CINCINNATI (TDB) -- Cincinnati City Manager Milton Dohoney Jr., reports in a memo to the mayor and council that Convergys Corp.'s (NYSE:CVG) downtown headquarters' payroll averaged "more than $100,000 per employee" in 2007. The company handles outsourced billing, customer care and human resources for corporate clients. Convergys had about 1,450 workers when it made a deal with the city in 2003 to remain downtown -- now it has about 1,471 (33 are part-time) -- amid reports it would add some 1,225 new jobs over a 12-year period. The memo indicates the company is falling short of the jobs creation goals. The memo is marked as number "1847" and can be tracked down on Cincinnati's e-gov online portal. The Daily Bellwether, however, will quote its entirety:
"The Economic Development Division has received the 2007 Annual report from Convergys relative to the Agreement for the Creation and Retention of Jobs, executed July 25, 2003. The report indicates that:
1) Convergys, as of December 31, 2007, employed 1,438 full-time and 33 part-time employees, for a total of 1,471 employees.
2) In 2007, the average annual wage of the 1,438 full-time employees was more than $100,000 per employee. The aggregate payroll for the 1,471 total employees was over $146,000,000; generating Earning Tax Revenues for the City in excess of $3,000,000.
3) Convergys exceeded their commitment of $100,000,000 of capital investment, as required by our agreement, by investing more than $166,000,000 in capital expenditures to date.
4) Small Business Enterprises (SBE) have been utilized for more than 30% of the expenditures related to renovation of the Atrium I building.
As indicated in the reports, Convergys had no net new employees for the Tax Year 2007; and therefore is not eligible for -- nor claiming -- any Job Creating Tax Credit for 2007. Therefore, Convergys is currently in compliance with the job creation terms of the Agreement, and payroll and capital investment significantly exceeded previous projections."
The Enquirer's Greg Korte was on the City Hall beat in July 2003 when the deal was struck to keep Convergys from moving to Northern Kentucky. While the jobs creation portion doesn't seem to have worked out, other parts of the bargain -- the earnings taxes and investments -- appear to have benefited Cincinnati.
Nice report, these breaks for businesses to remain are the kinds of things that really irk me. Rarely do businesses live up to their end of the agreement.
ReplyDeleteAlthough it is nice to see that while Convergys isn't living up to the job creation portion of the agreement, they seem to be meeting the other portions.