This is an archived article that was published on sltrib.com in 2005, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
KraftMaid Cabinetry no longer has to pay above-average wages in Utah to qualify for $3.2 million in state incentives.
In return for public assistance, the Middlefield, Ohio, cabinet maker would have had to pay employees at a West Jordan manufacturing plant at least 25 percent more than Salt Lake County's median wage of $24,800 - and in some cases more than twice the median.
But Friday, the Governor's Office of Economic Development Board unanimously waived that wage requirement at the company's request - a rare move that underscores just how badly the state wants a 640,000-square-foot facility that could employ as many as 1,300 people.
Traditionally, employers receiving state economic development incentives have been required to pay above-average wages. That would guarantee the state gets good-paying jobs in return for its largesse.
But in the KraftMaid case, "we felt we should do this, given the size of the project and the large number of jobs involved," said David Simmons, board chairman. "We are trying to keep this project [in Utah]."
Friday's decision is the second major concession the state has made in recent weeks to ensure the company expands in Utah - even though KraftMaid pledged to do just that months ago.
Nearly a year ago, Utah offered KraftMaid a $2.25 million grant - one of the largest commitments ever from the state's Industrial Assistance Fund - to entice it to build a manufacturing plant in Utah.
In August - six months after the company publicly announced it was expanding in Utah - the company changed gears and instead requested a different and larger incentive: $3.2 million in tax rebates. Economic developers said the company threatened to invest more than $100 million to build a new manufacturing facility in another state if its requested concession was not granted. The request was approved.
KraftMaid spokeswoman Kim Boos would not comment on the company's latest request and would not divulge its wage rates. "We don't have anything to share publicly at this time," she said.
But Friday's decision means KraftMaid theoretically could pay the federal minimum wage of $5.15 an hour and still receive one of the largest incentives Utah has ever provided to lure a company to the state.
Simmons said he doesn't think that will happen. The company will have to pay a competitive wage to attract qualified workers. "I think they are very committed to paying at least the county median [wage]," he said.