To persuade the state's largest biotechnology company to expand its Clayton plant, state and local officials promised a package of tax breaks and other financial aid worth nearly $20 million.
The incentives pledge was made public Friday, about a month after Talecris Bio therapeutics raised $1.7 billion on Wall Street and just days after it reported a $35.8 million profit.
The company does plan to spend millions of its own on the Clayton project, which will create 259 jobs over the next seven years. The company will consider Clayton for additional expansions, but likely would seek additional government aid.
The now-common practice of creating jobs - but only if they're tied to incentives - is drawing increasing criticism. Fueling the outrage: recent news that Dell plans to shut its factory in Winston-Salem, a project subsidized by a record assistance package.
Government officials say they need to use incentives because North Carolina must attract and keep solid employers to bolster its ailing economy. The Talecris jobs will pay average annual salaries of $51,066; the Johnston County average is $33,800.
"The goal is pretty simple: jobs, jobs and more jobs," Gov. Bev Perdue said at a news conference Friday morning in downtown Clayton.
An expanding biotech company is a bright spot for North Carolina in a bad economy, and the incentives are important "so that some other state doesn't lure Talecris away," she added.
Talecris wants to increase production to meet rising demand for its drugs made from blood plasma, medicines used to help patients with rare, chronic diseases.
But critics argue that handing out incentives to successful, multibillion-dollar corporations wastes taxpayer money. Talecris' stock began trading publicly on Oct. 1 after one of this year's largest IPOs.
Why, Orr asks
"If a company is well-funded and profitable, why are we subsidizing them?" asked Robert F. Orr, executive director at the N.C. Institute for Constitutional Law, which has sued the state over incentives given to Google and other companies.
"I'm against the state throwing away money they don't need to throw away, not when you're cutting teachers and mental health services," Orr added.
One big issue is that government leaders are promising money for potential new jobs, and large corporations could easily revise plans as economic conditions shift. Dell is closing its Winston-Salem factory in January because of weak demand for desktop computers. The Dell move will cost 900 people their jobs.
Another question is whether companies that get incentives are really considering expanding outside North Carolina, Orr said. That's one requirement to qualify for state incentives.
Talecris CEO Lawrence Stern declined to comment Friday on where else the company looked. The company chose Clayton because of a quality work force, the proximity to major universities and money, he said.
"We received very, very good incentives for that alternate site," Stern added. "Clearly, the [local] economic grants were paramount."
N.C. Commerce Department financial analyst David Spratley told state officials Friday morning that Talecris was looking at sites in the South Carolina counties of Greenville, Anderson and Spartanburg.
By choosing its Clayton site now, Talecris also is laying the groundwork for possible future expansion there. Stern said that Talecris has plans for two future stages of expansion in which the company will invest about $160 million more.
The company will decide next year where to expand further, Stern said, but Clayton is a possibility. That factory opened in 1974 when it was owned by Bayer.
"It would certainly be an attractive site for the same reasons we chose the site for this facility," Stern said.
More breaks possible
If Talecris wants to expand more, Johnston County would likely be willing to offer additional tax incentives, said Wade Stewart, chairman of the bounty commissioners.
The facility announced Friday will separate proteins from blood plasma, one step in turning donated plasma into medicines to treat immune diseases and other illnesses.
Construction is expected to start next year and take several years. It will add to a cluster of drug-making activity along U.S. 70 in the fast-growing Johnston County community. Novo Nordisk and Hospira employ hundreds at nearby plants.
Talecris' investment is the largest from a company in Johnston County's history, Stewart said.
Company officials began talking with county leaders six or eight months ago, Stewart said, but county representatives never knew for sure whether Talecris was considering expanding elsewhere. And while he said the county might not see financial benefits from the expansion for years, it will be positive in the long run.
Clayton Mayor Jody McLeod, who introduced the governor at the news conference, noted that it was Friday the 13th. But it was "a lucky day" for Clayton, he said.
Staff writer David Bracken contributed to this report.
