Arbor Networks promises to add 20 new jobs in exchange for tax breaks
The Ann Arbor City Council unanimously agreed Monday night to provide another tax break for Arbor Networks Inc..
The information technology security firm will receive a five-year abatement on $883,527 in real property improvements and $7.8 million in new personal property and equipment.
The latest tax break for the company runs through Dec. 31, 2016. As part of the agreement, Arbor Networks will be required to add no less than 20 jobs by Dec. 31, 2013.
Arbor Networks — whose logo is shown here on a product called a "threat management system" — spun out of the University of Michigan more than a decade ago.
Melanie Maxwell | AnnArbor.com
City officials said the agreement in 2008 also required Arbor Networks to move 74 jobs to its facility at 2727 S. State St. and add no less than eight jobs. The company reported that as of December 2010 there were 74 jobs at that location, but due to economic conditions it wasn't able to add the additional eight jobs, said City Assessor David Petrak.
The city's administration recommended approval of the latest tax break approved Monday night, calling the attraction and retention of Arbor Networks' operation consistent with the city's economic growth objectives, as well as the goals of economic development group Ann Arbor SPARK.
"The digital information business is continually changing with new and faster technology and Arbor Networks needs new test equipment and digital equipment, with anticipation of 20 new employees resulting to this facility," Petrak wrote in a memo to council members.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
Dog Guy
Wed, Oct 19, 2011 : 6:52 p.m.
Did anyone notice whether this time Arbor Networks promised "cross my heart" or "cross my fingers"?
Carole
Wed, Oct 19, 2011 : 2:09 p.m.
As I read this article, apparently there was a tax break for the company with the understanding that they would move their 74 employees to another location and hire 8 new employees, which they did not do. Let's see they received nearly $5 m -- 8 new employee!. Didn't comply with original deal, but was able to make another deal for a tax break to hire 20 - hmmmmmm. Don't quite understand.
Bob Martel
Tue, Oct 18, 2011 : 5:55 p.m.
Also, is there a feedback & assessment mechanism to evaluate the actual number of jobs created and claw back some of the tax abatement if the company does not hold up its end of the deal?
Bob Martel
Tue, Oct 18, 2011 : 5:53 p.m.
What is the actual value to Arbor Networks of this tax abatement? It would be nice to have that information so we can better assess the "cost to the community" of these twenty jobs.
fjord
Tue, Oct 18, 2011 : 4:47 p.m.
Another tax-breaks-for-jobs deal? How many jobs will be lost because of the reduction in tax revenues? Just another giveaway to a profitable business at the expense of taxpayers. This is no longer an economy, it's a hostage situation.
Ron Granger
Tue, Oct 18, 2011 : 3:14 p.m.
"but due to economic conditions it wasn't able to add the additional eight jobs, said City Assessor" Let's be clear - Arbor was *wildly* profitable during that time. It was a business decision to take the tax breaks, but not add those jobs. Clearly the system is broken when such a successful company can abrogate their obligations in the deal without any penalty. There need to be checks and balances. Otherwise the tax breaks will be abused. I don't think Arbor's case is anywhere near as egregious as Umi/Proquest. They got huge tax breaks (credits?) in exchange for claims that hey would add thousands of jobs. There needs to be some follow up on that.
Jim S.
Tue, Oct 18, 2011 : 4:27 p.m.
Hi, Ron. Do you work at Arbor Networks? How do you know these things?