$1.5M in incentives for Linamar, Jacob Holm withheld after falling short on targets

ASHEVILLE — Buncombe County plans to defer more than $1.5 million in economic development incentives to Linamar and Jacob Holm Industries after the companies failed to meet necessary benchmarks for the funding.

The county said it will postpone paying out a $1.5 million incentive promised to Linamar, an Ontario-based vehicle component and system manufacturer, after the company fell short of its capital investment target. In total, Buncombe offered Linamar a $9 million incentive — payable annually through 2020 — as an incentive for the development of a new facility at 2169 Hendersonville Road in Arden, which opened last year.

Linamar agreed to invest $190 million into the facility, including $143 million by 2017, county business officer Tim Love said Wednesday.

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But it had invested only $96 million into the facility by that time, more than 43 percent less than the agreed upon target to qualify for the incentive. The funding must be carried forward by the county and "made available in future years" if terms of the agreement are met, a county budget amendment shows.

Linamar exceeded job creation targets during the period, adding 250 new jobs when its goal was 152. It also exceeded targets for average wages by about 27 percent to $51,000 a year.

Thomas Grein, general manager of Linamar, said in an email that while business conditions can change from estimates, "we are still confident we will meet our original investment in a reasonable time frame."

"Currently we have several new business launches underway on our campus and there are additional opportunities being evaluated as well that reinforce our confidence on achieving these millstones," Grein said.

He added the company is "grateful" for continued support of government "for what has already been a very significant investment and we look forward to continuing to invest in this regionally dynamic area."

The county also partially deferred a $39,000 incentive payment to Jacob Holm Industries, a manufacturer of fibrous paper products in Enka. Buncombe agreed to a $1.12 million total incentive with the company beginning in 2014 and ending next year.

Unlike Linamar, it did not meet necessary job targets, hiring 44 workers instead of the agreed upon 66. It well exceeded investment targets at $79 million and met the average wage target of $46,000 a year. 

Jacob Holm Industries said the total cost of its Enka expansion would be $45.9 million, which, in turn, would create 66 new full-time positions.

"Due to multiple business conditions, we’ve struggled to maintain the additional 66 heads and because of that, we earned a prorated incentive payment," Jeffery Sellers, vice president of operations at Jacob Holm, said in a statement. "In actuality, we are currently very close to the total headcount requirement but approximately 14 of the total are currently temporary employees." 

Both development contracts are posted below.