HomeMy WebLinkAboutAgenda - 02-11-2011 - BBUILDING UPON PAST EFFORTS — CREATING A FUTURE FOCUS
A County -wide task force developed a Five Year Strategic Plan (2005 -2010) after a
collaborative involvement of residents. The Plan was endorsed by the County
Commission, the Carrboro Board of Aldermen, the Chapel Hill Town Board, the
Hillsborough Town Board, the Hillsborough/Orange County Chamber of Commerce and
the Chapel Hill/Carrboro Chamber of Commerce.
Staff changes within county government, a national economic decline and funding
constraints have delayed or deferred efforts to pursue the goals the Plan established. The
commitments and observations still have relevance and are worth pursuit:
Improved Local Business Climate
1. Develop clear criteria defining desirable businesses — including agricultural
options
2. Identify barriers
3. Provide outreach, recognition and expedited service to new and expanding local
businesses to meet development criteria
4. Form partnerships to create a stronger business climate and market changes to
existing and potential employers
5. Focus public education efforts on sustainability, social, economic and
environmental contribution of businesses
Infrastructure Investment to Increase Commercial Tax Base by Retaining and
Attracting Targeted Businesses
1. Extend water and sewer to the economic development zones
2. Facilitate the establishment adequate high speed information networks
3. Support Carolina North
4. Provide constructive input into the UDO
5. Encourage compact higher density development in areas with water and sewer
6. Encourage mixed use development
7. Promote public transportation.
8. Support Schools APFO
Work Force Development
1. Work closely with Durham Tech, LTNC, local school systems and others to
provide training options for adults seeking employment.
2. Link desired business market segments with training programs.
3. Promote a living wage and benefits philosophy within economic development
programs.
4. Consider the importance of workforce needs such as transportation, childcare,
eldercare, healthcare and affordable housing.
5. Support lifelong learning and retraining opportunities.
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Quality of Place
1. Increase the commercial tax base and support the revitalization of downtowns in
Carrboro, Chapel Hill and Hillsborough.
2. Support rural agriculture and encourage local markets along with conservation of
natural resources.
3. Preserve and promote historic structures and resources.
4. Provide life long learning options.
5. Promote inclusiveness and diversity.
6. Promote `hipness' by focusing on the uniqueness of each municipality and the
County as a whole.
Summary:
The goals established of creating 5,000 new private sector jobs and adding
$125,000,000 in new commercial property to County tax roles by 2010 were not fully
achieved. HOWEVER and more importantly, the basic parameters and goals as
outlined above still have relevance and appear a sound basis for moving forward.
The allocation of resources and establishment of priorities (every priority can not be
number one) remains to be addressed in a comprehensive manner.
Failure of the local option % cent sales and use tax last November was a set back.
The County (County Commissioners) must address how revenues and staff
resources will be allocated as we pursue outcomes associated with these efforts.
Economic development is NOT a quick fix effort. Today is the foundation for the
future. Building utility and communication infrastructure for future business
ventures; investing in appropriate workforce training opportunities; establishing an
"open- for - business" image; and seeing a return on those investments is a forever
process.
Elements beyond the County's control (general economic conditions, shifts in
business trends, changing business markets, etc.) will influence the timing and
intervals of success. If we remain committed, short -term hurdles will not impede
long -term outcomes.
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Building on Past Efforts — Creating a Future Focus
Excerpts from Notes from November 2009 Discussion
Defining the terms of the ED goal:
Implement planning and economic development policies which create a balanced,
dynamic local economy, and which promote diversity, sustainable growth and
enhanced revenue while embracing community values.
"balanced"
• Employment opportunities for every level of education /experience /skill
• Local availability of most goods and services
• Mix of locally owned and non -local businesses
"dynamic"
• Jobs that evolve, keep up with technology and cultural changes
• Open to change
• Progressive
• Provide opportunities for start-up businesses
• Modifying regulatory environment and moving with the times
• Thriving, marked by continuous and productive activity
"diversity"
• Diversity of jobs for different skill levels * *[this goal may be in conflict with the
goal of creating more high - paying jobs] **
• Ensure that all residents have an equal chance to benefit from ED, including
access and training for high - quality, high - paying jobs
• National and local- economy jobs. Large and small employers
• Geographical diversity: jobs dispersed around county
• Diversity in type of industry: light industrial, retail, etc.
"sustainable growth"
• Protect the environment, promote social justice and equity, and ensure sound
fiscal management, while facilitating economic development
• Low - polluting industries, low water usage
• Greenness
• Use what you've got, focus on assets
• Affordability: pay attention to tax burden
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"enhanced revenue"
• Expanding revenue sources: go beyond residential property tax
• Change ratio of residential to commercial tax base
• Cost of services vs. benefit of bringing in more residents. How will retail attract
workers?
• Being able to provide jobs and housing to handle inevitable population growth
• Promote ED that produces more revenue for county than it received previously,
after factoring in the costs of providing capital funding and county services
"community values"
• Education: life -long learning, education at all levels
• Social equity: heterogeneous, inclusive, sharing benefits of prosperity, lower
poverty rate, higher affordability
• High quality of life
• Progressive on environmental issues, protection of natural environment
• Focus on attracting businesses we do want instead of keeping out businesses
we don't want (removing regulations that are a hurdle)
• Regulation: flexibility vs. certainty?
• Clarity of standards (regarding regulation)
• Promotion of well -being of all county residents
Jonathan Morgan's presentation: Economic Development in OC
Three main approaches to ED:
• Recruiting new businesses
• Supporting and retaining existing businesses
• Growing new businesses
Supplementary strategies:
Creativity and Talent Strategies and Place- Making Strategies
• Orange County is already doing this well. (Arts and culture, social capital, quality -of-
life amenities, attracting residents, downtown development, etc.)
