Title
Allstate Insurance Company Business Investment Grant
Action
Action:
A. Conduct a public hearing regarding approval of a Business Investment Grant to Allstate Insurance Company, and
B. Approve the City’s share of a Business Investment Grant to Allstate Insurance Company for a total estimated amount of $741,539 over five years.
Body
Staff Resource(s):
Patrick Mumford, Economic Development
Kevin Dick, Economic Development
Explanation
§ On August 9, 2017, Allstate Insurance Company announced its selection of Charlotte for a capital investment of $34.7 million to expand and establish a major regional operations center in Charlotte.
§ Staff is requesting City Council approve a Business Investment Grant estimated to be $741,539 over five years. Mecklenburg County’s share is estimated at $701,986.
- On July 24, 2017, the City Council, in Closed Session, indicated its intent to approve a Business Investment Grant to Allstate.
- On August 2, 2017, the Mecklenburg County Board of Commissioners, in Closed Session, indicated its intent to approve a Business Investment Grant to Allstate.
- The total City/County combined grant is estimated to be $1,443,525 over five years.
- In addition to the grant for the expansion, the State of North Carolina also approved a Job Development Investment Grant in the amount of $16.8 million and $3,150,000 in community college training funds.
§ In addition to the $34.7 million capital investment, Allstate has committed to:
- A minimum of 2,000 jobs to be hired locally over five years with an average wage of $46,813 (94% of regional average wage)
- 1,444 current employees in Charlotte to be retained for the term of the grant
§ Additional benefits also include:
- Workforce development partnerships and relationships with the company can be utilized to connect talent to available positions
- The project’s alignment with:
§ City Values and Winning Cities characteristics
§ Letter to the Community (Good Paying Jobs)
§ Equitable Economic Development and Economic Opportunity
• Diversity of jobs on proposed project
• Job retention through corporate expansion
• Growth industry with significant job and contracting opportunities
Background
§ Headquartered in Northbrook, Illinois, Allstate was founded in 1931, after a spin-off with Sears and Roebuck. The company provides hazard insurance and other financial products and services through the Allstate, Esurance, Encompass and Answer financial brands. The company currently employs 1,444 people at its Charlotte operations center at 7345 IBM Drive in North Charlotte (District 4).
- Company plans to lease additional office space or build-to-suit at the company’s current location on IBM Drive (Innovation Park) or an alternative site located near a light rail station. The company will also lease office space in the uptown area.
- All prospective locations are expected to be within the Business Investment Zone.
Business Investment Grant
§ Request meets the City Council approved criteria for a five-year, 90 percent local business expansion grant.
§ The general terms and conditions of this grant include:
- The company will be asked to coordinate job fairs and recruitment events for both temporary and permanent jobs with the City and County. Community organizations and residents will receive ample notice of these employment activities in addition to training opportunities with City job training and placement partnerships.
- Actual grant payments are based on the value of the investment as appraised by the Mecklenburg County Tax Office.
- Property taxes due from Allstate must be paid before a grant payment is made.
- If Allstate removes the investment from Charlotte during the grant term, it shall pay back 100 percent of the investment grant paid to date.
- If Allstate moves the investment from Charlotte within five years of the end of the Business Investment Program (BIP) grant term, a portion of the grant must be repaid as follows:
§ Within One Year of the end of the BIP Term - 90 percent of grant payments
§ Within Two Years of the end of the BIP Term - 75 percent of grant payments
§ Within Three Years of the end of the BIP Term - 60 percent of grant payments
§ Within Four Years of the end of the BIP Term - 45 percent of grant payments
§ Within Five Years of the end of the BIP Term - 30 percent of grant payments
Fiscal Note
Funding: Business Investment Grant