(The Center Square) – A California-based company with 2023 revenues of $20.4 billion will get $7.6 million, and possibly more, in taxpayer subsidies to set up its southeastern distribution center in North Carolina.
Ross Stores clothing retailer will build a $450 million distribution center in Randolph County, the state of North Carolina announced Tuesday.
The North Carolina Economic Investment Committee approved $7.6 million in job development investment grants over 12 years for the project, which the state and company say will create 450 jobs.
In addition to the job development grant, Ross could receive other state assistance such as community college training for employees valued at $1.7 million, workforce solution grants for $1.7 million and grants for road improvements valued at $500,000.
A release from Gov. Roy Cooper's office says, “State payments only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets.”
Ross, with headquarters in Dublin, Calif., is an S&P 500, Fortune 500, and Nasdaq 100 with revenues in fiscal 2023 of $20.4 billion.
“Ross is joining a region of the state that is experiencing rapid growth,” North Carolina Commerce Secretary Machelle Baker Sanders said in a statement. “North Carolina remains committed to developing and providing the available and skilled workforce that companies need to execute their short and long-term expansion strategies.”
The proposed distribution center in Randolph County will be 1.7 million square feet in size, located on 330 acres. It will serve as a warehousing, fulfillment and packing center for the Southeast, the release says. Average annual wages would be $45,806 roughly the same as the current Randolph County average of $45,801.
During the 12 years the job development grants are distributed, the project will increase North Carolina’s economy by $1.4 billion, the state estimates.
The return on investment for the public funds is 61%, the governor’s office said.
“JDIG projects result in positive net tax revenue to the state treasury, even after taking into consideration the grant’s reimbursement payments to a given company,” a release said.
Common practice in economic development is to justify the incentives based upon new jobs that a business will bring to the state, announcing the average hourly wage for the new jobs and comparing it to the mean hourly wage of the county.
Economists question the effectiveness of financial incentives to private businesses to expand or come to a new state.
The use of hourly wage as an indicator is questioned because high salaries of a few corporate leaders can skew the average higher while it would not have the same impact on the mean wage.
“We are delighted to welcome Ross Stores to Randolph County,” Gov. Roy Cooper said in a statement. “Nationally recognized brands like Ross will appreciate the quality of life in North Carolina as well as the capability of our world-class workforce to help them grow and succeed.”
