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Wilmington City Council on Tuesday approved its end of a $575,000 incentive deal to Live Oak Bancshares, which is expanding its local headquarters with a planned new facility that would house its growing, cloud-based banking division known as nCino.
The unanimously approved performance grant from Wilmington will give the bank $50,000 a year for five years–or $250,000–as long as the bank keeps to commitments that end up in a $16 million property investment and 120 new jobs that pay an average annual compensation of $80,000.
“A grant to Live Oak Bancshares Inc. is competitively necessary to encourage the location of the facility in the City,” a memo about the request from city staff to council said Tuesday.
The New Hanover County Board of Commissioners approved $325,000 on Monday to the same end. (Related story)
“We need to do whatever we need to do to incent them to stay here,” Wilmington Business Development CEO Scott Satterfield said of the awarded local company, which he described as quickly growing and commendable for its ability to launch new, well-paying jobs.
“The ripple effect will be tremendous,” Satterfield said after noting home sales, restaurant support and other spending from the company’s added employees.
nCino, Live Oak’s cloud banking group, will grow into the planned new building to be developed next to the company’s recently completed headquarters on Tiburon Drive, off Independence Boulevard, officials said.
“nCino’s business is going gangbusters,” Satterfield said Tuesday, the same day the company announced a partnership with Charlotte-based PrecisionLender to place the latter company’s loan-and-deposit-pricing management software on nCino’s Bank Operating System platform, according to a press release.
“Originally developed within a live banking environment, the system [under nCino] organizes and automates data, eliminating the use of spreadsheets and duplicate loan documents,” the release explained. “Its reporting and dashboard features also enable real-time tracking and the built-in covenant tracking and business intelligence features help reduce regulatory compliance costs and policy exceptions.”
In August, the company announced that Moultrie, Ga., based Ameris Bank would bring on nCino’s cloud-based commercial loan system.
nCino boasts itself as a leader in its industry.
The planned, new facility would also house operations of Live Oak Banking Company and other subsidiaries that may be developed, information from the city said.
The city’s money in the project is, as approved Tuesday, in two divisions–half to be awarded on the direct investment expectation, and the other for the new, full-time equivalent jobs.
The county’s incentive was divided similarly.
In year one, for instance, the company will have to hire 25 new employees, with annual benchmarks thereafter to reach the minimum 120 new jobs in year five. Assuming it makes good on the jobs expectations each year, Live Oak annually would get $25,000 from the city and $32,500 from the county. The rest of the pay would come per the direct investment benchmarks.
‘Business case’ vs. ‘handouts’
Unlike past occasions in Wilmington involving incentives from local government to business, often criticized as the public sector “picking winners and losers,” no one spoke in opposition at a related public hearing at Wilmington City Hall on Tuesday. Voices of support included Greenfield economic and community development firm principal Robin Spinks, who opined the performance-based arrangement was the way to go with the incentive.
She said the new development’s expansion to local tax base would make the public participation worth it. “The business case is that they are making a very substantial investment in this community.”
Satterfield previously cited UNCW economist Woody Hall with a report of a $57 million annual economic outbloom from the company’s expansion. He then portrayed the city’s $250,000 incentive as comparatively minor in size.
But the approach did have opposition. “All businesses in the city should pay their appropriate share of the public tax burden, with none enjoying exception over others, no matter how big or small,” residents Bernhard and Song Thuersam wrote in an email to the mayor and council prior to Tuesday’s discussion. They asked the board to vote the request down.
“This unfortunate and illogical run toward incentives,” their email continued, “has had the logical and predictable result of having companies line up for handouts while threatening to either not locate here, or to leave town–and this is rank extortion.”
Scott Sullivan, co-founder of Cameron Management and chairman of the local Coalition for Economic Advancement, called Live Oak and its nCino subsidiary “a perfect industry for Wilmington” with a reputation for hiring local.
“It made sense just on the numbers in the deal itself,” City Councilman Kevin O’Grady said before his board’s approval Tuesday.
Mayor Bill Saffo called it a “good, conservative deal.”