County approves revised incentive agreement with Linamar

RETOOLING: Former Gov. Bev Perdue announces Linamar’s Asheville expansion in 2011 at the Grove Park Inn. Buncombe County commissioners entered into a revised agreement with the company on April 2 after Linamar fell short of investment and job creation goals associated with economic development agreements from 2011 and 2014. Photo by Jonathan Welch

As a result of the Great Recession — which began in December 2007 and ended in June 2009 — Buncombe County lost 10,000 jobs in the metro area, according to Tim Love, the county’s director of intergovernmental projects.

About 230 of those jobs went away when Volvo Construction Equipment relocated its Asheville-based positions to other Volvo facilities in North America in March 2010. In addition to the lost employment, the county also saw almost $300,000 in annual property tax revenue dry up.

Linamar, which manufactures automobile parts, moved into the 2169 Hendersonville Road facility soon after Volvo’s departure. To induce $315 million of investment and the creation of 800 jobs at the facility, Buncombe County entered into economic development agreements with Linamar in 2011 and 2014.

However, the county says Linamar has fallen short of the goals outlined in those deals.

“Due to some economic constraints and challenges, mainly the closing of the Caterpillar business in our region, Linamar has faced some challenges with meeting growth targets in the economic agreements they entered into with us,” Love told the Buncombe County Board of Commissioners during a meeting on April 2. “They’ve been forthright in that.”

Commissioners unanimously agreed to enter into a modified economic development agreement with Linamar, which the county believes will enable the business to meet its targets by 2024.

Under the terms of its 2011 agreement, the company was required to invest $125 million and create 400 jobs at the Hendersonville Road facility by the end of 2020 to qualify for a $10 million economic development incentive. In exchange for an extra $9 million incentive, a 2014 agreement committed the company to an additional $190 million investment and 400 additional new jobs by the end of 2021.

Ken McDougall, the company’s president of machining and assembly in America, tells Xpress Linamar’s first agreement with Buncombe County was based on a contract to produce diesel engine components for construction equipment manufacturer Caterpillar. When Caterpillar pulled out of the deal, Linamar had trouble meeting the county’s benchmarks, McDougall says, but the company has since found new business to fill the gap. He says he’s still looking for new contracts to keep the site — one of five the company operates in the state — humming with activity. “We’ve got a lot of people excited about the location,” he says.

The county began holding off on making incentive payments in 2017 after Linamar failed to prove it had met the agreed-upon benchmarks of 152 new jobs created and $143 million invested in capital projects by that point in the agreement, Love said.

As of last month, the company had created 300 jobs and invested $141 million in its facility. Love noted that the average wage of those jobs, $51,000, is considerably higher than the expectation set by the county of $39,000.

The revised agreement merges the investment and job creation goals into a single document and keeps the total value of incentives that Linamar will receive unchanged. Out of $19 million promised, the county has disbursed $13 million so far.

Changes in the new agreement include an increase to the average wage goal from $39,000 to $43,600 and an extended timeline that runs to 2024. The remaining $6 million of incentives will be paid in annual, $1 million increments over that six-year period.

Since 2011, the business has generated $1.8 million in property tax revenue and $600,000 of revenue in other local taxes. In the future, the county anticipates the company will generate between $400,000 and $500,000 in property taxes per year, according to Love.

Clark Duncan, the executive director of the Economic Development Coalition of Asheville-Buncombe County, pointed out that Linamar has created more jobs than were lost when Volvo Construction Equipment left its Skyland facility in 2010.

“I’m really pleased to hear tonight that they’re affirming their plans to scale that high-potential facility to more than 800 jobs here in our community,” he said, “and that’s something we’re here to celebrate.”

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About David Floyd
David Floyd was a reporter for the Mountain Xpress. He previously worked as a general-assignment reporter for the Johnson City Press.

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2 thoughts on “County approves revised incentive agreement with Linamar

  1. Enlightened Enigma

    why there’s Dumplin’ and David Gantt in the same photo… two of a kind.

  2. Lulz

    LOL the crooks do the same for those that can’t pay their taxes? Of course not. Linamar can’t meet the terms of the agreement, well the county just gives them more time. It’s all a joke.

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