New Orleans officials signed off Tuesday on a $6.5 million incentive package for a Fortune 500 technology company that has made a landmark pledge to bring 2,000 jobs to the city over the next seven years.
The City Council’s Economic Development Committee and the city's Industrial Development Board agreed, at separate meetings, to pay that sum over a decade to DXC Technology, a Virginia-based company that provides technology and consulting services for businesses and governments.
The money will be divvied out in annual installments as the company shows proof it has hired the people it promised, officials said.
Though the IDB’s vote is final, the council committee’s vote must be ratified by the full council. That approval is almost certain.
“Today is a very good day for the city of New Orleans,” said Councilman James Gray, who chairs the Economic Development Committee.
The incentives are part of a much larger pool of inducements to lure the company, which was formed last year as a result of the merger of Computer Services Corp. and the enterprise services business of Hewlett Packard Enterprises.
The state agreed last year to a package valued at $115 million, which includes a $25 million initiative that will focus on expanding the number of degrees that Louisiana colleges and universities award annually in science, technology, engineering and math.
The company also is in line for $18.7 million in performance-based grants over the next five years to help cover some of its initial costs.
Moreover, the company is expected to participate in other benefits programs the state regularly offers corporations, such as a program that offers a cash rebate of up to 6 percent of a company’s payroll for as long as a decade.
DXC’s local payroll is expected to exceed $133 million by 2025, as part of a deal that brightens New Orleans’ reputation as a burgeoning technology hub and that has been described as the single largest jobs expansion in the city's history.
By the end of this year, the company is due to fill 300 jobs at its Digital Transformation Center in the FreePort-McMoran building on Poydras Street, mostly information technology and business positions.
The company is required to add another 300 jobs each year until 2025. The jobs — to be filled largely by Louisiana college graduates and local tech specialists — will pay $63,000 annually, on average.
“The intent is not relocations from outside states or within other countries,” said Terrell Boynton, the director and site leader of the local office. “The intent, not only with this initiative, but with DXC’s mission here, is to develop locally.”
Some 167,000 students would be impacted by the changes DXC wants to establish in colleges' tech curricula.
The company says its plan will boost by more than 10 percent the 16,500 digital media jobs in the New Orleans region and generate over $8 million a year in additional tax revenue.
Although the news was met with uniform enthusiasm by the IDB members, some audience members and Councilwoman Nadine Ramsey questioned whether DXC will be held to rigorous hiring standards, comparable to the city’s requirements for disadvantaged business enterprises and local hiring programs for public construction and professional services work.
Brooke Smith, Mayor Mitch Landrieu’s chief of staff, responded that DXC’s incentive deal does not involve such work and thus would not fall under those requirements.
However, she said, the city will pay DXC only after the company shows that it has met the requirements for job creation. If the actual job numbers are below the requirements, the incentive will be prorated to the lower number.
The company will study how it might provide for local and diverse hires, Boynton added.
Councilman Jason Williams and Ramsey pushed for DXC to give more frequent updates to the council about its progress toward meeting its hiring goals, an idea Smith seemed amenable to including in the deal.