Meridian has paid thousands in taxpayer dollars to private companies to lure jobs
The office culture at the Meridian background-screening company Verified First is modeled on a Silicon Valley startup. Employees play Foosball during breaks. Management keeps a healthy supply of Nerf guns stocked. During the holidays, paper snowflakes dangle above the cubicles.
This year, the company is set to expand into a second floor of the office building it occupies near the intersection of Meridian and Overland Roads. The new space will include more cubicles, meeting spaces and a two-story slide.
Meridian taxpayers will be footing part of the bill.
In the past two years, Meridian has agreed to spend $300,000 in taxpayer money to encourage private businesses to relocate to the city.
The funds are part of a local match that cities must provide as part of the state’s Tax Reimbursement Incentive program. Companies relocating or expanding in Idaho can get back up to 30 percent of the payroll, sales and income taxes they pay each year for up to 15 years. Local matches are bundled with the state incentives to sweeten the deals.
Of the $300,000 Meridian has provided, $100,000 has gone to Verified First, which the state also agreed to reimburse $277,000 over eight years.
In return, Verified First has said it will bring 72 new jobs to Meridian, with an average wage of $46,700. To qualify for the tax reimbursement, a company must create new jobs with salaries higher than the average wage in the county where the jobs will be based. In Ada County, the average wage is $46,066.
“Meridian has been a tremendous partner,” said Zach Townsend, human resources director at Verified First. “The talent pool is amazing.”
Verified First was founded in Caldwell in 2013. In 2016, it moved to Meridian. It has grown from 60 employees to 125, with 90% located in Idaho.
CEO Devon Dickinson, though, lives in Arizona. When the company was looking to expand its sales team last year, it had considered opening a second office there. But Idaho’s incentives package persuaded the company to expand closer to where it began, Townsend said.
“When you double in size, your operations double in equipment— and cubicles and office space are expensive,” Townsend said. “This will really help the employees enjoy that space.”
Outgoing Mayor Tammy de Weerd has focused on making Meridian more than a bedroom community by attracting numerous companies to relocate there. By luring businesses to the city, Meridian diversifies its tax base and provides jobs that don’t require a commute to downtown Boise.
Economic Development Administrator Victoria Cleary said the tax incentive program is an important part of helping to create “family wage jobs” in Meridian.
“Meridian considers business attraction, retention and expansion a premier focus of our strategic plan,” Cleary wrote in a statement provided to the Statesman.
Matt Borud, chief business development officer at Idaho Commerce, said the state is excited about Verified First’s investment.
“It’s a very exciting project, particularly for the city of Meridian, to help a homegrown business in the tech community,” Borud said.
In addition to Verified First, Meridian also agreed to pay $200,000 over four years to the Idaho College of Osteopathic Medicine, a for-profit college and Idaho’s first medical school.
And it waived $100,000 in permitting fees when the college constructed a new building off of Interstate 84 near Locust Grove Road.
Idaho Commerce agreed to reimburse ICOM approximately $3.9 million in taxes over the course of 10 years as part of the agreement.
ICOM is putting the money from the tax reimbursement program toward a scholarship fund that is managed by Idaho State University.
“We made a pledge early in our establishment to not use any taxpayer money generated through this reimbursement program for operations,” said Stephanie Dillon, ICOM’s director of marketing. “We would prefer to have it directly benefit our students, and the scholarship fund does just that.”
ICOM said it would create 90 new jobs with an average wage of $88,300. So far, the company is on track: it created 34 jobs in 2017 and 67 jobs in 2018 for a total of 101 new positions with an average wage of $79,230, Borud said.
The job growth has come at a cost — for each of the 162 new jobs Verified First and ICOM are expected to create, Meridian paid $1,850. The state will also lose out on $4.2 million in tax revenue over the next 10 years.
Meridian has also managed to lure jobs away from Boise in recent years through the tax reimbursement incentive. In 2015, the state agreed to reimburse $6.5 million to Paylocity over 15 years in return for creating 551 jobs and $5 million in capital investments through building a new office in Boise. But just months after the grant was awarded, Paylocity decided instead to lease 62,000 square feet of space at Ten Mile Crossing, which is being built by Brighton Corp. and Ball Ventures Ahlquist in Meridian.
As part of its incentives package, the state paid Paylocity $300,000 directly as a reimbursement for infrastructure costs that were meant to be associated with a new building in Boise. Those funds were paid by Paylocity to Brighton Corp. and Ball Ventures Ahlquist to build the parking lot around the leased Meridian building.
Editor’s note: This story was updated on Thursday, Jan. 2 ,to add information about the Idaho College of Osteopathic Medicine’s scholarship program.
This story was originally published December 30, 2019 at 5:00 AM.
