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||$254,700,000||Caldwell||data center/server farm||210|
|2008||Spirit AeroSystems||$250,900,000||Lenoir||jet components production plant||1,031|
|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).