Exclusive: How North Carolina beat NY, Colorado to win a 1,000-job expansion
As the world grappled with the ensuing pandemic in early April, other news was brewing on Jones Street: Raleigh communications software firm Bandwidth was preparing to announce a plan to bring 1,165 high-paying jobs to the City of Oaks.
Under the code name “Project Athens,” the company, which provides 911, voice calls and text messaging services, was seeing what CEO David Morken described as “unprecedented levels of demand for communications services.”
“We’re enabling a more connected world at a time when people everywhere need it most,” he stated in the jobs announcement, which included a $106.4 million investment and a new headquarters off Edwards Mill Road.
But winning those jobs – which come with a slew of competitive benefits – was hardly guaranteed. Records, provided by the North Carolina Department of Commerce through a public records request, show it required an aggressive incentives package.
Bandwidth (Nasdaq: Bandwidth) was seriously toying with an alternative plan, bringing the new jobs to operations at its other office locations in Denver, Colorado or Rochester, New York, records show.
The company told the state in its incentives application that Denver was a real option, having “become a destination for tech companies.”
“Bandwidth has been able to consistently grow in that location since 2010 including doubling the office space last year,” the company told the state in its grant application..
And the Rochester office, which opened in 2018, was a viable option, too.
“The ease and speed with which [Rochester] was launched has made it a very attractive option for future growth,” the company stated, adding that the low-rent benefits, as well as “a large talent pool from established telecom engineering companies in the area” could make Rochester competitive to Raleigh.
“The company is contemplating expanding both these existing offices by 450 net new employees over the ensuing five years, with a projected capital investment spend of $27MM for each office during that same time period,” the company told the state.
And both alternatives put up an aggressive fight in terms of dollars, records show.
Here’s what Bandwidth told the state it could get in incentives from Colorado and New York:
- Colorado: $10 million to $11 million
- New York: $12 million to $15 million
But a much higher incentives haul helped lure Bandwidth’s continued commitment to Raleigh instead. The state incentives package, which included more than $1.6 million in community college training, totaled more than $33.9 million. And Wake County and Raleigh offered up nearly $3 million and $1.7 million, respectively.
According to the incentives agreement, Bandwidth needs to create and keep at least 932 of those jobs in order to receive grant funds by 2027. By 2023, it needs to have created at least 334 of those jobs, with the targets increasing every year. And the agreement has Bandwidth pledging to pay at least $87,149 in average annual salaries for those new jobs. For comparison, the Wake County average for 2019 was $62,395. Bandwidth said its goal was even higher, average wages of $96,832 for the new positions.
Currently, Bandwidth’s 675 employees (as of the grant application) make an annual average salary of $101,660.
Of the new jobs, the majority, at 410, will be in research and development, according to what the company told the state.
And a high salary is just one of the benefits cited in the grant application. Bandwidth, according to the application, offers its employees a “90 minute workout lunch,” an on site nutritionist, “corporate chaplains” and will preparation services, along with health benefits and new parent leave.
“Current operations are housed in several buildings in the Centennial Campus Office Park… however this new project will aim to bring all current Raleigh employees and new jobs included in this grant application to a single headquarters campus,” the company stated in its grant application.
Bandwidth told the state the plan is to construct roughly 400,000 to 500,000 square feet of building and site amenities to accommodate its new headquarters.
Original Article Source: Triangle Business Journal