Part and parcel

Manufacturing a deal: The Buncombe County commissioners approved a big economic incentives package to ensure Linamar Corp. operates locally. Pictured here: Linamar’s Vice President for Global Sales, Nick Adams, announces the deal with county, city and state officials at the Grove Park Inn. Photo by Jonathan Welch

The Buncombe County commissioners unanimously approved a $10 million economic-incentives package for Linamar Corp. July 26, as part of an agreement with the Canadian auto-parts manufacturer announced last month.

On June 28, the commissioners agreed to buy the former Volvo plant in Skyland for $7 million. Two days later, they announced plans to sell the 65-acre site and 405,108-square-foot building to Linamar. The company will buy the property early next year, leasing it from the county in the meantime for about $548,000. The $8 million purchase price will include the lease payment.

As part of the deal, Linamar agreed to invest $125 million in the facility and create at least 400 full-time jobs with an average wage of roughly $39,000 per year — about $5,000 more than the county’s current annual average.

In exchange, the county will give the company $10 million in incremental grants over the next three years. The money will be forfeited if the company doesn’t fulfill its obligations by Dec. 31, 2020. And the increased property-tax revenue the county will receive over the next 10 years is projected to exceed $10 million, noted County Manager Wanda Greene, who served as the county's chief negotiator.

The deal "is just a great thing for our community,” she told the commissioners. "We wanted to be flexible: We wanted them to be in Buncombe County, and we wanted to do whatever it took to get them here and grow these jobs for our citizens."

The city of Asheville plans to reimburse the county to the tune of $2.2 million; the state has also committed $2.7 million in grants plus $5.5 million in tax credits.

The real estate purchase and incentives package were key to closing the deal, said Greene, revealing that the county faced fierce competition from Winston-Salem and Greenville, S.C.

"From our discussions, we knew that speed to market was going to be critical, and we knew that having the facility ready at the Volvo plant was going to be our biggest way to deliver that critical component to them," the county manager explained. Praising the commissioners, she added: "It took a lot of political courage to go buy a building when there's a global financial crisis going on and not be able to tell the public why you're doing that. So I applaud you for taking that risk."

Board Chair David Gantt hailed Commissioner K. Ray Bailey's role in bringing the deal to fruition, saying his "fingerprints are all over this. … This wouldn't have happened without K. Ray Bailey." And Bailey, who chairs the Economic Development Coalition, gave the nod to Greene, saying, "I think we all know and appreciate the great work she's done."

Bailey also raised the prospect of the company’s expanding the facility in the near future. "One of the reasons they want that property is because of the additional acreage and the way they like to cluster," he said. "I think, in real numbers, there will probably be 800 to 1,000 people employed there not too long from now."

More than 700 people attended the company's job fair earlier this month, noted Greene, and Linamar has been conducting interviews since then. Only three nonlocal employees will work at the plant, she said.

Meanwhile, Commissioner Carol Peterson cited an economic "ripple effect," saying, "If you just drive down Hendersonville Road, you'll see on all the restaurants, 'Welcome Linamar.'"

Seeing red

Several residents weighed in during a pair of public hearings: one on the real estate deal, the other concerning the cash incentives. The few who spoke peppered the commissioners with a mix of praise and pointed questions.

In response to Commissioner Holly Jones' comment that the deal demonstrated the county's ability to "roll out the red-carpet treatment for business rather than the red tape," Candler resident Linda Southard implored the board to use that approach more often, saying, "Wouldn't it be nice if we did that for everybody and let the free market decide who should be here and who shouldn't be here, instead of all the regulations that might put people off and prevent them from coming?"

Lisa Landis of Pisgah Forest pointed out that those numbers don’t mean the typical worker will earn $39,000 per year, because highly paid management could skew the average salary.

And longtime county watchdog Jerry Rice handed out copies of a 2006 Associated Press story reporting that Volvo was planning to double its employment at the Asheville facility in exchange for as much as $10.6 million in city, county and state incentives.

"How does that money look now?" the Candler resident asked, noting that the company had shut down its local operations last year.

Commissioners and staffers alike defended the current arrangement, however. reiterating the $39,000 average wage, Greene explained: "The breakdown of the salaries isn't available. They're trade secrets, and we're not able to release those."

Gantt, meanwhile, stressed that the deal includes strong taxpayer safeguards in case Linamar fails to uphold its end of the bargain.

"If the incentive benchmarks haven't been met, there have been times in our history when we have not given payments," he reported, saying that was the case with Volvo. "I don't think we'll have that problem here, but we do have precedent for that."

— Jake Frankel can be reached at 251-1333, ext. 115, or at jfrankel@mountainx.com.

SHARE

Thanks for reading through to the end…

We share your inclination to get the whole story. For the past 25 years, Xpress has been committed to in-depth, balanced reporting about the greater Asheville area. We want everyone to have access to our stories. That’s a big part of why we've never charged for the paper or put up a paywall.

We’re pretty sure that you know journalism faces big challenges these days. Advertising no longer pays the whole cost. Media outlets around the country are asking their readers to chip in. Xpress needs help, too. We hope you’ll consider signing up to be a member of Xpress. For as little as $5 a month — the cost of a craft beer or kombucha — you can help keep local journalism strong. It only takes a moment.

About Jake Frankel
Jake Frankel is an award-winning journalist who enjoys covering a wide range of topics, from politics and government to business, education and entertainment.

Before you comment

The comments section is here to provide a platform for civil dialogue on the issues we face together as a local community. Xpress is committed to offering this platform for all voices, but when the tone of the discussion gets nasty or strays off topic, we believe many people choose not to participate. Xpress editors are determined to moderate comments to ensure a constructive interchange is maintained. All comments judged not to be in keeping with the spirit of civil discourse will be removed and repeat violators will be banned. See here for our terms of service. Thank you for being part of this effort to promote respectful discussion.

Leave a Reply

To leave a reply you may Login with your Mountain Xpress account, connect socially or enter your name and e-mail. Your e-mail address will not be published. All fields are required.