Saturday, February 7, 2009

Dell's tax incentives may change with job cuts

Cuts in the number of employees working at Dell's computer plant in Lebanon could end up costing the company tax incentives it has received since putting part of its operations in Wilson County a decade ago, officials there said.

But relocating some of the affected workers to a Nashville distribution center may also mean Dell gets more money from a separate incentives package with Metro government based on how many workers it ends up having in Davidson County.

Dell's decision to end manufacturing of desktop computers in Lebanon would leave 250 to 300 employees at Eastgate Business Park with an operation that refurbishes computers, servers and other Dell-branded products.

A similar number of workers were given opportunities to relocate to Nashville where they will be boxing, shipping or handling the company's products.

Bob Rochelle, an attorney representing the Wilson County Industrial Development Board, said the board would meet later this year to decide what to do after getting an updated employee count from Dell. Dell is entitled to the full benefits if it keeps 1,000 full-time equivalent workers in the county.

"I would hope that Dell because of the smaller presence here, they would just waive their tax break," Rochelle said. Last year alone, Dell saved about $110,694 from not having to pay city and county property taxes on its building and equipment at Eastgate Business Park, estimated Jack Pratt, Wilson County's assessor of property. On one empty parcel not exempted from property taxes, the company paid roughly $8,330.

Overall, Dell employs 3,200 to 3,300 in Middle Tennessee, mostly at the Nashville distribution center and a call center off Murfreesboro Road.

Under the company's grant agreement with Metro Nashville, Dell is paid $500 for each full-time equivalent employee in Davidson as of year-end.

The company collected a total of $3 million during its first four years in Nashville.

For 2007, Dell received $1.48 million based on 2,969 employees after receiving $1.3 million in 2006 for 2,607 full-time equivalent employees, according to Metro officials.

Separately, Dell also receives a break on Davidson County property taxes.

The recent shift of jobs from Lebanon to Nashville likely won't affect the grant payout for 2008 here, but would factor into the calculation for 2009, said Bob Lackey, finance manager in Metro's department of finance. "We're awaiting the 2008 results."

Most of the production work ending in Lebanon is being moved to operations in North Carolina, Dell has said.

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