Triangle Business Journal<\/a>, Red Hat executives lobbied hard for state incentives, playing a game of poker with their possible relocation.<\/p>\nThe company certainly had a good bargaining chip. Red Hat\u2019s 750 employees will move to the downtown office. Officials promise to create another 540 jobs locally and invest $30 million in \u201cconstruction, renovations, machinery, equipment, furniture and fixtures\u201d during a makeover of the 366,000-square-foot Progress Energy Building. Overall, they are expected to invest a total of $109 million in WakeCounty.<\/p>\n
In addition, the company recently announced it will hire 1,000 employees worldwide in 2012. Red Hat CEO Jim Whitehurst said Friday more of that 1,000 could be in Raleigh. He could not give an exact figure.<\/p>\n
That\u2019s something to hang on to, said Wake County Commission Chair Paul Coble.<\/p>\n
\u201cI\u2019m not a fan of incentives. But this makes perfect sense …\u00a0 in fact what we are doing is giving them a discount on their tax base. So what we gain in a tough economic time is a global headquarters and additional jobs that are coming in … We see our investment in Red Hat as being a great return on our dollars.\u201d<\/p>\n
North Carolina was recently praised by watchdog group Good Jobs First for use of incentives. The state received a \u201cB\u201d \u2014 one of only four to receive better than a C \u2014 on how strictly companies are held to their job and investment promises in exchange for tax breaks and other offerings.<\/p>\n
For the city and county\u2019s part, the amounts are so small the economic value is hard to argue, Meeker said. He said the city\u2019s slice is a fraction of what they\u2019ll get back in parking fees from Red Hat employees using nearby city decks.<\/p>\n
Derrick Minor, director of downtown development with the Downtown Raleigh Alliance, said the city\u2019s portion \u201cis a solid ROI,\u201d or return on investment, and not just when it comes to parking. Small business owners, too, will see the effect of more employees downtown.<\/p>\n
Clyde Cooper\u2019s Barbecue Owner Randy Holt agrees. After Red Hat\u2019s announcement about their move, he put out a sidewalk sign that read, \u201cWelcome Red Hat employees.\u201d<\/p>\n
\u201cI think it\u2019d be great to have a Fortune 500 company,\u201d Holt said.<\/p>\n
Minor also said many Red Hat employees will move closer to work, supporting recent condo and apartment construction projects.<\/p>\n
\u201cAdditionally, the companies that will move into downtown to be in close proximity to Red Hat (other tech companies, service providers, etc.) will carry the same benefits for the local economy,\u201d he said in an e-mail. \u201cIn summary, incentives are a great tool to use for both recruitment and retention, as long as there are performance metrics in place and the end result is a positive ROI from the investment.\u201d<\/p>\n
Whitehurst, too, said he believes the move brings more open-source and technology companies to the area.<\/p>\n
\u201cOne very, very well known open source software company just opened a development center, small at this point, just a dozen people … after a conversation I had with him about the quality of life here and the ability to attract people and the ability to retain people,\u201d he said, adding that he was not at liberty to name the company. \u201cSo I think if we make it a goal to do that, more explicitly than we have had in the past, then we can certainly make that happen.\u201d<\/p>\n
In this case, Red Hat is making some additions, but they\u2019re also filling the hole left by Progress Energy\u2019s potential merger with Duke Energy.<\/p>\n
The company has signed sublease agreements with Progress Energy, with plans to move in to100 E. Davie Street starting this spring. The move will be complete next year.<\/p>\n
The County Commission\u2019s Coble said that adds to the list of reasons to keep Red Hat here.<\/p>\n
\u201cWhen the process started we had just had the announcement that Duke and Progress Energy were going to merge. That was a blow to this area,\u201d Coble said. \u201cBut on the same day Red Hat stepped up and said they were going to be staying here and growing as a global entity. That was a wonderful opportunity to send the message to businesses that we aren\u2019t in decline, we are in the process of change. And we\u2019re moving maybe from one type of sector to a much more advanced and more modern look at how this city and county is going to grow.\u201d<\/p>\n
![\"\"](\"http:\/\/www.raleighpublicrecord.org\/wp-content\/uploads\/2012\/01\/red.hat_.centennial-300x199.jpg\" "\\"red.hat.centennial\\"")
<\/a>
Red Hat now leases space at NC State's Centennial Campus.<\/p><\/div>\n
But filling one gap means creating another, on Centennial campus, where Red Hat has a lease on two buildings \u2014 one with 120,000 square feet and the other with 80,000 square feet. Both are advertised as available for sublease.<\/p>\n
Michael Harwood, associate vice chancellor for Centennial Campus Development, expects the building owners will easily find new tenants for the spaces, which means more growth for the city.<\/p>\n
In the end, the Downtown Raleigh Alliance\u2019s Walden said there is really no way to know if the incentives changed the outcome.<\/p>\n
\u201cThe questions that can never be completely answered are: Would the company have changed its decision and moved elsewhere if the incentives hadn’t been offered, and would the company have stayed if the incentives weren’t offered?\u201d \u00a0he said.<\/p>\n
![\"\"](\"http:\/\/www.raleighpublicrecord.org\/wp-content\/uploads\/2012\/01\/whitehurst_red.hat010612-300x197.jpg\" "\\"whitehurst_red.hat010612\\"")
<\/a>
Red Hat CEO Jim Whitehurst at Friday's press conference.<\/p><\/div>\n
\u201cFor companies with a big impact and large name recognition, localities usually aren’t willing to take a chance,\u201d Walden said.<\/p>\n
Red Hat isn\u2019t telling. And whatever happened behind the scenes, Whitehurst made light of it all Friday.<\/p>\n
\u201cI\u2019d certainly like to thank Gov. Perdue who has multiple efforts, including an offer to cook me breakfast personally, which I haven\u2019t taken her up on yet,\u201d he said, eliciting laughter from the packed room. \u201cAs soon as we are neighbors, like a block away, I may take her up on that.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
State and local governments are paying nearly $16 million to a business that \u201cplayed poker\u201d to reap rewards. Here\u2019s a look why area officials say the bet will pay off. <\/p>\n","protected":false},"author":24025,"featured_media":9778,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[15,23],"tags":[],"_links":{"self":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/posts\/9917"}],"collection":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/users\/24025"}],"replies":[{"embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/comments?post=9917"}],"version-history":[{"count":0,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/posts\/9917\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/media\/9778"}],"wp:attachment":[{"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/media?parent=9917"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/categories?post=9917"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theraleighcommons.org\/raleighpublicrecord\/wp-json\/wp\/v2\/tags?post=9917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}