The Florida Department of Economic Opportunity and Piper Aircraft Inc. have agreed to amend an earlier contract to retain the company's operations in Florida and increase investment in aircraft manufacturing facilities.
Because the company is staying in Florida and has exceeded by about $30 million its capital and research and development investment obligations under the agreement, the state of Florida will permit Piper to retain half of approximately $6.6 million in economic development incentives already awarded to the company. Piper will be permitted to keep the other half, or about $3.3 million in previously awarded incentives, if it meets certain employment obligations for the next four years.
"Following a worldwide economic recession in general aviation, Piper is managing to emerge as a strong company with a backlog and a global presence in the aerospace industry," said Piper President and CEO Simon Caldecott. "As the largest manufacturing exporter in Indian River County, we are gratified that the state has recognized our ongoing contributions to Florida, Indian River County and Vero Beach."
The amendment calls for Piper to retain a specified number of 650 full-time equivalent positions, with an annual average salary of at least $46,500 for the four-year period. For each year the company meets the minimum employment threshold, its obligation to repay the approximately $3.3 million already received will be reduced by 25 percent. If Piper fails to meet the minimum employment threshold in any year, then it must repay significant amounts plus penalties.
Currently Piper is maintaining more than 650 full-time equivalent positions generating more than $40 million in annual payroll. The state of Florida has already received more than $13.3 million in escrowed funds that Piper has agreed will not be paid to the company under the original agreement, which was executed in 2008 prior to an unprecedented precipitous drop in the worldwide general aviation economy.
Piper requested that the state renegotiate its economic development incentive package in light of the unusual market realities for new aircraft sales and employment in the future. The recent amendment is a result of those negotiations. Since the original agreement and despite serious global economic challenges, Piper invested more than $100 million in the Vero Beach operation in addition to annual payroll and Florida supplier purchases. Piper's investment in the community, through product development costs and capital expenditures, has directly returned more than $9 for every $1 invested by the state and local governments in economic development incentives for the company and its employees.