Corporate Welfare Weekly - June 7th, 2010 – Issue 53

Recent Announcements…

 

$4,000,000 in potential incentives are available to Citco Fund Services under the Job Development Investment Grant (JDIG) for the creation of 250 jobs. The hedge-fund company plans to expand its office in Charlotte.

                ~ AP, Sun News, June 3, 2010

 

$35,000 in incentives is being sought from the city of High Point by Apixir Pharma Sciences. The start-up biotech company is seeking a location to build a new laboratory.

                ~ News & Record, June 3, 2010

 

JDIG awards for 12 companies are no more

 

The Triangle Business Journal reported that twelve companies that were awarded JDIG benefits for expansion have lost those benefits for not creating the promised number of jobs.

 

“The fine print written into each of the awards granted under North Carolina’s Job Development Investment Grant program is being put to the test.

 

In a down economy, with companies failing to create the jobs they promised, contracts that had promised millions of dollars in state incentives are being ripped apart. Since January, JDIG agreements with 12 companies around the state have been terminated.

From the state budget perspective, that’s good news: The 12 companies had been promised a total of $38.8 million in cash grants. For the state, it’s bad news: 3,552 promised jobs have not materialized.

 

Most of these companies were awarded the grants in 2005, 2006 and 2007 when the economy was growing at a rapid clip and companies were anticipating more expansion.”

 

While incentives abound, teaching jobs are at risk

 

WRAL reported that North Carolina legislators and Governor Perdue are petitioning Congress for money to prevent the loss of 10,000 teaching jobs. Interestingly, there is still plenty of money in the budget for economic incentives.

 

“U.S. Education Secretary Arne Duncan and two top North Carolina Democrats warned Thursday that without federal funds, thousands of teachers would be laid off in the coming weeks.

 

The jobs of 10,000 North Carolina teachers are at risk among 300,000 nationwide, Duncan said, as recession-hit state and local governments struggle to meet requirements to balance their budgets. Layoffs seem likely without federal support, Duncan said during a visit to Durham’s Southern High School with Gov. Beverly Perdue and U.S. Rep. Bob Etheridge, D-N.C.

 

Duncan and Etheridge said a $23 billion education jobs fund proposed in Congress was needed to keep teachers in the classroom and off the unemployment rolls at a time the economy remains fragile.

 

‘We are strongly urging Congress to take action and take action this month,’ Duncan said. ‘I don’t have a Plan B. Plan B is children around the country are going to get hurt.’ ”

 

Incentives not a factor in upcoming expansion

 

The Greensboro News & Record reported that Greensboro is in the running for the upcoming Timco Aviation Services expansion. While the company is aware that each location could offer some form of incentives, it is not making that a factor in its decision.

 

“TIMCO Aviation Services said Friday it wants to expand its California-based aircraft seat manufacturing business, a move that could bring 300 jobs to the Triad.

 

Kip Blakely, TIMCO’s vice president of sales and marketing, said the company is considering numerous other sites to grow Brice Seating, a Pacoima, Calif., firm it bought six years ago.

 

Brice makes seats for commercial airlines and military planes and currently employs 225 people. The expansion would be the first for the company.

 

Blakely said TIMCO could expand at its California site, but is also considering options inAlabama, Georgia and at least six locations in North Carolina.

 

‘We literally have looked west to east and are still looking,’ Blakely said. ‘It’s a great opportunity for our company. We very much want to bring the jobs to North Carolina.’

 

He added: ‘We have to look for the most competitive community to expand this business. We are not asking for incentives, but in every state there are incentives available.’ ”

 

Speedway Motorsports drops suit against local governments

 

The Sun News reported that the owners of Lowe’s Motor Speedway have dropped their lawsuit against the city ofConcord and Cabarrus County, but talks continue.

 

“The owners of Lowe's Motor Speedway have dropped their lawsuit against a North Carolina city and county as talks continue on settling a multimillion-dollar incentives deal.

 

The Charlotte Observer reported Charlotte Motor Speedway and its parent company, Speedway Motorsports Inc., have dropped their lawsuit against Concord and Cabarrus County.

 

Speedway attorney Jared Gardner says his clients can refile the lawsuit if talks don't work out.

 

The speedway sued in September, demanding repayment for $4 million worth of road work and other improvements around the Concord track and a nearby dragway.

 

The local governments had agreed in 2007 to $80 million in incentives to keep the speedway inConcord. The lawsuit was filed after the two sides disagreed over the terms of the incentives.”