Thursday, December 1, 2011

Did Chiquita swindle Charlotte taxpayers?

Does it matter how Chiquita spends taxpayers’ millions?

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


cmsparent2010 said...

NO IT'S NOT a legitamate debate - nobody who wil post here has enough knowledge or details to question it - This push to hate everything about business and government is ruining America. We can't even get a President because of media creating controversy out of everything.

John said...

Money is fungible. Its irrelevant what one says its can be used for anything. And the bottom line is, this is a good deal for NC and Charlotte. Criticizing this deal is silly.

If you want to critizcize the system by which incentives are provided, then feel free, but be sure and tell us exactly how you propose to change that system.

cooldela1966 said...

This amount is chump change. The incentives to lure Spirit Air to the Global Tranpark are estimated to be in the $250,000,000 range for 1,000 jobs. The Golden Leaf paid $100,000,000 of this up front! So the Chiquita deal is part of the dollar menu.

Garth Vader said...

John and cooldela,

If the deal is so "cheap", THEN YOU PAY FOR IT.

Skippy said...

It's a better deal than the $500,000,000,000 we paid for Solyandra for zero net jobs gained.

This is bad precedent, plain and simple. And once these new employees get here and get a taste of CMS inner City schools, hello Rock Hill.

Anonymous said...

Bottom line, Im glad Chaquita is here and we added jobs. Lets hope it leads to more relocations.

Julian Cuthbertson said...

This is definitely not the proper venue for a debate like this considering the key players in the deal are not here to dish out the facts. We are only speculating based on the limited facts that the CO is providing.

These days it seems like a lot of bandwagoners are taking positions against anything that is not benefitting them directly, even if it is an improvement for the community as a whole. Jealousy and finger pointing is running wild and the media is no help. Good rule of thumb is whenever you feel the need to complain, offer some valid solutions or alternatives to fix the problem.

cooldela1966 said...

Come on now! It is election time. So the state spent a few million. It will be good for Bev's campaign. Think of all the publicity for the "Jobs Governor." This if further proof that the state is not in financial difficulty. We could bring in 50,000 jobs if we just open up the checkbook and make it happen. Plus it is in keeping with the spirit of Christmas giving. And we did not even have to spend money on expensive wrapping paper. Be happy!