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Charlotte to consider incentives for low-wage tool jobs

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The Charlotte City Council on Monday will consider approving its share of a tax incentive package for tool manufacturer Stanley Black & Decker, even though pay for newly created jobs would fall below the city’s threshold for offering subsidies.

Stanley Black & Decker has told the city it wants to relocate a manufacturing plant from Reynosa, Mexico, to Charlotte, where the company already has a 450,000-square-foot factory in the Steele Creek area. City and county incentives would total $181,208.

The New Britain, Conn.-based company’s expected $5.2 million investment would create 250 new jobs over four years, with an average salary of just under $30,000.

The move is part of a nationwide trend of “insourcing” in which some overseas manufacturing jobs that had been outsourced are returning to the U.S.

The city’s previous policy of offering tax incentives for relocation or expansion was that a company’s new jobs had to be at or above the area’s median wage, which is about $45,600.

At the time, the city said it was important that subsidies be used only for jobs that “bring a quality of life” to workers.

But in 2012, with unemployment in Charlotte above the national average, council members changed that policy to attract manufacturing jobs. The new policy states that jobs eligible for tax breaks must pay at or above the average for that sector.

But the Black & Decker jobs don’t clear that bar. The city says they pay 90 percent of the average wage for “production jobs.”

Since the city changed its policy, council members have approved one other tax incentive package for jobs that don’t pay at or above average for their sector.

The city and Mecklenburg County in September gave the parent company of Carowinds $922,000 in tax breaks for a planned expansion of the amusement park.

That project is expected to create only 15 full-time jobs with an average salary of $43,000. The city’s policy is that a project must create at least 20 full-time jobs to be eligible for tax incentives.

In addition, the Carowinds project is expected to add 270 seasonal jobs with an hourly wage between $8.10 and $8.25.

Council members tentatively approved the Stanley Black & Decker incentives in a Sept. 23 closed session meeting. The city’s share of the tax incentives is $66,126.

The Mecklenburg Board of County Commissioners also tentatively approved in September its share of tax incentives, which would be $115,082.

‘Folks who could benefit’

The tax incentives are part of a program known as a Business Investment Grant.

A company that relocates or expands is given a refund, or grant, for a period of time based on the new property taxes they would pay. The grant program has been used to attract companies such as Siemens, Chiquita Brands International and Cedar Fair, the parent company of Carowinds.

Stanley Black & Decker announced in November it had chosen Charlotte over Jackson, Tenn., for the expansion.

The city’s economic development director, Brad Richardson, said if an economic development project meets most of the city’s criteria, city staff will bring it to council members for consideration.

Richardson said the fact that the proposed Black & Decker jobs were in manufacturing helped influence city staff to bring it to the council.

“We looked at some census data that said we haven’t replaced all of the manufacturing jobs lost from 2004 to 2010,” Richardson said. “There are unemployed folks in the community; $29,000 is not a great wage, but there are folks who could benefit from that wage.”

The Mecklenburg unemployment rate has been declining and is now 7.1 percent. It is still higher than the national average of 6.7 percent.

The City Council is also scheduled Monday to consider its share of a $6.4 million Business Investment Grant for Electrolux, a home appliance maker that relocated its North American headquarters from Savannah, Ga., to Charlotte in 2010.

The company now employs 700 people with an average wage of $90,000.

Electrolux has said it will consolidate research and development, accounting and marketing into a new facility in Charlotte, adjacent to its existing headquarters building.

The expansion will create 610 jobs with an average salary of $100,000.

Harrison: 704-358-5160
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