Incentive program to boost business
By Steve Herring
Published in News on August 21, 2015 1:46 PM
Wayne County commissioners implemented an incentive grant policy Tuesday for new and/or expanding industries in the county and then just minutes later awarded the first grant.
A second grant application was tabled at the request of the applicant.
Commissioners went out of their way to offer assurances that the only tax money that would be used for the grants would be what is paid in by the companies receiving them.
The first grant, worth $7,439 per year over a five-year period for a total of $37,284, was awarded to Greensboro-based Repreve Renewables that produces bedding products for the poultry industry.
The grant is dependent on the company completing the project within two years once under way and creating the promised number of jobs and its $2.8 million investment.
"Just to make sure that it is very clear, we are not taking any local tax dollars and giving any incentive to any industry to come to Wayne County," Commissioner Joe Daughtery said. "What this program does is basically say, 'If you will come, pay your taxes, then we will give an incentive from the taxes that you paid back to you as a grant.' It is basically using their dollars."
The second company was not identified. County Manager George Wood said that is not unusual and does not conflict with the state open meetings and public record laws.
State law requires public hearings before the grant can be awarded.
In the future, the county will advertise a public hearing and the incentives, but not the company's name, he said. The company's identity will not be made public until the day of the meeting.
"But the public would know what the incentives are, how many jobs and that sort of thing," he said. "(The companies) don't want it pre-announced because they only want it announced when the board is going in there to vote on the incentives."
Wood said he and Wayne County Development Alliance President Crystal Gettys had been working on the policy for about four months.
Repreve Renewables and the second industry did not spur the policy, but just happened to come up while the policy was being developed, he pointed out.
"Most counties have incentive policies in place, and it is tool for WCDA," Wood said. "If we get a prospect in, one of the first questions they are going to ask you is, 'What kind of incentives can you offer?'"
Prospects are usually looking at several sites and are actually looking for ways to eliminate a site, he said.
If other counties can make specific offers and Wayne County says it is open to negotiations and doesn't have a formal policy, it could be eliminated right then, Wood said.
"They have to pay the taxes first and the amount of the incentive is always a percentage of what their taxes are," he said. "So really what we are doing is repaying some of the taxes paid. We would never go in the hole on this.
"If they don't perform, then we wouldn't give them the incentive."
Most counties and cities have an incentive policy, Wood said. Mrs. Gettys is going to try to convince the city of Goldsboro to adopt the same policy, or at least a similar one, he said.
It was Mrs. Gettys who early on suggested the need for the policy, since the county had some guidelines, but nothing formal, Wood said.
Incentives are not popular with the public, he said. But the county cannot afford not to offer them if other areas are, he added.
During the public hearing on the policy, Commissioner Ray Mayo asked if there were any circumstances in which the county would use tax dollars to "entice" a company to move into the county.
It is possible, but it would be at the discretion of commissioners, Mrs. Gettys said.
School board member and former commissioner Arnold Flowers said he supports the effort. But he added that he would like to see the county address how to help local companies with startup costs.
In some cases those cost can be enough to stop such a company before it can get off the ground, Flowers said.
Daughtery agreed the county needed to look at reaching out to small business and entrepreneurs.
Factors to be considered in awarding a grant include project size, the number and type of jobs created and the anticipated hourly wages and potential for future expansion and increased employment.
Once the policy guidelines have been met, and the industry has paid its full taxes on real and personal property, it would then get a percentage of the taxes in a cash grant, Mrs. Gettys said.
The grant will be determined by the amount of the investment, Mrs. Gettys said.
"Again, this is not any money that we are going to have to find," she said. "This would come out of their taxes that they have paid in full and it is over a five-year period that it would be disbursed each year after their taxes have been paid and we have been notified."
The grants would be broken down into four levels based on the cost of a qualifying capital investment by new or expanding industries:
* Level I (65 percent): $1 million to $4,999,999.
* Level II (75 percent): $5 million to $9,999,999.
* Level III (85 percent): $10 million to $24,999,999.
* Level IV (95 percent): $25 million or more. Grants at this level may quality for additional incentives including. Any additional incentives would come as a recommendation from a committee consisting of the county manager, a county commissioner, Wayne County Development Alliance board chairman and its president.
The annual grant would be calculated by multiplying the dollar amount of the investment, as determined the Wayne County Tax Department, by the current general county tax rate and then by the percentage level of the grant.