NC kills 2,250-job incentives package in Charlotte after Allstate fails to meet goals

One of the largest economic projects in recent North Carolina history was terminated by the state Tuesday after generating no new jobs.

The North Carolina Economic Investment Committee ended its 2017 incentive agreement with the insurance giant Allstate, which had pledged to add at least 2,250 new employees to its operations center in Charlotte.

In a July 12 letter to the committee, Allstate said the surge in remote work, which began during the COVID-19 pandemic, made it challenging for the company to comply with its initial hiring commitment.

“We’ve concluded that our new workplace model is incompatible with (the grant program) rules,” wrote Eric Steffe, the company’s director of global corporate real estate. “Under our policies, the vast majority of our North Carolina employees are no longer directly associated with a physical work location and are therefore ineligible to be counted as project site or (grant) remote employees.”

At the end of last year, Steffe noted, only 213 of Allstate’s North Carolina employees elected to physically work at their existing campus in Charlotte.

The company could have received up to $17.8 million in payroll tax breaks from the state. Instead, North Carolina paid no money from its initial job development investment grant, or JDIG, while local governments have given the project cash grants worth $1.4 million.

Allstate has spent at least $34 million on expanding its Charlotte site, state records show.

Another state-backed project falls short

Back in 2017, Allstate executives believed the initial job target of 2,250 was likely too conservative.

The company already employed more than 1,400 in the area, and according to documents obtained by The Charlotte Observer, Allstate told state officials its hiring could go “well beyond” the announced figure.

“This is one of the largest job announcements in history for the Charlotte-Mecklenburg area at one time,” Gov. Roy Cooper said at the time.

Six years later, the project is officially over. There were clear signs Allstate was falling behind its job pledge; under the company’s first proposed hiring schedule, it would have added 2,250 positions by 2020.

In his letter to the state, Steffe said he felt Allstate’s employee-choice work environment could permit more aggressive hiring throughout North Carolina. He added that “without question, Allstate continues to view the State of North Carolina as a strategic market to attract talent, and an excellent place for our employees to reside.”

Allstate may be one of the larger state-backed economic projects to fall short but it’s not an outlier.

Most of the job development investment grants awarded by North Carolina don’t meet their initial announced job or investment targets, a recent News & Observer analysis found.

Since North Carolina began awarding JDIGs in 2003, early-terminated grants have outnumbered completed grants by more than 3-to-1. From 2003 to 2015, the majority of awarded JDIGs ended prematurely in every year but one.

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