BATON ROUGE, La. (AP) – Louisiana has ended its economic development deal with Bell Helicopter and is trying to recover millions of dollars in subsidies, saying the company failed to create the jobs promised in the $26 million facility built by the state.
Economic Development Secretary Don Pierson announced late Tuesday that he made the decision after “four years of underperformance by the company.”
“The state of Louisiana has met its obligations for the project. Bell Helicopter has not,” Pierson said in a statement.
The company disagreed Wednesday that it violated the terms of its Louisiana deal. But with the state cutting off incentives, Bell has started closure of the Lafayette facility involved in the dispute and filed a lawsuit in state court Tuesday seeking to avoid repayment to the state.
“Employees in Lafayette were notified Monday, and Bell is actively working with each of them to either find positions within the company appropriate to their skills and interests or help in finding work in the local community,” Robert Hastings, Bell executive vice president, said in a statement.
The deal with Bell Helicopter was highly touted when announced by former Gov. Bobby Jindal’s administration in 2013, with the company planning to assemble helicopters in Lafayette and create 115 new full-time jobs. Louisiana competed with several states to win the project.
Pierson said Bell employs 22 people at the site today, not even meeting renegotiated, lower job benchmarks.
The Louisiana Department of Economic Development “valued Bell Helicopter as a world-class manufacturer with world-class aerospace products,” Pierson said.
“We regret that our experience with Bell Helicopter has left the state of Louisiana with no other choice but to terminate.”
When the deal was announced, the Jindal administration agreed the state would build a $26.3 million 82,000-square-foot (25,000-meter) hangar facility at Lafayette Regional Airport that Bell would lease. The state offered $8 million in additional grants for infrastructure, equipment, relocation and other expenses.
Gov. John Bel Edwards’ administration is seeking to recoup some of that spending. Pierson’s office said the cooperative endeavor agreement calls for a $16 million repayment from Bell and the state will pursue additional damages beyond that.
Texas-based Bell initially announced plans to assemble helicopters in Louisiana. Pierson described continuing changes to the plans, with the state agreeing to instead allow the company to do partial assembly of a different helicopter than first announced. Pierson said the company later told the state that it was again changing the scope of work in Lafayette.
Bell hasn’t reached the 95-job benchmark required by this year, Pierson said.
“We must protect the interests of the state of Louisiana and its taxpayers,” he said.
Hastings, representing Bell, said the company invested its own money in the Lafayette facility to support the assembly work and said it was following a known “master schedule” that was slowed by federal regulatory hurdles.
“We have remained in compliance” with the state deal, he said.
The company filed a lawsuit against the economic development department, asking a state district judge to declare that Louisiana breached its contract with Bell by ending the deal and the company doesn’t owe the state anything.
Other Bell facilities in Louisiana aren’t affected by the dissolution of the Lafayette deal.