In a controversial decision, the city of Charlotte will pay a defense manufacturer $875,000 – along with $732,000 in city and county tax rebates – to bring an aerospace headquarters to Charlotte.
Hartford, Conn.-based United Technologies announced plans in 2011 to buy Charlotte-based Goodrich Corp, a manufacturer of aerospace parts and technology for civilian and military planes. United Technologies has said it will combine Goodrich with another business, Hamilton Sundstrand, for a new aerospace division office.
The company considered Northern Virginia, West Palm Beach, Fla., and Charlotte. The city said the company picked Charlotte in part because of money the city offered.
United Technologies, in an email to the Observer, also said the “aerospace talent at Goodrich” was a primary reason for the move.
The City Council approved the incentives June 25 in a 6-5 vote. Voting against paying the company were Republican Warren Cooksey, and Democrats John Autry, Michael Barnes, Patsy Kinsey and LaWana Mayfield.
The vote was close because the incentive package is a break with typical Charlotte policy.
For business relocations or expansions, the city usually offers what’s known as a Business Investment Grant. Once a company’s capital investment has been made, the city gives the company up to 90 percent of the property taxes it would be scheduled to pay.
But last year, the city broke with that policy when, along with the county and state, it offered Chiquita Brands International nearly $5 million, which the company said it needed to cover moving expenses. At the time, some council members warned it would set a bad precedent and that other companies would seek similar deals.
In an interview Monday, Cooksey said United Technologies has roughly $6 billion in reserves, and “this doesn’t strike me as being necessary.”
During the June 25 meeting, Kinsey said “they are asking for a lot of money ... and they are very wealthy.”
In addition to the city and county incentives, the state is kicking in $2.5 million, as part of a One North Carolina grant.
Autry said he was voting against the deal mostly because United Technologies is a defense company. “I’d like to see businesses (come to Charlotte) that ... aren’t destroying parts of the world,” he said.
City information on the deal says the company will invest no less than $4 million in new taxable property and will create 325 full-time jobs, with an average wage of $200,000.
Goodrich today employs 200 people in Charlotte. The city said it expects about 100 Charlotte-based employees to remain in the new division headquarters.
Brad Richardson, the city’s economic development director, told council members that United Technologies will most likely move into the existing Goodrich building on West Tyvola Road, near Charlotte Douglas International Airport. The company said it will spend $4 million on taxable improvements.
The deal has provisions that give the city some insurance.
Among them: United Technologies must establish its division headquarters within 12 months; the headquarters must remain in Charlotte for 10 years; the company must keep at least 90 percent of planned jobs.
This division headquarters will be the company’s first outside of Connecticut.
Products made by the new United Technologies Aerospace Systems unit will include landing gear, wheels and brakes, propeller systems, fire protection systems, engine components, electric systems, aircraft interiors, air management systems, sensors and space systems, according to an email from the company.
Council members voted on the deal after a marathon budget meeting and had little discussion on the issue. They discussed it in more detail during a May 14 closed session meeting, but the city clerk’s office hasn’t transcribed what happened in that meeting.
