Quark Biotech Takes Its Incentives to California

Quark Biotech announced last week plans to shutter its Cleveland operations and relocate back to California. In today's Cleveland Plain Dealer, an article describes that the company will take at least $1.2 million in state technology grant money and maybe $200,000 from a City of Cleveland development grant with it back to California.

While there are no guarantees that any company will stay in place after receiving public incentive dollars, there are measures, called clawbacks, re-calibrations and recissions, that can help local or state government recover a part or all of what it invests in a company. Quark may return the Cleveland money, but the state may just be out of luck on this one.

The lesson here is that economic development incentives must be 'performance-based.' These measures should be built into incentive agreements at the front-end to ensure that all parties understand what the deal is.

Read more here.