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California Competes Tax Credit Committee Meeting Report

The California Competes Tax Credit Committee met on Thursday to make final determinations on the 31 contracts recommended by GO-Biz. One awardee, Duarte Nursery, asked that their tax credit contract worth $250,000 be withdrawn from consideration. Since there is not enough time left in California’s fiscal year to replace Duarte, that amount of credit will be added to the $150 million available in the next fiscal year.

GO-Biz representatives announced that the date for the next round of applications would be announced on June 30 and would likely take place in September or October. There will likely be three or more rounds of applications for the 2014/2015 fiscal year.

The five member committee approved all but one of the recommended credits in a single motion without discussion. One application, that of #13 AI California, LLC (Aldi Grocery), was the subject of some debate.

Sara Flocks of the California Labor Federation offered public comment objecting to the tax credit allocation for Aldi on the basis that the jobs they were proposing to create were not “good jobs,” and that there is outstanding litigation against the company. She pointed out that the complementary NEC program specifically excludes all retail businesses from eligibility. GO-Biz countered that the amount and type of litigation against Aldi was not uncharacteristic for similar businesses, and that the distribution center and retail jobs were sorely needed in the areas of their proposed development. One board member, Greg Cogner, actively sided with Flocks’ comments. Three board members asked for additional time to review the issues surrounding the award. Since the credit must be allocated by the end of the fiscal year, another committee meeting was scheduled for June 30 for the committee to make its determination. If the board votes against Aldi, their $700,000 allocation will be added to the amount available for 2014/15.

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