Thursday, December 1, 2011
A fascinating story from the Observer’s Steve Harrison peeks inside the City Council’s closed session where it debated providing incentives to the banana giant to move its corporate headquarters to Charlotte.
In a highly unsual move, Charlotte and Mecklenburg County agreed to each pay $875,000 over three years, plus some property tax relief, to help offset Chiquita’s moving expenses. The state will give $2.5 million toward the movers. This has people upset.
Chiquita’s demand was unique, to be sure. But what’s the difference? If state and local governments agree to give almost $23 million to attract the company, it doesn’t matter if the company uses it for moving expenses or planting more banana trees. It’s true the moving-expense money is cash up front (though spread over three years) versus forgiven taxes, which is the typical incentive. But the moving money is subject to clawback provisions that require the company to pay it back if it doesn’t meet certain criteria around job creation, salary levels and staying in Charlotte for at least 10 years. And even if the city stipulated that the money wasn’t for moving expenses, it still goes to Chiquita, which could use it to move money around from somewhere else.
Whether taxpayers ponied up too much to attract Chiquita’s corporate headquarters (and its $40 million payroll) to Charlotte is a legitimate debate. We think states need to be reserved and selective in employing incentives, but that the Chiquita deal was not over the top. But sweating about whether the money defrays the cost of a move or defrays some other cost seems beside the point.
-- Taylor Batten
Posted by The Observer Editorial Board at 11:10 AM