Follow the Money: (Corporate Welfare Weekly: Issue 80)

Dec 24th, 2010
by Elizabeth Lincicome
from Follow the Money


Follow the Money: Issue 80


December 20-25, 2010



Wake County Judge Rules in Favor of NCICL in Public Records Case


RALEIGH, DECEMBER 21st--This week, the Wake County Superior Court rewarded NCICL for fighting corporate welfare and economic incentives handouts when it ruled in favor of the Institute in a public records lawsuit filed against the Secretary of State’s office back in 2009. In fulfilling its mission, to act as a public interest watchdog for the citizens of North Carolina, NCICL learned last year that SpiritAero Systems received a massive economic development incentives package and apparently employed an individual to lobby government officials for incentives. However no lobbyist had registered with the Secretary of State as is required by law. As a result, NCICL filed a formal complaint concerning the apparent lobbying law violation. In the words of NCICL Senior Staff Attorney Jeanette Doran, “All attempts to learn what, if anything, the Secretary of State did with ICL’s complaint were met with steadfast refusals to release public records.”


This past June, almost a year after filing the initial complaint, NCICL filed a lawsuit in Wake County seeking public records concerning what action, if any, the Secretary of State took in response to NCICL’s complaint of a lobbying law violation. This brings us to this week’s ruling in favor of NCICL. The State has been ordered to provide the records requested including “a complete explanation of what procedural actions have taken place in regard to any lobbying law violation including fines levied or referrals to the District Attorney of Wake County.” Read the Judge’s Order and our formal press release by visiting our website


North Carolina Incentives Packages: Quick Hits 


Hat tip to High Point Enterprise reporter and loyal Corporate Welfare Weekly reader Paul Johnson who on Wednesday had a chance to ask Governor Perdue about her perspective on using economic incentives to recruit employers.


'“I hate incentives,” the first-term Democratic governor said during the roundtable phone interview with media representatives from across North Carolina.


In a perfect world, Perdue said she would prefer that incentives payments to private employers didn’t take place. The dilemma, the governor said, is that North Carolina and its communities can’t “unilaterally disarm” from offering incentives when other states keep playing the game.


“Incentives are part of every business discussion that I have,” the governor said. 


Perdue indicated that she wouldn’t object if the U.S. Congress moved to restrict incentives offers, creating a level playing field among the 50 states. 

But Congress hasn’t shown any inclination to address the issue, which means the incentives wars between states – even within states – has escalated. 


Perdue answered the question about incentives posed by The High Point Enterprise, which asked the governor about PGT Industries. The window manufacturer, which left Davidson County for neighboring Rowan County four years ago after an incentives offer, told employees earlier this month that it will relocate by the middle of next year to Sarasota County, Fla., after receiving an even more lucrative incentives package. The PGT Industries relocation will cost the Piedmont 490 jobs."'


Novartis Receives $4.7 Million for Latest Expansion 


While the governor was busy waxing incentives policy on a conference call with reporters Wednesday, her office was busy issuing a press release about Novartis Vaccines and Diagnostics Inc. receiving a massive incentives package from the county and state. Novartis opened a $600 million vaccine plant in Holly Springs just last year. That facility is expected to begin commercial vaccine production in 2013. For its latest expansion, the company was awarded state and local incentives worth as much as $4.7 million to build a $36 million research lab. This, on top of the $40 million it received to initially open the vaccine plant.


The Raleigh News & Observer reports:


“Novartis also considered building its research lab and pilot plant in the Tuscany region of Italy.


The company noted that Holly Springs provides it with access to a large pool of talented employees and proximity to high-level research universities.

The company has room to expand. To lure Novartis to town, Holly Springs borrowed $8.3 million to buy the company 167 acres of land and spent $12 million on road improvements and other infrastructure upgrades.”


Is Red Hat Looking for Incentives?


Recently, there has been a growing interest in local tech firm Red Hat's next move. For anyone following real estate, their search for 300,000 square feet of new office space is an exciting prospect. But for anyone following incentives, Red Hat’s strategy of saying little about how their decision will be made while making it known they are considering sites in Austin, TX. and Atlanta, GA. as well as moving within the Triangle sure sounds like a familiar tactic to get an incentive bidding war started. Red Hat has said it is eyeing local sites such as Raleigh's North Hills, Durham's American Tobacco Campus, downtown’s Charter Square project on Fayetteville Street, and the two-tower Edison project –also downtown.


The News & Observer reports:


“Whether it remains in North Carolina could depend on how generous an incentives package the company receives from the state and local governments. Because Red Hat is considering Atlanta and Austin, it is eligible to receive job-creation and investment grants from the state, even if it remains on Centennial Campus.


The role that incentives now play in relocation decisions has made it harder for developers to determine how serious a company is about their proposals.

Last year, executives of Radio Shack visited several Triangle locations as part of a multisite search for a new headquarters. The company ultimately remained in Fort Worth after getting tax incentives from the city and county.”


State Awards Incentives to Companies in East and West


On Monday, the governor’s office announced the state will give incentives to two companies that plan to expand operations in N.C.


Arvato Digital Services, which provides logistics, distribution and other services to high-tech companies, plans to expand its operations in the Buncombe County town of Weaverville, just north of Asheville. Arvato will receive $200,000 in incentives from the One North Carolina Fund.


Enviva, a biomass fuel producer based in Richmond, VA., will build a wood pellet manufacturing plant in Hertford County. The company will receive $270,000 in incentives from the state to convert the former Georgia Pacific lumber site in Ahoskie, located about 120 miles northeast of Raleigh, while only creating around 53 jobs in the process.