The issue: Yokohama has opened a Cornelius facility
Back in April, Yokohama Tire Corporation announced plans to establish a technology research and development center in Cornelius. It is the North American manufacturing and marketing arm of Yokohama Rubber Co., which is based in Tokyo and is an international tire manufacturing and sales company. The company's product line includes tires for high-performance, light truck, passenger car, commercial truck and bus, and off-the-road mining and construction applications, according to a news release from the time of the announcement. The facility is now located in the Legacy Pointe development off Bailey Road, but it was stated to be contingent upon approval of a business investment program grant by the Mecklenburg County Board of Commissioners and an economic development incentive grant by the Cornelius Town Board of Commissioners.
What happened: The town approved the incentive grant
The Cornelius Board of Commissioners held a public hearing during its Sept. 17 meeting regarding the economic development incentive grant before unanimously approving the measure. According to Deputy Manager and Planning Director Wayne Herron, the company has already moved into its new home. Part of the agreement states there must be job creation of 45 or more full-time jobs with a wage rate of at least $80,000 by Dec. 31, 2021. The investment grant is for a period of five years and is to be equal to 90 percent of the new ad valorem tax revenue. Herron’s documents show the total five-year estimated Cornelius taxes for the property is just under $66,000 with the five-year net revenue estimated to be $6,594.18. Herron advised that each year the tax assessor will verify the tax value, which means the grant could be worth more or less.
What it means: They have to stick with their deal or pay it back
Lake Norman Economic Development Director Ryan McDaniels told the board, when asked, that the number of jobs expected to be created by the agreement is more than double what is typically required. Not all of them are brand new for the company, but rather some jobs already existed when it was initially set up near UNC-Charlotte. But relocating creates jobs in the Lake Norman area. However, if the job creation and salary expectations aren’t met, the company will have to pay back the Cornelius property tax grant funds. According to town attorney Karen Wolter, the clawback required by the state is 100 percent if the company closes or moves within five years. There is a sliding scale for the business investment program returns if the company were to remove 50 percent or more of the investment within five years after the end of the incentive program, according to the contract. Wolter assured Commissioner Kurt Naas it was a “very healthy clawback” in response to Naas’ concern that “we are not going to get Chiquita’d on this,” referencing how the banana company closed its headquarters during the time it was in an economic development grant program with the City of Charlotte and the state of North Carolina.
What’s next: Other companies have considered incentives.
Yokohama is also seeking an economic development incentive from Mecklenburg County. The matter is slated to go before the county board at its Oct. 2 meeting. Herron told Cornelius commissioners it is also for five years at 90 percent. The new Cornelius company isn’t the only one that has sought these sort of incentives from the town. Herron told the board the former Curtis Screw plant, now MacLean Curtis, had previously been approved for an incentive program but had never collected on it. It has since relocated to Mooresville. He added that Olde Mecklenburg Brewery is in the process of creating a new and separate incentive agreement with the town, but it has not come before the board for approval.