North Carolina has landed 316 new jobs from a Texas-based financial services firm, but state officials said the recruitment was costly, using up most of the available grant money in a key incentives program.
Dimensional Fund Advisors, an Austin-based financial services firm, said Wednesday that it will open an East Coast headquarters in Charlotte. The announcement underscores Charlotte’s reputation as a financial hub and means the city is to set to see construction of another major office building, adding to a booming real estate sector.
The company is being lured with about $18 million worth of state and local incentives. But in making the announcement, Gov. Pat McCrory and Commerce Secretary John Skvarla bemoaned the state legislature’s inaction on their request to extend and increase North Carolina’s incentives program.
Although the state cap on its main program, the Job Development Investment Grant, was renewed July 1, Skvarla said much of the grant’s cap space has already been used on Dimensional.
“We are effectively through that cap in one week,” said Skvarla, speaking at the Charlotte Chamber. He said his “plea and suggestion” for legislators is to create a JDIG program without a cap, to make luring companies easier.
Dimensional is set to receive $10.3 million over 12 years from North Carolina as a refund for state employment taxes.
The city and Mecklenburg County would pay the company business improvement grants worth an additional $7.6 million over seven years, according to a county spokesman. The county’s share would total more than $4.8 million, while the city’s share would total almost $2.8 million. City Council and the County Commission have both held preliminary votes indicating their intent to approve the grants.
Dimensional’s new jobs, which the company said it will create by the end of 2020, will pay an average annual wage of $147,025. That is more than twice the Mecklenburg average.
The company will initially rent space in the center city area. Dimensional co-CEO and chairman David Booth said a location isn’t set yet. The company then plans to build a new headquarters building. Booth said that location hasn’t been finalized. The building is expected to cost $105 million, including costs for acquiring land, construction and outfitting the office.
“We’ll build an office building similar to the one we have in Austin,” Booth said.
The company’s building there is seven stories high, and Booth said the Charlotte building will be constructed with growth in mind.
“We’ll probably build a building for 500 to 600 people and hope to fill it,” he said.
Booth said the company examined a number of cities along the East Coast during its search. Bill Cronin, Charlotte’s economic development director, said a site in South Carolina near Charlotte was in the running.
“We considered everywhere from Miami to Boston,” Booth said.. He said Charlotte’s quality of life, workforce, status as a financial hub and Charlotte Douglas International Airport made the city attractive. He also said the incentives deal was also key.
“It was really important,” Booth said. “It’s not a deciding factor, but it’s an important factor.”
The company was awarded the state incentives package on Wednesday morning at a meeting of the state Commerce Department’s Economic Investment Committee in Raleigh.
Dimensional Fund Advisors, founded in 1981, has manages nearly $400 billion global assets. The company employs more than 850 people and has 11 offices in eight countries. The jobs the company will create in Charlotte include investment managers, a sales team and IT positions.
McCrory praised the company for picking Charlotte, and said Dimensional will add to North Carolina’s reputation as an innovative, business-friendly state. McCrory, former mayor of Charlotte, also said the company’s employees will be welcomed.
“If you’re here a week, you’re going to be a native,” he said.
McCrory and Skvarla said they plan to keep pushing the legislature to pass a new version of the incentives program.
While a House proposal calls for an expanded job grants program, the Senate version of the budget would curb incentives and limit their use in more prosperous counties such as Mecklenburg. McCrory said he will try to get the incentives program passed separate from the contentious budget negotiations.
“My goal is still to get it out of the budget,” he said. “If it stays in the budget, that means we at least have probably until mid-August. I frankly think that’s a policy issue and not a budget issue. ... That’s not the way we should do business.”
News & Observer staff writer John Murawski contributed.