Everyone seems to have an instant opinion on whether Chiquita should have to pay back some of the $22 million in incentives it’s slated to receive, given its plans to move its corporate headquarters to Ireland after less than two years in Charlotte.
Charlotte Mayor Patrick Cannon declared hours after Chiquita announced its proposed merger with Irish company Fyffes on Monday that the company could likely keep the incentives. Mecklenburg Economic Development Director John Allen, on the other hand, said the move would violate the incentives agreement, and Chiquita would have to pay money back if the city and county enforced their own rules.
The truth is it’s too early to say what should happen. Besides legal arguments over what the contract specifically demands, the outcome should hinge on whether Chiquita meets current and future targets for jobs, payroll and capital investment it promised when it negotiated the incentives in 2011. The banana company still might hit those numbers, even as the headquarters moves to Dublin.
Let’s go back to Sept. 12, 2011, when Charlotte’s City Council met in closed session to discuss incentives to land Chiquita. Minutes from that meeting make clear that the city provided incentives beyond what it normally would to land a company. The minutes also make clear that Chiquita was unlikely to move to Charlotte without such an aggressive offer.
Anthony Foxx, the mayor at the time, told the council, “I think this is an enormous opportunity for us, but it does require us to do some mental gymnastics to get there.”
The council wanted to be protected in case Chiquita did not fulfill its promises. So ultimately the city, Mecklenburg County and the state agreed to a deal that included “clawback” provisions to accomplish that.
The emphasis throughout the negotiations was rightly on hard numbers – long-term jobs, payroll and capital investment – more than on the intangible boost of having Chiquita’s headquarters domiciled here. Aren’t well-paying jobs, after all, the whole point?
The company committed to creating 417 full-time jobs here with an average salary over $100,000. It also said it would invest $14 million in its headquarters and a new research and development lab. To earn the initial incentives, the company would have to hit 90 percent of its job promise, or 153 jobs by the end of 2012, 245 jobs by the end of 2013 and 375 jobs by the end of 2014.
Chiquita has hit those benchmarks to this point, with 310 employees here now, and says it will hit the 2014 goal. The company says it intends to keep a similar presence here, despite the corporate move. Chiquita has received only about $2 million of the promised $22 million so far.
Taxpayers were generous with Chiquita, and it’s essential that the company be held to its promises. Its proposed move to Ireland is a ding to the city’s psyche. But what the public should care most about are well-paying, long-lasting jobs, and lots of them. If Chiquita continues to keep its end of the deal on that front, the state and local governments should too.
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