Red Hat plans on sticking around the Triangle and will create hundreds of high-paying jobs over the next decade.
State officials approved two grants for the Raleigh software company today. The first, worth up to $6.75 million, calls for Red Hat to create 240 jobs over the next four years with average annual salaries of $80,525.
The second will be worth up to $11.02 million, and is tied to Red Hat creating 300 more jobs over a 5-year period beginning in 2015.
The grants require Red Hat to expand in Wake County, but it's not clear whether the company has picked a location.
State officials scrambled when Red Hat began considering larger space for its rapidly expanding headquarters last year. In addition to looking at expansion at its current facilities at N.C. State's Centennial Campus, Red Hat looked at other locations in the Triangle, Boston, Atlanta and Austin, Texas.
The company is looking to build between 300,000 and 400,000 square feet of office space to meet its needs. About 700 of Red Hat's roughly 3,600 employees are in Raleigh.
The grants require the company to retain those employees.
Red Hat is considering a number of locations in Wake County, including Perimeter Park in Morrisville, Raleigh's North Hills, N.C. State's Centennial Campus and multiple sites in downtown Raleigh.
The company currently leases 188,000 square feet on Centennial Campus, two-thirds of which is leased through 2020.
What happens with those leases will likely be a major factor in where Red Hat ends up locating.
It could try to sublease the space or N.C. State may be open to taking some of it.
Incorporating the leases into a relocation agreement would be difficult given lenders current skittishness about commercial real estate.
The size of Red Hat's proposed expansion, and the fact that so little new office space is being built, has made the project much coveted by local developers.
Those who submitted proposals to the company have heard little back. Today's announcement does take one option off the table: American Tobacco Campus in downtown Durham.
Jim Goodmon, CEO of Capitol Broadcasting, the owner of American Tobacco, had made no secret of his desire to lure Red Hat to Durham.
Business reporter David Bracken came to the N&O in 2004. He covers commercial and residential real estate. Contact David at 919-829-4548 or
Comments
Who's Your Momma?
Mon, 01/10/2011 - 19:58 — gmonet46One more company I own! Thanks to Beverly Purdue and Barack Obama...my portfolio looks good on newspaper!
Not Just Dems
Tue, 01/11/2011 - 04:03 — msshainCome on, get real, if you want to point fingers, the Repubs are actually worse than the Dems at being swayed by business interests and supporting corporate welfare. While it may be an ordained fact among some that Obama is a socialist as well as a foreigner and a muslim, I did not realize that he was a corporate pimp as well. For that matter, I guess he is responsible for these winter storms.
That said, Perdue looked pretty foolish in that big red hat. It is nothing to celebrate for the state to be taken to the cleaners just not to be forced to lose an ongoing business. It is analogous to paying protection money to the Mafia.
Now it gets political?
Tue, 01/11/2011 - 17:52 — gmonet46C'mon get real...Perdue and Obama are Democrats who happen to be in charge here...but you make it I was slamming Dems...I'd have called a Repubican out had they made the same decision to spend my money for government involvement in any company. You see things through partisan glasses obviously, and I cannot argue with that.
Plenty of space downtown
Mon, 01/10/2011 - 19:55 — breining24The Progress Energy building should have plenty of space for Red Hat when all of the jobs move to Charlotte.
The Math
Mon, 01/10/2011 - 18:29 — msshainSo, if Red Hat creates the job it says and then receives the ransom from the state, that averages out to 30K per job. I had a small business for fifteen years in the Triangle and created about the same pay/job equivalent for several dozen people, but I forgot to demand my cool Mil not to bail out of the state, oops
The Math
Mon, 01/10/2011 - 18:29 — msshainSo, if Red Hat creates the job it says and then receives the ransom from the state, that averages out to 30K per job. I had a small business for fifteen years in the Triangle and created about the same pay/job equivalent for several dozen people, but I forgot to demand my cool Mil not to bail out of the state, oops
IBM is Next?
Mon, 01/10/2011 - 17:55 — BourbonStHow much will IBM extort from the state should they decide to leave?
Red Hat
Mon, 01/10/2011 - 17:17 — cheesedadWhile some may oppose providing grants to companies to come/stay in NC and add jobs, it is a necessary evil. We are in a marketing / sales war with every other state.
Most important is to keep local companies local. These grants to Red Hat to expand will provide hundreds of high pay jobs to Wake County residents. Their income taxes and the increased real estate taxes Red Hat will pay on their expansion will repay us handsomely.
@JoeTarheel
Mon, 01/10/2011 - 17:13 — TheLibertineIt's not "corporate incentives," Joe, it's CORPORATE WELFARE and it has to stop!
Corporate incentives-necessary evil
Mon, 01/10/2011 - 16:59 — JoeTarheelFolks,
While many of you clearly do not like the 'incentives' programs for North Carolina, I can assure you that you would like even less when NC companies continuously pack up and move to more 'aggressive' states.
Corporate incentives, while you may not like them are done in virtually (if not all) states in the US. I can assure you if NC did not pony up, Texas and Georgia would have. That's nearly 1000 jobs plus corporate taxes, etc.
If you don't 'pay up', someone else will and you will be complaining about unemployment figures in Raleigh and NC. Which one is worse?
Does not make it right. We
Mon, 01/10/2011 - 18:15 — msshainDoes not make it right. We cut back on welfare back in the Clinton years, why not corporate welfare nationally? Red Hat got an absurd IPO during the dot.com years and had a 18 Billion dollar evaluation at one point with only 10 Million yearly, okay good for them. They stashed away plenty and still have over a Billion in cash. Then they hit up the state that launched them so successfully for 18 Million so they won't it during these economic times when we are struggling not to lay off more teachers, cutting public staff and programs. SHAME ON YOU, REDHAT, greedy bloodsuckers !!
Good Riddance, Red Hat!!!
Mon, 01/10/2011 - 16:30 — BourbonStRed Hat is a relative newcomer to the area, and if the company is not happy here, there will be absolutely no love lost if Red Hat leaves. A few million dollars in payoff money to Red Hat by the state and/or county shouldn't make a dime's worth of difference in their staying or not staying. This reminds me a little of a 21 year old kid telling his/her parent that they're going to leave home if the parent doesn't buy him/her a new car. Red Hat grew up in this area, and if it's their time to fly the coop, I'd tell them the same thing I'd tell my kid "Good Luck, and Good Riddance!"
What a con game
Mon, 01/10/2011 - 15:56 — mountainboyShame on the state for paying this extortion and shame on the company for playing this childish scam. This the private sector's version of "pay-to-play".
Here we go again with the corporate welfare!
Mon, 01/10/2011 - 15:48 — GordonTrenchardDoes anyone the remember all the public money thrown at Dell to run an operation here? And how the whole thing blew up? Just read a story today about how there is a lawsuit in front the Court of Appeals because of a bunch of money thrown at Johnson & Wales to build there? Where does it all stop? What exactly is the criteria for this?
If a company is here and they threaten to move away is that justification to throw money at them? What about small companies? Why does Redhat get grants and not other companies in this area? It is the same old, same old.