Commerce RI committee OKs incentives to GE that could reach $11.7M, create 300 jobs

(Updated 4:16 p.m.)
PROVIDENCE — An advisory committee of the R.I. Commerce Corp. on Tuesday recommended a package of incentives for GE Digital, the new technology-based division of General Electric Co., which could encourage creation of 300 jobs in Providence.
The company has already publicly stated that it intends to bring 100 jobs to Rhode Island. The proposal recommended by the Commerce RI committee would include layered thresholds for incentives tied to even more jobs.
The state incentives under the Qualified Jobs Incentive Tax Credit program kick in once a company creates jobs, based on wages paid per employee. GE Digital proposes to create its first 50 jobs by July 1, 2017, and would then be eligible for incentives based on job creation. The company would then be eligible for credits for the next 25 jobs created by Jan. 1 2018, and the full 100 of its initial investment by Jan. 1, 2019, according to Commerce Secretary Stefan Pryor.
Beyond that, if GE Digital creates another 100 jobs by Jan. 1 2020, and yet another 100 positions by Jan. 1, 2021, it would be eligible for additional per-job credits.
The Qualified Jobs Incentive program allows companies that create jobs that exceed the state’s median salary to receive up to $7,500 per job. The company credit is triggered by the wages paid to the employees.
In the case of GE Digital, the median salary for the 100 jobs proposed initially is expected to be $88,000. The average salary is expected to exceed $100,000, which is nearly twice the Rhode Island median.
If the company creates the 300 jobs, it could be eligible for as much as $11.7 million, according to Pryor. It would be required to maintain them for at least 12 years.
In addition to the Qualified Jobs program, the GE Digital incentive package would include the state’s First Wave Closing Fund, which is a more discretionary program. The committee recommended $650,000 from that account to provide the company with $150,000 to help build out its offices, and up to $500,000 for purposes related to job creation, including if it wants to provide a loan repayment amount for tech talent it is recruiting, Pryor said.
If the company creates just the 100 jobs under the timeline, it would be eligible for a combined $5.3 million in incentives under both programs, he said.
The Commerce Corporation’s Investment Committee voted to recommend the package, which will now go before the full Commerce RI board on Wednesday afternoon.
Pryor said GE had been “a pleasure to work with” through negotiations, and Commerce board members observed that the company’s investment in Rhode Island was a great opportunity for the state.
Board member Bernard V. Buonanno III, the managing director of Nautic Partners, asked what the state might expect in terms of job creation.
“There is opportunity for expansion,” Pryor said. “We’re very pleased the company applied with a structure that includes thresholds at higher numbers, the 200 and 300. If there are any factors that come into play to determine whether the company can expand to those numbers, rest assured, we will work very closely with them to make sure they meet their talent needs.”
GE Digital was one of two companies whose expansion plans were reviewed by the committee.
Finlay Extracts & Ingredients, a company that is part of a multinational tea and coffee related business, is proposing to build a research and development facility and a modern manufacturing plant at Quonset Business Park.
The company, which purchased Autocrat Inc. in 2014, is now located in Lincoln and does not plan to close that location, according to Jesse Saglio, the Commerce investment division leader. Its proposed investment in a new, 16-acre site at Quonset is another significant opportunity for Rhode Island, Commerce officials said.
The construction investment by the company, whose parent company is headquartered in London, is expected to reach $54.3 million. The incentives sought for the expansion, and recommended for approval by the committee, include Rebuild Rhode Island tax credits for the facilities, to be built in two phases, up to $276,972, as well as a sales tax exemption on construction related goods for up to $571,000. The company also would be eligible to receive the Qualified Jobs tax credits, and proposes to create 73 new jobs, starting with 24 new full-time jobs in 2017, according to Commerce board documents.

Rhode Island is competing with other locations for the business expansion, noted Saglio. He did not identify the locations.

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