Corporate Welfare Weekly - December 4, 2009 – Issue 27

December 4, 2009 – Issue 27

 

Recent Announcements…

 

In September of 2008, Providencia USA Inc. received $2,500,000 in incentives from Iredell County and a $56,000 grant from the One North Carolina Fund. According to a 2008 Statesville Record & Landmark article, the Latin American-based company planned to build its first U.S. manufacturing plant in Statesville. The project was delayed for 15 months due to the recession. The Iredell County Industrial Facilities and Pollution Control Financing Authority agreed on Thursday to grant the company an additional $9,100,000 in Recovery Zone bonds.

                ~ Bethany Fuller, Statesville Record & Landmark, December 4, 2009

 

$60,000 to SANS Technical Fibers LLC from the One North Carolina Fund. The synthetic nylon filament and yarn manufacturer will expand its plant in Rockingham County. The grant must also be matched by local governments.

                ~ Staff Reports, News & Record, December 2, 2009

 

$13,280,000 in federal stimulus bonds granted to Project Cardinal for a “top-secret” industrial expansion in Mecklenburg County. On Tuesday, commissioners voted 7 to 0 to approve the incentives package. The mystery company will receive the federal bonds along with an additional $150,000 from the NC Department of Transportation to help build a “rail industrial access track” for the project.

                ~ April Bethea, Charlotte Observer, December 2, 2009

 

A local Arden company, CPU2, is spending $1,350,000 to install 1,248 photovoltaic panels “to cut energy costs and reduce greenhouse gas emissions,” according to company president, Jeff Baker. CPU2’s executive vice president said federal and state incentives helped fund the new equipment. The company processes and ships orders for products purchased through the television. (NCICL has been unable to determine what these incentives are or how much.)

                ~ Clarke Morrison, Asheville Citizen Times, December 1, 2009

 

Good Advice for the Unemployed!

 

WFMY News 2 reported in an October 27 article that there is one financial expert that foresees a rebound in the economy due to the emergence of new small businesses.

 

“ ‘There’s never a better time than when you’re unemployed to take a risk, to try something new, to go over your skill sets,’ said Sherry Jarrell. She teaches finance and economics at Wake Forest University. …

 

People ‘need to be more flexible about the specific industry they can offer their services to,’ she said. ‘Don’t limit yourself to just being in textiles or just being in high tech.’

 

She recommends one first step: examine the needs in your community, then figure out a way to meet it.

 

‘You can think about… gee I wish there was this kind of service, carpooling service, I like the way that company does things, I wonder if I can help them promote themselves more widely.’

 

Jarrell points out the best thing that could happen during unemployment is you find and start something you really love, so your job becomes more than a paycheck.”

 

What a great way to approach a difficult situation! Unemployed professionals should hold their heads up high and think outside of the box. They just may discover a new market or demand for products and services in their community that has not been met.

As one famous talk show host recently proclaimed, “Discover your entrepreneurial spirit!”

 

Quotes of the Week…

 

Site Selection magazine names North Carolina’s business climate #1 in the country! Site Selection is an award winning magazine of corporate real estate strategy and area economic development.

 

North Carolina’s business climate has been ranked #1 by Site Selection magazine eight times in the past nine years. This is great news for North Carolina! What is very interesting is it has almost nothing to do with state and local incentives deals. The magazine’s cover story “Watch and Learn” explains the top ranking is due to the state’s infrastructure of higher learning and combination of commerce and curriculum. A few quotes from the magazine article explain why our business climate has come out on top.

 

“Nobody paid attention to the fact that there were 1,500 spinoffs out of RTP. SAS, Quintiles … we have some of the largest companies in the world that were guys just starting stuff. More jobs have come out of those 1,500 firms than out of the big companies.”

~ Rick Weddle, President and CEO of Research Triangle Park, explaining that it’s not the “big players” that have made the most impact in the state.

 

“When I worked for the state department of commerce in the late nineties, I could count on one hand the number of projects in a five-year period that had serious conversations with our university system. Now it’s hard to find a project that does not involve a conversation with our university system.”

~ Leslie Boney, Associate Vice President for economic development research, policy and planning for the University of North Carolina’s 16-campus system

 

“We’ve had a large presence in the Charlotte area and in other areas in North Carolina for 40 years now, and it was our first-hand knowledge of the excellent business environment here that convinced us to expand our investment further.”

~ Randy Zwirn, President and CEO of Siemens Energy, Inc., and has referred to the area as an energy “center of excellence.”

