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19 <br /> 1 topics, including the strategic communications plan, should be addressed at which work <br /> 2 sessions over the next few months. <br /> 3 <br /> 4 The Board took a 15 minute scheduled break. <br /> 5 <br /> 6 <br /> 7 3. Economic Development Incentive Guidelines <br /> 8 (Steve Brantley- Presenter& Rod Visser) <br /> 9 <br /> 10 <br /> 11 Rod Visser drew the Board's attention to PowerPoint slides (Attachment 3a) and <br /> 12 spreadsheets (Attachment 3b) that Economic Development Director Steve Brantley had <br /> 13 provided for inclusion in the retreat agenda packets. The stated objective for this <br /> 14 segment of the agenda was that the Board review and discuss Economic Development <br /> 15 Incentive Guidelines and provide direction to staff. <br /> 16 <br /> 17 Steve Brantley said that he and his staff had spent 5 months researching what other <br /> 18 parts of North Carolina do with economic development incentives. Their research was <br /> 19 focused primarily on business recruitment, encompassing corporate headquarters, <br /> 20 research & development (R&D), warehousing, and the like, on par with the recent <br /> 21 Japanese success. <br /> 22 <br /> 23 He said that most large projects like Morinaga include an incentive component in the <br /> 24 decision-making process, whether with the company or site selection consultant. The <br /> 25 prospect of incentives (or not) can affect a decision even to make a first visit to a <br /> 26 potential site. People's reactions to incentives range from repugnance to ambivalence <br /> 27 to acceptance as a part of doing business. The reality is that when trying to put <br /> 28 businesses in the County's economic development districts of the caliber of Morinaga, <br /> 29 it's a normal part of the site selection process. <br /> 30 <br /> 31 Steve Brantley discussed various aspects of State incentives, including matching <br /> 32 requirements. He explained that incentives have a number of uses, including providing <br /> 33 a competitive advantage. He provided additional detail about the AKG North America <br /> 34 and Morinaga America Foods projects reflected on the slide on page 110 of the agenda <br /> 35 packet. He described the formula for calculating incentives, and explained that they are <br /> 36 not a rebate of property taxes, which is not allowed under North Carolina law. When <br /> 37 conditions are met, incentives are paid to the company in the form of a performance <br /> 38 grant. <br /> 39 <br /> 40 In response to a question from Commissioner Rich, Steve Brantley explained how <br /> 41 counties and municipalities can be in competition with each other for projects and how <br /> 42 they must coordinate with the State on packaging incentives. <br /> 43 <br /> 44 He explained that staff had surveyed the 40 jurisdictions annotated on the map on page <br /> 45 111, where they personally know individuals on staff and their way of operating. They <br /> 46 asked these jurisdictions generally what they do regarding incentives for a project like <br /> 47 Morinaga. Only 6 out of 28 counties and 4 out of 12 municipalities have written formal <br /> 48 incentives policies; the majority has unpublished guidelines to allow them to set a <br /> 49 performance agreement and broad latitude to confidentially determine grants. Most <br /> 50 operate in a manner similar to what Orange County has done, which is a percentage of <br /> 51 the taxable value of that project paid back to the company as a grant. Details for each <br /> 52 jurisdiction surveyed are included in the spreadsheets at pages 118-121. <br /> 53 <br /> 54 Steve Brantley explained a handout he provided regarding the Town of Carrboro's <br /> 55 incentive agreement with Hampton Inn. That agreement will result in a probable <br />