Star Tek Problem Highlights Economic Development Shortcomings

By Paul Gable

The situation at Star Tek does not appear to be exactly what came to light yesterday.

According to several sources with knowledge of Star Tek, the new local operation was not a startup. Instead, its roots lay in Jonesboro, Arkansas.

According to the information we have received:

  1. Star Tek had a successful operation in Jonesboro when it signed a new, three year contract with Direct TV, a contract that contained an opt out clause.
  2. Shortly thereafter, Star Tek began looking into the economic incentives being offered around the country and up popped Horry County.
  3. Direct TV essentially told Star Tek not to upset the applecart as it was very happy with the Jonesboro operation. But, Star Tek said it was moving to Myrtle Beach because the State of South Carolina and Horry County offered a number of financial incentives to relocate.
  4. After moving here, bringing supervisory personnel familiar with the Direct TV contract from Jonesboro, the company had trouble hiring personnel to fit their desired employee profile. This has been reported in various local media outlets as far back as April 2014.
  5. Finally, Direct TV took advantage of the opt out clause and cancelled the contract pulling its business from the local Star Tek operation.

Our sources say there is a smaller, healthcare related call center for Experian that currently employs approximately 40 people at the Myrtle Beach location.

However, the Direct TV contract was supposed to be the big one for the Myrtle Beach location with more than 150 local employees hired already and the vast majority of the announced 665 jobs tied to the Direct TV contract.

According to our sources, employees who were hired for the Direct TV contract have been told Star Tek is now hoping to grow the Experian contract (that would be the new healthcare healthcare client already on the site referred to in a Star Tek email yesterday) to take up some of the slack and/or find a new client to fill in for the loss of jobs from the Direct TV contract loss.

According to our sources, the number of affected employees is 150+, who have been told they will be paid through November but were put on notice that layoffs would occur after that if new or expanded contracts aren’t found to make up for the Direct TV contract loss.

This situation is a perfect example of how companies shop for economic incentives from government agencies, which have no better idea of how to create jobs and grow the economy than to throw public money around to buy jobs from somewhere else.

According to several Horry County officials, representatives from the Myrtle Beach Regional Economic Development Corporation told county council members that the Star Tek operation in Myrtle Beach would be a brand new startup (not coming from somewhere else) and that it had a “rock solid” three year contract with Direct TV as a solid base for job creation.

Neither of these statements proved to be true.

Did MBREDC fail in its due diligence as it was putting the deal together or were certain facts intentionally left out when the deal was presented to county council?

 

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