 

“It’s been an excellent climate to work in. … They have a college focused on developing new engineers for the power production business. It’s just now starting to take off.”

~ Mark Pringle, Siemens’ Charlotte plant manager. Pringle says the company uses talent from area trade schools and works with local colleges in recruiting and co-op assignments.

 

“We were founded in this area due to a strong scientific and technology culture, central location and a high standard of living. We also benefit from a highly skilled local work force. Cree draws talent from the public universities and community colleges in North Carolina, as well as from other states around the world as we grow.”

~ Greg Merritt, Vice President of corporate marketing at Cree. The company chose Durham due to its existing LED chip manufacturing capabilities, reasonably priced and reliable power, as well as the area’s strong university connection.

 

“A creation like RTP supplies a community of active intellect and inquiry that no one school could create on its own. … The Research Triangle’s main function is it supplies that critical mass, with a very large population of very smart, highly trained people in a small area. I was told there are more PhDs per capita in this area than any other – which I promise you was not true in 1957.”

~ Richard H. Brodhead, President of Duke University, at the annual global conference of the International Association of Science Parks in Raleigh, June 2009.

 

If these are the reasons companies move to North Carolina or expand existing operations – why do we pay some companies with public dollars to persuade them to take the obvious, most beneficial path?

 

Did the Charlotte City Council Break the Law?

 

The Charlotte Observer reported in an article written by Steven Harrison on November 25 that two experts say Charlotte City Council’s closed-session vote to purchase options for the Eastland Mall violated N.C. Statute 143-318.11, also known as the open meetings statute.

 

“When the Charlotte City Council authorized the city to spend $400,000 to secure options to buy property at Eastland Mall, all debate and voting took place in private, during closed sessions.

 

Two experts now say those votes violated the state’s open-meeting laws, which require almost all government business to be conducted in the sunshine. Amanda Martin, an attorney for the N.C. Press Association, said the city could have discussed its negotiating strategy in private, but needed to take a final vote in public.

 

The city of Charlotte says that’s not true, that it has been in ‘full compliance’ with the law. …

 

At issue are three votes council members took in 2008 and 2009 to secure options on the empty Belk and Dillard’s department stores at Eastland Mall. The city paid for the options with the hope it could partner with a private developer to transform the site into a community of homes, stores and offices.

 

It appears now that the city may lose the $400,000 when its options expire at the end of March. A developer hasn’t stepped up to redevelop the site.”

 

Speedway Incentives Lawsuit Update…

 

The Scene Daily reported in an article written by Bob Pockrass on December 1 that the City of Concord and Cabarrus County asked a judge to dismiss the Lowe’s Motor Speedway lawsuit, which is fighting to enforce an informal incentives contract. The lawsuit was filed by SMI (Speedway Motorsports, Inc.) Chairman Bruton Smith, in which he accuses the local governments of breach of contract and wants the courts to force both the city and the county into a formalized agreement that would give SMI $80 million in grants and tax incentives for renovations and the construction of a drag strip.

 

“SMI Chairman Bruton Smith had threatened to move LMS [Lowe’s Motor Speedway] in October 2007 if he did not get the permits to build the drag strip on land near the existing 1.5-mile oval. As other area governments began offering incentives, the City of Concord and Cabarrus County offered an $80 million incentive package in November 2007 – with the details to be worked out later – to keep LMS where it’s currently located.

 

The local governments and SMI never reached a formal agreement, and SMI, which says it has spent $4 million already on public improvements it claims are reimbursable, filed a lawsuit in September in North Carolina Superior Court in Concord.

 

SMI asks for a judgment requiring the governments to take all necessary action to formalize an agreement and [pay] damages for breaches of the agreement and misrepresentations.

 

In a filing last week, Concord and Cabarrus County ask for the case to be dismissed.”

 

Around the Nation…

 

The Associated Press reported in an article written by Susan Montoya Bryan on December 3 that New Mexico has promised more than $20,000,000 in incentives to Hewlett-Packard Co. to open a customer service and technical support center in Rio Rancho.

 

“Aside from the tax incentives, [Fred] Mondragon [New Mexico’s Economic Development Secretary] said the state approved $6 million in capital outlay funds for the HP project and another $6 million has been promised. It also has provided $8 million in job-training incentives.

 

Some critics have said the state, which is facing a $650 million budget shortfall, cannot afford to be so generous when trying to attract companies.”