Tech company must pay back most incentivesAlien Technology will be on the hook for nearly all of the millions in public dollars it received in the form of direct investment, tax relief and loans.
By: Dave Roepke, INFORUM
Alien Technology will be on the hook for nearly all of the millions in public dollars it received in the form of direct investment, tax relief and loans.
The only piece of the incentive package that’s not required to be paid back is about $250,000 in property taxes Alien avoided paying on the building it leases in the North Dakota State University Research and Technology Park.
Fargo City Assessor Ben Hushka said the 10-year tax exemption saved the company about $82,500 a year on its facility, which is valued at $3.8 million. The building, owned by a group of private investors, will be taxed on a prorated basis for 2009 based on when Alien leaves, he said.
There could be losses for North Dakota, which invested about $1.1 million in Alien through its state-owned bank and the North Dakota Development Fund. Shane Goettle, head of the state’s Commerce Department, said he is not sure how much that equity stake is worth.
“It’s just too early to tell right now. We’d like to get the full value back,” he said.
Goettle said state officials last week discussed divesting with Alien executives, but will hold off until the firm decides whether to make the Fargo shutdown permanent. Buyouts would be in installments, he said.
Nearly $3 million Alien received via two low-interest loans from the Bank of North Dakota will be repaid through a process directed by the “lead lender,” a private bank that hasn’t been publicly named, Goettle said.
“Typically, the debt is in a better position to be paid than the equity,” he said.
Alien has agreed to pay off the $90,000 it owes on a zero-interest loan it received from the Growth Initiative Fund, which is managed by the Greater Fargo Moorhead Economic Development Corp., said the group’s president, Brian Walters.
That loan was approved for about $134,000 and was meant to help Alien pay down interest on other loans. The $90,000 is the portion that’s already been paid out, Walters said.
While in business, Alien fulfilled the requirement to create 31 jobs mandated in the loan contract, Walters said. In 2006, it employed 44 in Fargo, though that figure dropped to 38 in 2007 and 22 in the past year, Walters said.
With the Fargo plant set to close, Walters said staff of the Growth Initiative Fund will ask the fund’s board today to follow the terms of loan, which require Alien to repay within four months. Because of a lag in processing, the repayment will actually take five months, he said.
Forum reporter Tracy Frank contributed to this report
Readers can reach Forum reporter Dave Roepke at (701) 241-5535