Minutes 01-31-2014 - Laserfiche WebLink

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a competitive advantage. He provided additional detail about the AKG North America and Morinaga America Foods projects reflected on the slide on page 110 of the agenda packet. He described the formula for calculating incentives, and explained that they are not a rebate of property taxes, which is not allowed under North Carolina law. When conditions are met, incentives are paid to the company in the form of a performance grant. In response to a question from Commissioner Rich, Steve Brantley explained how counties and municipalities can be in competition with each other for projects and how they must coordinate with the State on packaging incentives. He explained that staff had surveyed the 40 jurisdictions annotated on the map on page 111, where they personally know individuals on staff and their way of operating. They asked these jurisdictions generally what they do regarding incentives for a project like Morinaga. Only 6 out of 28 counties and 4 out of 12 municipalities have written formal incentives policies; the majority has unpublished guidelines to allow them to set a performance agreement and broad latitude to confidentially determine grants. Most operate in a manner similar to what Orange County has done, which is a percentage of the taxable value of that project paid back to the company as a grant. Details for each jurisdiction surveyed are included in the spreadsheets at pages 118-121. Steve Brantley explained a handout he provided regarding the Town of Carrboro's incentive agreement with Hampton Inn. That agreement will result in a probable payment by the Town of$475,000 over a 5 year period. His calculation is that the Town incentives reflect 86% of taxable value, which is above the County's precedent to go as high as 75%. He then commented on the map of North Carolina counties at page 115 that shows how each county is categorized as being in Tier 1, 2, or 3 with regard to applicability of State incentives. He gave an example about State Job Development Investment Grants (JDIG), which the State reserves for "the largest of the large" — projects that will create 200 or more jobs. He explained the table on page 116 that demonstrates how Orange County, being in Tier 3, is at a competitive disadvantage with regard to JDIG incentives compared to Tier 2 competitor counties (e.g. Alamance and Granville) and Tier 3 competitors (e.g. Vance and Caswell). He said that incentive policy at the County level can help close that gap. Steve Brantley said that during the past 2.5 — 3 years, the Economic Development office and County Manager have looked at each business project as they have matured from a first site visit to being a real possibility of landing that company, looking at what might be an appropriate incentive, and discussing that in closed session with the Board when appropriate. He noted that a company wants an answer quickly—they don't want a public process or a 3 week wait. He said that he needs to be able to have a ballpark answer that he can quote and have the Manager check with the Board as appropriate. Steve Brantley said that the County's practice of providing performance grants at a maximum of 75% of taxable value for 5 years is in keeping with other jurisdictions. It is not too generous, and is in the median of incentives formulas. This concluded Steve Brantley's presentation. Michael Talbert reiterated that it is really important to have flexibility in what we are doing and how we are doing it, and for Steve Brantley to be able to answer a company almost immediately. He said they also must consider the disadvantage of being a Tier 3 county - that will make a difference for some projects. Some people may be willing to