City and county officials are poised to provide a combined $8 million and other financial incentives to Airbus as it prepares to break ground on its second final assembly line in Mobile.
A copy of an agreement between the Mobile County Commission, the Mobile City Council and Airbus was recently made public, detailing what local officials are willing to offer the European aerospace giant as it expands its footprint and operations locally.
The county and city will both provide financial incentives as Airbus begins to construct a second assembly line for its A220 aircraft — a twin-engine, medium-range jet airliner originally built by Canadian manufacturer Bombardier Aerospace.
The partnership between Airbus and Bombardier to build the A220 was finalized last summer, and the addition of the second assembly line is expected to result in a $210 million capital investment for Airbus’ existing campus.
A groundbreaking for the project has been tentatively set for Wednesday, Jan. 16.
In its proposed agreement with local governments, Airbus stated it will hire approximately 432 new employees for the project by the end of June 2021, pledging to give “good faith consideration” to local contractors.
In exchange, the city and county will each make $4 million cash contributions toward any and all “capital expenses incurred” by Airbus during the project’s development and construction. The council delayed the vote for a week, per its rules, but it appears the item will be cleared for takeoff next week. A County Commission vote on a similar cash incentive is planned next week.
If approved, the $4 million contributions would be paid out over a 10-year period.
The county and city would also agree to waive certain applicable permitting fees as well as abate certain sales, use and property taxes other businesses are required to pay.
Specifically, the agreement states the city would waive all noneducational sales and use taxes associated with construction until the entire project is completed, as well as all noneducational ad valorem taxes for a period for the next 10 years.
The Mobile Revenue County Commission also submitted a letter confirming any related improvements on land owned by the Mobile Airport Authority would not be subject to ad valorem taxes after the agreement is signed and finalized.
Airbus also pledges to make “good faith best efforts” to develop more apprenticeship and training programs through its existing partnerships with Flight Works Alabama and the state’s workforce development arm, AIDT.
That would include implementing a “fast track” training program specifically targeting members of the local community, including high school students and recent graduates, with job recruiting and training efforts.
A high school senior can enroll in a Flight Works program and graduate to the company’s “fast track” program before gaining full-time employment. An apprentice would be paid while training for the job.
The County Commission provided $500,000 toward the Flight Works facility in 2018 and the City Council will consider a $150,000 contribution in a separate agreement next week.
Councilwoman Gina Gregory said Tuesday she is frequently asked how the city can help county schools, and said support Flight Works and the fast track program would provide an opportunity to do just that.
“This shows that the city is involved in doing something for schools,” she said. “It shows the city is involved to the degree it can be.”
While it appears there will be little issue in approving these incentives next week, councilors did want to make sure disadvantaged business enterprises (DBEs) were given access to the project.
Britton Bonner, an attorney working for the city on economic development, told the council the company would make a “good faith effort” to involve DBEs wherever it could, as part of the agreement. He added the company would also make a “good faith effort” to hire from Mobile County.
“I would like to see a plan in place to make sure this is what they’ll do,” Councilman Fred Richardson added.