Georgia made one of its most aggressive deals ever to land global medical manufacturer Baxter International, offering a combined $179 million in local and state incentives.
Local incentives added up to $101 million, while the state contributed $78 million, according to the official inducement agreement signed by the state, local Joint Development Authority and Baxter, which was obtained under the Open Records Act.
Baxter, which is expected to bring 1,500 high-paying jobs and $1 billion in new equipment and buildings by 2018, will save an estimated $94 million on local property taxes during the next 15 years.
The company will not pay any property tax until it's up and running in 2018 and then payments will be phased in over a 10-year period. The company will still contribute $31 million in taxes during that time, according to the agreement.
Because the company is locating in Stanton Springs, the industrial park that is jointly owned by Newton, Walton, Morgan and Jasper counties, both the incentives and revenue will be split four ways.
Newton and Walton both have a 37.5 percent share in the park, while Morgan owns 15 percent and Jasper 10 percent.
Local incentives also include $5.9 million to build a wastewater pre-treatment facility for Baxter, as well as the waiving of local fees: $650,000 by Walton County and $613,400 by Newton County.
The state's official incentive package totaled $78 million, though the Georgia Department of Economic Development said Thursday the numbers were not final and could change:
- $28.1 million - quality job tax credits available to companies that pay at least 110 percent of county average (highest Baxter wage rate will be 200 percent above Walton County average); 1,133 jobs are expected to qualify and the credit is $2,500 to $5,000 per job
- $4.7 million - job tax credit based on number of jobs; 307 jobs expected to qualify
- $27.21 million - sales tax exemption on machinery and equipment; part of newly passed law to attract industry
- $4.26 million - sales tax exemptions on construction
- $13.75 million - project development grant - land purchase, equipment, parking lots, exterior lighting, fencing, interior roads, landscaping and part of wastewater facility
As with most major incentive packages, the company must meet certain minimum investment levels or else it could be required to pay back incentives.
For local incentives, the company must meet at least 70 percent of its initial investment by Dec. 31, 2026. Local incentives are tied to a stated investment of 1,463 full-time jobs (two part-time jobs will qualify as a full-time job) and $1.13 billion.
For state incentives, the company must meet a minimum of $830 million and at least 1,300 full-time jobs in the first 10 years after operations start.
While not normally included in total incentive figures announced by the state, Baxter will also receive around $26 million in hiring assistance from the state.
The largest chunk, and most important part to Newton, of the assistance will come in the form of a $14 million biotech training center that will be built and operated by the state. The center will be built in Stanton Springs next to Baxter and be used initially by the company to train its needed workforce.
The 20,000 square foot center will have four labs, four classrooms, a room for computer training and dedicated meeting space for up to 500 people or a 150-person sit down event.
The state will pay all operating costs for the first seven years, at which point Baxter can enter into a joint operating agreement if it chooses or give up its space. The center is expected to be a major tool in Georgia's efforts to attract future biotech industries.
"The new training center at Stanton Springs is a long-term investment in Georgia's future as a hub for the bioscience industry. It will be a state-of-the-art facility that will ensure Baxter and future client companies will have a deep pool of talent from which to draw," Chris Cummiskey, commissioner of the Georgia Department of Economic Development, said in an email.
Other assistance includes an estimated $10.3 million in actual training provided by Quick Start, a program run by the Technical College System of Georgia which provides free, customized workforce training to qualified businesses.
According to the inducement agreement, Quick Start employees will be sent to existing Baxter facilities to learn the company's processes and design a fully-customized training program to meet both start-up needs and provide a long-term pipeline of workers skilled in bio-manufacturing operations. These processes can also be made part of the Technical College System of Georgia if needed, the agreement says.
Workforce recruitment efforts and the Georgia Work Ready program's contribution are valued at a combined $1.79 million.
Under the agreement, local governments are also prevented from offering more favorable incentives to a competing company.
Though details have yet to be finalized, Baxter could hire another 300 employees around the state at plasma collection centers, which in turn could lead to even more state incentives for the company. If Baxter were to reach the 1,800 job level it would then be eligible for the state's mega project job tax credit, which could save the company another $16 million.
Baxter's initial $1 billion investment will only be built on one third of the company's 162-acre site in Stanton Springs, leaving room for significant growth in the future if the company continues to be successful.
According to the agreement, any expansion could receive future incentives, which would be akin to a recent expansion by local polyester film manufacturer SKC, which received significant incentives when in 2011 it located a $100 million plant to produce the protective film that coats solar panel cells.
According to the Atlanta Journal-Constitution, Caterpillar received roughly $75 million state and local incentives earlier this year, while Kia received an estimated $410 million in incentives in 2006.