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County Economic Development Incentives Policy In The Works

By Cece Nunn, posted Mar 31, 2017
The Wilmington City Council and New Hanover County Board of Commissioners met Thursday to discuss economic development strides in the area. (Photo by Cece Nunn)
Officials are renewing a push to develop a business incentives policy that can apply to both the city of Wilmington and New Hanover County.

Creating "a realistic and sustainable policy for New Hanover County" was a recommendation in the Garner Report, an economic analysis from 2014 that helped boost local economic development efforts, such as plans in place to extend water and sewer on U.S. 421 and modify New Hanover's Special Use Permit ordinance.

City and county elected officials met Thursday afternoon to talk about the progress the area has made on the Garner Report suggestions, along with which of those feasible suggestions to tackle next.

Of the economic development incentives, County Manager Chris Coudriet said, "This is perhaps where we've had the least amount of success, but there were other things that took priority -- like the work around film incentives, water and and sewer, and there were also some slight changes in the legislation."

Beth Schrader, chief strategy and budget officer for New Hanover County, explained some of the relevant state law changes, which occurred after staff members presented a recommended framework for an incentives policy in April 2015.

Those changes came with new procedural requirements, including expanded notice and hearing requirements for every economic development appropriation, an explicit finding of fact requirement and that all appropriations would be subject to the Local Government Fiscal Control & Budget Act and public disclosure.

The recommended framework for a uniform local incentives policy suggests that instead of requiring companies to have a minimum capital investment, the focus should be on whether they exceed their return-on-investment threshold for prospective tax revenues and/or income to be received over the next 10 years. As a slide in Schrader's presentation explained, several target sectors have low capital investment, such as high-tech firms, but provide significant numbers of high-wage jobs.

Another suggestion in the recommended framework was that eligible jobs be paid 10 percent above the New Hanover County average for comparable jobs and that the wages be above the level that qualifies for entitlement programs and 200 percent above the federal poverty level. 

As of the third quarter of 2016, the average weekly wage in New Hanover County was 20 percent below the U.S. average and 10 percent below the North Carolina average, Schrader explained. That's a little better than the numbers were at the height of the recession when they were 24 percent below the U.S. and 15 percent below the state, she said. 

Under the staff suggestions, employer sectors recommended as targets for the area in the Garner Report, including life/marine sciences research and development jobs, could be eligible for a 10 percent bonus.

The staff recommended framework builds off of the city's current incentives policy. 

"The city does have an incentive policy; the county does not. Everything's a one-off negotiation. I think we as a staff would suggest that makes it a little bit more complicated for [Wilmington Business Development, Wilmington Downtown Inc.] and others who are doing work on our behalf," Coudriet said of the county's economic development partners.

In other words, a policy that could apply to the city and county is something potential employers are looking for.

"I'm sure there's unanimity to conform as much as possible with the city on the policy. We've been told by many people that it's necessary ... we identified it [as a priority] at prior joint meetings. Let's get it done," said Woody White, chairman of the New Hanover County Board of Commissioners.

In response to a question from Comissioner Jonathan Barfield about whether the wishes of the business community and the practices of other communities in the state and U.S. were being taken into account, Schrader said the recommended framework included in put from site selectors, companies, the Wilmington Chamber of Commerce, economic development partners and the city and county staffs.

"But if we're taking the opportunity to look at it one more time, there's no reason why we shouldn't engage all of those partners again," Schrader said.

In an analysis of best practices around the country, the staff found that some of the wishes are not necessarily allowed in North Carolina, Schrader said.

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