The Status Of Chiquita's Incentive Dollars
Earlier today the 320 or so employees of Chiquita received an email which began “Dear Associate, We now embark on Chiquita’s next chapter.”
That’s how Chiquita told its workforce the company’s Uptown headquarters will be closed. This just three years after the company received an incentive package potentially worth more than $20 million to come to Charlotte and keep its worldwide headquarters here for 11 years. Now there are questions as to how much incentive money – and in what form the company has received. Tom Bullock joins All Things Considered host Mark Rumsey for the latest on this story.
MR: We’ll get to the incentives in a moment but lets start with what we know about the closure.
TB: We know the Chiquita headquarters here in Charlotte will be closed. We don’t know the fate of the roughly 320 employees, or if the headquarters will be relocated somewhere else in the U.S. or abroad.
The email you referenced said this was a move to allow the company to be closer to their consumers and operations.
Of course this is all predicated by the hostile takeover of Chiquita late last year by two Brazilian companies – they have now taken Chiquita public and can do with it what they wish.
MR: What kind of a response have we seen by city and county officials to today’s announcement?
TB: A lot more upbeat than one might expect.
In a statement Mayor Dan Clodfelter thanked Chiquita for contributing to the community. Then came a line saying he would not be available for interviews.
And Bob Morgan – the head of the Charlotte Chamber of Commerce – put out a Youtube video that visually almost looked like a promotional video for Chiquita.
"The story of Chiquita’s recruitment is a really good one. Attracted here by a favorable cost climate like most companies. Bu they also particularly needed the ability to travel internationally. And the Charlotte airport and the growing international destinations we offer were key," said Morgan in the video.
And Mecklenburg County Manager Dena Diorio sent an email to members of staff and county commissioners with some talking points. They include:
· our attention now should be on the approximately 300 impacted employees and their families.
But also had these more cheery talking points:
· We are appreciative of the Chiquita’s corporate philanthropy and investment in the community.
· We believe Charlotte-Mecklenburg continues to attract new and expanding businesses.
Not all county commissioners followed the script. This is what Bill James had to say about these talking points:
"They’re trying to change the subject from 'government and elected officials screwed up and gave money up front to a company' to 'our attention should now be on the 300 impacted employees,' etc. etc. I don’t buy that. This is a screw up. They should just own it."
MR: Lets talk about the incentives next. How much tax money has the company received?
TB: That’s a harder question to answer than you might expect. Lets start with what we know. Chiquita was given an incentive package to relocate from Cinncinati to Charlotte in late 2011. This is a combination of tax payer dollars from the city, county and state. It would be worth north of $20 million IF the company met job goals and kept its headquarters in Charlotte for 11 years.
Obviously that won’t be the case. The payments to Chiquita were made on a yearly basis. And what they received each year changed. They moved here in 2012 and have received 3 years worth of incentives – about $2.5 million so far. The city and county money make up about $1 million of that.
City and county leaders say Chiquita has agreed to give that money back. Chiquita has not publically announced if that’s the case.
MR: Now that’s what’s we know – what’s in question?
TB: It has to do with a word used again and again in the minutes of the September 12, 2011 closed door meeting where the city council approved the package of economic incentives that convinced Chiquita to move here. The word is upfront.
Here’s an example – Brad Richardson who was doing economic development for the city at the time told the closed door meeting quote “The company has requested two things, one is some money to help with upfront costs.”
This was presented as a deal breaker throughout the meeting.
These were moving costs, help in paying severance, etc. These aren’t the usual things economic incentives deal with. Mayor Pro-Tem Michael Barnes, who voted in favor of the packages that night, says that made this proposal unprecedented.
"As I recall, and you’ll have to refresh my memory on this, one of the primary differences was that we were advancing money for their moving expenses," said Barnes.
That total MAY be worth $5 million.
Now the city says there was no such upfront payment, that its part of the overall economic incentive package . And we’re going through the contracts with Chiquita and company records to find out if it did or did not occur.
If – and again I want to say IF – they did its not clear if the city, county or state could claw back those funds.
MR: That’s WFAE’s Tom Bullock. Thank you
TB: Thanks Mark.