March 15, 2010 – Issue 41

Recent Announcements…

$80,000,000 in promised incentives has been granted to Siemens Energy Inc. from multiple sources to expand its gas turbine operations in Mecklenburg County. The power-generation company has been awarded a $1,000,000 grant from the state’s One North Carolina Fund as well as a Job Development Investment Grant (JDIG) that could yield as much as $21,750,000 in maximum benefits over twelve years. In December 2009, the City of Charlotte pledged $44,500,000 in federal tax-exempt bonds and Mecklenburg County pledged $13,300,000.

                ~ Staff Reports, Asheville Citizen-Times, March 11, 2010

                ~ Steve Harrison, Charlotte Observer, March 10, 2010

$76,500 in incentives has been granted to Turbotec Products Inc. from the One North Carolina Fund. The company, a supplier of heat exchangers and heat transfer products, will be moving most of its Connecticut operations to Hickory. The state grant is contingent on a local match so more incentives are on the horizon.

                ~ Staff Reports, News & Record, March 12, 2010

$43,736 in local incentives was granted to Triad Racing Technologies by Iredell County to move its Toyota racing engine operations to Mooresville. The Iredell County Board of Commissioners passed the incentives during a February 16 board meeting with a 2 to 1 vote. Commissioner Scott Keadle cast the sole vote against the giveaway.

                ~ Iredell County Board of Commissioners, regular minutes, February 16, 2010

Quote of the Week…

“No financial incentives from state or local government entities were involved in New Breed’s acquisition of the facility. It has not been New Breed’s policy to seek nor accept incentives. We believe it is our corporate responsibility to invest in our infrastructure, not the responsibility of tax-payers.”

~ Joe Hauck, New Breed Logistics’ Director of Business Development, quoted on the company’s website back in 2005, regarding the relocating of the company’s headquarters to High Point, NC. This is a fresh reminder of how things are supposed to work in the business world. Unfortunately, due to restructuring, the company will be closing its High Point plant. Incentives would not have prevented the closure, just as the $250 million in incentives didn’t prevent Dell from closing its Forsyth County plant.

Aren’t incentives supposed to favor poorer counties?

The Triangle Business Journal reported in its March 12^th paper that wealthier counties are hogging 60% of the incentives money!!

“Sixty percent of almost $700 million in cash paid out by the North Carolina Department of Commerce in business incentives and job creation grants between 2004 and 2009 went for projects in the state’s five wealthiest counties.

A new report also reveals that the total amount of cash and tax credits committed to recruiting companies statewide stood at $1.2 billion at the end of the 2008-2009 fiscal year. Besides the $700 million in cash, the total includes $93 billion in tax credits claimed by companies, $993 million in “other” tax write-offs (largely sales tax writedowns) and $121 million in general fund expenditures.

The latest revelations about how the state spends money on corporate recruitment are contained in the state’s 2010 Economic Development Inventory, a document prepared by the General Assembly fiscal researchers each of the past three years to catalog North Carolina’s economic development spending.

…Between 2004 and 2009, Commerce spent $698 million on 718 projects, with 60 percent of the money going to the five wealthiest counties and 80 percent going to 10 counties. Of the 10, only one, Lenoir County, which got $29 million, was a lower-income county as measured by a tiered ranking of the counties.

In Wake County, some 135 projects were funded by state cash; Durham had 111 projects, Mecklenburg got 42. By contrast, Hyde County in eastern North Carolina, one of the state’s poorest counties, had zero dollars for zero projects.”

The top five recipients (Wake, Durham, Mecklenburg, New Hanover, and Guilford) are all rated as tier 3 counties by the NC Department of Commerce’s tier designation ranking system. This means they are classified as the least distressed in the state. Mecklenburg County alone received more in JDIG awards than 92 other North Carolina counties combined!!

Who needs incentives? It’s much more fun to jump in a freezing lake!

The Rocky Mount Telegram reported in a March 9 article written by John Henderson that

Google is seeking out a location somewhere in the U.S. to install an ultra high-speed Internet service pipeline. Multiple communities are battling to win Google’s commitment to their area, but surprisingly the “battle” does not include incentives…at least not yet. Google has not announced whether it will seek incentives for the deal.

“A kick-off meeting for a community initiative to convince Google to install an ultra high-speed Internet service pipeline in the Twin Counties drew nearly 100 residents Tuesday.

A wide range of people who wanted to become part of the “Twin Counties Google Initiative” met at the Black Box Theatre in the Imperial Centre for the Arts & Sciences. City leaders, business owners and chamber officials listened to the initiative organizers outline a plan to generate community support they hope will convince Google to pick Rocky Mount as the site for its pilot project.

Communities across North Carolina and the rest of the country are lobbying for the fiber optic network that Google has offered to fund.

Allison Sikes, chief executive officer of Strategy Performance who is handling marketing work for the initiative, repeatedly urged the crowd to access a Web site that has been formed to help funnel comments from the community to Google.

“We need all the support we can to submit online nominations to Google so that we can be chosen out of the many, many communities that are vying for this great service,” Sikes said.

The lobbying effort is two-pronged. City staff is filling out a request for information to Google, which delves into technical issues such as access to utility poles and right of way.

The community initiative involves barraging Google with e-mails and phone calls to show the community’s support for Google’s fiber optic service, which would be 100 to 500 times faster than current local speeds.

Google officials could not be reached for comment on Monday or Tuesday. The company has said on its Web page it plans to install one or more of the systems in communities ranging in size from 50,000 to 500,000.

Initiative organizers said the high-speed Internet service would be a magnet for high-tech businesses, improve educational opportunities for children in the Twin Counties and significantly improve resident and business Internet service.

“Think about how well we could attract businesses and industry to the area (with the new system),” Sikes said.

… Rocky Mount is facing stiff competition and some cities have gone out of their way to get noticed.

Topeka, Kan., informally renamed itself “Google, Kansas,” for the month of March.

In Duluth, Minn., Mayor Don Ness, wearing just a T-shirt and shorts, recently jumped into frigid Lake Superior in a video posted on YouTube to get Google’s attention.

Mayor David Combs said he’d be willing to make a similar plunge.

“I’ll go in the Tar River or the City Lake,” the mayor said, generating laughs from the crowd.”

Reminder…

The Corporate Welfare Weekly recently launched an effort to identify ANY company doing businesses in North Carolina who plans to expand, relocate within the state, or simply create new jobs – but ISN’T getting any incentive from the state or local government.

Email Shelley Gonzales at gonzales@ncicl.org