After years of becoming more Raleigh centric, Advance Auto Parts has officially made the City of Oaks its corporate headquarters, but only after receiving a $12 million incentive package from state and local governments.
On Wednesday morning, the state Economic Investment Committee approved the incentives for the publicly-traded auto parts retailer. Company officials then joined Gov. Roy Cooper at the old N.C. Capitol building to make the announcement shortly before 10 a.m.
In addition to moving its corporate headquarters from Roanoke, Va., to Raleigh, the company plans to invest $5.5 million here and create 435 new jobs over five years. The average annual wage for those jobs will be $106,000. The average annual wage in Wake County is $56,245.
Those 435 new jobs are going to be heavily focused on technology, with the company ramping up its digital marketing and software staffs to better compete for online shoppers.
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“About 70 percent of the purchases in our category start on a mobile device. So, whether or not they are walking through the swinging doors or ordering online, we need to win in that space,” Tom Greco, Advance Auto’s CEO, said in an interview Wednesday after the announcement.
“Talent availability is absolutely the No. 1 driver” of our decision, Greco added. “You have to have access to software developers, software engineers, dev ops, all of those areas are important. We have a great talent pool in Raleigh to do that work.”
The 435 jobs will be based at the company’s corporate campus on Millbrook Road and in the Duke Energy tower in downtown Raleigh, where its digital marketing team is located.
The company must meet hiring and investment goals to receive any incentive funds. This is the incentives breakdown: $9.4 million Job Development Grant from the state; $500,000 from the City of Raleigh, $88,000 from Wake County and $370,00 from Capital Area Workforce Development.
Because Wake County is considered a tier-3 county, the Department of Commerce will pay up to $3.1 million into the state’s Industrial Development Fund’s Utility Account. The Utility Account helps rural counties fund infrastructure projects.
Advance Auto Parts officials said the company was looking at both Henrico, Va., and India for its relocation and expansion. “It was a competitive process and Virginia participated and that was a factor” in North Carolina needing to offer incentives, Greco said.
However, the company has steadily become more Raleigh focused, expanding functions and moving employees here, since 2014, when it acquired its Raleigh-based competitor General Parts International for $2 billion. Advance still has around 600 employees in Roanoke — mainly in customer support — and there will be no expected cuts there.
In 2017, Greco, and a majority of Advance Auto’s leadership team relocated to Raleigh. The executive team all received thousands of dollars in relocation benefits from Advance Auto, according to documents filed with the Securities and Exchange Commission.
This is the second time the state has given Advance Auto Parts an incentives package. In 2014, the company was awarded more than $17 million shortly after it acquired General Parts. At that time, Advance Auto said it would create 600 new jobs in North Carolina. The company is still responsible for meeting hiring and investment requirements from the 2014 agreement.
A majority of those 600 jobs, however, weren’t exactly new. Rather they were workers that were already employed by General Parts, The News & Observer reported at the time.
Governor Cooper said in an interview that incentives were necessary to keep Advance in Raleigh.
Incentives were “necessary to make it happen,” Cooper added. “Look they had other choices … we feel good about the package we presented and feel positive that they made this choice.”
Attracting headquarter projects to North Carolina has become an increasing priority for the state’s economic development arm. The state has narrowly missed out on several projects in recent years.
Currently, the state legislature is considering a bill that would more than double the amount of incentives that the state can offer to companies. Though, Advance’s deal was done under the current incentive framework and will not be eligible for any increases the state might pass.
Cooper said he supported increasing the amount of incentives the state can offer.
“There are other efforts out there that we believe it will affect,” Cooper said. “We are looking forward to attracting more companies and maybe even more corporate headquarters to North Carolina.”
When asked whether Apple was still looking at the state, Cooper declined to comment.
“I can’t talk about economic development projects, but we are going to continue to work to attract all kinds of companies and particularly technology companies that are on the west coast,” he said. “We are a center for technology and for bio technology in North Carolina and those kinds of companies are ripe” for working in North Carolina.