Title
AXA Equitable Life Insurance Company Business Investment Grant
Action
Action:
A. Conduct a public hearing regarding approval of a Business Investment Grant to AXA Equitable Life Insurance Company, and
B. Approve the City’s share of a Business Investment Grant to AXA Equitable Life Insurance Company for a total estimated amount of $486149 over seven years.
Body
Staff Resource(s):
Patrick Mumford, Economic Development
Kevin Dick, Economic Development
Explanation
§ On May 9, 2017, AXA Equitable Life Insurance Company (AXA announced its selection of Charlotte for an investment of $17.2 million for the expansion of its regional headquarters in Charlotte.
§ Staff is requesting City Council approve a Business Investment Grant estimated to be $486,149 over seven years. Mecklenburg County’s share is estimated at $460,218.
- On May 2, 2017, the Mecklenburg County Board of Commissioners, in Closed Session, indicated its intent to approve a Business Investment Grant to AXA and held a public hearing on Tuesday, June 6, 2017.
- On May 8, 2017, the City Council, in Closed Session, indicated its intent to approve a Business Investment Grant to AXA.
- The total City/County combined grant is estimated to be $946,367 over seven 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 $11.8 million and $935,000 in community college training funds.
§ In addition to the $17.2 million capital investment, AXA committed to:
- 550 new jobs over five years with an average annual wage of $95,000 (191 percent of the regional average wage).
- 315 of the new positions are expected to be hired locally
- 580 current employees in Charlotte to be retained for the term of the grant
§ Additional benefits also include:
- Workforce development partnerships and relationship with 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
§ AXA, headquartered in New York, was founded in 1859 and provides life insurance, annuities, and other financial products and services. AXA currently employs 580 people at its Charlotte operations center. With the addition of 550 new jobs, the location will become AXA’s largest operation center in the United States.
- The company plans to lease an additional $147,000 square feet of office space for a ten-year term at 8501, 7201 and 7207 IBM Drive in the University City area. The company will invest $17.2 million for leasehold improvements, machinery, and equipment.
- The location is within the Business Investment Zone and City Council District 4.
Business Investment Grant
§ The request meets the City Council approved criteria for a seven-year, 90 percent regional headquarters 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.
- All property taxes due from AXA must be paid before a grant payment is made.
- If AXA removes the investment from Charlotte during the grant term, it shall pay back 100 percent of the investment grant paid to date.
- If AXA moves the investment from Charlotte within seven year 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
§ Within Six Years of the end of the BIP Term - 30 percent of grant payments
§ Within Seven Years of the end of the BIP Term - 30 percent of grant payments.
Fiscal Note
Funding: Business Investment Grant