NC Loses Out To SC in Big Jobs Deal, State Leaders Point Fingers
South Carolina officials celebrated another big jobs announcement Thursday - Continental Tire will open a new manufacturing plant in Sumter County and hire 1,700 people. North Carolina leaders, meanwhile, have been busy blaming each other for losing the deal.
These economic development deals are always a battle over which state can offer the sweetest package of incentives with tax dollars. North Carolina Commerce Secretary Keith Crisco says Brunswick County was the clear favorite over sites in South Carolina and Louisiana, but Republican lawmakers weren't willing to do what it took to seal the deal.
"Everybody was on board except Senate leadership," says Crisco. Senate President Pro Tempore Phil Berger says Crisco is right: "We're unwilling to sign off on what we perceive to be an unethical deal."
Berger says the deal was unethical because the property the state was offering Continental in Brunswick County is owned by a group of Democratic donors who gave more than $52,000 to Governor Bev Perdue's campaign. Those donors had worked a deal to sell the property for nearly twice what they paid in 2007. Brunswick County would buy it and then give it to Continental.
"Pay for Play" is what Berger calls that. But Brunswick County Economic Development Director Jim Bradshaw says he negotiated the sale, not Perdue or the Commerce Department. "The state had nothing whatsoever to do with it," says Bradshaw, adding that he had no idea what political donations the property owners had made.
"What are economic developers supposed to do?" asks Bradshaw. "When we show sites, are we supposed to look up who gives to whom?" Senator Berger says the governor and commerce officials should have been more forthcoming about who owned the property, rather than leaving it for the press to uncover. Perdue and Secretary Crisco say Berger's claims are just a diversion from the real problem - that Republican legislative leaders couldn't muster the votes needed to offer Continental a winning deal. Continental wanted $45 million from the state to help with construction costs.
Typically, the state offers companies a rebate on their property taxes contingent on the jobs they create. Crisco says the Continental deal was unusual because the company wanted the money at the beginning, and would pledge to pay it back if the promised jobs didn't materialize. That's why the deal needed legislative approval.
Senator Berger says lawmakers couldn't see spending the money. "What happens if the money is given to the company and then for one reason or another they decide they're not going to come? Do we have any kind of security for that?" says Berger. "These are tax dollars we're talking about. This is money in tight economic times that we didn't feel was appropriate for us to be loose with."
Nonsense, says Secretary Crisco: Continental is a multi-billion dollar international company with manufacturing plants that stay open for 40 years on average. Documents released by the governor's office do show provisions were included in the proposal to make sure taxpayers weren't left holding the tab if Continental backed out.
As for the other part of Berger's argument, Crisco says, "South Carolina's budget is no better - and perhaps worse - than ours, but they came up with the money." South Carolina's deal includes at least $35 million in grants for Continental upfront. The whole episode carries an added sting for North Carolina because just six years ago, Continental shuttered a manufacturing plant that employed hundreds in Charlotte. Then in 2008, South Carolina lured Continental's North American headquarters across the border from Charlotte to Lancaster County with - you guessed it - a taxpayer funded incentives package worth more than half a million dollars.