Chiquita HQ Moves To N.C. After $22M In Incentives
RALEIGH, N.C. (AP) — Banana giant Chiquita Brands International confirmed Tuesday it will move its global headquarters from Cincinnati to Charlotte after a North Carolina economic development panel approved an incentives deal worth more than $22 million.
The state Economic Investment Committee voted Tuesday in favor of the deal, which includes more than $20 million in state incentives and more than $2 million from local government to bring at least 375 high-paying jobs to North Carolina by 2014.
"We had to compete and compete hard for this company," Gov. Beverly Perdue said at a news conference in Charlotte announcing the move.
Committee members said moving Chiquita's headquarters, along with research and development laboratories, will eventually bring a total of about 417 jobs to the area as part of an overall investment of around $14 million. The jobs are supposed to pay an average of about $107,000.
Committee members said the incentives were needed to give Charlotte an edge over Ohio, Florida and Louisiana. Another key factor in the company's decision was the greater access to foreign flights in and out of Charlotte Douglas International Airport and the assortment of those flights, according to CEO Fernando Aguirre, who spoke at the news conference.
"Charlotte provided the most compelling economic opportunity for Chiquita by far," he said.
Aguirre praised Cincinnati and Ohio for providing a home for the company since 1987, but said the move to Charlotte will, among other things, save Chiquita more than $4 million a year in operating costs.
"Times change, and the fact is, we needed to make decisions that would help our business not just for the short term, but also for the long term," he said.
The move should be complete by the end of 2012, Aguirre said, although he expected most employees would be in Charlotte by next summer.
With operations across the globe, Chiquita has more than 21,000 employees worldwide. The company this month reported a $29 million third-quarter loss due to higher expenses and lower revenue. Profits were $61 million in 2010, down from $91 million the previous year.
The company is in a cost-cutting drive. Ohio officials said they were unwilling to go as far to keep Chiquita in Cincinnati, where it employs about 400 workers, as North Carolina was to lure it away.
"The company has issues beyond what incentives can address," said Rob Nichols, a spokesman for Ohio Gov. John Kasich. "When it's a priority to make sure incentive packages begin returning an investment for taxpayers as quickly as possible, we're not going to be irresponsible and give away the store to try and keep a company that fundamentally doesn't want to be here or which has already made up its mind to leave"
The main markets for the produce company's bananas, bagged salads and snacks are North America and Europe. Its main banana producers are in Latin America. Chiquita has management operations on all three continents.
"The improved air accessibility to primary destinations in Latin America and Europe and access to an experienced international labor force that supports Chiquita's long-term goals" were key elements to the company looking at a move to Charlotte, said Susan Rather, who coordinates North Carolina's key incentives grant program.
Chiquita also considered staying in Cincinnati or moving to Louisiana or South Florida, which prompted North Carolina to offer its combination of grants, tax breaks and worker training, Rather said.
A Florida site offered great airline connections to Latin America and Europe and a concentration of Spanish-speaking businesses that offer a pool to recruit bilingual talent with international business experience, Rather said. Louisiana offered to reimburse the company for its employee relocation and recruiting expenses, and to subsidize the cost for air transport to Europe and Latin America, Rather said.
Chiquita spent $19 million in 2008 and 2009 to move its European headquarters from Belgium to Switzerland, where it enjoys tax advantages.
Charlotte's competitors "have demonstrated significant aggressiveness in providing upfront cash to help offset the tremendous cost burden in relocating Chiquita's international headquarters, which surpass North Carolina's offer," Rather said.
If the company meets its hiring and investment goals over 11 years, it could collect $20.2 million from North Carolina and about $2.5 million more from the city of Charlotte and Mecklenburg County.
Chiquita has been based in Cincinnati since 1987, when it moved from New York. In 2005, the company considered moving its headquarters, but decided then to remain in Ohio.
Earlier this year, Charlotte was publicly discussed by Chiquita as a possible new home for its headquarters. The company has a lease extension running through 2012 on its namesake headquarters building in downtown Cincinnati.
Cincinnati's regional airport has lost international flights as airlines shifted routes away from Midwestern hubs, creating a concern for the business community, said Ellen van der Horst, president and CEO of the Cincinnati USA Regional Chamber.
"It's always disappointing to have a business leave the region, especially one as well-known as Chiquita. But it's part of business," van der Horst said.
Cincinnati Mayor Mark Mallory said in a statement Tuesday that the city will attract business in the future.
"While Chiquita has decided to leave our community, Cincinnati's business community continues to remain strong and growing, and we have many more wins in our future because Cincinnati is a great place to do business," Mallory said.