Chiquita Closing Charlotte Headquarters
Fruit company Chiquita has announced it will close its Charlotte headquarters in the next 18 months. Chiquita employs more than 300 at that headquarters. The closure comes less than three years after state, city, and county officials lured the company from Cincinnati with a $22 million package of economic incentives in 2011. Mecklenburg County Commissioner Bill James is a critic of those incentives. He says today’s news shows why they’re a bad strategy.
"What kind of loyalty do you get? I don't want to sound crass, but, no one falls in love with a hooker. And in essence Mecklenburg County and the City of Charlotte, they've been hooking themselves out to these companies," said James.
So far, the city and county have paid about $1 million. County manager Dena Diorio says Chiquita has agreed to return that money.
The company also received $5 million up front for relocation expenses —no word if that will come back, too. (see note below) Chiquita has not said where it will relocate to. The company, Charlotte mayor Dan Clodfelter, and the county manager have all declined further interviews.
Mecklenburg County Manager Dena Diorio sent an email this morning to all county commissioners announcing the closure.
Correction: The final incentives agreement does not mention a $5 million upfront payment. While the payment was described as "upfront" money when the council initially approved the deal, the city says - and contracts with Chiquita show - any payment was going to be spread over three years and tied to the number of people employed. The city says this is the $1 million paid from city and county funds, and Chiquita has agreed to repay it.
WFAE's Lisa Worf and Ben Bradford discuss what we know so far about the closing.
LW: What do we know?
BB: Not much other than that it’s happening. Chiquita sent a letter to its employees that it will be quote “simplifying” and “streamlining” its business—which is lingo for cutting jobs. As of 2015, the company has 320 people in Charlotte. The letter says they’ll move out of Charlotte in the next year to year and a half. And we know the catalyst for this. Chiquita just got bought by two Brazilian companies—juice company Cutrale Group and banking conglomerate Safra. This played out as a whole drama at the end of last year. Chiquita had planned to merge with the Irish company Fyffes, and under that deal the Charlotte office would stay where it was. But, Cutrale-Safra made an unsolicited bid. It turned into a bidding war between Fyffes and Cutrale, and then ultimately, it was a hostile takeover by the Brazilian companies. Shareholders approved the deal in October, and since then the Charlotte office’s fate has been in limbo.
LW: With the headquarters closing, Charlotte will lose 300 jobs. But many of the people in those jobs are recent transplants. Chiquita just moved to Charlotte in 2012.
BB: That’s right, and that’s the other big part of this story. When Chiquita came it was a huge deal in 2012. It moved here from Cincinnati. It was because the state, the city, and the county offered this jumbo incentive package. Usually, companies receive a certain percent tax rebate on what they’re paying in taxes. First of all, Chiquita got a large amount and, second,
got a $5 million relocation package that it was paid immediately. That was unusual and that was the reason they came here. (see note above) But, of course, it was very recent and very controversial as well.
LW: What’s going to happen to all that money?
BB: Part of what we know from an email from the county manager to county commissioners is that the company has said it will send back the amount of money that’s received so far that needs a refund. That apparently is just over $1 million shared evenly between the city and the county.
LW: What’s the reaction been so far? Have we heard anything from city and county leaders?
BB: We’ve seen emails from the mayor, county commissioners, and from the chamber of commerce. So far they’re trying to hold to a fairly positive tone, saying, “it was a good deal and we’re sorry to see them go. We regret that this has happened.” As a matter of fact, we have the talking points the county manager has suggested commissioners use. They read:
· While we are disappointed that the Chiquita headquarters will no longer be located in Charlotte, our attention now should be on the approximately 300 impacted employees and their families.
· We are appreciative of Chiquita’s corporate philanthropy and investment in the community and we believe Charlotte-Mecklenburg continues to attract new and expanding business.
That’s the tone we’re seeing them take. Of course, the mayor sent out a similar statement hitting those points and then saying he’s not available for interviews.
LW: We don’t know where Chiquita is going at this point.
BB: The only thing we know so far is that it will be in the next 12-18 months.
Bob Morgan, president of the Charlotte Chamber, responded to the Chiquita announcement with this video.
Check back here as WFAE updates this developing story.