story from Talk Business, a TCW content partner
The state of Arkansas will receive $459,000 in clawback funding from tech giant Hewlett Packard for its failure to meet employment goals as part of a $10 million incentive package.
HP announced in December 2008 that it would locate a tech support facility in Conway. It received roughly $10 million in incentives from Gov. Mike Beebe’s Quick Action Closing Fund as part of an agreement to create 1,000 jobs within five years.
In mid-2013, HP laid off about 500 workers and later in the year announced it would hire 200 with different skill sets. As a result of the net employment figures, HP failed to meet all of the requirements of its original deal.
AEDC notified HP late last week it owed a total of $459,000 back to the state’s economic development agency from the $10 million given to the company from the governor’s fund.
In order to determine how much HP owed, AEDC used a formula that was included in the signed agreement. It weighs total employees and total payroll against the 1,000 jobs promised.
“The strength of HP’s overall payroll in Conway played a factor in determining the amount owed, made it a bit less,” said AEDC spokesman Scott Hardin. “We don’t share the exact formula as that would allow the company’s specific employment and payroll information to be made public.”
Hardin said there is little more in the way of formality to kick in the repayment of the money owed to the state. He added that HP has informed Arkansas economic officials that they are in the process of making the payment.
“HP has worked closely with us throughout this process and the company has always said it will honor the exact terms of the original agreement,” Hardin said.
Current employment at the HP facility in Conway stands between 700 and 900 people, according to the company.