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American Express incentives would be richest ever

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Comments (9)

Wednesday, April 21, 2010

(Updated 1:34 pm)

By Amanda Lehmert and
Donald W. Patterson
Staff Writers

GREENSBORO — The Greensboro City Council on Tuesday set a public hearing for May 4 to consider a financial incentives offer to American Express, which wants to build a $400 million data center that would employ up to 150 people.

The package, reported to be worth between $5 million and $7 million, would be the largest in the city’s history, if approved.

Local recruiters briefed council members on the project Tuesday night in a closed session. City officials declined to release any details about the company or an incentives package until the day of the public hearing.

An official familiar with Greensboro’s proposed package has put the offer between $5 million and $7 million. It is believed that money would go toward water, sewer and road improvements.

The Guilford County Board of Commissioners learned about the project last Thursday and has scheduled a hearing for May 6 to consider a $6 million offer. That, too, would be the largest incentives package in the county’s history.

Assistant City Manager Denise Turner said Tuesday that the largest recorded incentive package authorized by the council went to RF Micro Devices in 1999. It totaled $2.5 million.

Between 1996 and 2007, the council awarded the chip maker $5.9 million in incentives.

The city also granted $3 million to Koury Corp. in 1994 for its Grandover residential and resort project.

The county’s largest incentive award — $2 million — also went to RF Micro in 1999.

The American Express project would involve two buildings on two sites in eastern Guilford County. One is at Rock Creek Center, seven miles east of Greensboro on Interstate 40-85. The other is north of the interstate on land owned by developer Roy Carroll.

The Carroll property would be annexed into the city.

If American Express selects Guilford for its data center, the company could break ground this summer.

Eventually, local officials say, the company’s investment could surpass $1 billion.

Contact Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com

Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com

Accompanying Photos

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InventorNC

April 21, 2010 - 6:56 am EDT

Incentives! I never see any calculations of the payback for these incentives. What will the taxes be on the real estate and on wages? If the jurisdiction will be building roads and other improvements, presumably with bond money what triggers rebates to or payments by the company? Account for interest citizens must pay on bonds we float to pay up front costs such as roads and sewers. What will trigger the incentives? What penalties are there for not meeting objectives?

Finally what is the rainmaking effect of the project? For the Fed Ex projects - both of them - we can expect many companies will want to move in and locate close to the hubs. It is unclear what effect Citi's project would have. For some projects that's a benefit to the city or county that should be taken into account.

It is time to sharpen our pencils over these incentive packages or we will find ourselves talked into making rash moves.

Unaffiliated

April 21, 2010 - 7:14 am EDT

Remember Dell!

onbe1kanoby

April 21, 2010 - 7:38 am EDT

and sometimes you get burn, but you have to keep on trying! Remember Guilford Mills, Cone Mills... are all but history!

aliluyya

April 23, 2010 - 10:37 am EDT

Incentives can be useful, but here's an idea --> only give them out AFTER the company has fulfilled it's side of the promise/contract. It's the only way to make sure money isn't given to companies that aren't going to make an investment in NC (other than not giving them anything at all).

This is how NC's film-industry incentives work. Once the money from a production is in state coffers, accounted for by the production company, and approved by the state, then they get a percentage back.

Panacea

April 21, 2010 - 8:38 am EDT

More corporate welfare. American Express can afford its own water, sewer, and road improvements.

maxinedog

April 21, 2010 - 9:21 am EDT

Hold on Panacea, neither you nor I were required to directly pay for our water, sewer, and road improvements, and we will pay much less in property taxes than this project. I hope that the local officials don't take your advice and start billing us all for water, sewer, and roads that our property touches (if such a cost segmentation could be made). I can't afford it, I need corporatations to pay property taxes to cover my shortfall. Local municipalities lose money on every house that has a tax value below $250,000, large commercial payers are the only profit centers, we need more - not less of them.

AllegedlyTrue

April 21, 2010 - 10:17 am EDT

The city should clearly outline the expected economic/financial benefits for the community by offering these incentives and then hold American Express accountable to those outcomes. If the company does not deliver what it promises and the incentive money doesn't benefit the community, American Express should have to pay them back. It's that simple.

Bosco

April 21, 2010 - 10:58 am EDT

And das dat. By the way, who's the broker on the Carroll property?

realitychecks007

April 21, 2010 - 12:35 pm EDT

Point One:
American Express has been an active member and corporate citizen in good standing in our community for some time now. To think that they would consider growing in our area is a great opportunity that can provide an average of $60,000 for a new employee's annual salary and an overall potential growth for our area to the tune of $1 billion.

Point Two:
Encourage media sources not to make mention of such large company names and possible economic development opportunities until there is something officially on the table. It can scare businesses away!! We can't grow if we run around town shouting out what we know or have heard. That's called reactive. Any intelligent business person is proactive. Why is it that many media sources know when something should be kept quiet and a few rotten apples seem to want to have something to fill column space? Ridiculous, careless and inappropriate. Let me point out that there are many great objective reporters and journalists at the News & Record. Again, one bad apple can spoil things for the lot and for a major economic development opportunity.

Point Three:
AllegedlyTrue says it best when he/she states that we should wait to see and hear all of the details fully presented to us by our elected officials before we make any judgments, decisions or rash statements. As with any project of this magnitude American Express understands that we would expect the company to deliver on its promise or pay us back any money provided.

Point Four:
It saddens me to see folks rushing to judgment on a project that we know so little about. Let's wait our turn to hear from our elected officials. That's why they are there. Today, we simply do not know enough. So how about if we all get back to work and wait for the public hearings to hear more and not go in with a fixed decision. No one would want a financial institution to have a fixed decision in its mind when walking into one of our businesses, now would we?

Point Five:
Change is often good because it involves growth, of which we so desperately need just like much of our country. To be considered for such a project is a blessing. Again, away from the water cooler. There's nothing to chatter about here. Wait until May 4th and May 6th and focus on growing your own businesses successfully as you have so that we can attract other 'large fish' such as American Express.