As Gov. Pat McCrory and the state legislature wrestle over how much money North Carolina spends on tax incentives, new documents show the state was outbid by Georgia in its latest effort to land a coveted automaker.
North Carolina offered Mercedes-Benz USA $15.4 million worth of incentives to encourage the company to move its headquarters from New Jersey to the Raleigh area, according to N.C. Commerce Department documents. That’s less than the reported $23.3 million offered by Georgia.
Starting in September, North Carolina officials sought to woo up to 800 jobs and a blue-chip brand to possible sites in Raleigh and Research Triangle Park. But the U.S. arm of the German automaker Daimler announced in January that it had picked Atlanta for a new state-of-the-art facility.
The decision was the latest economic development blow for the state, which last year saw Toyota choose Texas over Charlotte for its North American headquarters and watched companies such as LPL Financial cross the border to South Carolina in pursuit of big incentives packages.
McCrory has been pressing the General Assembly to pass legislation that would replenish the state’s Job Development Investment Grant program, the primary tool economic developers use to lure company relocations and expansions. But the House and Senate have developed competing jobs bills.
Commerce Department spokeswoman Kim Genardo on Tuesday said a number of factors play a role in where companies choose to locate. For Mercedes, she said the department believes uncertainty about the future of the state’s incentives “weighed into the company’s decision.”
North Carolina is eager to land an auto manufacturing plant, which would bring high-paying jobs and attract suppliers that often settle nearby. On Monday, Volvo Car Corp. added fuel to the incentives debate when it announced plans to invest $500 million to build a new plant in the U.S. Multiple reports have said North Carolina is among several southeastern states in the running.
Sen. Bob Rucho, the Senate finance chairman, has said the Senate’s plan includes a method of calculating tax liability that is attractive to automakers.
In its bid for Mercedes, North Carolina offered a JDIG grant valued at $14.2 million, plus $1.2 million in training incentives, according to documents obtained under a public records request. As for local governments, Raleigh proposed $2.8 million in tax incentives, and Durham County offered $900,000.
In addition to Georgia and North Carolina, Mercedes-Benz, which codenamed its headquarters search “Project Eagle,” also looked at Tennessee, Florida and Texas, the documents say.
A summary preparing North Carolina officials for a meeting with Mercedes’ CEO included talking points praising the company’s interest in the state and the potential jobs it might bring. “We are working hard to establish a strong business climate – reducing corporate and income taxes has been a priority,” the talking points said.
Documents outlining Mercedes’ goals for the relocation included “maximizing state and local economic incentives.”
Mercedes-Benz did not respond to a request for comment. In January, the company said Atlanta was a “premier city” close to its Southeast customer base, the port in Brunswick, Ga, and its manufacturing facility in Alabama, which accounts for half of the vehicles it sells in the U.S.
Tuesday’s public records request provided much less information than the state has supplied in the past. That’s because less information about failed job recruiting efforts is now made public under a public-private partnership the state created to handle recruiting tasks.
While economic developers say this will help with future job recruiting efforts, open government advocates contend it damages the public’s right to know how officials are trying to dole out tax breaks.
Observer staff writer Ely Portillo contributed.