By Holly Fesperman LeeSalisbury Post
CONCORD ó A former state legislator who was instrumental in bringing Philip Morris USA to Cabarrus County says it will take creative thinking to handle the cigarette maker’s closing.
Former N.C. Sen. Jim Johnson proposes forgiving some property taxes Philip Morris will owe the city and county over the next couple of years in exchange for some of the 2,100 acres the company owns here. The county and city could then use that land, along U.S. 29 in Concord and near Interstate 85, to lure more industry, he said.
Meanwhile, a Congressman from Concord says it’s not too late to fight for the company. U.S. Rep. Robin Hayes said in a letter to state and local officials this week that all levels of government should cooperate on incentives to convince Philip Morris to stay.
“I was sorry that North Carolina did not get an opportunity to present itself as the U.S. home for Philip Morris operations prior to the announcement,” Hayes wrote. ” While I am fully aware that Philip Morris has announced their planned moves over the next few years, I believe that corporate decisions are potentially subject to change if new considerations arise.
“… While there is no guarantee that we can change Philip Morris’s plans with an incentive package, the cost of doing nothing is the guaranteed loss of 2,500 manufacturing jobs in North Carolina.”
Philip Morris parent company Altria Group announced Tuesday that it will decrease production at its manufacturing plant in Concord beginning late next year, and will shut the plant down completely sometime in 2010.
The move will eliminate 2,500 jobs at the Cabarrus County facility, though Philip Morris said it plans to expand production at its Richmond, Va., plant and plans to offer most of its local employees jobs there. Others who are eligible will receive retirement and severance packages.
The company cited declined U.S. tobacco sales in announcing the closing and said it will shift much of the production of cigarettes sold in Europe to facilities on that continent.
Coming less than four years after Pillowtex shut down its massive Kannapolis mills and put 4,300 local people out of work, the closing is yet another blow to the local manufacturing sector.
But it’s not just jobs that are being lost. Philip Morris paid nearly $12 million in combined property taxes to Concord and Cabarrus County last year. In Concord, Philip Morris accounts for about 13 percent of the tax base.
Johnson, who served in the N.C. House and Senate from the mid-1960s until 1990, recalled that Cabarrus County leadership was against Philip Morris, and most industry, during the late 1970s. But residents wanted higher wages.
Dissatisfied with employment choices in the county, Johnson asked residents to come together and sign a petition telling Philip Morris that Cabarrus County wanted the company.
Response was slow at first, Johnson said, but he ultimately got more than 7,500 signatures.
“I worked hard to get it here because we had so much opposition. I had a committee of 15 and those folks put themselves on the line,” he said.
He hand-delivered the petition to Philip Morris headquarters in New York.
About two months later, he got a response.
Johnson said company officials told him that they were so impressed by the average citizen’s interest that the company would come to North Carolina.
“It’s meant a lot to this community. I’m very grateful to the committee that worked with me to get this here,” he said. “I think it’s certainly benefited Cabarrus County for these past 25 years.”
Johnson, who now practices law in Concord, said he hates to see the company he helped recruit leave, but understands “the practical economic reasons why that’s taking place.”
He hopes “Cabarrus County leadership now has the foresight to understand that we need industrial base. We don’t have it anymore,” he said. “… Now’s the time for Cabarrus County to see what they can do to develop an industry base.”
Talking with Philip Morris and possibly joining with the state to purchase some of the 2,100 acres Philip Morris owns in Concord may be the first step, Johnson said.
“They could also zone for industrial development,” he said.
“Right now, they need to look down the road for getting industry. Rowan County should be congratulated time and time again, because they’ve seen down the road. They’re far ahead of Cabarrus County,” Johnson said.
Johnson said he’s concerned that with the $12 million in taxes that will be lost jointly by the city and the county, government officials might rush to let developers in.
“Growth for growth’s sake is not the way to go,” he said.
If the County isn’t careful, he said, developers may come in, build $250,000 homes and leave once they’ve made their money ó leaving the city and county to carry the burden of infrastructure and services for new residents.
“With this loss of revenue, they’re going to have to raise taxes,” Johnson said.
But he has a plan for Cabarrus to recoup some of the money that will be lost.
“My point would be, why not say, ‘OK, Philip Morris, we’ll swap you land for taxes for the next 24 to 36 months,’ ” he said. The company could then deed some of the land to the county.
Johnson said the arrangement would help the city, county, state and Philip Morris.
The company would still have its facility and the county and city would have enough land to develop, sell or hold for future industrial use.
To Johnson, the plan is a good alternative.
If developers come in, the county won’t have much control, he said.
“There’s a lot of good people that worked hard to give an alternative to one employer,” he said. “It worked out well. I’m sorry it’s gone, but we’ve got to move on and look down the road from here.”
Contact Holly Lee at 704-797-7683 or hlee@salisburypost.com.