Sunday, September 16, 2012

Will Treasure Coast company failures have chilling effect on future incentives?

By Eric Pfahler
Posted September 16, 2012 at 4 a.m.


Digital Domain Media Group's shocking bankruptcy Tuesday has left Treasure Coast residents wondering what will happen the next time a glitzy company promises jobs in exchange for land, buildings, tax abatements, millions in incentives and whatever else it can negotiate.

All three counties have had a bankrolled company that failed to reach employment mandates tied to their state and local incentive packages. Though all three examples are different in nature and how they affected their respective community, each company was promised millions, and given a portion of that, before various problems besieged them.

Though Piper Aircraft Co. still employs more than 700 in Indian River County, and American Energy Innovations has repaid Martin County with hopes of moving forward, Digital Domain in St. Lucie County is the first to leave a local government with millions in future bills and the possible loss of more than $7 million in cash incentives.

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Piper Aircraft (Indian River County)

The promise

Expand from 963 to 1,400 employees with $46,500 average salaries through 2015; spend $45 million in capital investments; not relocate to Oklahoma City or Albuquerque, N.M.

The incentives

$12 million from county, $20 million from state

The outcome

Announced in October the indefinite suspension of Piper Altaire light business jet program, saying small airplane sales had shrunk.

The fallout

The governments are negotiating whether Piper will return some of the county's $4 million and the state's $6.7 million. Piper employs 730 today, 233 fewer than before, but noted it maintained an average payroll of $40 million annually from 2008-11 and has met capital improvement requirements.

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