City gives Perot Systems $3.5 million to stay; Perot ships 250 jobs to India?
I thought the most interesting story in Sunday’s Journal Star was the one about how according to a state report, Perot Systems has shipped a whopping 250 jobs off to India.
Interestingly, Dick Piersol got the information from a state Labor Department petition seeking federal training for people who lost jobs to foreign outsourcing. Perot Systems would not confirm the accuracy of the report.
This was shocking news that belonged on the front page of the paper, to me, because two years ago, the city of Lincoln bestowed $3.5 million in tax increment financing on Perot to help it build a new office, which it moved into last year. The public was told that Perot had been considering consolidating its Lincoln operations in another city, but Lincoln enticed them to stay here with a $3.5 million TIF carrot that helped them build a new 150,000-square-foot building in the University of Nebraska Technology Park, up by Verizon. The TIF — which is like a convoluted property tax break, to me, because Perot gets to have the money that normally they would have had to pay in new property taxes — was to be used to pay for a 60-year ground lease and street, utilities and streetscape improvements.
But the kicker is that the public was told the new Perot building would enable the company to create about 150 software engineering jobs that pay an average of $50,000. Makes you wonder how that’s coming along? If they’ve shipped 250 jobs off to India, did they create any new jobs? And if they didn’t, what are the ramifications? Does the city have any way of getting its money back if a company doesn’t hold up its end of a TIF bargain?
In addition, the state petition also states that the Perot office is closing in “early 2011.” However, a Dell spokesman said that’s not true. (Computer giant Dell bought Perot Systems last year.)
Before the TIF deal, the information technology company had 750 employees scattered in seven sites across Lincoln. At that time, Lincoln was Perot’s second largest site in the country, and third largest in the world. And Piersol reported that in February the company said it had 900 Lincoln employees and would be hiring 150 more.
The company has acknowledged it has laid people off last year and this year, Piersol reports, but won’t say how many.
Does the city know how many people are really working there? Does it make an effort to find out?
These are the questions I expect our council members to be asking the Beutler administration.
Dena, I am wondering if TIF was even mentioned or covered when Dell bought Perot Systems? Sometimes, and this is no excuse, these type of agreements are not covered, considered or mentioned during merger/takeover negotiations. I am not surprised since the bottom line is profit, not job creation . Again, no excuse, but it does happen.
Are we not surprised? Can we believe anything our local government says?