I read in the Fargo Forum that yet another much-touted economic development project here in North Dakota is failing.  Alien Technologies, a company that opened up shop in Fargo to make RFID tags, projected a payroll of 319 employed Fargo-area workers.  To date, the company has only managed to employ 35.

FARGO, N.D. From the ceiling of Alien Technology’s facility in north Fargo hang several vacuum hoses, waiting to be hooked up to the technological marvel that assembles and tests the company’s “smart tags.”

They serve as a reminder that while Alien has enjoyed strong growth in recent months, the plant is operating at less than full capacity. It also is short of long-term job projections Alien provided when seeking tax breaks and economic development incentives to expand to Fargo.

By 2008, Alien had expected 319 workers in Fargo. Its current count is 35. The company postponed its initial public offering of stock in July 2006, and went through a round of layoffs designed to boost efficiency and cut costs.

“I think, in their minds, obviously with their IPO they expected to be at a different stage,” said Brian Walters, executive director of the Greater Fargo Moorhead Economic Development Corp.

“But, again, for the capital investment they’ve made and the jobs that have been created, (they) have exceeded what we required,” he said.

If employing 35 North Dakotans is all that was required of this company North Dakota taxpayers are getting screwed.

Consider:

The Bank of North Dakota initially gave Alien Technologies a special, low-interest $1.7 million loan.

The Bank of North Dakota gave Alien Technologies a second special, low interest $1.2 million loan.

The Bank of North Dakota bought $500,000 of equity in Alien Technologies.

The Greater Fargo Moorhead Economic Development Corp. loaned Alien $134,000 to help buy down the interest on those Bank of North Dakota loans.

The state Commerce Department’s North Dakota Development Fund bought a $500,000 preferred stock equity investment in Alien.

The city of Fargo gave Alien a 10-year, 100 percent property tax exemption on its facility worth about $87,500 per year, based on the plant’s appraised value of roughly $3.8 million.

All of that based on Alien Technology’s claim when they opened up shop in 2006 to employ 1,200 people in North Dakota by 2010.  The taxpayers of North Dakota have invested $7,700,000 in this company through loans, purchased equity and tax exemptions.  And what have the taxpayers gotten?

Thirty five jobs, at a cost of $220,000.00/job.

Granted, some of these loans will probably be paid off.  Some of that equity might create some proceeds.  But given how badly off-track Alien Technology’s business plan seems to be that’s very much in doubt.

So given this, and all the other failures of government-run economic development we’ve seen, can we finally admit that government can’t create jobs?  That keeping taxes high to pay for loans and investments and tax exemptions for businesses that wouldn’t even be in North Dakota were it not for all the tax dollars they get is a bad idea that rarely ends in success?

I hope so, soon, because I don’t know how much more of economic development like this North Dakotans can afford.