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Incentives - good or bad business?

An up-and-down history

The microchip plant near Orlando has been run by a series of companies that have gone from high-tech boom to the brink of bankruptcy.

By Times Staff Writer
Published April 10, 2005

1980: AT&T's equipment division, Western Electric, announces plans for a microchip plant to employ 1,500, and possibly more. Gov. Bob Graham's administration and Orange County provide generous permits and pay at least $5.5-million to build roads and infrastructure to accommodate the plant.

1985: Plant opens.

1987: AT&T subsidiary, which inherited plant after breakup of the telephone monopoly, lays off 77 production employees at the plant.

1989: The plant says it will eliminate 117 jobs as plant production employment drops to about 540.

1994: AT&T says it plans to add about 100 scientists at the plant even as the company sheds 436 other jobs in Central Florida.

1995: Gov. Lawton Chiles' administration and Orange County pledge more than $10-million in tax refunds, cash, training aid and road money after AT&T executives announce they have a $90-million offer to expand their chip plant in Spain.

1996: Control of plant passes to Lucent Technologies, which provides a list of incentive items it wants from county, state and Universities of Central Florida and South Florida. The company considers new high-tech projects "on par with or greater than what Walt Disney World represents to the tourism industry."

1997: Legislature creates new sales tax break on high-tech equipment, new cash incentive program and new university funding to support high-tech industry.

County agrees to pay $1,681,667 for additional wastewater capacity over 10 years.

1998: Lucent announces joint venture to make chips in Singapore.

State and county offer up to $35-million in tax breaks and cash over 10 years. In turn, plant agrees to invest $287-million in a branch of renowned Bell Labs, with 200 employees making an average salary of $58,750; says it will donate up to $20-million in sales tax savings to UCF and USF, making the schools eligible for an additional $20-million from state.

1999: Orange County Commission approves up to $8.2-million over eight years for a new plant upgrade with 100 new jobs. City of Orlando kicks in $1-million over five years as Lucent becomes third-largest taxpayer in county - behind Disney and Universal.

2000: Office of Gov. Jeb Bush agrees to up to $6.5-million in "performance grants" for a $700-million investment and 100 jobs with an average annual salary of at least $38,000.

Lucent denies rumors of job shift to Singapore as plant employment peaks at more than 1,800.

2001: Plant cuts about 600 workers; informs county utilities division it will ship some "backgrinding" equipment overseas.

Lucent, which spins off plant to Agere Systems, gets tax refunds of more than $12-million for overpaying state taxes. County agrees to extend deadline for plant to request incentive payments.

2002: Agere announces factory is for sale.

State water board renews permit for plant to use up to 2.1-million gallons of water a day despite recent drought and watering restrictions in Central Florida.

2003: Governor's office certifies Agere for additional sales tax breaks.

2004: Agere says it will close plant by end of 2005 if buyer can't be found. Employment at plant drops to about 600.

2005: Economic development officials try to lure buyer with incentives.

Source: Times research, Orlando Sentinel

[Last modified April 10, 2005, 01:11:25]

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