Wilmington, DE, September 27--Delaware officials disclosed Friday that the state offered Invista $14 million in incentives to keep 350 high-paying jobs in the state, according to DelewareOnline.com.
If finalized, the package would be the largest ever from Delaware's strategic fund, which is used to attract and retain businesses, said Judy McKinney-Cherry, director of the Delaware Economic Development Office.
Invista, the former DuPont Co. textiles and interiors business, must keep the jobs in Delaware for at least six years, McKinney-Cherry said. The jobs also must pay an average salary of $90,000.
Invista announced in June that it would keep the headquarters for some of its operations in Delaware, but the state did not reveal the terms of the incentive package until Friday.
Invista said it considered sites in five countries and four states in a relocation search after DuPont sold the company to a subsidiary of Wichita, Kan.-based Koch Industries in April. Invista officials said the apparel and performance fibers businesses and part of the intermediates business would relocate to the Little Falls Centre office park off Centerville Road west of Wilmington.
"The business-friendly environment, economic development package and the relatively favorable tax climate make Delaware the right choice for Invista," said company spokeswoman Kristin Altimari.
Altimari would not give details on the incentive packages offered by the other states or countries.
Delaware's strategic fund was established under former Gov. Tom Carper, after Playtex Products Inc. approached state officials in 1994 with a $6 million offer from Virginia officials to relocate their tampon manufacturing plant to Richmond. The state's economic development director at the time recommended a $3 million cash payment to keep the company.
The largest overall incentive package in Delaware's history was given to AstraZeneca in 1999. The pharmaceutical company received roughly $400 million in incentives - some in cash but most in land and tax breaks - to locate its headquarters in Fairfax. Nearly all of the incentives came from sources other than the state's strategic fund.
Gov. Ruth Ann Minner said the Invista package is a good investment for the state. "We saved 350 jobs keeping Invista in the First State, and I think that is well worth our investment in time and resources,'' she said.
John Flaherty, spokesman for Common Cause of Delaware, a nonpartisan government watchdog group, said state grants to businesses should be closely scrutinized to ensure that the taxpayers' interests are being served.
"This may be a good idea, and certainly no one would want to see former DuPont employees lose their jobs, but the burden is on the state development office to make the case that this is money well spent," Flaherty said. "I know that there are a lot of small businesses throughout the state that would like to get this kind of attention and assistance, but they're not big enough."
The Delaware Economic Development Office calculated that if the state lost the Invista headquarters jobs, it would lead to a $237 million annual decline in the state's gross product. That figure included not only lost salaries, but also the indirect losses felt by people whose businesses or livelihoods depended on Invista or its employees.
The jobs must stay in Delaware for six years. That figure was chosen because it would take six years for the state to recoup the $14 million in personal income taxes paid by the Invista employees, McKinney-Cherry said. She also noted that while the jobs must average $90,000, the actual annual salaries of many of the jobs are likely to be higher due to bonuses.
