As Herbalife Opens, Incentive-Makers Learn From Dell Closure

A company that makes nutrition protein shakes and other dietary supplements will officially open its plant in Winston-Salem Friday. Herbalife received a large tax incentive package to locate its facilities in the city, and state and local leaders will be watching to make sure the company create jobs.

Herbalife is the gleaming new face on this manufacturing plant in southeast Winston-Salem. The $100 million site sits where Dell used to be.

Dell closed in late 2009 after it received massive tax incentives.  State officials were at odds with the company over whether it should repay millions of dollars in tax credits.

Herbalife is also getting their share of incentives--about $10 million worth. In return, Herbalife will have to make thousands of dollars in capital investments and create around 500 jobs by the end of 2015. The company currently employs around 350 people, and says it has made significant upgrades to the building. The county says Herbalife is on track for meeting its first incentives installment this year.

Kyle Haney, a budget and management analyst for Forsyth County, says while Dell did pay back a good portion of the money given to them, safeguards have been put in place to better protect the county's investment this time.

“I think one of the really important things that we do is try to structure our contracts where the call back is up front, so if they don't perform on schedule, we don't pay them the first amount because sometimes it easier not to pay someone than to try to get money back from them,” says Haney.

Meanwhile, some financial experts are raising concerns over the company's recent falling stock prices. In 2012, a prominent hedge fund manager accused the company of being a pyramid scheme and said he was shorting its stock. The company vehemently denies these claims. The Federal Trade Commission opened an investigation last year.

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