HP ENTICED WITH $43Million TO BUILD ARK. FACILITY

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HP ENTICED WITH $43Million TO BUILD ARK. FACILITY

 user 2008-06-26 at 12:52:18 pm Views: 56
  • #20198
    http://www.businessweek.com/ap/financialnews/D91HBDP00.htm
    HP enticed with $43M to build Ark. facility
    Hewlett-Packard
    Co. was offered more than $43 million in incentives from state and
    local officials to build a new customer and technical service center in
    Conway, according to documents released Wednesday.Details such as the
    number of jobs, average wages and the company’s investment were blacked
    out in a memorandum of understanding between the technology company and
    the state, as well as several attachments. The Arkansas Economic
    Development Commission released the documents to The Associated Press
    in response to a Freedom of Information request.The June 17 memo,
    however, details the the $35.4 million in incentives that the state
    used to lure the Palo Alto, Calif.-based company to Conway for its new
    facility. Officials announced last week that the company plans to open
    the center by the end of 2009 and have its full contingent working
    within four years.Beebe has contributed $10 million from a fund he
    controls to help attract new businesses and help existing ones expand
    to go toward that infrastructure.The document also details $8.3 million
    in incentives that local officials in Conway offered to HP to open the
    new center. The local incentives included $2.1 million for the
    project’s site work and nearly $3 million for transportation corridor
    improvements to the office park where the facility will be located.

    The company has said it will hire 1,200 people for the new center.
    The
    Conway Development Corp. has already announced it will provide a $28
    million, 150,000-square-foot building for HP to lease.The city also
    agreed to a 65 percent abatement on property taxes for the facility if
    HP and the Conway Development Corp. agree — a savings of more than
    $1.8 million over ten years, the agreement said.The state’s incentive
    package included tax credits through the Advantage Arkansas program,
    which provides credits equal to 1 percent of the net new payroll for a
    period of five years with a minimum annual payroll of $125,000.
    Officials blacked out the annual payroll increase and the estimated tax
    credit HP would receive under the agreement.HP will also receive money
    through the Tax Back program, which grants a refund of state and local
    sales and use taxes paid on the purchases of construction materials.
    The company will also receive training assistance, including a
    reimbursement of training investments between $500 and $650 per
    position.State economic development officials have traditionally not
    released documents detailing the incentives offered to companies,
    citing state FOI law exemptions for documents related to a company’s
    planning, site location, expansion, operations, or product development
    and marketing.The incentives agreement includes documents that refer to
    “Project Sigma,” the code name state officials used for the HP center
    before it was announced.Joe Holmes, a spokesman for the Economic
    Development Commission, said the agency decided to release the
    incentive agreement after open records requests were filed following
    last week’s announcement.”This is not something we’ve normally
    released, but when you look at it, there’s very little in there that
    has not been talked about,” Holmes said.

    Most of the information
    withheld from the documents released Wednesday detailed the annual
    payroll, employment figures and some of the specific tax credits HP
    would receive from the state. Beebe has said beginning pay for the jobs
    will start above $40,000.The state also required HP to create a minimum
    number of each year and pay an average salary or else face the
    possibility of paying back part of the $10 million in “quick action
    closing fund” offered.The minimum number of jobs, average salary and
    formula used to calculate any refunds to be paid to the state were
    withheld from the documents released by the agency.Beebe earlier this
    week defended the amount of incentives that were offered to HP.”We
    obviously felt like it wasn’t too much for a project of that size,”
    Beebe told reporters. “They are looking at a $50 million annual
    payroll, that’s five times what the quick action closing fund (will
    provide) in just one year.”