State in­cen­tives were key to lur­ing Honey­well to Char­lotte, records show

The Charlotte Observer - - Front Page - BY DEON ROBERTS

der­[email protected]­lot­teob­server.com

Chang­ing N.C. law to vastly ex­pand cor­po­rate re­lo­ca­tion in­cen­tives was a crit­i­cal move for Honey­well be­fore the man­u­fac­tur­ing tech giant would com­mit to mov­ing to Char­lotte, newly re­leased doc­u­ments from the state show.

North Carolina awarded a larger in­cen­tives pack­age to win the global head­quar­ters of New Jersey man­u­fac­turer Honey­well than the av­er­age deal of­fered by four other states, ac­cord­ing to the doc­u­ments.

In De­cem­ber, North Carolina ap­proved up to $42.5 mil­lion in in­cen­tives for the For­tune 500 com­pany in ex­change for re­lo­cat­ing and bring­ing 750 jobs to Meck­len­burg County from 2020 to 2024. The county’s in­cen­tives of about $ 28 mil­lion and Char­lotte’s $ 17 mil­lion brought Honey­well’s to­tal in­cen­tives to more than $87 mil­lion.

The other states — Ge­or­gia, Florida, South Carolina and Texas — of­fered pack­ages with an av­er­age value of $ 32.7 mil­lion, ac­cord­ing to the more than 600 pages of doc­u­ments, which were pro­vided to the Ob­server this week through a pub­lic records re­quest.

In the other states, Honey­well con­sid­ered re­lo­cat­ing to the metro ar­eas of At­lanta, Hous­ton, Tampa and Or­lando, as has been pre­vi­ously re­ported. In the case of South Carolina, the por­tion of the Char­lotte metro area that ex­tends into that state was among fi­nal­ists con­sid­ered by the com­pany, doc­u­ments show.

The doc­u­ments did not list the amount of in­cen­tives that each of the four states of­fered. But they pro­vide fresh de­tails into Honey­well’s push for more in­cen­tives from North Carolina.

In of­fi­cially an­nounc­ing plans Nov. 30 to come to Char­lotte, Honey­well said the de­ci­sion was con­tin­gent on the state ap­prov­ing an in­cen­tives pack­age.

Three days later, Gov. Roy Cooper signed leg­is­la­tion that more than dou­bled the amount of in­cen­tives the state can of­fer com­pa­nies, al­low­ing the state to award a larger grant to Honey­well.

The change lets the state pro­vide firms up to $ 16,000 in an­nual tax breaks for ev­ery job cre­ated, up from the pre­vi­ous cap of $6,500 per job. That same day Cooper signed the bill, Honey­well’s in­cen­tives were ap­proved by the N.C. Eco­nomic In­vest­ment Com­mit­tee, a body that votes on state in­cen­tives pack­ages.

The change in the law was ex­pected to in­crease the value of the state’s por­tion of Honey­well’s in­cen­tives by $8 mil­lion to $ 10 mil­lion, ac­cord­ing to an Oct. 12 let­ter to Honey­well CEO Dar­ius Adam­czyk from Cooper, Se­nate leader Phil Berger, House Speaker Tim Moore, Se­nate Demo­cratic Leader Dan Blue and House Demo­cratic Leader Dar­ren Jack­son.

“We re­al­ize that typ­i­cal in­cen­tive strate­gies do not al­ways suit game-chang­ers like Honey­well,” the let­ter said. “In or­der to se­cure this head­quar­ters op­er­a­tion, each of us will sup­port and work to build bi­par­ti­san sup­port” for rais­ing the $6,500 cap, they wrote.

Honey­well con­tin­ued to press North Carolina for the higher cap, doc­u­ments show.

For in­stance, in a Nov. 29 let­ter, com­pany gen­eral coun­sel Anne Mad­den told the N.C. Eco­nomic In­vest­ment Com­mit­tee that Honey­well’s will­ing­ness to move to Char­lotte “re­mains sub­ject to en­act­ment” of the higher cap.

“While Char­lotte re­mains our first choice se­lec­tion for Honey­well’s new head­quar­ters lo­ca­tion, should the state and lo­cal in­cen­tives not be awarded, we would not com­mit to go to Char­lotte and would in­stead plan to pivot to our down-se­lected sec­ond or third choice lo­ca­tions, both of which re­main vi­able and at­trac­tive choices,” Mad­den wrote.

The leg­is­la­tion to lift the cap did not pass with­out op­po­si­tion.

Repub­li­can Rep. Jonathan Jordan had com­plained on Nov. 29 that the bill ap­peared “out of thin air” that week. “I just can’t be­lieve we are in­creas­ing this amount and go­ing for more money to give to our cor­po­rate wel­fare pro­grams and crony cap­i­tal­ism,” Jordan had said dur­ing a com­mit­tee meet­ing.

To be sure, North Carolina has awarded in­cen­tives pack­ages larger than Honey­well’s. For in­stance, in­surer MetLife was granted $87.2 mil­lion in a 2013 pack­age for cre­at­ing 2,600 jobs in Char­lotte and Cary. That award was among the largest in the state’s his­tory.

In re­lo­cat­ing from Mor­ris Plains, N.J., Honey­well plans to shift to Char­lotte its se­nior lead­er­ship, in­clud­ing the CEO, and sup­port po­si­tions, as well as “the most crit­i­cal strate­gic and man­age­ment per­son­nel,” ac­cord­ing to ap­pli­ca­tions for state in­cen­tives.

The com­pany also plans to es­tab­lish a han­gar at Char­lotte Dou­glas In­ter­na­tional Air­port to house four cor­po­rate air­craft and 32 flight and main­te­nance crew per­son­nel, ac­cord­ing to the doc­u­ments.

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