Editorial: Good to see new requirements in tax incentive deal
In an era where people are more divided than ever on politics, there’s some agreement on a common economic development practice.
Tax incentives attract opposition from conservatives and liberals alike as taking money out of taxpayers’ pockets, giving away money that could be spent elsewhere or stashed away for a rainy day. Those who are elected and county officials freely admit that they must offer incentives to remain in competitive economic development discussions.
If no one offered tax incentives, that would probably be fine with Rowan County commissioners. If incentives didn’t exist, however, someone would come up with them as a way to gain an edge in bringing new business to town.
North Carolina offered hundreds of millions of dollars in tax breaks to lure Apple, the world’s largest technology company by revenue, to the Raleigh area. It was the largest incentive package in the state’s history.
Closer to home, Rowan County lured Chewy to town with $2.3 million in promised tax breaks, a $400,000 equipment grant and a promise to make sure municipal water and sewer reached the site. Would Rowan County have landed Chewy’s fulfillment center without offering some sort of tax incentives? Maybe not.
More than one factor weighed in Rowan County’s favor, including logistics costs. Another was that Rowan County’s incentive package was slightly sweeter than other top choices — one of which was believed to be the Spartanburg, South Carolina, area.
Rowan County commissioners and economic development officials are now working through what could be the next Chewy fulfillment center — a 675,000-square-foot speculative building on Webb Road that will be called the I-85 Commerce Center. NorthPoint Development, which brought Chewy to town, is overseeing construction. There’s no tenant announced yet.
County officials also have awarded incentives to the project, which would return a portion of tax payments back if certain requirements are met. Some of those requirements were particularly good to see, including a minimum number of jobs and an average wage requirement. It was even better that Economic Development Council Vice President Scott Shelton said the organization is telling developers the county is only interested in incentivizing projects that bring jobs, not just the construction of new buildings.
Tax incentive agreements a decade ago would have included a job figure and average wage as information, but they probably wouldn’t have used both as a requirement for incentives.
As Rowan County becomes more attractive to business and residential developers, commissioners and EDC staff are wise to include those sorts of stipulations in tax incentive agreements. They may find a solution that satisfies conservatives and liberals in at least one area.
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