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.’”
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 know?” 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.”