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Dell Inc. has confirmed in writing that it will repay $26.5 million in incentives from the city, Forsyth County, the Millennium Fund and the Forsyth County Development Corp. following its decision to close its computer assembly plant in Forsyth County.

A letter from Dell to Mayor Allen Joines, dated Oct. 20, states, "Dell agrees and acknowledges that the amounts listed in your letter are the amounts to be repaid …within 30 days from receipt of a formal letter sent by the community at the time the Dell facility in Winston-Salem ceases operations." The letter is signed by Kip Thompson, Dell’s vice president for global facilities and strategic growth.

Thompson sent his letter in response to a letter Joines sent on Monday, Oct. 19, outlining the amounts to be reimbursed by Dell. They are: $15,556,071 to the city; $7,916,328 to the county, $2,774,228 to the Millennium Fund; and $308,622 to the Forsyth County Development Corp.

"No one in government likes having to pay incentives to bring employers to a community," Joines said, "but it is necessary in order to be competitive. However, incentives must include the protection of strong performance requirements. Dell’s agreement to repay all local incentives validates the strength of our contract with Dell and shows that incentives are not inherently risky if properly structured."

The city’s incentive agreement with Dell required that the company create 1,700 jobs within five years of the plant opening on September 19, 2005, and invest at least $100 million. Failure to meet these conditions would result in a return of all upfront expenditures, incentive payments and title to the land Dell purchased with city money.

Of the $15,556,071 paid by the city, $8.5 million was for land acquisition, site preparation, and other upfront costs. Annual incentive payments were based on Dell’s property-tax payments.

Letter from Mayor Joines to Dell [pdf/1p]

Letter from Dell to Mayor Joines [pdf/1p]

 

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