Incentives For IBM’s Missouri Facility Scrutinized
February 25, 2013 Dan Burger
IBM opened its state-of-the-art Information Technology Service Delivery Center in Columbia, Missouri, in October 2010. At that time, IBM publicized it would create up to 800 jobs by the end of 2012.
That’s the kind of news any city would welcome these days. And these types of things just don’t drop out of the sky. Cities and states woo corporations to their locations with offers of tax incentives and real estate deals. Of course cities and states are working with public money. And the public expects transparency in how its money–many millions of dollars–is being spent and what is guaranteed in return.
The guaranteed return is exactly what the issue is here. According to a report by KOMU 8 News, the local news station, the contract IBM made with the state, which entitled the corporation to a $28 million incentive program of tax credits and job training funds, was actually written to create 600 jobs by 2015. There was no public mention of this number, only the “as many as 800” number.
The same IBM public relations information that makes note of the job creation benefit also makes note that IBM received a nice pat on the back from the state of Missouri: “IBM Corporation was the recipient of the Governor’s Economic Development Project of the Year Award for the greatest state and local economic development impact project. IBM’s ‘Project Tiger’ chose Columbia as its site to house a service delivery center, providing IT systems management and operations, database management and overall IT project management while creating 800 new jobs”
As KOMU News 8 pointed out, “To get these incentives, IBM must file annual reports with the state documenting the number of people it has hired in the year.” But after requesting the appropriate documents from the Department of Economic Development, it was learned that IBM last reported–on June 30, 2012–it had 469 employees at the Columbia, Missouri, facility. That’s the last report IBM filed, although an end of 2012 report was expected.
IBM, through Jim Chapdelaine, its director of cross competency services in Columbia, stated to KOMU News 8 the company is “currently on pace to meet our commitments to the state.” Chapdelaine also said that commitment was 600 jobs due by 2015. There was no mention of the “as many as 800 jobs by the end of 2012” details that were publicly stated before the contract was signed.
In addition to the state’s $28 million incentive package to be paid in full by 2015 if IBM meets its goals, the city of Columbia agreed to pay $3 million over a 10-year time span to purchase a building for IBM. The city agreed to lease the building to IBM for a dollar per year for 10 years.
Columbia Mayor Bob McDavid told KOMU News 8 that despite taking millions in public money, IBM has no obligation to share its employment information.
The center is part of an extensive network of IBM delivery centers in more than 20 countries, providing IT services and business process outsourcing capabilities to IBM clients around the world. The Columbia Delivery Center provides server systems operations, security services, and end user services, including maintenance and monitoring of computer hardware and software systems to clients in the United States.