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NFKjeff

Spanish auto parts manufacturer Sanyo Corte Fino to locate NA headquarters in VB.

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Governor Mcauliffe was in Virginia Beach today to announce that Spanish auto parts manufacturer Sanjo Corte Fino will locate it's North American headquarters in the city. The Commonwealth provided a $1M incentive to help the company build a $17.5M manufacturing operation that will eventually employ 85.

http://pilotonline.com/business/spanish-company-to-establish-north-american-headquarters-in-virginia-beach/article_bbdc59eb-2161-57f1-bb42-e4a9fad15908.html

Edited by NFKjeff

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Good development to bring 85 more jobs to town. But is $1 million in incentives quite a lot for 85 jobs? Don't get me wrong, this is good news for the area, but I think we might be going crazy with these economic development incentives. I saw that the jobs would pay about $40K. Between 85 jobs, that's a TOTAL payroll of $3.4 million/yr (granted, I know there will be several positions that pay significantly more than $40K.

Edited by HRVT

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Quite honestly I don't think it's too bad. I've seen business relocate to the Raleigh area that have many millions in incentives to relocate.

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2 hours ago, urbanvb said:

Quite honestly I don't think it's too bad. I've seen business relocate to the Raleigh area that have many millions in incentives to relocate.

How big were the businesses? For instance, Norfolk (and the state of VA) just spent a hefty $7 million to lure ADP. But that investment is yielding a game-changing 2000 jobs. 85 new jobs is good news, but when the incentive to bring the company to town looks to be more than a quarter of the annual compensation that company will produce, it's hard to say if it's a very savvy investment.

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9 hours ago, HRVT said:

Good development to bring 85 more jobs to town. But is $1 million in incentives quite a lot for 85 jobs? Don't get me wrong, this is good news for the area, but I think we might be going crazy with these economic development incentives. I saw that the jobs would pay about $40K. Between 85 jobs, that's a TOTAL payroll of $3.4 million/yr (granted, I know there will be several positions that pay significantly more than $40K.

I can't agree with you on this being too large of an economic incentive. I believe that looking only at the projected payroll for one year does not show a very accurate picture of the impact that a company like this could have. 

Sanjo is locating it's North American Headquarters in Virginia Beach. Aside from whatever prestige having another multi-national corporation bring it's HQ here there are other benefits which I believe make this a very sound investment.

The city has landed a major tenant for one of it's industrial sites, thereby putting that vacant land into the taxable column. A North American headquarters of a manufacturing company represents a lot of potential growth for future jobs and tax base. When STIHL started in VB it only occupied 20,000 sq. ft., and now is a 1 million sq. ft. operation. I'm not suggesting that Sanjo will grow as large as STIHL, but that it does represent a tangible opportunity for growth of living wage jobs.

Also, this is the type of import/export manufacturing which will have an impact on port operations, and employment in that sector. There is definitely a ripple effect which goes far beyond a single years payroll for 85 initial employees.

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Well if it can grow over time, it's definitely a worthwhile investment. I definitely wasn't trying to take a Debbie Downer tone. I'm just not a huge fan of some of the outrageous incentives that have been thrown out (not just here) to lure development that doesn't pan out. I understand the ripple effect and over the long haul this should be a win. Though I'll admit that I didn't realize that Stihl started so small here.

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12 hours ago, HRVT said:

Well if it can grow over time, it's definitely a worthwhile investment. I definitely wasn't trying to take a Debbie Downer tone. I'm just not a huge fan of some of the outrageous incentives that have been thrown out (not just here) to lure development that doesn't pan out. I understand the ripple effect and over the long haul this should be a win. Though I'll admit that I didn't realize that Stihl started so small here.

I understand your trepidation about economic development incentives. Some states have really gotten into a mess by their appearant indescriminate use. I think of the nightmare situation that Louisiana has created, but I know there are others.

I know that in this case Kentucky, Tennessee, and Ohio were also trying to lure Sanjo. There have to be some kind of measures which need to be met in order for incentives to make sense. At some point a project is just not worth the cost in incentives. I think overall the Commonwealth of Virginia, and our local governments do a pretty good job of examining the pros and cons.

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