Talecris Biotherapeutics plans to add 259 jobs over the next seven years as part of a $268.7 million expansion of its Clayton drug-manufacturing plant.
To convince the Research Triangle Park company, which recently raised about $1.7 billion on Wall Street, to expand in this region, state and local officials promised a package of tax breaks and other financial aid that could be worth nearly $20 million.
The practice of using such incentives to lure jobs is drawing increasing criticism, especially with the recent news that Dell plans to shut its factory in Winston-Salem, a project subsidized by a record assistance package.
Government officials say they need to use incentives because North Carolina must attract and keep solid employers to bolster its ailing economy.
"The goal is pretty simple: jobs, jobs and more jobs," Gov. Bev Perdue said at a news conference this morning in downtown Clayton.
An expanding biotech company a bright spot for North Carolina in a bad economy and the incentives are important "so that some other state doesn't lure Talecris away," she added.
Talecris' new jobs will pay average annual salaries of $51,066, state officials said. That's above the Johnston County average of $33,800.
Talecris, the state's largest biotechnology company, wants to increase production to meeting rising demand for its drugs made from blood plasma.
The state will give Talecris as much as $3.91 million to create the new jobs. To get that full amount, Talecris will have to create and keep the new jobs and retain its 2,298 existing jobs in the Triangle, including 1,800 at the Clayton plant already.
Johnston County will kick in tax breaks worth as much as $16 million over 10 years said Mike de Sherbinin, an economic development consultant for Johnston County.
Critics argue that handing out incentives to successful, multibillion-dollar corporations wastes taxpayer money. Talecris' stock began trading publicly on Oct. 1 after one of this year's largest IPOs.
"I'm against the state throwing away money they don't need to throw away, not when you're cutting teachers and mental health services," said Robert F. Orr, executive director at the N.C. Institute for Constitutional Law, which has sued the state over incentives given to Google and other companies.
"If a company is well-funded and profitable, why are we subsidizing them?" Orr asked.
One big issue is that government leaders are promising money for potential new jobs, and large corporations could easily revise plans as economic conditions shift. Dell is closing its Winston-Salem factory in January because of weakening demand for desktop computers. The Dell move will cost 900 people their jobs.
Another question is whether companies that get incentives are really considering expanding outside of North Carolina, Orr said. That's one requirement to qualify for state incentives.
Talecris CEO Lawrence Stern declined to comment this morning on where else the company looked. The company chose Clayton because of a quality workforce, the proximity to major universities and money, he said.
"We received very, very good incentives for that alternative site," Stern added. "Clearly, the economic grants were paramount."
N.C. Commerce Department financial analyst David Spratley told state officials this morning that Talecris was looking at sites in Greenville, Anderson and Spartanburg counties in South Carolina.
By choosing its Clayton site now, Talecris also is laying the groundwork for possible future expansion there. Stern has said that the company has plans for three more stages of expansion worth as much as $750 million.
The new facility will separate proteins from blood plasma, one step in turning donated plasma into medicines to treat immune diseases and other illnesses.
Construction is expected to start next year and take several years to complete. The facility will add to a cluster of drug-making activity along U.S. 70 in the fast-growing Johnston County community. Novo Nordisk and Hospira employ hundreds at nearby plants.
In 2005, Johnston Community College also opened a Workforce Development Center nearby. That center will train new Talecris employees. The college has no immediate plans to expand the center, but it is possible moving forward, JCC president David Johnson said.
“We’ll have to see what the demand will be,” he said.
Talecris' investment is the largest from a company in Johnston County’s history, said Wade Stewart, chairman of the County Commission.
Company officials began talking with county leaders six or eight months ago, Stewart said, but county representatives never knew for sure if Talecris was considering expanding elsewhere. And while he said the county might not see financial benefits from the expansion for years, it will be positive in the long run.
“I feel very good about it,” Stewart said.