Corporate Welfare Weekly - October 23, 2009 – Issue 21
Oct 23rd, 2009
October 23, 2009 – Issue 21
Governor Perdue’s Asian Fishing Trip…
Since last week, Governor Perdue and a few top economic development officials have been on a trade mission to Japan and China seeking more ways to spend already scarce North Carolina tax revenue. While Japanese companies are certainly enticed by the prospect of financial incentives from the state, fortunately, Chinese companies are not.
WRAL reported Governor Perdue’s observations in an October 22 article written by CapitalBroadcasting Company:
“China’s growing economy is so strong that incentives are not the key factor to luring investment, Perdue observed. … Rather than money and incentives, Chinese companies are looking for support and assistance in navigating the state system. … Companies with a base in Communist China are used to dealing with government entities, she said.”
Recent Announcements…
Dell has agreed to pay back more than $26 million in incentives. $15.5 million will be returned to the City of Winston-Salem and almost $11 million to Forsyth County.
~ Associated Press, October 22, 2009
$1,000,000 has been approved for EMC Corp. by the Durham City Council on Monday. The funds are to help the company establish a new research facility in Durham County. County commissioners unanimously approved $1.2 million for the company last week.
~ Capitol Broadcasting Company, WRAL, October 20, 2009
Surry County has been busy…
$50,000 in local incentives to Vaughan-Bassett Furniture Corp. The deal was approved by the Surry County Board of Commissioners on October 18 to help the company reopen its facility in Elkin. The incentives will be in the form of a loan to be used for expenses relating to hiring and training workers. The county may forgive the portion of the loan for each job that remains by 2012.
~ Meghann Evans, Mount Airy News, October 19, 2009
$950,607.62 to “Project Protect” by the Surry County Board of Commissioners. At an October 19thpublic hearing, the commissioners voted unanimously to approve the purchase of an existing industrial facility in Mount Airy for the undisclosed company. The county will lease the building to the company for $1 a year for at least five years. If the company meets its commitments after the five years, the county will convey the facility to the company.
~ Meghann Evans, Mount Airy News, October 20, 2009
$19,000 - $77,200 in local incentives has been granted to “Project Tough” from the City of Mount Airy. The unnamed company will receive the incentives in the form of property tax rebates over five years. The Surry County Board of Commissioners will hold a public hearing on November 2 to propose that the county should match the city’s incentives package.
~ Meghann Evans, Mount Airy News, October 20, 2009
A Tidbit worth Mentioning…
Surry County Commissioner Craig Hunter did not vote on the “Project Protect” incentives deal to avoid any conflict of interest. Hunter is part-owner of Facilities Corporation of America, the company that is listing and receiving commissions from the county’s purchase of the property for the undisclosed company. The remaining commissioners voted unanimously to approve the project.
~ Meghann Evans, Mount Airy News, October 20, 2009
A strong argument against incentives has been that state, county, and city leaders tend to favor incentives deals that fill their individual pockets the most. There is little honor in recusing oneself when there is no risk of loss. Recusal becomes respectable when the likelihood of loss due to nonparticipation is imminent or at least more likely.
Encouraging Tidbit…
The Winston-Salem Journal reported in an October 22 article written by Richard Craver that Ameritox,a Baltimore life-sciences corporation, will be expanding its business to North Carolina withoutincentives!
“Ameritox said yesterday that it would create 228 jobs in 2010 … without local and state incentives. … Ancelmo Lopes, the Chief Executive Ameritox said, … ‘We chose Greensboro and North Carolina because it offered a diverse and talented work force, an abundance of top-tier educational institutions, and is well situated to help our company continue to grow.’
Discouraging Tidbit…
The Charlotte Business Journal reported in an October 16 article written by Matt Evans that the jobs left behind by Dell’s departure will not be easily replaced. Mr. Evans writes:
“It’s not likely that the soon-to-be shuttered Dell computer manufacturing plant will join the countless relics of the furniture and textile industries scattered around the Triad as an empty, unused shell, experts say. But the odds that the 750,000-square-foot building in the Alliance Science and Technology Park will again employ 1,000-plus workers as Dell has are much lower, given the shortage of major manufacturers looking for new facilities in this economy.”
Quotes of the week…
“I wouldn’t expect it to be empty five years from now, but people will be smart to lower their expectations about jobs-per-square-foot,” he said, adding that “1,400-person projects just are not common in any industry. But getting a nice operation with a couple of hundred jobs is feasible.”
~ Mark Sweeney, Senior Principal of McCallum Sweeney Consulting, as quoted by theCharlotte Business Journal, regarding the soon-to-be empty Dell plant. The Greenville, SC-based firm provides site-selection, incentive negotiations, and economic development consulting to corporations such as Nissan and Boeing..
“No government likes having to pay incentives to recruit employees, but it has become a necessity to stay competitive.”
~ Winston-Salem Mayor Allen Joines, as quoted by the Triangle Business Journal
If no government likes having to pay incentives to recruit employers, then let’s all agree to stop this nonsense for the taxpayer’s sake.
Around the Country…
$1,300,000 has been granted to United Furniture Industries to expand and repair its Okolona, Mississippi manufacturing facility. The Mississippi Development Authority provided $1.1 million in community Development Block Grant funding and the Appalachian Regional Commission provided an additional $190.000. The company will add 100 jobs to its current work force of 1,400 as well as repairing its roof and sprinkler system.
~ Associated Press, October 13, 2009