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Taxpayer subsidy to ‘good hands’ company comes up empty

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(The Center Square) – The North Carolina Economic Investment Committee this week ended a $17.8 million taxpayer subsidy for the insurance company Allstate, more than three years after a deadline to produce 2,250 jobs.

The committee on Tuesday canceled the Job Development Investment Grant inked in with Allstate in 2017 to create 2,250 jobs at its operations center in Charlotte by 2020, the latest in a string of failed incentives in recent years.

Data from the most recent annual Economic Development Grant Report shows that out of the 384 Job Investment Development Grants announced between 2003 and the summer of 2022, only 37 had been completed through the end of December 2020. Another 183 remained active, while 85 were terminated with some funds dispersed, 68 were terminated with no funds dispersed, and 11 had withdrawn.

Only 37 grantees completed terms of the agreements and closed with funds dispersed, according to the report – a success rate of 9.6%.

Eric Steffe, Allstate’s director of global corporate real estate, blamed the fallout on the company’s shift to remote work during the pandemic in a letter to commissioners earlier this month.

The Center Square’s questions for Allstate had not been answered prior to this publication.

Steffe wrote that Allstate, which employed 213 at its Charlotte campus at the end of 2022, concluded its remote work model is “incompatible” with the grant program that only counts employees associated with a physical work location.

The company has not received any state funds because the grants are paid on performance, but local governments have contributed $1.4 million in cash grants.

State officials told the media they waited until this week to cancel the grant to provide a grace period following the pandemic, and stressed there was no risk to the state due to the grant terms.

The deal, touted in 2017 as one of the biggest job-creation incentives in the state’s history, follows several others in recent years that have fizzled out in the wake of the pandemic.

A $338 million deal signed in 2020 for the managed health care services company Centene Corp. to move its headquarters to Charlotte came unraveled in August, with Centene pointing to the shift to remote work. Two months prior, Advance Auto backed out of a 2018 agreement worth $9.3 million to bring its headquarters to Raleigh for similar reasons.

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