RALEIGH—The Economic Investment Committee has awarded a grant to the R.H. Donnelley Corporation to relocate its headquarters to the Triangle area of North Carolina. Under the agreement, the state will provide the company with a reimbursement of 65 percent of personal state withholding taxes for up to10 years. About 140 of its employees are expected to move to North Carolina in early 2004.

Now based in Purchase, N.Y. and Overland Park, Kan., the company will relocate to North Carolina. R.H. Donnelley is the largest public stand-alone publisher of yellow-page directories in the country. It has been independent since 1998, when it spun off from The Dun & Bradsheet Corporation. Donnelley employs more than 1,400 people across19 states, 240 in North Carolina.

George Bednarz, a company spokesman, said the move would not have taken place without the incentives package. “There is a considerable cost to do the move, and we had to weigh the costs and returns. The economic incentives were pivotal to that decision.” The North Carolina grant could be as much as $4.3 million if the company creates all the promised new jobs over 10 years.

The Economic Investment Committee comprises the secretary of commerce, secretary of revenue, the state budget director, and two appointees of the General Assembly. Formed by the Job Development Investment Grant initiative approved last year by the legislature, the group can award up to 15 grants annually.

Gov. Mike Easley said in a statement, “It is essential that our state continues to compete for successful companies like R.H. Donnelley that will bring a much-needed boost to our state’s job market and economy.”

The company acquired Sprint Publishing and Advertising earlier this year, significantly enlarging its organization. In an effort to consolidate operations, corporate headquarters will likely be moved to the Raleigh-Durham area, with site selection to begin immediately. Donnelley has been in discussion with the state for more than six months, Bednarz said.

“We had a strong desire to bring headquarters together so as to avoid a more disjointed operation,” he said.

Other states under consideration were New York, Kansas, Missouri, and Florida. It is not known what economic incentive offers might have been made in the effort to attract Donnelley.

A description of terms for the Community Economic Development Agreement indicates a minimum total of 112 jobs should be created by 2004, 166 by 2005, and 220 by 2006 to avoid default. Failure to meet targets outside an allowable variation for any two consecutive years will result in termination of the grant.

The program criteria also require caps on the amount of grant money paid for any given year. This agreement features a cap of $300,000 for 2004 that will increase to $450,000 by the 10th year. Donnelley is also required to have investments of at least $2.5 million in land, buildings and fixtures, infrastructure, or machinery by the end of 2004.

The grant is the second this year awarded under the legislative initiative. In May, Infineon Technologies Corporation was the initial recipient of a Job Development Investment Grant.

Jim Fain, secretary of commerce and chairman of the Economic Investment Committee, said Donnelley was deserving of its endorsement. “We’ve been very impressed with this company, the amount of preparedness, the wealth of information they have provided, and the ease with which we’ve been able to work with them. It bodes well for the value they will provide to North Carolina.”

A summary of findings listed by the Committee includes: the project will create a net increase in employment; be consistent with the economic development goals; offer benefits to North Carolina that outweigh the costs; and strengthen the economy by providing worker training, enhancing critical infrastructure, and increasing the state and local tax base.

Jones is an editorial intern at Carolina Journal.