The Lubbock Economic Development Alliance provides incentives to businesses that create jobs or bring added business to the City of Lubbock.
"The whole point of this is to bring new dollars into the community," said LEDA CEO and President John Osborne.
There is a list of criteria for local businesses to meet in order to be considered for the incentives. In addition to new jobs, companies must be able to outsource their goods or services to regions outside the City, which brings outside business.
"I know a number of local printers have been upset with us with the fact that we incentivized a deal with a local printer that's been in business for over 20 years but they fit all the project guidelines," said Osborne. "At least that company can continue to grow and expand."
Another company upset with LEDA is Beck Steel Inc. John Beck Jr. helps run his family business, which has been in Lubbock for 40 years. "Basically what LEDA is doing is they have made a decision to give incentives to one of our competitors," said Beck.
KCBD NewsChannel 11 obtained official documents that reveal LEDA gave Desert Tank $394,000 as an incentive for the creation of 92 new jobs.
Beck said the incentive has caused his company to increase wages for workers artificially, which amounts to $9,000 a week, $500,000 a year.
"The market determines what the wages are not some government agency," said Beck.
Beck also said the claim of creating more jobs for companies is sometimes an illusion.
"You pay somebody an incentive to leave company A to go to company B you haven't created anything," said Beck.
LEDA'S incentive program provides money or programs to businesses who meet a list of criteria, including new jobs and outsourcing 51% of services or goods outside the City of Lubbock. For example, Osborne said this program has helped to alleviate the shortage of local nurses through their assistance to programs like the one at Texas Tech University. The program can also help particular industries who require specialized positions.
Since the steel industry requires highly skilled worker, Beck said he simply cannot hire enough employees.
"We can't afford to lose one worker," said Beck.
Out of 85 employees, Beck said he needs to hire at least 25 more. The shortage of these workers makes the industry competitive for employers, which is one reason Beck had to artificially increase wages. Beck said the boost Desert Tanks received amounts to an extra $2 an hour per worker, which they had to match.
Beck said he is not familiar in the criteria, since LEDA has never contacted his company. "We've never gotten an email a questionnaire, a phone call, a lunch invitation; none from LEDA has ever called this office. We're probably one of the largest employers in Lubbock."
Osborne said they want to work with all local companies that are eligible to participate in the incentives.
He stressed the program is designed to help the local economy, not create more competition.
"We have a bylaw that basically states that it can't be devastating to a particular industry."
Copyright 2012 KCBD. All rights reserved.