Economic Development…Being PreparedJoint Committee on Economic Development

and Global EngagementMarch 17, 2016

Economic Development…Being Prepared

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PLANNING

BUILDING AVAILABILITY

SITE DEVELOPMENT

PUBLIC INFRASTRUCTURE

Planning Services

Planners assist with developing strategic plans, services include:

• Market analysis• Mapping and Geographic Information Systems (GIS)• Specialized programs to maximize community economic opportunities• Community economic profiles• Project management and logistical support• Review of local development policies for process efficiency and more

effective economic investment and development• Identification of viable projects, collaborative partnerships, and

stakeholders• Development of new services or products to meet expressed needs• Identification of funding opportunities and grant assistance

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PLANING

Planning Services

East Spencer Gateway Project – Stakeholder based planning process resulted in development of small area plan and market analysis for Exit 79, an undeveloped interchange on I-85 in Rowan County.Purpose of the Plan: • To plan for the highest and best use of the interchange • To develop a tool for marketing the interchange to future developers • The planned build-out scenario for the interchanges is estimated as

follows: • $370,086 new tax revenue • 600 new jobs • $5,782,888 in new employee wages

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Public Infrastructure• An industry targets an areas for industrial development

• Focus on providing infrastructure needed to serve industrial clients

• Opportunities: Water, Sewer, Natural Gas, Railroad, & Road Access

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Town of Forest City Water line extension to benefit Facebook

Richmond County Water Treatment Plant to benefit

Perdue Farms

Public Infrastructure

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Pender County Sewer infrastructure for

RC Creations

Site Development

• Established in 2012• Available to local governments • Up to $4 million in Tier 1 and 2

counties and up to $3 million in Tier 3 counties

• 100% of funds needed for industrial site preparation (no acquisition)

• 2% interest rate

• 7 year term with yearly payments (interest only the first 2 years)

• More than $9.5 million loaned for 2 sites

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Catawba County CDBG Site Development Loan

Building Availability

• Established in 2006

• Available to local governments for up to $1 million

• 2% interest rate

• 5 year term with yearly payments (interest only first 2 years)

• Eligible amount projected at $35,000 per job

• More than $4.5 million loaned for 6 shell buildings

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Pender CountyCDBG Shell Building Loan

Large Manufacturing Project

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READY PROPERTY

RECRUITMENT, SCREENING

&TRAINING

ON-SITE PREPARATION

DISCRETIONARY INCENTIVES

Development Ready Properties

• NC Certified Sites– statewide inventory of industrial sites that have undergone a rigorous prequalification process to reduce the risks associated with development by providing detailed information about the site including price and availability, utilities, access, environmental concerns and potential development costs

• CSX Select Sites– premium, certified rail-served sites for industrial development

• Duke Energy Site Readiness – identify, assess, improve and increase awareness of industrial sties

• Creative Site Assessment – innovative online assessment tool that independently rates potential sites for economic developers

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Discretionary Incentives

• Landmark improvements made to NC’s competitiveness in 2015 session

• Reductions in personal income tax

• Reductions in corporate income tax, phase in of single sales factor apportionment

• Extension of JDIG sunset through 2018

• Increase of annual cap to $20 million

• Creation of high yield project category for projects with $500 million investment and 1,750 new jobs

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Recruitment, Screening and Training

• Public announcement of project to bring greater awareness of job opportunities

• Community orientation, job fairs, diversity recruitment, campus recruitment, etc.

• Positions listed with NCWorks to ensure access to broadest possible qualified labor pool

• Candidates screened to company specifications • Realistic job preview to provide candidate overview of company

philosophy/culture, salaries, benefits, etc.• Customized Training program support for new hires to meet company

specifications• Support for company instructor expenses • Training facilities

On-Site Preparation

• Amount depends on characteristics of site and layout/design of building(s)

• Site Infrastructure Development Fund only available state program to meet this need

• Decisions made by Economic Investment Committee

• Utilized once for Merck -- $24 million appropriated in FY2003-04 for the development of vaccine plant on 256 acre site in Durham

• Required to create 200 jobs by December 2009 with an average wage of $57,000 and capital investment of $256 million

• Structured in form of forgivable loan – must satisfy annual performance criteria to retain full amount disbursed

• 10% forgiven each year from 2010-2019 following demonstration of annual compliance

• Repayment obligations secured by deed of trust

• Since 2004, Merck has announced two expansions bringing the total investment to more than $1 billion and more than 1,000 new jobs

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Program Development Considerations

CDBG Site and Building Program Considerations

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• Ensures commitment of local community to industrial development through planning, public ownership and investment

• Reasonable term and immediate payments on loan interest ensure program dollars are “revolving”

• Will continue to educate communities on programs, but expect to be able to handle demand

• No potential to seed program with additional CDBG funds

• Additional state dollars to CDBG loan program will be required to follow CDBG requirements

• Avoid confusion in marketplace with different programs with different criteria and requirements that do the same thing

Site Infrastructure Development Fund Considerations

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• Tool for active job creation projects (not prospective development)

• Site prep remains gap in NC’s competitiveness in large, transformational manufacturing projects

• Alternative approach – provide EIC with capped authority with future appropriation as needed

Economic Development…Being PreparedJoint Committee on Economic Development

and Global EngagementMarch 17, 2016