SOUTH PORTLAND — When Texas Instruments (TI) completes its $5.6 billion
purchase of National Semiconductor, the computer chip maker might continue to
invest in its South Portland facility, or it might pick up stakes and move on
down the metaphorical road.
At Monday’s City Council workshop not even a trio of
National honchos, or their lawyer, could say for certain what might happen.
“On day one [after the sale is complete], the National
flag will come down, the TI flag will go up, and we’ll have a little
celebration,” said Doug Wilson, National’s VP of operations. “Then, on day two,
we’ll look at the books.”
Wilson said he expects the company to stay in Maine,
based on its higher-than-expected purchase price, and a sales force that could
increase National sales “by 10 times.”
“The fear I have is that if TI does what they say they
are going to do, we’ll actually run out of capacity,” he said.
Still, Wilson acknowledged there will be some
redundancies once the two companies merge and, for now, a planned $100 million
build-out of National’s Western Avenue facility is on hold “until the dust
settles.”
Councilors spared no breath in praising National as an
“amazing corporate citizen” of the city, just as they made no bones about a
plan hatched to roll out the red carpet to TI.
A TIF (tax increment financing) deal between South
Portland and National was set to expire this year. Created in 1995 when
National built its $200 million plant expansion, the deal has returned to
National 50 percent of all taxes derived from new construction and increased
property value assessments since then.
That’s amounted to $45 million dollars returned to
National coffers. A considerable amount, but a fraction of the $1.3 billion
Wilson says National has invested in South Portland since then. The other $45
million went into the city’s general fund, while South Portland also enjoyed
the benefits of hosting a business with 550 employees earning anywhere from
$28,000 to $200,000 (the plant’s 123 engineers earn between $53,000 and
$170,000).
According to City Manager James Gailey, he and city staff
have “worked diligently” with National over the past three months to hammer out
a new TIF deal. The deal presented to councilors Monday included a one-year
extension, this time splitting new tax revenue on a 60/40 basis.
“There’s not a lot to say,” said Gailey. “We’re just
proposing a one-year extension in hopes of giving National Semiconductor and
Texas Instruments a smooth transition over the next couple of months.
“It’s kind of hard for National Semiconductor to say, ‘We
are going to invest this much money into the plant over the next few years,’
because they don’t know what Texas Instruments is going to do. We hope that
over the next six to eight months, Texas Instruments will have better guidance
for managers here at the local plant, to then talk about new investment and
possibly extending the TIF agreement out further. But until that day comes, we
have this.”
According to the city’s attorney, Shana Cook-Mueller of
Portland-based Bernstein Shur, the city will get the larger share of the new
deal.
“What we are proposing in this one-year extension is that
that 40 percent of TIF revenues that are captures will be returned to the
company,” said Cook-Mueller. “Ten percent will go to the city’s TIF fund and
the 50 percent that has gone to the general fund will continue to do that.”
“I think it’s important that we do this because it
provides the playing board for the potential growth of the facility,” said the
city’s finance director, Greg L’Heureux. “There’s the income for the city, but
the real intent of any TIF is to support redevelopment of the facility and to
maintain jobs.”
“Essentially, what we are doing is throwing a
place-holder down,” said Councilor Tom Coward. “We’re saying, we want you guys
to be here, now sort it out and then come back and talk to us a year from now.”
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