proposed Nike factory in Goodyear.

Gov. Doug Ducey announced via Twitter early Tuesday morning that he was pulling the funds in response to Nike canceling a new sneaker with a Betsy Ross-themed flag on the back of the shoe.

Ducey called Nike’s decision not to release a shoe that featured a U.S. flag with 13 stars "embarrassing" and tweeted: “We don’t need to suck up to companies that consciously denigrate our nation’s history.”

According to the Wall Street Journal, Nike asked retailers to return the shoes after activist and former NFL star Colin Kaepernick raised concerns that the flag is a symbol used by some white supremacist groups.

Ducey's announcement came hours after the city of Goodyear approved financial incentives for Nike to build the $184 million facility, which would bring around 500 jobs to the city.

In a statement to KJZZ, Nike Inc. said, “We regularly make business decisions to withdraw initiatives, products and services. Nike made the decision to halt distribution of the Air Max 1 Quick Strike Fourth of July based on concerns that it could unintentionally offend and detract from the nation’s patriotic holiday.”

Susan E. Marie, executive vice president with Arizona Commerce Authority, wrote in an email to KJZZ, “At the governor’s direction, we are withdrawing an up to $1 million grant from the Arizona Commerce Authority Competes Fund. Unlike other programs in statute that are eligible to any and all companies, including Nike — this is purely discretionary."

Jon Riches, director of national litigation with the Goldwater Institute, said it’s another example of why government should not give tax dollars to private businesses.

“Companies should rise and fall on their own merits, not on the whims of any politician anywhere,” he said.

Monday night, the Goodyear City Council voted to waive nearly $1 million in fees and reimburse Nike for another $1 million. In exchange, Nike would have to create at least 500 full-time jobs and spend more than $180 million to turn an existing building into a manufacturing facility.

In its Tuesday statement Nike also said, “We already employ 35,000 people in the U.S. and remain committed to creating jobs in the U.S., including a significant investment in an additional manufacturing center which will create 500 new jobs.”

Goodyear Mayor Georgia Lord released a statement that said, "The city of Goodyear has found itself in the middle of a difficult situation. Today, much has unfolded. I can appreciate the emotion and discussion that I’ve heard on this important topic. Last night, the Goodyear City Council unanimously approved a job creation agreement with Nike. This deal is expected to bring more than 500 jobs and a significant investment to the city. We will honor the commitment we made in our agreement. It has been a focus of the Goodyear City Council to build a strong economy for years to come and we will continue to work hard to bring the kind of high quality jobs that our residents deserve."

Riches said the situation should serve as notice to businesses.

“They should know that if they’re going to get into the business of accepting taxpayer resources, it comes with it additional scrutiny that might not otherwise exist,” he said. “The government shouldn’t be involved in the subsidy business in the first instance whether or not it agrees with some speech today or different speech tomorrow.”

Howard Fischer of Capital Media Services joined The Show to talk more about the situation.

As a senior field correspondent, Christina Estes focuses on stories that impact our economy, your wallet and public policy.