Carolina Journal News Reports
RALEIGH — Gov. Mike Easley last week gave Lowe's Companies a $100,000 grant from the One North Carolina Fund, because the home-improvement retail company decided to locate a data processing facility in Winston-Salem.
Lowe's reported $30.8 billion in sales in fiscal 2003. It will invest $71 million in the data center, the governor's office said. The One N.C. grant represents 0.14 percent of Lowe's investment, raising questions about whether the company seriously considered placing the project anywhere else.
"Obviously it couldn't make a difference for a $71 million investment," said state Rep. Paul Stam, R-Wake, a frequent critic of taxpayer-funded targeted economic incentives. "That's just a tiny fraction of the Realtor's fees."
Lowe's has data centers in Wilkes County and Mooresville, where its headquarters resides. The company said the new data center is expected to employ 20 to 25 people.
"We have been evaluating sites in metropolitan areas for several months," said Steve Stone, Lowe's chief information officer, "and believe the Winston-Salem location can best meet our current and future needs, while being conveniently located to our operations in Wilkesboro and Mooresville."
Winston-Salem and Forsyth County also gave $3.6 million in incentives to the company, Lowe's spokeswoman Chris Ahearn said.
"We had to look at a number of different factors," she said. "Certainly incentives were an important criteria."
She said Lowe's looked at other states, but the company wanted to be near its existing facilities.
"We had some pretty strict criteria," Ahearn said.
Scott Connell, vice president ofWinston-Salem Business, an economic development nonprofit agency that negotiates on behalf of the city and Forsyth County, said company officials told him that Charlotte; Rock Hill, S.C.; and Greenville, S.C.; were also considered for the project.
"We offered a considerable property tax break," said Kevin Landmesser, vice president of the Greenville Area Development Corporation. He did not want to disclose how much was offered. He said South Carolina’s incentives would have been minimal considering the limited number of jobs that would be created.
Landmesser said he believes that Lowe's strong ties to North Carolina won out in the end. Connell said likewise.
"There were some proximity issues to where their headquarters was," Connell said. "That's what we were told."
Last May supporters of Easley pleaded with the General Assembly to replenish the One N.C. coffers with $20 million, which the governor uses to "close deals" for businesses considering location or expansion in the state. The companies would theoretically locate elsewhere were it not for the additional funding.
“We have to replenish this,” said Rep. Bill Owens, D-Pasquotank, who sponsored the “emergency” legislation and warned that neighboring states “would love to see us not pass this right now.” He said that without the new appropriation, “we’re out of business.”
“The emergency appropriation for the One North Carolina Fund is critical to bring jobs to the hard-working families of our state,” Easley said in a statement eight months ago. The legislature granted his wish.
The state in the past year has also granted targeted tax breaks to Verizon Wireless and Harris Microwave Communications Division, despite evidence that they were coming to North Carolina without the incentives.
Lowe's employs more than 16,000 workers in North Carolina and is a Fortune 50 company.
Vanessa Capobianco, a spokeswoman for Easley, did not return a phone message inquiring about the project or the governor's award to Lowe's.
"These are just ribbon-cutting contributions," Stam said. "They're enough for Lowe's to finance the parties when they open the place up."
Paul Chesser is associate editor of Carolina Journal. Contact him at firstname.lastname@example.org.