Skip to main content

Incentive “Mega-Deals” in North Carolina

 

By

 

Community and Economic Development – Blog by UNC School of Government

https://ced.sog.unc.edu

Incentive “Mega-Deals” in North Carolina

By Jonathan Morgan

Published August 7, 2013

Over the last fifteen years, North Carolina has used hefty incentive packages to get several high profile corporate and industrial facilities to locate in the state.  The projects include many prominent companies such as FedEx, Dell, Google, and Apple.  I discuss the evolution of incentives in North Carolina and the details of the Dell and Google projects in a previous article.

How does North Carolina’s use of incentives for such large-scale projects compare to that of other states?  A recent study conducted by Good Jobs First documents the “Largest Economic Development Subsidy Packages Ever Awarded by State and Local Governments in the U.S.”  Does North Carolina make the list?

Good Jobs First is an ardent advocate for significant reforms in state and local economic development incentive policies.  Its study examines 240 incentive packages awarded for so called “mega-deals” that cost $75 million or more  in state and local government financial commitments.  The findings show that Michigan has completed the most mega-deals with 29.  Second place goes to New York with 23 followed by Ohio and Texas each with 12, and Louisiana and Tennessee both with 11.  Three states—Alabama, Kentucky, and New Jersey—have each completed 10 mega-deals.  North Carolina is in the next tier with 8 projects that qualify as mega-deals.  Other states with 8 mega-deals are Mississippi and Missouri.

The table below shows North Carolina’s eight mega-deals in the order of most costly to least costly.

 Incentive “Mega-Deals” in North Carolina

Year Recipient Incentive Value County Project Type Jobs
2009 Apple $320,700,000 Catawba data center/server farm 50
2004 Dell $279,000,000 Forsyth computer manufacturing plant 1,700
2007 Google $254,700,000 Caldwell data center/server farm 210
2008 Spirit AeroSystems $250,900,000 Lenoir jet components production plant 1,031
1998 Nucor $161,000,000 Hertford steel mill 300
1998 Federal Express $115,000,000 Guilford air cargo hub 1,500
2013 MetLife $101,100,000 Wake and Mecklenburg insurance office relocations 2,600
2006 Fidelity Investments $87,200,000 Wake investment company facility 2,000

The study’s other key findings reveal how the cost of mega-deals in the U.S. has changed over time and the types of projects that state and local governments tend to support:

  • The costs and number of these deals are increasing.
  • Eleven of the mega-deals examined exceed 1 billion in incentive costs.
  • The average cost per job created is estimated to be $456,000.
  • Most mega-deals are for manufacturing facilities, corporate offices, energy plants, and research facilities.
  • The companies receiving the largest number of mega-deals include: General Motors (11), Ford Motor (9), Intel (6), Boeing (4), Daimler/Mercedes (4), Nissan (4), and Toyota (4).
 

Published August 7, 2013 By Jonathan Morgan

Over the last fifteen years, North Carolina has used hefty incentive packages to get several high profile corporate and industrial facilities to locate in the state.  The projects include many prominent companies such as FedEx, Dell, Google, and Apple.  I discuss the evolution of incentives in North Carolina and the details of the Dell and Google projects in a previous article.

How does North Carolina’s use of incentives for such large-scale projects compare to that of other states?  A recent study conducted by Good Jobs First documents the “Largest Economic Development Subsidy Packages Ever Awarded by State and Local Governments in the U.S.”  Does North Carolina make the list?

Good Jobs First is an ardent advocate for significant reforms in state and local economic development incentive policies.  Its study examines 240 incentive packages awarded for so called “mega-deals” that cost $75 million or more  in state and local government financial commitments.  The findings show that Michigan has completed the most mega-deals with 29.  Second place goes to New York with 23 followed by Ohio and Texas each with 12, and Louisiana and Tennessee both with 11.  Three states—Alabama, Kentucky, and New Jersey—have each completed 10 mega-deals.  North Carolina is in the next tier with 8 projects that qualify as mega-deals.  Other states with 8 mega-deals are Mississippi and Missouri.

The table below shows North Carolina’s eight mega-deals in the order of most costly to least costly.

 Incentive “Mega-Deals” in North Carolina

Year Recipient Incentive Value County Project Type Jobs
2009 Apple $320,700,000 Catawba data center/server farm 50
2004 Dell $279,000,000 Forsyth computer manufacturing plant 1,700
2007 Google $254,700,000 Caldwell data center/server farm 210
2008 Spirit AeroSystems $250,900,000 Lenoir jet components production plant 1,031
1998 Nucor $161,000,000 Hertford steel mill 300
1998 Federal Express $115,000,000 Guilford air cargo hub 1,500
2013 MetLife $101,100,000 Wake and Mecklenburg insurance office relocations 2,600
2006 Fidelity Investments $87,200,000 Wake investment company facility 2,000

The study’s other key findings reveal how the cost of mega-deals in the U.S. has changed over time and the types of projects that state and local governments tend to support:

  • The costs and number of these deals are increasing.
  • Eleven of the mega-deals examined exceed 1 billion in incentive costs.
  • The average cost per job created is estimated to be $456,000.
  • Most mega-deals are for manufacturing facilities, corporate offices, energy plants, and research facilities.
  • The companies receiving the largest number of mega-deals include: General Motors (11), Ford Motor (9), Intel (6), Boeing (4), Daimler/Mercedes (4), Nissan (4), and Toyota (4).
Author(s)
Tagged Under
economic development incentives | incentives | tax incentives

This blog post is published and posted online by the School of Government to address issues of interest to government officials. This blog post is for educational and informational Copyright ©️ 2009 to present School of Government at the University of North Carolina. All rights reserved. use and may be used for those purposes without permission by providing acknowledgment of its source. Use of this blog post for commercial purposes is prohibited. To browse a complete catalog of School of Government publications, please visit the School’s website at www.sog.unc.edu or contact the Bookstore, School of Government, CB# 3330 Knapp-Sanders Building, UNC Chapel Hill, Chapel Hill, NC 27599-3330; e-mail sales@sog.unc.edu; telephone 919.966.4119; or fax 919.962.2707.

https://ced.sog.unc.edu/2013/08/incentive-mega-deals-in-north-carolina/
Copyright © 2009 to Present School of Government at the University of North Carolina.

3 Responses to “Incentive “Mega-Deals” in North Carolina”

  1. Ruth Murphy

    The question is “How many projects actually met the new “JOBS” goal?” – as defined full-time, at least 6 months, with benefits, etc.

  2. "Green" Apple Solar Farm in NC Installs Diesel Generators - Civitas Review

    […] that state and local governments showered Apple with a package of taxpayer handouts and targeted tax breaks valued at $320 million to bring their server farm to […]

  3. Tech Giants Want NCGA To Keep Renewable Subsidies Flowing | NC Political News

    […] said. But using estimates derived from a Good Jobs First study, he believes Apple got an incentives arrangement valued at $320.7 million to locate in North […]

Comments are closed.