North Carolina officials have terminated a jobs grant for a Durham-based power technology company, saying that the company failed to comply with reporting requirements tied to the economic incentive — one of several such cancellations this week tied to unusual compliance issues.
Smart Wires Inc. in 2021 announced plans to move its headquarters from California to Durham — a $21.5 million investment that was expected to create 250 high-paying jobs at the Durham office and a research-and-development facility over five years. To lure the energy-grid technology company at the time, the North Carolina Department of Commerce’s Economic Investment Committee approved a jobs grant worth about $2.8 million, to be paid to the company in installments if it met hiring and investment targets.
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The company opened its headquarters in Durham in 2022 and had hired about 40 people when it opened. But on Tuesday, the committee canceled the company’s grant, saying it failed to file its 2023 annual report on its investment and hiring in the state. The report was due March 1, 2024, but the company missed that deadline and still hadn’t filed the report by the end of 2024, officials said. No grant payments had been made to Smart Wires, a department spokesperson said.
It was unclear how much money the company has invested or how many jobs it has since created in Durham. A spokesperson for the company didn’t respond to a request for comment.
Commerce officials enforce benchmarks and reporting requirements to ensure that the state’s grant dollars are being issued only to companies that make good on promises to invest and hire in the state. Even if a company meets its investment and hiring goals, the state can cancel economic incentives if a company fails to comply with reporting requirements.
And while it’s not unusual for the state to cancel incentives deals, it is rare for cancellations to be spurred by reporting failures. It’s more common for companies to request a cancellation of an incentives grant citing changes to business strategy or economic pressures.
Those don’t appear to be issues for Smart Wires. Last month, the company said it had raised $65 million in fresh funding to spur expansion in the face of increasing electricity demand from data centers that serve artificial intelligence applications.
Other cancellations
Smart Wires was one of three companies to have grants canceled over what state officials described as a failure to report.
Commerce officials also canceled a grant worth up to $2 million for BestCo, a maker of over-the-counter drugs, vitamins and supplement products, which in 2022 promised to invest $177 million and create 394 jobs in Mooresville. The company also hadn’t filed its annual report, commerce officials said. The company didn’t immediately respond to a request for details on how much it had invested or how many people it had hired. No payments had been made as part of that grant, state officials said.
And a grant worth up to $1.2 million was canceled for Sunlight Batteries, which announced plans for a $40 million expansion that was expected to create at least 130 jobs in Mebane. It was also unclear how much the company had invested or how many jobs it had created as part of that plan. The company didn’t file its annual report, officials said. A company spokesperson didn’t immediately respond to a request for comment. No grant payments were made to the company, state officials said.
Equitable Life requests termination
Commerce officials also terminated a grant worth up to $11.8 million for Equitable Financial Life Insurance Co. on Tuesday after the company asked the state to kill the potential incentive tied to a Charlotte expansion.
In 2017, the company had pledged to invest about $18 million as part of a plan to add 550 jobs in Charlotte, where the company’s biggest physical facility as measured by headcount is located.
To meet the requirements of the grant, the company needed to create at least 495 new jobs by the end of 2023. But in a letter last month to state officials, executives said the company had missed the mark by about 95 jobs “due to larger strategic changes in our business and industry as a result of the Covid-19 pandemic.”
“The company remains committed to both its workforce of over 1,000 employees and physical operations in North Carolina — as evidenced by the over $35 million of investments it has made, and continues to make, in its Charlotte facility,” Jeffrey J. Hurd, Equitable’s chief operating officer, said in a Jan. 17 letter to state officials.