05/14/08 — Duplin looks at industrial incentives

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Duplin looks at industrial incentives

By Steve Herring
Published in News on May 14, 2008 1:52 PM

KENANSVILLE -- Incentives for industrial recruitment, "love them or hate them," are part of the cost of doing business today, Bud Cahoon, economic development manager with the N.C. Electric Membership Corp., told Duplin County commissioners at the board's most recent session.

Meanwhile, the commission met in closed session for about an hour at the end of the meeting to discuss "economic development matters." The board adjourned without any discussion or taking any action after returning to open session.

Duplin County Manager Mike Aldridge said Cahoon's presentation and the topic of the closed session were not related and that the presence of both on the agenda were "happenstance."

Cahoon, who had been invited by the county's Economic Development Advisory Board to speak to commissioners, said the cost of incentives should not come up front, but rather off of the additional revenue streams created by new development.

Cahoon said incentives "do complicate the process somewhat."

Aldridge asked Cahoon if parts of an incentive package could come back and "bite you."

"Yes, some counties get ahead of the curve," Cahoon said.

He said it should be made clear upfront that if a business or industry fails to meet its projections for employment or other requirements then it does not get the incentives.

Cahoon presented a comparison of how some counties figure incentives. He said that even with guidelines it is often necessary to negotiate the incentive package depending on the circumstances.

He said guideline factors vary by county, but most include, but are not limited to: total financial investment; number of jobs created; payroll; and the potential for future expansion and increased employment.

For example, Sampson County offers a maximum grant of up to 50 percent of an industrial development of at least $1 million.

Aldridge said the purpose of Cahoon's visit was "informational only" to make commissioners aware of what is being done in other counties.

He said that when a business or industry visits Duplin County, it has already been to other counties. What is offered in those counties sets the bar for Duplin, he added.

Aldridge said some people see incentives as "giving away the store."

"That is not it, it is just a matter of being competitive," he said.

The county does not have a set formula for offering incentive packages, he added. One of the primary incentives sought by industry is land or site improvements including water and sewer. Not having to pay for the land or those improvement costs frees up money for an industry to use in other ways, Aldridge said.

He said he could recall only two occasions when Duplin offered incentives -- both of which were rebated taxes based on the industries making good on building and employment commitments.

"You are not giving away anything you had, you are rebating something that you would not have had if you hadn't gotten the development," he said.

Aldridge said the recent decision by Fibrowatt to locate in Sampson County just three miles west of Faison, was not because of Duplin's lack of an incentives package or because the county does not have an economic development commission.

When looking at a potential new industry a county must also examine the type of environmental impact it will have, he said.

He noted that the impact of a "high-tech" industry, such as one that manufactures computers, would be different than a "green industry" like Fibrowatt.

Duplin County disassembled its economic development commission some months back when director Woody Brinson retired.

Aldridge said the county is in the process of involving the public and private sectors to form an organization similar to the Wayne County Development Alliance, and that they hope to have a new director in place and the non-profit structures up and running by July.

He said it would take people who are more informed about the industrial-recruitment process in order to make it work.

"We have to attract those people who can held us attract industry," he said.

In his remarks to the board, Cahoon said, "The secret of any incentive is to get back more than you give out."

He added, "The public perception is that incentives are bucketloads of cash. Incentives, to me, are tools you have to use. It doesn't matter if you want to. You have to be competitive."