Gunmaker Gets $39 Million From Taxpayers for 300 Small-Town Jobs

(Bloomberg) -- It took two decades of wooing, millions in tax credits and the gift of a free factory, but Georgia finally bagged its quarry. A Brazil-based gunmaker agreed to move from the Miami area to a small town just north of the Florida border.

Taurus Holdings Inc. is expected to bring 300 jobs to Bainbridge, Georgia, population 12,000. In exchange, Taurus will receive a government-incentive package that’s worth more than the $30 million the company said in 2017 it was willing to spend to settle claims that it manufactured defective firearms.

Gunmakers are weathering tough times that render their business unappealing to many communities. But economic-development officials in sympathetic political and regulatory environments like Georgia are competing relentlessly for the industry’s relatively stable and high-paying manufacturing jobs. Tennessee, North Carolina and Wyoming are among the states that have attracted firearms companies with perks such as tax breaks, construction assistance and relocation costs.

Bainbridge officials carried on a recruitment campaign that included repeat visits with gun executives during the National Shooting Sports Foundation’s annual trade show.

Gun Range

But it was neither wining nor dining that iced the deal. In late 2017, Rick McCaskill, head of the Development Authority of Bainbridge and Decatur County, began giving tours to Taurus executives of their prospective corporate campus. On a visit, the executives heard a welcome sound: the pop-pop-pop of a nearby police gun range, the sort of amenity that could be a zoning challenge in other jurisdictions.

“That really warmed them up,” McCaskill said.

Deal sweeteners totaled at least $39 million, according to the offer letter. Local governments pitched in $20 million for construction, $7.9 million of tax credits, $4.5 million of infrastructure work, $4.3 million in property-tax abatements and $3 million for equipment.

Taurus also receives 73 acres (30 hectares) of land, with room to expand, for a lease of $1 a year. After 20 years, Taurus will own the acreage.

The suite of offerings, including the land arrangement, is typical for a Georgia jobs deal, according to Kasia Tarczynska, a researcher at Good Jobs First, which maintains a database of subsidy deals. The cost per job is still high, she said.

A deal for $50,000 a job is fair, Tarczynska said. The Taurus deal is more than $130,000 per job.

‘Give It Away’

“Right now we’re heavy on the give-it-away side of the pendulum,” McCaskill said. “If you’re going to get a project these days, you really have to put a lot into it.”

Taurus will spend $22 million in the community, according to the Bainbridge city manager, and there’s the possibility that Taurus’s relocation could attract related manufacturers. McCaskill said he already has a commitment from the box-maker that packages Taurus’s guns to open a plant with 10 jobs in the area.

Subsidy deals are common, though they remain controversial. Critics say they starve public coffers, sucking money from schools and infrastructure repair. Communities have spent billions for companies to move jobs rather than create new ones. Wisconsin’s $4.5 billion deal in 2017 with Taiwan-based tech firm Foxconn to bring as many as 13,000 jobs to the state has been criticized for giving up too much. Amazon.com Inc. set up a reality-show-style competition last year among North American cities to determine which would grant the $870 billion company the most attractive concessions to build there.

Coming to America

Since coming to America in the 1980s, Taurus’s U.S. operations have netted millions in sales by offering low-cost alternatives to Smith & Wesson Corp. and Glock Inc. Taurus exports to over 100 countries; the U.S. accounts for 80% of its revenue.

Taurus joins a trend of gunmakers on the move. Beretta shifted to Tennessee, Strum Ruger & Co. to North Carolina, and five different weapons manufacturers in recent years have relocated to Wyoming. Each of the states shelled out incentives to entice the firearms companies.

“We continue to see states recruit companies to leave less hospitable environments, like Connecticut,” said Larry Keane, senior vice president of the National Shooting Sports Foundation. Connecticut has passed laws regulating gun ownership in the seven years since a gunman killed 26 people, including 20 schoolchildren, in Newtown. Taurus was “very well-received by the citizens of Bainbridge in creating good paying, quality manufacturing jobs that will be there for a long time,” he said.

Subsidies for Taurus’s facility in Florida -- about $369,000 of tax refunds over seven years -- ended in 2017, public records show, and the narrow defeats of gun-control Democrats for two statewide offices in 2016 was a political risk. Despite years of voting with the National Rifle Association, Florida lawmakers raised the age required to buy firearms in the state after shootings at an Orlando nightclub in 2016 and a Parkland high school in 2018.

“I think Florida was really up for grabs,” McCaskill said. A big part of his pitch was that Georgia “is a very gun-friendly state,” he said.

In 2016, Taurus settled a class action lawsuit that alleged nine different models of its firearms fired unintentionally when bumped or dropped, even with safeties on. The company agreed to buy back or repair the models without admission of wrongdoing.

In October, Taurus filed a notice in Florida saying it would dismiss 175 people at its factory there.

“That’s a part of life,” McCaskill said. “If you’re not constantly adding new jobs, the ones that are here aren’t all going to stay. It doesn’t work that way.”

To contact the reporters on this story: Polly Mosendz in New York at pmosendz@bloomberg.net;Caleb Melby in New York at cmelby@bloomberg.net

To contact the editors responsible for this story: Aaron Rutkoff at arutkoff@bloomberg.net, ;Jeffrey D Grocott at jgrocott2@bloomberg.net, Bob Ivry, Larry Reibstein

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