County Approves Incentives for General Tobacco

Source from:  By John Barbour Staff Writer Tuesday, June 19, 2007 06/20/2007

Rockingham County Commissioners approved their share of more than $3 million in economic incentives meant to lure General Tobacco, Inc. to Mayodan. Monday night, commissioners unanimously approved $1.73 million for the Miami-based cigarette manufacturer. The company manufactures GT One, Bronco and Silver brand cigarettes and has sales of almost $400 million per year, said Graham Pervier, president of the county Partnership for Economic Development. "Their products are distributed all over the United States and all over the world," he said. If General Tobacco decides to locate in Mayodan, they are expected to bring 200 jobs to the former Unifi Plant No. 5. Last week, the Mayodan Town Council approved their share of the economic incentives – $1.3 million. The payments by Mayodan and the county will be made in annual installments, beginning in 2010 and lasting for eight years. "These funds are not money that is paid up front," said Pervier. "They don't start until the new investment is in place, the new employees are in place, and until the property has been listed for taxes and taxes have been paid." During that same eight-year period, General Tobacco will pay the county about $2.1 million in property taxes, he said. "In North Carolina, we don't rebate taxes, but sometimes the incentives are expressed in terms of taxes paid," Pervier said. The incentives amount to about 80 percent of property taxes, he said, meaning the difference is about $383,000 in the county's favor. In order to receive the complete payments, General Tobacco must agree to spend $55 million on machinery and property improvements, and pay salaries at least equal to the county average. "If the investment and job targets aren't met," Pervier said, "then the investment payments are reduced proportionately." Pervier said wages paid by General Tobacco would be between $36,000 and $40,000 per year – higher than the county average, and the company will offer medical and dental insurance. "This is very sophisticated and very expensive cigarette-making equipment," he said. "The folks who will be working on it will have to be well-trained and, I would expect, computer-literate." Commissioner Amelia Dallas asked if the company could be required to hire local workers. Pervier said they are not, but added that the county's history may be why the tobacco company is considering a move here. "I would hope and believe that one of the reasons they are looking at our area is our history of involvement with the tobacco industry," he said. Pervier said he expects a decision from General Tobacco "sooner rather than later," but said that nothing has been finalized. "This is not an announcement," he said. "General Tobacco, we understand, is considering other locations, but we hope the local incentive package and whatever the state provides will induce them to do the project here." Enditem