The Tribune Democrat, Johnstown, PA

April 16, 2013

Official: Huge MetLife deal could exhaust N.C. incentive fund


Staff and wire reports

RALEIGH, N.C. — North Carolina business recruiters say a historically outsized package of about $100 million in state and local incentives to get MetLife Inc. to move 2,600 jobs from other states to North Carolina could stall benefits to other companies or force lawmakers to loosen up the rules.

North Carolina state Commerce Department emails released this week in response to a public records request by The Associated Press show recruiters knew their big offer to MetLife would consume a big chunk of the annual limits on how much state officials could promise companies relocating to North Carolina.

MetLife last month was awarded a Job Development Investment Grant worth up to $87 million, the largest in the history of the state’s biggest discretionary incentive program.

The grant allows the insurance giant to take tax breaks over 12 years if it meets hiring and investment targets.

Gov. Pat McCrory proposed a budget last month that would change the date the program starts counting toward its annual cap to July instead of January, making an extra $15 million available this summer, Commerce Department spokesman Josh Ellis said Tuesday. The budget doesn’t increase the program’s $15 annual limit, Ellis said.

MetLife announced last month it would move 2,600 jobs from offices in Pennsylvania Massachusetts, Connecticut, Rhode Island, Pennsylvania, New Jersey and California to Charlotte and the Raleigh suburb of Cary. Charlotte will become the U.S. headquarters for MetLife’s retail insurance business and Cary will host a global technology and operations hub.

When the deal was announced in March, MetLife said its office in Richland Township would be affected. The office would not be closed, the company said, but it was not known how many jobs would be affected.

Along with promises to other companies, the MetLife offer would push the tax breaks disbursed at McCrory’s discretion to $13.5 million of the allowed $14 million, forcing any new business opportunities to wait until a new state budget in July replenished the funding, Stewart J. Dickinson, a top state business recruiter, said.

“At a point in the very near future we will have to tell prospective grantees that we cannot award their grants until after 7/1/2013,”  Dickinson said in a December email.

Dickinson said in a February email the JDIG cap would be reached by mid-April. He did not respond to messages. Companies haven’t yet been denied tax breaks under the recruitment programs because neither program has hit its cap, Ellis said.

The limits set in North Carolina law are designed to prevent the state from giving away too much to companies hungry for the biggest incentives, said Allan Freyer, a former economic development consultant and now a policy analyst at the left-leaning North Carolina Budget & Tax Center. The two incentive programs are designed to close a deal getting companies to move or increase jobs in North Carolina.

Cambria County President Commissioner Douglas Lengenfelder said local government, economic development agencies and related organizations must work together to compete with programs such as the incentive package that is bringing MetLife to North Carolina.

“More than ever, there is a vision for the county,” Lengenfelder said Tuesday after Johns-town-Cambria County Airport Authority’s meeting.

Lengenfelder said it’s frustrating to see local jobs lured away by North Carolina’s $94 million incentive package.

“How many opportunities does this county have?”

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