Incentives bring La. big economic boost
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State officials compared Tuesday’s announcement of 2,900 Shaw Group and Westinghouse Electric jobs coming to Louisiana over the next decade to winning a major auto assembly plant.
But the nuclear manufacturing and headquarters retention project with Shaw definitely differs from the single-site, capital-intensive economic development plans linked to auto plants and steel mills.
Adam Bruns, managing editor of the Atlanta-based Site Selection magazine, said it’s too early to tell if the Shaw-Westinghouse deal would land Louisiana on the publication’s annual ranking of the top deals in economic development — but it’s in the mix.
Site Selection’s Top Deals of 2007 started with a $1.5 billion, 3,000-job deal for Amazon.com in Seattle and ended with a 931-job, $400 million campus in the Pittsburgh area for Westinghouse Electric Co., the same company joining Shaw in a 600,000-square-foot Lake Charles facility that will build nuclear power components. Also on that list was the more than $4 billion ThyssenKrupp steel mill that nearly came to Louisiana but went instead to Alabama.
“It’s a very significant project because of the industry niche it’s in,” Bruns said of the Shaw deal. “Being a Westinghouse-Shaw Group project, the potential for it to branch off into other industry niches would seem to be strong. If you’re a modular components manufacturer, then that sounds like flexibility is your middle name.”
The $210 million in state incentives Louisiana is pledging to Shaw and Westinghouse sounds considerable, Bruns said, but the package appears tightly structured with guarantees that Shaw will produce the 2,900 jobs projected or lose many of the incentives. A Mississippi deal to win a Toyota manufacturing plant last year offered $293 million in incentives for a $1.2 billion plant with 2,000 jobs.
Here’s the gist of Louisiana’s deal with Shaw and the Shaw-Westinghouse joint venture in Lake Charles:
In the next two decades, the capital investment by Shaw and Westinghouse and the additional payroll will generate a projected $25 billion in sales activity in the state and a projected $6 billion in additional earnings, he said.
“From an economic standpoint, certainly it’s a good deal for the state,” Terrell said. “I think one of the things we didn’t account for … is just the intangible benefit of having a Fortune 500 company in the state for the long run, in terms of charitable contributions and in terms of the prestige when you go out and attract other industry.”
But the nuclear manufacturing and headquarters retention project with Shaw definitely differs from the single-site, capital-intensive economic development plans linked to auto plants and steel mills.
Adam Bruns, managing editor of the Atlanta-based Site Selection magazine, said it’s too early to tell if the Shaw-Westinghouse deal would land Louisiana on the publication’s annual ranking of the top deals in economic development — but it’s in the mix.
Site Selection’s Top Deals of 2007 started with a $1.5 billion, 3,000-job deal for Amazon.com in Seattle and ended with a 931-job, $400 million campus in the Pittsburgh area for Westinghouse Electric Co., the same company joining Shaw in a 600,000-square-foot Lake Charles facility that will build nuclear power components. Also on that list was the more than $4 billion ThyssenKrupp steel mill that nearly came to Louisiana but went instead to Alabama.
“It’s a very significant project because of the industry niche it’s in,” Bruns said of the Shaw deal. “Being a Westinghouse-Shaw Group project, the potential for it to branch off into other industry niches would seem to be strong. If you’re a modular components manufacturer, then that sounds like flexibility is your middle name.”
The $210 million in state incentives Louisiana is pledging to Shaw and Westinghouse sounds considerable, Bruns said, but the package appears tightly structured with guarantees that Shaw will produce the 2,900 jobs projected or lose many of the incentives. A Mississippi deal to win a Toyota manufacturing plant last year offered $293 million in incentives for a $1.2 billion plant with 2,000 jobs.
Here’s the gist of Louisiana’s deal with Shaw and the Shaw-Westinghouse joint venture in Lake Charles:
- $32.5 million for infrastructure, work-force training and dock bulkhead improvements in Lake Charles.
- $37.5 million over 10 years for Quality Jobs payroll tax rebates on the Lake Charles jobs.
- $50 million in potential tax exemptions over 10 years from the state’s Industry Assistance Program, with exemptions capped at $5 million a year.
- $90 million in performance-based loans of $9 million per year for 10 years. The loan is forgivable, meaning Shaw pays nothing, if the payroll targets are met. Shaw would pay back a portion of the loans for hiring goals not reached.
- $19.5 million in exempted local property taxes at the Port of Lake Charles covering a 15-year period.
- $1 million from the city of Lake Charles for construction work.
- $1 million from Calcasieu Parish for infrastructure improvements.
- $500,000 from the Port of Lake Charles for bulkhead improvements.
In the next two decades, the capital investment by Shaw and Westinghouse and the additional payroll will generate a projected $25 billion in sales activity in the state and a projected $6 billion in additional earnings, he said.
“From an economic standpoint, certainly it’s a good deal for the state,” Terrell said. “I think one of the things we didn’t account for … is just the intangible benefit of having a Fortune 500 company in the state for the long run, in terms of charitable contributions and in terms of the prestige when you go out and attract other industry.”
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