HP, Nordex Expected To Refund Incentive Funds After Failing to Meet Goals

by Mark Friedman  on Monday, Aug. 26, 2013 12:00 am  

If a company doesn’t meet or exceed the minimum number of jobs it promised, then the government agency could claw back some or all — or even all with interest — of the incentive money, Mussio said.

States, however, tend to work with companies to help them though the rough patches.

“We always reserve the right to maybe renegotiate an agreement” to help keep a company in business, Holmes said.

Shortly after the Quick Action Closing Fund was created in 2007, the AEDC began to insert clawback provisions in its contracts with companies that accept the money.

“It’s a mechanism for us to recoup some of the Quick Action monies that are used when things don’t go right,” Holmes said.

Holmes said the clawbacks are mostly used in agreements involving the Quick Action fund because other incentives, such as tax breaks, are performance-based and only realized when a company actually creates jobs.

High Hopes for HP

In June 2008, Hewlett-Packard announced it would open a customer service and technical support center in Conway that would employ 1,200 workers.

These are “the kind of jobs that represent increased earning capacity and wages for the needs and demands of families in today’s society,” Gov. Mike Beebe said during the announcement, held in front of a packed house at the University of Central Arkansas’ Donald W. Reynolds Performance Hall.

The state of Arkansas offered a number of incentives to lure HP to Conway including $10 million from the Quick Action Closing Fund.

It also was a big deal for Arkansas when, just a few months after HP’s announcement, Nordex said it would invest about $100 million and employ 700 people with an average wage of $17 an hour.

“Today we celebrate another important step for our state into the renewable-energy industry with Nordex’s decision to make a significant investment in Arkansas,” Beebe said in a news release at the time. “While we have seen a lot of high-quality jobs coming to Jonesboro in the past few years, Nordex opens up all kinds of future opportunities for northeast Arkansas.”

 

 

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