EconWar



The News & Observer


Raleigh, N.C.


April 14, 1995

The telling record of the state's chase for Motorola

Carrick Mollenkamp, Staff Writer

Copyright © 1995, The News & Observer



A 7-inch-thick file details movement and the growing sense of losing 'Project Geraldine.'

Her job as a real estate consultant based in Virginia Beach, Va., is to secretly scout sites for large company expansions that have the power to change rural horse country into high-tech valleys. Usually, in the initial stages of a search, she won't reveal the name of company despite questions from economic developers.

In North Carolina, the deal she was handling was code-named "Project Geraldine."

The project was Motorola Inc.'s $3 billion semiconductor plant, now headed for the outskirts of Richmond, Va. The company said Wednesday that after a search of 600 sites, Motorola chose West Creek, a 3,500-acre business park in rural Goochland County.

The $22 billion electronics and computer company also considered Treyburn, a Durham corporate park, for the plant that one day will operate 24 hours a day, seven days a week, employing 5,000 people to make the semiconductor chips that end up making billions of dollars in revenue for Motorola.

In the end Treyburn lost. Dearborn said, however, that North Carolina could be a player for the next major move by Motorola in the next five to 10 years.

"I would guess that a major site could come to North Carolina," Dearborn said. "It could come a lot sooner."

But this week, Virginia was the winner.

For North Carolina, the two-year chase began with a memo to Gov. Jim Hunt in October 1993 from his Department of Commerce staffers. "It's real and it's big," the note said about a tip that Motorola was searching. Department of Commerce officials knew it might be Motorola but they didn't know much else.

The note was included in a 7-inch-thick file that recorded every move North Carolina recruiters made to recruit Motorola.

Among the findings revealed in the file:

-There was never any correspondence to indicate that Treyburn and Richmond were the only finalists. In fact, Department of Commerce officials never seemed to know whether Treyburn was still being considered as late as January.

A memo from Watts Carr, then the director of business and industry development, to another Commerce official indicated they were getting nervous. "Feel we should hear something," Carr scrawled across the note.

On Jan. 31, Commerce received bad news: "Motorola has optioned land in Richmond," read a phone message to Bill Teague, a top developer in Commerce. A month later, after a personal trip by Hunt and Commerce Secretary Dave Phillips to Motorola real estate officials in Phoenix, the news got even worse: Treyburn was out.

-During the search, Tar Heel officials said the project was not incentive-driven, based on conversations with Motorola officials. Virginia's $85.6 million inducement package, however, caught North Carolina leaders by surprise and left them wondering if incentives might have been a bigger factor.

Virginia's package, which must be approved by the legislature, includes $60 million in performance-based manufacturing grants that could be issued in $12 million cash grants spread over five years; a $4.6 million facility tax credit and $5 million for worker training; and $16 million to develop a electronics curriculum at Virginia Commonwealth University.

North Carolina's incentive package was nothing more than roads, power rate discounts and amenities like membership in Treyburn Country Club. The only unusual offer was a training facility at Durham Technical Community College.

In October, early in the chase, Don Johnson, Motorola's site director, asked where the "meat" was in North Carolina's package, according to a memo to Hunt. The "meat" never came.

-State recruiters also were concerned that press coverage in North Carolina might hurt the project. Noted specifically was The News & Observer and its reporting on the project, Treyburn, Durham schools and environmental concerns in the watershed.

An update to Phillips, the Commerce secretary, from Carr noted that Motorola officials said the Richmond Times-Dispatch was "less controversial, less 'nosey' about the project and more of a booster."

But press coverage aside, North Carolina seemed to be losing the project. In late February, officials with the Greater Durham Chamber of Commerce, which had taken a lead role in recruiting Motorola, scrambled to come up with additional incentives. A chamber official told Commerce, "now might be the appropriate point in time to put forward any additional 'proposals/incentives' "

But not knowing what Virginia had offered made it difficult for North Carolina officials to come up with anything to match.

By February, Durham chamber officials had a sense that the project was in trouble, based on conversations with Motorola officials in the company's existing Research Triangle Park operation.

On Feb. 24, a fax went out to a group of Durham leaders and state officials. There was information, the fax said, "that suggests that we must take immediate action or the project may be lost."




Used with permission.
All rights reserved. No part of this article may be reproduced, translated, or transmitted in any form or by any means without permission in writing from The News & Observer.

Copyright © 1995, The News & Observer.


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