NC Was Ready to Offer Toyota $107 Million, Documents Show
Monday, September 1, 2014 10:28 pm | 2Minute Read
(The Charlotte Observer/MCT) —
North Carolina was prepared to offer Toyota up to $107 million worth of incentives to lure the automaker’s North American headquarters to Charlotte, documents obtained by the Charlotte Observer show.
But in April, the state lost out to Texas, which offered less money but benefited from other factors, such as direct flights to Japan.
The details of North Carolina’s quest to land Toyota have come to light as Secretary of Commerce Sharon Decker and other economic development leaders push Gov. Pat McCrory to call a special legislative session to extend North Carolina’s main incentives program.
The Job Development Investment Grant program is set to run dry by late October. Proponents say such incentives are crucial to convincing big companies to move to the state.
But North Carolina’s interest in Toyota shows the size of an incentive package isn’t always the most important factor in a company’s decision. Other intangible considerations — including cost of living and direct flights to Japan — helped Texas lure Toyota with a $40 million incentives package, economic development and Toyota officials said Thursday.
“My gut tells me there was a whole lot more than just incentives,” Charlotte Chamber President Bob Morgan said. Still, he said incentives are “absolutely” crucial to getting large companies to consider Charlotte.
Toyota’s North American headquarters, which the company moved from California, would have come with 2,900 high-paying jobs. Not having incentives to offer “takes us out of the game, potentially,” Morgan said.
Decker said Texas’ low taxes meant the state didn’t have to offer as big an incentives package as North Carolina to be competitive.
“We were competing against a state without personal or corporate income taxes,” she said. “It’s a challenging competitive situation for sure.”
The Charlotte Chamber has joined Decker and other members of the N.C. Economic Developers Association in pushing for a special session to extend the state incentive program and possibly start a new, flexible “closing fund” to help the state seal deals with undecided companies.
Decker said Wednesday that North Carolina is pursuing a large company that would take 80 percent of the JDIG fund’s balance, leaving little for 30 or so other projects and roughly 10,000 jobs that are “in the pipeline.”
South Carolina has a “closing fund” that can be used at Gov. Nikki Haley’s discretion. In June, South Carolina used $38.7 million to help land a tire company, as well as two Charlotte companies that relocated south of the state line. The three companies brought a combined 7,000 jobs.