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North Carolina was ready to offer Toyota $107 million, documents show

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N.C. Secretary of Commerce Sharon Decker

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  • Other significant incentives packages in Charlotte

    North Carolina, Charlotte and Mecklenburg County have deployed big incentives packages to lure companies in recent years, though not always successfully. Here’s a look at some of the most high-profile recent incentives deals, and how they compare with the $107 million in incentives North Carolina was prepared to offer Toyota:

    • Boeing, up to $683 million: North Carolina tried unsuccessfully last year to persuade aircraft manufacturer Boeing to locate its new 777X jetliner manufacturing plant at a site next to Charlotte Douglas International Airport. The factory would have come with up to 8,000 jobs. The company ultimately chose to keep its plant in Seattle, lured in part by a blockbuster $8 billion incentives package.

    • Sealed Air Corp., $43 million: The maker of Bubble Wrap, as well as a range of packaging and cleaning supplies, announced plans in July to relocate its headquarters to Charlotte from New Jersey. The company plans to bring almost 1,300 jobs.

    • Electrolux, two grants: The company moved its North American headquarters to Charlotte in 2010, lured in part by a $27 million incentives package. Electrolux brought more than 700 jobs. In December, the company announced plans to add 810 more jobs and expand the headquarters, aided by $34 million worth of state and local incentives.

    • Chiquita Brands International, $22 million: Chiquita relocated from Cincinnati in 2010, promising to bring 400 jobs. The company’s incentives are now in question after Chiquita’s announcement earlier this year that it will merge with an Irish produce company and move its headquarters to Dublin – though Chiquita has said many of the corporate jobs would stay in Charlotte.

    Ely Portillo



North Carolina was prepared to offer Toyota up to $107 million worth of incentives to lure the automaker’s North American headquarters to Charlotte, documents obtained by the Observer show.

But in April, the state lost out to Texas, which offered less money but benefited from other factors, such as direct flights to Japan.

The details of North Carolina’s quest to land Toyota have come to light as Secretary of Commerce Sharon Decker and other economic development leaders push Gov. Pat McCrory to call a special legislative session to extend North Carolina’s main incentives program.

The Job Development Investment Grant program is set to run dry by late October. Proponents say such incentives are crucial to convincing big companies to move to the state.

But North Carolina’s flirtation with Toyota shows the size of an incentive package isn’t always the most important factor in a company’s decision. Other intangible considerations – including cost of living and direct flights to Japan – helped Texas lure Toyota with a $40 million incentives package, economic development and Toyota officials said Thursday.

“My gut tells me there was a whole lot more than just incentives,” Charlotte Chamber President Bob Morgan told the Observer. Still, he said incentives are “absolutely” crucial to getting large companies to consider Charlotte.

Toyota’s North American headquarters, which the company moved from California, would have come with 2,900 high-paying jobs. Not having incentives to offer “takes us out of the game, potentially,” Morgan said.

Decker told the Observer that Texas’ low taxes meant the state didn't have to offer as big an incentives package as North Carolina to be competitive.

“We were competing against a state without personal or corporate income taxes,” she said. “It’s a challenging competitive situation for sure.”

The Charlotte Chamber has joined Decker and other members of the N.C. Economic Developers Association in pushing for a special session to extend the state incentive program and possibly start a new, flexible “closing fund” to help the state seal deals with undecided companies.

Decker said Wednesday that North Carolina is pursuing a large company that would take 80 percent of the JDIG fund’s balance, leaving little for 30 or so other projects and roughly 10,000 jobs that are “in the pipeline.”

South Carolina has a “closing fund” that can be used at Gov. Nikki Haley’s discretion. In June, South Carolina used $38.7 million to help land a tire company, as well as two Charlotte companies that relocated south of the state line. The three companies brought a combined 7,000 jobs.

Slow dance to lure Toyota

Toyota chose Plano, Texas, in late April after two months of anonymous inquiries through real estate firm Jones Lang LaSalle. Although Toyota visited Charlotte, the company didn’t reveal its identity to economic developers with the state or Charlotte Regional Partnership, who put together an incentives estimate.

The Observer requested emails and documents from the Commerce Department after Toyota’s decision was announced, and received them this week. The documents offer a glimpse of the secretive, delicate dance by companies who want to move without tipping anyone off before they’re ready.

An official with Jones Lang LaSalle approached the Commerce Department in mid-February. He said he had a big client looking to relocate – a Fortune 50 company that was considering Charlotte. The state and Charlotte Regional Partnership moved quickly, signing nondisclosure agreements and drafting an incentives package, even though they weren’t told the client’s identify beyond the codename “Project One.”

By the end of February, they sent Jones Lang LaSalle an estimate of how much the company could expect to receive in exchange for moving 2,900 jobs to Charlotte with an average salary of $107,000 and a capital investment of $261 million.

The state said the company could expect up to $107 million. Of that, the largest part would be made up of an $86 million JDIG grant paid out over a dozen years. Such grants are tied to job creation and are based on a percentage of the company’s state income tax withholding.

An additional $2 million worth of state incentives would come from the One North Carolina Fund, and $4.3 million would be paid toward recruiting and training costs. City and county incentives were estimated at between $8.2 million and $14.9 million.

Officials from “Project One” visited Charlotte on March 19 and toured potential temporary office sites. They also met with executives from other companies that have relocated to Charlotte, including Electrolux, Chiquita Brands International and MetLife.

After the March visit, Mike Bennett of Jones Lang LaSalle emailed state officials and called the trip a “phenomenal tour.” He filled out a formal application for economic incentives in early April using the state’s online system.

But on April 28, Texas Gov. Rick Perry and Toyota officials announced the North American headquarters was relocating to Plano, just north of Dallas.

Toyota spokesman Javier Moreno said Thursday that direct flights to Japan, the cost of living and central geographic location all played a role in selecting Plano over Charlotte.

North Carolina economic development officials – who had never been told which company they were actually wooing – learned of Toyota’s decision to move to Plano when the news broke. Stewart Dickinson, a state Commerce Department official, emailed his reaction in a terse note to another official:

“Crap but not earthshaking.” Staff writer Eric Frazier contributed.

Portillo: 704-358-5041; Twitter: @ESPortillo
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