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Economic development leaders receive a lesson in incentives

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By Brian Slattery

LELAND — Brunswick County economic development officials learned a lesson in the changing methods to attract industry from a consultant who selects sites for them.

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Brunswick County Economic Development Commission Executive Director Jim Bradshaw invited Chris Lloyd, a consultant with McGuireWoods Consulting infrastructure and economic development, to speak to the EDC board Thursday, July 10, at the Brunswick Community College’s Leland Center.

Lloyd said his work as a site selector more often requires him to be a site eliminator.

“Economic development moves fast today to get through a complex process,” Lloyd said.

He spoke to the audience of Brunswick County’s economic development commission members, county commissioners, municipal economic development board members and business owners about the use of incentives to attract business to an area.

Lloyd said incentives are not the be-all, end-all of economic development, but they are part of a list of needs businesses will look for a community to fill. He said there are 3,500 communities in the United States and businesses are always looking for the place that fits their needs.

Atop the list, Lloyd said, are the logistics of the site a community is presenting.

“Industries expect sites to be ‘shovel ready.’ They want to know the site can be ready quickly,” Lloyd said. “If a site is not ready to go, it is easy for me to eliminate you.”

He added a company can use the Internet to learn about a site and the community.

“I guarantee right now someone is looking at your website and thinking about your community,” Lloyd said. The economic development commission’s website is “your front door,” he said. Not having information available makes it easy to dismiss a community just from an online search.

Lloyd said industries searching for a new location are also looking for more than just a site. They want to know the community is ready to work with them for the next 20 years, that there is a workforce that is qualified to do the job, that their CEO would be willing to move his family there. So they expect a professional team to work with them from the community side.

“They want a sense of place,” Lloyd said.

Incentives can be a top three concern or further down the list, but they are a part of doing business and more often the incentive is cash over any other benefits.

Tax credits don’t influence businesses anymore, he said. That has led to a “war on incentives” from political parties on the right and the left.

But he pointed to surveys that show a majority of the public sees job creation as the biggest issue for the government to address and support the use of incentive money.

“The silent majority wants something done,” he said.

Lloyd said North Carolina is focused on lowering corporate income tax as an incentive. The state is good at worker training programs, but has underfunded and restricted cash programs, has a cumbersome application process and lacks a political consensus on incentives. He pointed out that southern states surrounding North Carolina have embraced incentives on a larger scale, which puts local communities at a disadvantage when funding is unavailable to attract industry.

While North Carolina has spent $660 million on incentive programs, South Carolina has spent nearly $900 million. Virginia, Kentucky, Tennessee and Georgia have all spent more than double that amount, at least $1.29 billion for incentive programs. And Florida has put almost $4 billion into incentives.

Lloyd also presented numbers for strictly cash incentives available in a few representative states. North Carolina has set aside $15.1 million in the Job Development Investment Grants program.

Comparable programs in several states also overmatch North Carolina, Lloyd said — Virginia has $27 million available, Ohio has $29 million set aside, Texas holds $43 million and South Carolina has a $70 million fund.

Lloyd said the communities can’t approach incentives as a “whatever it takes” process.

Industries respond to communities that know what they can offer and have done their homework.

Communities will look at the return on investment their incentives can provide. They have written incentive policies, the business community supports their effort and elected officials receive frequent and transparent briefings on offers.

Lloyd said communities can’t expect every industry interested in their location to be the next Google and can’t depend on grant programs as incentives as they will eventually run out. And every year there is a business fad they can’t chase.

“Focus on the strengths of your community,” Lloyd said.

Commissioner Marty Cooke asked Lloyd how to promote incentives as an issue for state legislators to address.

Lloyd said to bring their representatives into their meetings and discussions more often.

“(You) only talk to the general assembly when they are in session. They don’t get invited to these meetings but they are available when they are not in session,” Lloyd said.

Project Diamond

Brunswick County’s efforts to use the incentive programs available through the state were rewarded at the North Carolina Department of Transportation’s Board of Transportation monthly meeting July 9-10.

The board’s Rail Division requested and received $200,000 from the Freight Rail & Rail Crossing Safety Improvement Funds to partially finance constructing rail industrial access track to serve a potential industrial partner for the county.

The EDC has two 1,100-acre industrial sites along U.S. 74/76 to promote to businesses in North Brunswick County

A site that sits on the Brunswick/Columbus County line also runs along the CSX Railroad line.

The NCDOT’s Board of Transportation approved the funding to support an unidentified industrial project called Project Diamond.

The board agenda described the project as a company considering construction of a new facility in Brunswick County. The company proposes to hire more than 1,000 new employees and make a capital investment of at least $35 million. They anticipate receiving at least 1,500 carloads of rail freight per year and require rail access in order to choose the Brunswick County site.

The funding was approved contingent upon an environmental review, a construction schedule that complies with grant requirements, meeting all the requirements of the Freight Rail & Rail Crossing Safety/Rail Industrial Access Program and implementation of transportation improvements necessary to protect the safety of the pubic contractors and employees of Project Diamond.

On July 11, Bradshaw released a statement describing the funding as an improvement to the facility to help make the site more attractive to the industry rather than part of an agreement to relocate to the county site.

“We are presently working with 13 industrial prospects. As we compete, we apply for grants from multiple state and federal sources. One of the prospects we are working with requires rail assistance. Therefore, we have approached CSX (Transportation) and the North Carolina Department of Transportation for funding to construct rail in case this particular industry located in Brunswick County,” Bradshaw said.

“We are also applying for a number of grants for other projects as well so you all will see other grants we are pursuing in the weeks and months to come. Most of the industrial prospects we are working with will take months to make a decision and are looking at multiple states, including this one. We want to make sure we have the best package we can to present so we can remain competitive.”

Brian Slattery is a staff writer for the Beacon. Reach him at 754-6890 or bslattery@brunswickbeacon.com.