The intersection of preparation and opportunity has presented a slate of four economic development proposals under consideration, according to local officials.
It’s one of the only times city and county officials have fielded approval for this many incentive payment packages at once.
Though details are still undisclosed, the companies represent a variety of industries and positions, according to the preliminary details shared thus far.
New Hanover County and city of Wilmington officials are preparing for the performance-based incentives packages, offering the companies up to $2.6 million combined should they meet specific job-creation and investment goals.
Wilmington Business Development CEO Scott Satterfield attributed the timing of the full plate of proposals to “the benefit of a lot of work and a lot of luck” when addressing commissioners last month.
“We’ve got a full pipeline, and that’s not uncommon, but for all of these to come together, it’s kind of interesting, certainly,” he told the board.
County commissioners approved their portion of the five-year deal, committing more than $1.9 million. As of press time, the city council was expected to follow on March 1 by budgeting nearly $700,000 for the packages.
Combined, the four companies – with differing plans – aim to create an estimated 1,064 jobs and invest $126.2 million in real and personal business property in the area. Three are existing companies, and one is a prospective business looking to locate in the area to serve the Port of Wilmington.
“These [are] a culmination of years of work in some cases. There obviously are long-term relationships and trust between the companies, our organizations, both public and private sector partners,” Satterfield told county commissioners. “Our project pipeline is extremely active right now.”
Satterfield said WBD prefers to consider local incentives an effort to allow a company “to keep some of its money.” They aren’t actual tax reimbursements, but they can be understood similarly, he explained. Accounting for the planned investments, “We’re allowing these companies [to] potentially keep about a percentage-and-a-half of their money,” he said. “From that standpoint, I think it’s a pretty fair investment.”
No payments will be administered until performance is verified, he said.
The local incentives are being prepared as part of a package that also includes potential state grants that are still pending, according to local officials. N.C. Department of Commerce spokesperson David Rhoades said the department does not comment on companies’ conversations or plans prior to announcements.
“Strictly speaking, it’s not like the taxpayer is reimbursed directly,” Rhoades said of the state’s most well-known incentive program, the Job Development Investment Grant, or JDIG. “Speaking in a general way, that could be categorized as a reimbursement ... it’s a pretty good way to explain how the program works.”
When asked to reflect on the factors behind the latest batch of proposals, New Hanover County Commissioner Deb Hays said the region’s profile has risen in recent years. “All of a sudden, we’re on the map,” she said.
The rise of remote work serves the region favorably, she said.
“They’re choosing where they want to live,” Hays said. “And guess what? We live in a choice area.”
The docket of newly approved incentives arrives at a time local governments had recently cleared their previous direct economic development obligations. In its fiscal year 2019, the city wrapped up its incentive commitments to Live Oak Bank and CastleBranch and finished out payments to PPD in 2018.
Before approving payments for Vantaca in September, the county had just one recurring direct-to-business incentive recipient budgeted that remains in place today: National Gypsum. The company was approved to receive up to $580,000 in 2018 from both local governments over a five-year period to restart its shuttered plant. Those payments are scheduled to stop after fiscal year 2024.
Beginning with the upcoming fiscal year 2023 budget, five new recipients are slated to join the city and county’s incentives docket (Vantaca and the four undisclosed companies referred to as projects Speed, Transit, Buckeye and Clear).
The city’s new financial obligations total $155,000 annually through 2027. New Hanover County’s new annual obligations over the same timeframe total $407,500.
As for Wilmington, the five new companies will join the city’s recurring National Gypsum payments and its $30,000 annual payments to Wrightsville Beach for the deannexation of the Galleria project on Wrightsville Avenue.
In 2014, the town and city entered into a 30-year deal, by which Wilmington would pay Wrightsville Beach $800,000 over time for the deannexation. Wrightsville Beach first annexed the property in 1985, according to previous reporting from Lumina News. The developer, State Street Properties, pitched plans to transform the space into a mixed-use center including a seven-story hotel in 2019; the company withdrew its plans in 2020 following concerns from neighbors. So far, no new proposals have come before city council, but the developer submitted a new street layout concept to city planners in January.
Other than the Galleria payments, which are based on an interlocal agreement, the commitments represent just the “potential annual amounts ... provided the benchmarks are met each year,” according to city spokesperson Jennifer Dandron.
Payments are adjusted based on the percentage of the benchmark met, Dandron said. For example, PPD received less than the full amounts it was eligible for after missing hiring goals.
Companies can also forgo their plans altogether, rendering budgeted incentive payments moot.
In 2017, Alcami Corp. gave up its $500,000 in local incentives as part of its planned expansion to pursue Durham instead.
This year’s roster of new companies could be just the beginning; Satterfield said even more “significant opportunities” and new announcements may arise this year.
“To have four companies eager to expand in New Hanover County is a testament to our economic development partnerships and the opportunities that exist in our community,” said New Hanover County Commissioners Chair Julia Olson-Boseman.
The creation of diverse and highwage jobs is a key priority in the county’s strategic plan, according to Boseman.
“We have been working hard to ensure New Hanover County has an environment where businesses can plant roots, grow and thrive,” she said. “I think these four companies are a reflection of that hard work and the work of our partners.”