Nearly $30 million in state and local government incentives were offered to CZ-USA as part of a bid to persuade the Czech Republic gun-maker to invest $90 million to locate a production facility and its North American headquarters in Little Rock and employ nearly 600 workers.
The incentives include a package from the Arkansas Economic Development Commission totaling $24 million if all the performance goals are met in two separate phases over six years, according to Brandi Hinkle, communications director for the agency.
The total doesn't include money CZ-USA could receive under the Create Rebate program, which provides annual cash payments based on a company's annual payroll for new, full-time permanent employees.
The commission released details of the incentives Wednesday, a day after Gov. Asa Hutchinson announced CZ-USA's decision to build the plant and headquarters on a 73-acre tract at the Port of Little Rock.
Local incentives include the port deeding the land to CZ-USA once its employment goals are met. The Little Rock Port Authority board is scheduled to meet Friday to approve the arrangement, which also must meet the approval of the Little Rock board of directors.
Additionally, the city of Little Rock and Pulaski County will contribute $500,000 each toward a $4.9 million project to improve Zeuber Road between Frazier Pike and Thibault Road. The CZ-USA site is off Zeuber Road, but economic development officials say the improvements will benefit existing and future port tenants, not just CZ-USA.
Hutchinson is contributing the balance of the cost of the road improvement project -- $3.9 million -- from the governor's quick-action closing fund, which the state Economic Development Commission said "allows the Governor to act quickly and decisively in highly competitive situations to finalize an agreement with an employer to locate or expand its business in Arkansas."
One element of the state Economic Development Commission incentive package -- called the Tax Back, which is a sales and use tax refund -- is "statutory," which Hinkle said is available to any company that meets the performance goals.
Under the Tax Back program, a portion of sales and use taxes can be refunded on the purchase of building materials and taxable machinery and equipment to qualified businesses that invest at least $100,000 and sign a job creation agreement.
Other elements of the incentives are "discretionary, meaning we run numbers to determine if it will be offered and the amount," Hinkle said.
The incentive package comes with caveats, she said. "These are all performance-based and have claw-backs if the benchmarks aren't met."
The incentives are broken down in two phases of three years each.
The first phase requires a $60 million investment by CZ-USA and the creation of 357 jobs within three years.
In exchange, the state agreed to provide an $11 million loan, a $4 million infrastructure grant and $1.25 million in training assistance.
The size of the infrastructure grant "is dependent upon the strength of the company, of jobs, average wage, project investment and costs associated with facility/site improvements," according to commission documents.
The second phase requires CZ-USA to invest $30 million and create 208 jobs over the next three years. The state, in turn, will provide a $7 million loan and $750,000 in training assistance.
In both phases, the company could be eligible for cash payments under the Tax Back program and Create Rebate program, according to commission documents.
Business on 04/25/2019