Honeywell is a Fortune 100 Company coming to Charlotte. Here’s what it means.
Changing N.C. law to vastly expand corporate relocation incentives was a critical move for Honeywell before the manufacturing tech giant would commit to moving to Charlotte, newly released documents from the state show.
North Carolina awarded a larger incentives package to win the global headquarters of New Jersey manufacturer Honeywell than the average deal offered by four other states, according to the documents.
In December, North Carolina approved up to $42.5 million in incentives for the Fortune 500 company in exchange for relocating and bringing 750 jobs to Mecklenburg County from 2020 to 2024. The county’s incentives of about $28 million and Charlotte’s $17 million brought Honeywell’s total incentives to more than $87 million.
The other states — Georgia, Florida, South Carolina and Texas — offered packages with an average value of $32.7 million, according to the more than 600 pages of documents, which were provided to the Observer this week through a public records request.
In the other states, Honeywell considered relocating to the metro areas of Atlanta, Houston, Tampa and Orlando, as has been previously reported. In the case of South Carolina, the portion of the Charlotte metro area that extends into that state was among finalists considered by the company, documents show.
The documents did not list the amount of incentives that each of the four states offered. But they provide fresh details into Honeywell’s push for more incentives from North Carolina.
In officially announcing plans Nov. 30 to come to Charlotte, Honeywell said the decision was contingent on the state approving an incentives package.
Three days later, Gov. Roy Cooper signed legislation that more than doubled the amount of incentives the state can offer companies, allowing the state to award a larger grant to Honeywell.
The change lets the state provide firms up to $16,000 in annual tax breaks for every job created, up from the previous cap of $6,500 per job. That same day Cooper signed the bill, Honeywell’s incentives were approved by the N.C. Economic Investment Committee, a body that votes on state incentives packages.
The change in the law was expected to increase the value of the state’s portion of Honeywell’s incentives by $8 million to $10 million, according to an Oct. 12 letter to Honeywell CEO Darius Adamczyk from Cooper, Senate leader Phil Berger, House Speaker Tim Moore, Senate Democratic Leader Dan Blue and House Democratic Leader Darren Jackson.
“We realize that typical incentive strategies do not always suit game-changers like Honeywell,” the letter said. “In order to secure this headquarters operation, each of us will support and work to build bipartisan support” for raising the $6,500 cap, they wrote.
Honeywell continued to press North Carolina for the higher cap, documents show.
For instance, in a Nov. 29 letter, company general counsel Anne Madden told the N.C. Economic Investment Committee that Honeywell’s willingness to move to Charlotte “remains subject to enactment” of the higher cap.
“While Charlotte remains our first choice selection for Honeywell’s new headquarters location, should the state and local incentives not be awarded, we would not commit to go to Charlotte and would instead plan to pivot to our down-selected second or third choice locations, both of which remain viable and attractive choices,” Madden wrote.
The legislation to lift the cap did not pass without opposition.
Republican Rep. Jonathan Jordan had complained on Nov. 29 that the bill appeared “out of thin air” that week. “I just can’t believe we are increasing this amount and going for more money to give to our corporate welfare programs and crony capitalism,” Jordan had said during a committee meeting.
To be sure, North Carolina has awarded incentives packages larger than Honeywell’s. For instance, insurer MetLife was granted $87.2 million in a 2013 package for creating 2,600 jobs in Charlotte and Cary. That award was among the largest in the state’s history.
In relocating from Morris Plains, N.J., Honeywell plans to shift to Charlotte its senior leadership, including the CEO, and support positions, as well as “the most critical strategic and management personnel,” according to applications for state incentives.
The company also plans to establish a hangar at Charlotte Douglas International Airport to house four corporate aircraft and 32 flight and maintenance crew personnel, according to the documents.
Under terms of its state incentives, Honeywell must pay a minimum average salary of $278,560 for the jobs it will create in Mecklenburg County every year over the 12 years of its grant, according to documents. Once the 750 jobs are in place, total compensation for those positions will be more than $261 million a year, the documents say.
Talks between Honeywell and the state began as early as May, documents indicate. The project was referred to as Project Bee by state officials during negotiations.
In its application for North Carolina incentives, Honeywell said it conducted a site-selection process for eight months to identify leading markets for the headquarters, narrowing the list to North Carolina and five other locations.
Honeywell said it was looking for a place that would help it recruit and retain top talent as well as provide competitive cost of living, the highest-quality schools, a low crime rate, efficient transportation access and lower costs of operations, among other things.
“Location factors such as individual tax burden, business tax burden, location attractiveness, and economic development incentives become the critical location variables in differentiating the short-listed locations,” the application said.