IBM will report Columbia job figures to state by year's end

Monday, September 19, 2011 | 12:01 a.m. CDT; updated 4:49 p.m. CDT, Monday, September 19, 2011

COLUMBIA — Much of the more than $30 million in state and local incentives used to lure IBM to Columbia was contingent on the company's ability to produce jobs. But since opening in 2010, the company has remained mum on how many employees are working at its technology service center on LeMone Industrial Boulevard.

IBM spokesman Jeff Tieszen said the company was on pace to reach its original goal of hiring 600 full-time and 200 contracted information technology employees, but it wouldn't disclose how many jobs had been filled so far. 

A breakdown of IBM's incentives


Missouri Quality Jobs

What IBM gets

$14.8 million in tax credits from the state accrued over a 10-year period.


IBM has to create at least 100 full-time jobs, a figure it already has reached. The jobs must have an annual average salary above the Boone County average of $36,280.


According to a letter the state sent IBM, the issuing of the credits began on July 25, less than a year after the company made its first hire in October 2010.


Missouri BUILD program

What IBM gets

$11.6 million in tax credits from the state accrued over a 10-year period.


IBM has three years to hire 600 full-time employees. The jobs must have an annual average salary above the county average.


The state has not issued these credits yet.


Lease agreement

What IBM gets

During its first 10 years in Columbia, IBM leases its building for $1 per year, regardless of the number of jobs it creates. If it extends the lease for five years, its rent is technically $100,000, but it receives a rent credit for each full-time employees it has, up to 600 workers. Thus, if it reaches 600 full-time employees, it has no fixed rent.


During the first 10 years, IBM pays a “fixed rent” of roughly $111,000 per month to amortize a $10 million loan the Columbia Area Jobs Foundation took out to renovate IBM's building. It pays an additional monthly rent of $50,000 to cover operating expenses. If it extends its lease, it will still have to pay the additional rent.

Additional benefits

IBM also accepted $4.5 million in job training incentives and $412,500 worth of recruitment assistance from the state. The company didn't accept Chapter 100 bonds originally offered by Boone County that would have provided sales tax exemption for personal property.

But at the end of this year, that figure will become public information.

In order to continue receiving one of the tax credits that drew the company to Columbia, IBM will have to report hiring and payroll figures to the state at the end of its tax year, on Dec. 31. And though the company has received some of the tax credit, jobs training and recruitment assistant incentives, it has to hold up its end of the bargain to receive others.

According to a tax credit application IBM filed with the Missouri Department of Economic Development, the company had hired 101 full-time employees as of April 14. The average salary of those workers was listed as $67,063. 

When IBM's arrival was announced, Regional Economic Development Inc., a nonprofit group that was involved in negotiations for IBM’s coming to Columbia, said IBM would pay employees an average salary of $55,000.

In an interview last year with the Columbia Daily Tribune, REDI chairman Dave Griggs said IBM planned to hire at least 90 percent of its workforce from within 60 miles of Columbia.

When asked Sept. 12 by the Missourian where that jobs number came from, Griggs said, "One can make some assumptions, and the vast majority of them are going to be hired in a  60- to 90-mile radius of Columbia."

Griggs said he believed IBM was concerned about finding employees locally before selecting Columbia because it was having difficulty staffing the service center it opened in Dubuque, Iowa, in 2009.

IBM spokesman Tieszen said the company didn't have a goal of hiring 90 percent of its employees locally, but he added that it was recruiting heavily from MU and other Missouri universities and that a majority of its hires were from within the state.

"One of the major reasons we chose Columbia was because of the local talent pool, and we've been very pleased with it," he said.

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fhhdg hfgybdh September 19, 2011 | 10:19 a.m.
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Yuan Yipeng September 26, 2011 | 12:36 a.m.

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