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Jobs Announcement Draws Scrutiny

RALEIGH — Gov. Mike Easley announced at a Currituck County groundbreaking ceremony Friday that an automobile auction will expand its Virginia-based auto wholesale operation into North Carolina. The governor’s comments at the event and in a press release are inconsistent with other information uncovered by Carolina Journal. The discrepancies include the reason the company chose North Carolina, the influence of financial incentives, and the number of jobs for North Carolinians. The company pursued the North Carolina site only after a 2001 extortion scheme to secure a site in Suffolk, Va. had failed.

Don Carrington
News

No Incentives from Competing States

RALEIGH — When Harris Microwave Communications Division President Guy Campbell announced Thursday that his company will relocate its headquarters from Northern California to Durham, he said North Carolina’s offer of incentives won out over Florida and Texas in a “competitive” process. But while North Carolina offered a package of up to $4 million in withholding-tax rebates to Harris, it turns out that Florida and Texas decided to forfeit instead of play the incentives game. North Carolina’s Economic Investment Committee awarded the grant June 3. Long before then, however, Harris Microwave had identified its location in Durham as its corporate headquarters.

Paul Chesser
News

Did Jobs Grant Clinch Relocation?

RALEIGH — Harris Microwave Communications Division, the latest beneficiary of tax rebates through North Carolina’s Job Development Investment Program, was granted up to $4 million in incentives Thursday for relocating its headquarters from Redwood Shores, Calif. But at the time the state Economic Investment Committee awarded the grant yesterday morning, the communications-equipment company had long prior already identified its location in Durham as its corporate headquarters, both verbally and on the web. Under the statute that created the program, incentives may only be granted to businesses that otherwise would not relocate to the state.

Paul Chesser
News

Senate Panel Pulls Incentives Bill

RALEIGH — A bill that would expand funding and the number of projects that can be subsidized for economic development was tabled in a Senate Finance Committee meeting Tuesday. Both Democrat and Republican senators doubted the worth of the Job Development Investment Grant program in a lively debate. Some thought the legislation might have failed in a vote before its sponsor, GOP Sen. Fletcher Hartsell of Concord, asked that the bill be set aside. Current law allows the state to provide tax-rebate incentives for 15 businesses per year, with up to $10 million per year for the entire program. The new legislation would increase the potential number of projects to 25, at a cost of up to $18 million annually.

Paul Chesser
News

House Easily Approves Incentives

RALEIGH — The North Carolina House Thursday tentatively approved another $20 million for the One North Carolina Fund, used to help seal economic development deals with businesses moving or expanding in the state. “We have to replenish this,” said Rep. Bill Owens, who sponsored the “emergency” legislation and warned that the state’s neighbors “would love to see us not pass this right now.” He claimed that without it, “we’re out of business.” The House supported the bill on a 99 to 14 vote, which came on the heels of a Carolina Journal report that large companies are now banding together to learn how to extract as much incentives money as possible from elected officials.

Paul Chesser

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On Milking A State’s “Cash Cow”

RALEIGH — A workshop conducted in late March, led by experts in getting economic development incentives from state and local governments, shows that large companies are now banding together to learn how to extract as much public money as possible from elected officials. The seminar taught dozens of corporate government-relations executives how to “Turn Your State Government Relations Department from a Money Pit into a Cash Cow.” It urged companies in part to “involve elected officials in press announcements;” to “thank everybody a zillion times;” and to “be mindful of the election and legislative cycle.” Two NC lawmakers criticized the presentation and what it signified.

Paul Chesser
News

Status of Boeing Records Disputed

RALEIGH — Carolina Journal’s attempt to gain access to records on the Boeing-GTP incentives began Dec. 19 with a phone call to the Commerce Department. One reason why the records weren’t released for nearly two months was that officials asserted some of the records constituted trade secrets that were exempt from the public records law. “The secret treatment given to economic development meetings and records in North Carolina is as restrictive as anywhere in the country,” said one attorney, noting that the increasing use of economic incentives will exacerbate the debate over openness in government.

Richard Wagner
News

Post-Boeing, Incentives Debate Rages

RALEIGH — No matter how NC slices them, “targeted economic incentives” — such as the $534 million package offered to Boeing to start a new plant at the Global TransPark — discriminate against firms already in the state, both supporters and opponents of the inducements say. But they disagree on what can be done to solve the problem. “You’ve got to be competitive,” said a supportive lawmaker. “If we don’t provide jobs for our people, we’re lost.” But opponents say other policies, especially across-the-board relief for small businesses, would create more jobs.

Richard Wagner
News

Biotech Failure Blamed on State

RALEIGH — State officials botched the recruitment of a biotechnology company because of a power struggle between the Department of Commerce and an economic development agency in northeast North Carolina, officials of the company say. Documents also show that rather than helping the company in negotiations, North Carolina’s Northeast Partnership continued a practice of seeking equity in the companies it recruits. Senate President Pro Tem Marc Basnight appears to wield strong influence over the Partnership, sometimes determining whether and how businesses get state incentives.

Paul Chesser
News

Boeing Offer Was At least $93M

RALEIGH — North Carolina offered Boeing at least $93 million in incentives to build the aircraft company’s proposed 7E7 Dreamliner at the Global TransPark in Kinston, a state Commerce Department official said Friday. The incentives, offered under the William S. Lee economic development act, included estimated tax credits of $65 million and $28 million for a job development investment grant. The grant carried a requirement that Boeing provide 1,200 jobs if the company built its plant at Kinston.

Richard Wagner
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