State incentives to Mercedes: $29K per job

The state and local incentive package offered to Mercedes-Benz to move its U.S. headquarters to metro Atlanta could total more than $27 million, including a grant and certain tax breaks.

Georgia and Fulton County officials on Tuesday further outlined their offerings to Mercedes-Benz USA. The company last week announced a move here from New Jersey and is said to be close to picking a site in Sandy Springs or Alpharetta.

The state offered an incentives package valued at $23.3 million, and the Development Authority of Fulton County estimated that property tax savings for the company’s headquarters campus could total $4 million over 10 years.

The state and local incentive package would be valued at about $28,750 per job for 950 total employees, according to an analysis by The Atlanta Journal-Constitution.

“In addition to the substantial amount of additional tax and other revenues and financial benefits that the 800 to 1000 new jobs will bring to this area, this completed project will significantly enhance the tax digest of Fulton County,” the authority said in a statement.

The Mercedes perks package is in line with those extended for similar corporate relocations on a per-job basis. Homebuilder PulteGroup, which completed its move from metro Detroit to Atlanta this year, received state and local perks that could total more than $23,500 per job. Pulte did not build a campus as part of its move.

An application for bond financing — which would likely come with property tax breaks — filed last week with the Development Authority of Fulton County, described a headquarters project with 800 jobs and a higher investment figure of $93 million. Mercedes US President and CEO Stephen Cannon said the job figure could climb to nearly 1,000.

Cannon has said Georgia’s low-cost environment, workforce quality and proximity to its Alabama factory and other assets were more important in its decision than incentives.

The Mercedes package is considerably less costly per job than recent megawatt manufacturing projects.

Automaker Kia’s package for building a plant near LaGrange totaled $195,000 per job, including federal perks. The state and local assistance to Baxter International (now called Baxalta Inc.) was $140,000 per job for its bioscience plant near Social Circle. Incentives for Engineered Floors’ two factories in northwest Georgia could be worth $44,000 per job.

In a Dec. 12 letter to an executive with international real estate firm JLL, state economic development chief Chris Carr outlined a package that included grants, tax credits and other “cost avoidances.” JLL represents Mercedes, which was identified in the letter as “Project Eagle.”

The state’s “offer of support” said the project would create 800 new jobs, but it also used an assumption of up to 950 jobs to calculate potential incentives. (In a Tuesday news release, the state described the project as involving at least 800 jobs and an investment by Mercedes of about $74 million.)

The offer included a $6 million state grant, and jobs tax credits for 950 jobs. The letter said 800 of those would qualify for a higher threshold of incentives for “quality jobs” because of their high wages. The offer also included 50 in-state tuition waivers.

The average pay for the headquarters employees is expected to be more than $78,000, the letter said.

“Mercedes-Benz will find in Georgia a state that will help its bottom line, and a people who will welcome its team and their families with open arms,” Gov. Nathan Deal said in a news release.

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