Fort Collins Council backs $1.6M HP rebate
Wednesday, May 19, 2010
Posted by: Su Hawk
Council backs $1.6M HP rebate Funds will be used to expand Harmony campus
BY KEVIN DUGGAN • KevinDuggan @coloradoan.com • May 19, 2010
Saying it wasn't too much to pay to support job creation, the Fort Collins City Council on Tuesday approved $1.6 million in tax rebates for Hewlett-Packard Co.
The council voted 4-1 to approve a business investment agreement with the company to go with a planned expansion on its Harmony Road campus. The rebates of use tax and personal property tax would be issued over 10 years as HP invests an estimated $64.4 million into the project.
Even with the rebates, the city is expected to receive $2 million in tax revenue from the expansion, which city officials say is projected to create about 100 high-paying jobs as well as hundreds of spin-off jobs in construction and support industries.
Mayor Doug Hutchinson said the agreement fits in with the city's goal of supporting responsible economic development. The sum tied to the agreement is relatively modest, he said.
The city isn't writing a check from its coffers to help HP with its plans, he said, but would share revenue it wouldn't otherwise receive. "Not one of those dollars would exist without this project," he said.
Mayor pro tem Kelly Ohlson, who cast the lone dissenting vote, said the city has been generous in supporting businesses through incentives and tax-supported funding and may have hit a saturation point. "There are all kinds of incentives other than continually opening your checkbook to corporate America," Ohlson said.
The HP project would likely happen without the rebates, he said. The company has pulled a building permit for the project, which would be a retrofit of 40,000 square feet in Building Six on the campus, said Mike Freeman, the city's chief financial officer.
The status and timeline for construction of the facility, which would be a sustainable data center, is not clear. The agreement is performance based with the rebates capped even if HP's investment in equipment and material exceeds its projections, city officials say.
Supporters of the agreement told the council HP has been a "good corporate neighbor" during its 35 years in Fort Collins. To not support the creation of primary jobs would be "negligence to say the least," resident Carrie Gillis said. But critics said the international company, which brings in billions of dollars in annual revenue, does not need the financial help to do its project here.
Glen Colton, a former HP employee, said the company has benefited from access to the city's good water and inexpensive electricity over the years. "I think they have a lot of reasons to come here without this," he said. Council member Ben Manvel said seeking financial help from governments is part of the "game" played by corporations as they seek to maximize profits.