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County approves industrial incentive; city up next

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New Hanover County is in.

Now it’s up to the City of Wilmington to decide if $500,000 in incentives will be given to a company, already based locally, to expand and establish a world headquarters here.

“This is not something we do just as a thank you. We don’t give money away.” — New Hanover Chairman Woody White, on the county’s incentive grant for Castle Branch. Photo courtesy New Hanover County.

County commissioners voted Monday to approve New Hanover’s half of a city-county partnership that would provide incentive grants totaling $500,000 over five years to Castle Branch, an employment screening firm with offices near Mayfaire Town Center, for an expansion that would add 400 jobs to the area.

The grants—$50,000 per year for five years, each from the city and the county—are contingent on Castle Branch, within four years, committing to a long-term lease of a new commercial office building with a construction value of at least $10 million, according to county documents. The company would also commit to adding 400 jobs on top of its current 200 employees.

Commissioners approved the county’s grant unanimously, and Wilmington council is set to consider a grant from the city at its meeting Tuesday night.

Scott Satterfield of Wilmington Business Development, which requested the city-county partnership, told commissioners an economic impact assessment conducted by Woody Hall, of UNCW’s Cameron School of Business, showed the investment would add $30 million in “additional dollars” to the community each year.

“So clearly this has a tremendous economic impact in our region,” Satterfield said.

Satterfield also noted, at the encouragement of commissioners chairman Woody White, that Castle Branch is also considering a site in northern California, hence the reason for the local incentives. But Paige Freeman, of Americans for Prosperity, a conservative political advocacy group, said in a public hearing that locating here should be incentive enough.

“I firmly believe that Castle Branch, if indeed they want to headquarter in New Hanover County, will do so without tax dollars and without tax incentives,” Freeman told the board. “They’re already here, and they expanded last year, adding about 50 jobs. So we know they’re here, we know they’re expanding, we know they’re settled in. They like the area.”

Contending that California is not business-friendly, Freeman added, “In contrast, North Carolina and New Hanover County is much more business-friendly. We have lower tax rates, lower property tax rates. And that’s the incentive. That’s what we have to offer.

“So I think that it’s really unnecessary to offer tax dollars when we’re offering a business-friendly environment and we’re offering cuts across the board, fair to all businesses,” Freeman said. “We’re not allowing government to pick and choose the winners. We’re offering tax incentives by way of lower income rates and business-friendly environment to all businesses; not picking losers and winners through government.”

Commissioner Jonathan Barfield confirmed with County Manager Chris Coudriet that Castle Branch’s investment, upon completion, is projected to add $120,000 in annual property tax revenue. If the county doesn’t provide the incentive, Barfield said it would lose that revenue and 400 new jobs.

Calling the incentive a rebate that is given for money the company would pay upfront, Barfield also noted local opposition to companies considered “smokestack” industry.

“Well this company right here will not be a smokestack company,” Barfield said.

Before calling for the vote, White also shared his opinions on the investment, and responded to points that Freeman had made.

“I’ve over the years shared some real concerns about these types of decisions on the part of governing bodies. I will say, when you sit in this chair… it’s a little more difficult sometimes,” White said. “And what I’m realizing is that we are lagging Rocky Mount, Greenville, some of our peer cities, in unemployment.

“And just like Commissioner Barfield, I see these people every day in and out of my office,” White said. “They can’t find work. They’re underemployed; not just unemployed.

“So when I see a project like this, I share some of the same concerns that other members of our citizens have on whether or not government should pick winners and pick losers,” he said. “But we don’t have the luxury of being policymakers here on this board. We have a responsibility and a duty, I believe, when we take an oath, to try to do everything we can to see that our fellow brothers and sisters that live in our neighborhoods and work and drive on our roads have good jobs.”

Noting the company’s growth in the city and the county, and its projected growth in university and medical systems across the country, White added: “It is true that northern California is probably not a very vibrant and job-friendly area. But it’s one that is right in the epicenter of where the growth of this company is.

“And while this is a tough decision for some, if we were not to do this and not indicate our desire to have them stay here and grow, and they did go to where their growth is, 400 of our fellow citizens or kids coming out of UNCW that would stay here probably would not work. And that’s a decision that is not acceptable for me.”

Reiterating points that Satterfield made, White noted the incentive comes with benchmarks that Castle Branch must meet to receive it.

“It is a real incentive. It’s a necessity that we incentivize,” White said. “This is not something we do just as a thank you. We don’t give money away.

“This is tax dollars that ultimately, if these people are employed, and if their certificate of occupancy is issued, that they will be essentially rebated, if we can use that word,” he said. “And until then, they do not get a penny.

“We have to have that callback provision, that protection to our taxpayers. But we also have to recognize the public policy and the need to employ our local citizens.”

Wilmington City Council will consider its incentive grant at its meeting tonight. That meeting starts at 6:30 p.m. at Wilmington City Hall.

Jonathan Spiers is a reporter for Port City Daily. He can be reached at (910) 772-6313 or jonathan.s@portcitydaily.com. On Twitter: @jrspiers

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Posted by on February 19, 2013. Filed under Latest News,Local News,New Hanover County,Wilmington. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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