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The governments of New Hanover County and Wilmington have reserved a $500,000 grant for a growing private business in the city–on the condition it chooses Wilmington for its planned world headquarters and creates with it at least 400 new jobs.
With the incentive to be split evenly between the city and the county, Wilmington City Council on Tuesday unanimously approved its half after staffers noted it was “competitively necessary” to persuade Castle Branch Inc. to establish its main office here.
The New Hanover County Board of Commissioners unanimously approved its part Monday morning after learning the company was also scanning real estate in northern California.
“Where will they add 400 new jobs and add a new section to their business and grow that opportunity? We want it to be here, in Wilmington,” said Scott Satterfield of the nonprofit Wilmington Business Development, which requested the city-county investment in Castle Branch.
But the money isn’t automatic for the company, whose services include employment screening and drug testing and which currently has a 32,000-square-foot office near Mayfaire Town Center in Wilmington. Satterfield said the expansion to a world headquarters here would involve larger, class office space filled out with the help of the city-county contribution.
Under the arrangement, the city and the county will each pay $50,000 a year for five years, or $250,000 each, as long as the company picks Wilmington, invests at least $9 million in real and personal property here and creates 400 new jobs incrementally by 2017.
Those jobs should on average pay $35,000 a year, the city’s resolution said.
The company currently employees 200-some people in Wilmington, according to information from the county.
Satterfield said the company’s new hires per the expansion would give local college graduates great, white-collar opportunity and incentive to become permanent Wilmingtonians.
But the proposal was met with some adversity.
Paige Freeman, Wilmington-area leader of conservative advocacy group Americans for Prosperity, told council that such a targeted cash incentive from government was the wrong idea.
She praised Castle Branch for its growth, calling it a “wonderful company,” and noted the need for jobs. But this is a case of government picking winners and losers, she said.
“Other businesses that are also here, thriving and wanting to expand, [the local government is] not going to do that for you,” Freeman said. “So it is a sticky situation when the government comes in and picks and chooses in this fashion.”
She said she felt confident Castle Branch would select Wilmington over northern California anyway per relatively low tax rates here and activity in the N.C. General Assembly that may lead to tax reform and a slashing or elimination of this state’s corporate tax rate.
But Councilman Kevin O’Grady said the city wouldn’t want to be wrong about Castle Branch’s intentions. “I know there’s a sense that this company is already here, and they’re likely to stay,” he said. “But that is just an opinion.”
O’Grady also noted that the cash it gets from the city and county would be repaid in property taxes.
With the job creation thresholds the company must meet, which the state will verify, “It’s not like we’re writing a check and just handing it to them,” Councilwoman Margaret Haynes said.
Earlier during Tuesday’s city council meeting, New Hanover County Board of Commissioners Chairman Woody White appeared for a brief address on the importance of inter-governmental teamwork and called the Castle Branch effort a perfect example.
“This type of collaboration,” White said, “is critical to our future.”
Referring to Freeman’s remarks, Wilmington Mayor Bill Saffo said he recognized the controversy of government handing incentives to individual companies, but said governments that don’t engage in the practice will be left to “sit on the sideline” and miss out while businesses follow the money elsewhere.