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

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

Nordex’s incentives included up to $8 million from the Quick Action Closing Fund, of which $6 million was to go for training, the training facility and site preparation. As of last week, only $2.5 million of that amount had been used.

The city of Jonesboro was approved for $2 million to do rail and road work in connection with the site, but only $1.4 million had been paid out of the fund.

But neither company delivered the jobs it promised, at least not long term. When Nordex made its announcement about stopping production, it had only 50 workers.

It is unclear exactly how many employees HP had at its Conway plant. HP’s spokeswoman said the company doesn’t release employment figures at a specific location.

A spokesman for Nordex didn’t respond to emailed questions.

A Matter of Formulas

The AEDC said that a number of factors are considered during clawback negotiations. The commission looks at how long the employees were employed and what their salary was.

“There’s a different formula for each year,” Holmes said.

The amount due the fund could be prorated. If the money was used to improve the site, such as adding a rail line that could be used for another company, “we do not claw back that portion of the money,” Holmes said.

Nice-Pak was awarded $2.5 million in October 2008. As with other awards from the Quick Action Fund, a check wasn’t written as a lump sum, but paid over time as work was completed, Holmes said.

Nice-Pak was supposed to create 300 full-time jobs but didn’t, which resulted in a clawback payment of $95,736 in January, Holmes said.

Holmes said he couldn’t release more details about the transaction because it is considered proprietary information.

 

 

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