Fidelity Invokes Little Rock as Leverage in Florida

by Chip Taulbee  on Monday, Sep. 19, 2005 12:00 am  

Arkansas has reportedly put a $22.2 million incentive package on the table for Fidelity National Financial Inc. in exchange for 800 new jobs.

The package signals a tightening of competition between Little Rock, which is already home to some 1,100 employees of the company's Fidelity Information Services unit, and the Fortune 500 company's Jacksonville, Fla., headquarters. Jacksonville has its own $10.5 million offer to get the new positions, and earlier in the year it was the recipient of dozens of Fidelity jobs moved from Little Rock.

As both cities court the new jobs, Fidelity has not been shy about playing one off the other in order to get the best possible deal.

Little Rock's incentive package was revealed at an Aug. 23 Jacksonville City Council meeting by Ginny Myrick of Holland & Knight, a law firm that represents Fidelity. Myrick was using Little Rock's reported offer as leverage to persuade the council to approve $10.5 million in incentives from Jacksonville and the state of Florida. The council approved.

Arkansas Business acquired a written copy of Myrick's presentation that outlined the incentives, the vast majority of which were to come from Arkansas' Create Rebate program.

Myrick, who could not be reached for comment, reported to the council that Fidelity could rake in more than $18.5 million in tax rebates over 10 years if the company increased its Arkansas payroll by $2 million over two years.

Other incentives would come from the Advantage Arkansas tax credit program, the Investment Arkansas credit on sales and use tax program, training incentives, infrastructure improvements from the city of Little Rock, and economic development incentives from the Fifty for the Future organization.

Despite the documentation by Fidelity's lawyer, Fidelity spokeswoman Michelle Kersch said she was not aware of any negotiations with Little Rock or Arkansas. And Mitch Chandler, communications section leader for the Arkansas Department of Economic Development, followed the department's policy of refusing to confirm or deny negotiations between the state and any particular company.

Chandler did, however, say the state would make efforts to keep Fidelity jobs in Little Rock and to add more.

"It's important for us to keep Fidelity here," Chandler said. "We want to keep those jobs. They're high-paying jobs. They're important jobs to our community. They have been for a long time."

Whether Fidelity is considering adding any jobs to its Little Rock campus is unknown; however, its Information Services unit grew last week in a merger with check authorizing provider Certegy Inc. of St. Petersburg, Fla. Certegy has more than 5,000 employees worldwide, but it remains to be seen whether any of them will be relocated as part of its merger with Fidelity.

The homegrown Fidelity Information Services was founded in 1968 by Jack Stephens and Walter Smiley as Systematics. Later it became Alltel Information Services, and then became Fidelity Information Services in 2003 when it was sold to Fidelity National Financial.

Bruce Moore, Little Rock city manager, said the city would do what it could to keep Fidelity jobs in Little Rock and even add more; however, Moore denied there had been any negotiations with Fidelity.

"To characterize it as starting negotiations would be a little off," Moore said. "We've had continual dialogue with the leadership of Fidelity for a period of time."

Moore would not detail what efforts the city made to keep Fidelity from moving jobs from Little Rock to Jacksonville earlier this year, but he did say that they had "dialogue."

In January, Arkansas Business reported (here and here) — citing unnamed sources — that Fidelity was on the verge of eliminating about 100 technical support jobs with average salaries of at least $50,000 in Little Rock.

At the time, company officials, including Kersh and Harold Fackler, senior vice president of Fidelity Information Services, denied any knowledge of jobs leaving Little Rock. But in February, the company told its Little Rock employees that some of their jobs were being relocated to Jacksonville or being eliminated as part of a "reduction in force."

Fidelity has never reported the number of jobs that were moved. They also did not respond to numerous requests for a count of Little Rock employees. The Little Rock Regional Chamber of Commerce, however, reported that figure to be 1,100, citing Fidelity.

Fidelity's last round of talks with Jacksonville netted it a $12.5 million incentive package in exchange for the company moving its headquarters from Santa Barbara, Calif., to Jacksonville.

According to Ginny Walthour of the Jacksonville Economic Development Commission, Fidelity is still mulling Jacksonville's most recent offer. Walthour also said Little Rock and Jacksonville were the only places she was aware of competing for the new Fidelity jobs.

 

 

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