The Arkansas Economic Development Commission said Thursday that Danish manufacturer LM Wind Power, which operates a plant in Little Rock, has repaid the state $3.4 million in incentives following a review that indicated the company had not met specified employment goals.
The company received $6.9 million from the Governor's Quick Action Closing Fund in 2007 on the condition that it meet certain employment goals, including having 1,100 employees in Little Rock by this year.
AEDC spokesman Scott Hardin said LM employs about 520 at its Little Rock facility, which makes wind turbine blades. He said the agency worked closely with LM over the past few months to determine how much the company would have to repay.
The $3.4 million figure takes total employment and payroll into account, he said.
"It was determined in mid-November the amount the company would provide back was $3.4 million," Hardin said. "On Nov. 18, AEDC and LM Wind Power signed an agreement confirming $3.4 million was the correct amount. The funds have already been recaptured by the state.
"Although LM is not operating at the employment level the company originally announced in 2007, AEDC is encouraged the company still employs more than 500 people in a volatile wind energy market," he said.
AEDC has worked out similar deals with other companies that have failed to meet employment goals. Last year, Nordex USA returned $2.5 million in state grants after it ceased production at its Jonesboro wind turbine manufacturing plant.
Hewlett-Packard, Allied Wireless, Nice-Pak and Pinnacle Foods paid back incentive money to the state in 2013 as well.
- $6.9 million from the Governor’s Quick Action Closing Fund.
- $8 million from the EIF (Economic Infrastructure Fund), which was used for infrastructure such as roads and parking.
- Corporate income tax exemption for wind-power manufacturers (as passed by the Arkansas Legislature).
- Tax Back (refund of sales taxes paid during construction) and Create Rebate (cash rebate of a percentage of overall payroll) funds. The cash rebate is equal to 5 percent of overall payroll for the Little Rock facility.