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To be honest, I'm not so sure in this case. Basically we're giving this company incentives as if they're Boeing, Airbus, or Northrup Grumman. In truth, they're a speculative startup that could take $100 million, build the plant, and then run out of cash and go bankrupt (there's a strong chance of this scenario playing out IMO).
Basically, there's a TON of risk here, but no greater reward than any other major (established) company coming in. It's not like if this plant goes well that the company is going to shift HQ to Greensboro and bring hundreds of six-figure jobs. Basically, it's 1700 or so moderate-paying jobs for a very high cost of incentives.... no different than Toyota but least with Toyota we can feel pretty confident that the battery plant will get off the ground... potentially leading to more later.
I get what you're saying, but as far as the incentives go, thats not going to be the case. JDIG packages are paid out over 10 to 12 years, based on meeting hiring and investment goals. If the goals aren't met, the incentives aren't paid. I'm sure there will be some uofront incentives (mostly local) for free land, etc., but those will be subject to clawback provisions is the comapnay doesn't meet it requirements. There is some risk, but not a huge one, imo.
Also, a plant of this nature has the potential to attract lots of suppliers (a la BMW in SC).
I get what you're saying, but as far as the incentives go, thats not going to be the case. JDIG packages are paid out over 10 to 12 years, based on meeting hiring and investment goals. If the goals aren't met, the incentives aren't paid. I'm sure there will be some uofront incentives (mostly local) for free land, etc., but those will be subject to clawback provisions is the comapnay doesn't meet it requirements. There is some risk, but not a huge one, imo. Also, a plant of this nature has the potential to attract lots of suppliers (a la BMW in SC).
My understanding is that the state is paying $ 106 million in the first year, to accommodate their requirements for setting up manufacturing at PTI:
"House Bill 334 would appropriate $106.75 million in state Job Development Investment Grant funds for fiscal 2021-22 to “a high-yield project for an airplane manufacturer” at PTI." The state would provide $106.75 million in a Job Development Investment Grant, with some $15 million to be used for site work at the airport, $35 million for roadwork through the NC Department of Transportation and $56.75 million for the airport to use “for the construction of one or more new hangars.”
If this proves to be unsuccessful and BOOM turns into a BUST, there will not be any ability to claw back this money. One could argue that this needs to be done for any potential company considering setting up shop at PTI, but HB334 is tied specifically to BOOM. Apparently the state doesn't consider risk in approving these grants. Toyota is rock solid, so minimal risk there.
My understanding is that the state is paying $ 106 million in the first year, to accommodate their requirements for setting up manufacturing at PTI:
"House Bill 334 would appropriate $106.75 million in state Job Development Investment Grant funds for fiscal 2021-22 to “a high-yield project for an airplane manufacturer” at PTI." The state would provide $106.75 million in a Job Development Investment Grant, with some $15 million to be used for site work at the airport, $35 million for roadwork through the NC Department of Transportation and $56.75 million for the airport to use “for the construction of one or more new hangars.”
If this proves to be unsuccessful and BOOM turns into a BUST, there will not be any ability to claw back this money. One could argue that this needs to be done for any potential company considering setting up shop at PTI, but HB334 is tied specifically to BOOM. Apparently the state doesn't consider risk in approving these grants. Toyota is rock solid, so minimal risk there.
If you are correct, the monety isn't going directly to the company, its all being spent on real estate and infrastructure that will be left behind if the compoany goes bust. So, the worst case scenario is there will be fully developed complex that another company can make use of. That is a great risk mitigation strategy on the part of the state and the airport, and actually lowers the risk level.
If you are correct, the monety isn't going directly to the company, its all being spent on real estate and infrastructure that will be left behind if the compoany goes bust. So, the worst case scenario is there will be fully developed complex that another company can make use of. That is a great risk mitigation strategy on the part of the state and the airport, and actually lowers the risk level.
I'm thinking the same thing. The state's position is that they are investing in long term infrastructure, and basically using BOOM to help build it out and help put the state on the map for other aerospace companies. If BOOM does go bust, the facility and surrounding resources will likely remain, creating a ready made opportunity for another similar company.
If you are correct, the monety isn't going directly to the company, its all being spent on real estate and infrastructure that will be left behind if the compoany goes bust. So, the worst case scenario is there will be fully developed complex that another company can make use of. That is a great risk mitigation strategy on the part of the state and the airport, and actually lowers the risk level.
That's correct. Similar to Dell Computers and the North Carolina Global TransPark.
If BOOM was Boeing or Airbus, that would be another thing.
I'm thinking the same thing. The state's position is that they are investing in long term infrastructure, and basically using BOOM to help build it out and help put the state on the map for other aerospace companies. If BOOM does go bust, the facility and surrounding resources will likely remain, creating a ready made opportunity for another similar company.
But what gets built will be specific to BOOM's needs. This isn't exactly a generic manufacturing plant. The specifications would really only work for a limited number of companies.
If BOOM goes bust, it would difficult to find a replacement. And there would be more money needed to make changes to fit the new company's specifications.
But what gets built will be specific to BOOM's needs. This isn't exactly a generic manufacturing plant. The specifications would really only work for a limited number of companies.
If BOOM goes bust, it would difficult to find a replacement. And there would be more money needed to make changes to fit the new company's specifications.
But what gets built will be specific to BOOM's needs. This isn't exactly a generic manufacturing plant. The specifications would really only work for a limited number of companies.
If BOOM goes bust, it would difficult to find a replacement. And there would be more money needed to make changes to fit the new company's specifications.
That's very likely true, but I do feel that whatever experience can be gained from having BOOM at PTI; however long that may be, will improve the Triad's and NC's chances of landing other opportunities in the future.
I'm sure that state officials are well aware of the risks associated with BOOM and have done their homework. They clearly are thinking long term here, with or without BOOM in the picture.
Not being an expert in the field, I can only offer my gut feeling that BOOM will indeed go bust. What we can't know however, is whether or not other suitors existed for this airport parcel. If not, well a bird in the hand...........Still on the other hand, what if we had taken a pass on BOOM in the hope of finding a more promising long-term tenant? I'm certain that this thought crossed the minds of those in charge of decision making. I've made it a point to bone up on these very folks as much as possible, and though it's my opinion to trust their judgment, only time will be the final arbiter of their wisdom.
This is just a question I'm throwing out there. What is the evidence that Boom will go bust? Honestly seems like a lucrative venture producing jets that can fly to any where in the world in 4 hours. The business travel world would love that. The company has been in business for a while now and I would think they would have gone bust several years ago if the company were on shaky grounds. In addition Boom Supersonic already has a big customer. United Airlines have already purchased more than a dozen of planes and they haven't been manufactured yet. I also suspect at some point they could secure government contracts with the Airforce. In recent years the Airforce, NASA etc has been leaning more and more on the private sector. Once Boom starts manufacturing the jets the company will be the world leader in producing commercial jets that fly faster than the speed of sound. Yes there is some risk, but if the Triad wants the kind of economic growth we see in areas like Charlotte and the Triangle then the region needs to become a leader and not a follower. Taking big risk is the price for such success. Research Triangle Park was a risk when it was envisioned in the 1950s and 60s and it paid off.
Last edited by gsoboi78; 01-23-2022 at 09:08 AM..
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