Buncombe County’s political and business elites gathered at the Grove Park Inn on Oct. 22 to crow over what they called the region’s biggest-ever economic coup: a $650 million investment by aerospace manufacturer Pratt & Whitney in a new manufacturing facility to be located on undeveloped forestland alongside the French Broad River near Biltmore Park.
It wasn’t until a Board of Commissioners briefing on Nov. 5, however, that Buncombe officials revealed the potential price of their success. Under the terms of a proposed economic development incentive agreement, county taxpayers would subsidize Pratt & Whitney — a division of military contractor Raytheon Technologies, a Fortune 50 company with revenues of over $77 billion last fiscal year under the leadership of CEO Gregory Hayes, whose total compensation was $21.5 million in 2019 — to the tune of $27 million.
The deal will not be finalized until the board’s next meeting at 5 p.m. Tuesday, Nov. 17. The commissioners will vote on whether to approve the incentive following a public hearing, which will likely be held virtually due to the COVID-19 pandemic.
Tim Love, Buncombe County’s director of intergovernmental relations, explained that the incentive would be paid in annual installments over at least 10 years. The money would also be tied to the company’s fulfillment of promised targets regarding jobs, capital investment and average wages. Pratt & Whitney has agreed to create 800 jobs with an average annual wage of $68,000, more than double the county’s per capita income as of 2018.
The amount of the incentive, added board Chair Brownie Newman, was designed to be revenue-neutral for the county. Pratt & Whitney is expected to pay roughly $2.5 million annually in property taxes on its facility’s equipment, as well as excise taxes on the value of the 100-acre site that it will receive for $1 from Biltmore Farms. The county’s incentive is estimated at $2.6 million per year.
Love stressed that, while the county won’t see a net property tax gain from Pratt & Whitney over the period of the incentive, local residents would immediately benefit from over 1,000 temporary construction jobs created to build the facility. And, once fully operational, the plant is expected to have an area payroll impact of $74 million per year, some of which would be spent in the local economy.
“There’s going to be benefits when we talk about corporate philanthropy, hiring practices, competitiveness in our region,” Love added. “We think there are a lot of indirect benefits that are important to note that we’re not going to quantify for you today.”
If approved, the county’s incentive to Pratt & Whitney would be its largest to date by $8 million, exceeding a $19 million total subsidy to Canadian auto parts maker Linamar. The county’s largest economic development deal with a local company has been a roughly $3 million subsidy to Black Mountain-based Ingles Markets arranged in 2010.