• Partnerships are important ways to stay strong in these areas.
Themes that emerged from the discussion:
1. Provide INFRASTRUCTURE:
• Orange County is already a very attractive place for businesses and
residents. But we lack the capacity to accommodate all the businesses that
might be interested in locating here. Big need for more space for these
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businesses, need to improve the infrastructure for them.
• Existing businesses also need physical infrastructure: office space, wet -lab
space. Improving infrastructure will help us retain /support those
businesses.
• The great shoe -store analogy of 2009: Our county is like a shoe - store. It's
not just about attracting the businesses into the county (into the shoe -
store), we also have to be able to accommodate them when they get here
(we have to have the shoes they want in the right size!)
2. Streamline the PERMITTING PROCESS:
• Think of how to bring in businesses we do want, rather than using
regulations to keep out businesses /industries we don't want.
• Use advocates to aid businesses to understand the systems and
requirements.
3. Adopt TARGETED STRATEGIES:
• We need to know what kinds of businesses we want to attract /retain /grow.
We need to know what size shoes those businesses need. Then we can
shape our efforts strategically around that. Need to focus and be proactive,
not just take whatever scraps come along.
4. Focus on RETAINING EXISTING BUSINESSES:
• Existing businesses are a big resource; let's not throw all our money and
time into recruiting new businesses when we have businesses right here
already.
• Underscore the value Orange County places on home -grown business.
• Be responsive to local businesses' needs by tracking needs and providing
supportive infrastructure, space, etc.
• Partnerships can help us retain and support businesses —need to work with
the universities and with other city /county governments.
5. Build on the STRENGTHS and ASSETS Orange County already has:
• Attitude: the Board is talking about ED in a new way: focusing on what they
want rather than what they don't want.
• Location — proximity to highways, universities, UNC healthcare system, etc.
• Highly educated population
• We're already doing "place- making" strategies well: lots of cultural assets
• Agriculture
• High quality of life here that is attractive to residents and businesses
• County has some big parcels of land set aside yet undeveloped
• Public education system, universities, community colleges
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Understanding the role of the board, moving forward
Questions that need to be answered:
• What other partners do we need to engage for economic development? (talks are
underway at the ED -staff level)
• What is the next step for water and sewer w/ Mebane and Durham to EDD? (Board
is ready to invest money —what needs to happen next ?)
• Which types of businesses /industries do we want to attract?
There's general consensus on the following next steps:
• Direct staff to begin working on improving infrastructure. This is a long process.
Let's start now.
• Find ways to make the regulatory process easier for businesses. Establish an
"advocate" who helps guide businesses through the process.
• Focus on retaining and supporting existing businesses. Broad agreement that this is
an important strategy for Orange County.
• Orange County already does a good job with the place- making strategies (amenities,
etc.) We need to stay strong in that way, and add in these other strategies at the
same time.
• Continue to work on defining a more proactive, deliberate strategy: still need to
answer the question of: what kinds of businesses do we want to recruit?
• Communicate with the public about the Board's ED plan and discussions. Need to
create a synopsis for the press.
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STATUS OF ORANGE COUNTY ECONOMIC DEVELOPMENT EFFORTS
1. Employment of an Interim Director to lead the County's efforts is now in place.
Mr. Gary Shope brings considerable North Carolina and regional experience to
the County. He will be analyzing our organization providing recommendations
designed to build upon our strengths and address needed improvements.
2. The Planning Board and county staff are actively moving the U.D.O project
toward adoption and implementation.
3. The Efland sewer system completion is being pursued. It is a $4 million project
with $1.4 million in federal grant funding.
4. County staff is negotiating expanded utility options with the cities of Mebane and
Durham with the intent to extend utility availability into the County's economic
development zones located along Highway 70 and I — 85.
5. Engineering services are under contract for the design of alternative sewer and
water system extensions from the system operated by the City of Mebane into the
Buckhorn economic development zone.
6. County staff is formalizing recommendations for consideration and adoption by
the County Commission for a program providing business development/expansion
incentive grants.
7. County staff is refming a proposal for County Commission consideration that
would establish an appropriate number of specific utility districts within the
County's economic development zones. These districts would provide the basic
financial vehicle via a special assessment or property tax to assist in funding
utility infrastructure.
8. A need exists to provide high speed intemet services and broadband coverage
within many areas of Orange County including the County's economic
development zones. County staff is establishing priority locations where cell
towers could be placed to expand access to broadband coverage throughout the
county especially in areas of potential economic development. The County is
seeking partnerships with private sector providers to deliver these services.
9. The County's small business loan program has become an active tool to assist
local business expansions and diversification.
10. County staff has initiated and will expand discussions with local landowners and
private development groups to facilitate prepared sites and business parks to be
marketed within Orange County for new business expansions.
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11. County staff is working closely with the staff of the County's towns and city to
facilitate coordinated approaches to site selection inquiries from site search firms.
Active project request responses are being prepared that involve the Towns of
Chapel Hill, Hillsborough and City of Mebane.
12. We are working closely with various elements of UNC to develop useful
collaborations and expanded relationships to enhance our economic development
efforts. We collaborated with the Department of City and Regional Planning to
gain graduate student research services and facilitate ongoing assistance including
Graduate Interns to assist in specific research projects. The UNC Institute of
Government is assisting in organizational analysis and other aspects of improving
the County's economic development program.
13. The County is in the process of completing construction of a regional food
processing center targeting small entrepreneurs in the food production business.
The facility should open late spring or early summer. A facility manager is in the
process of being hired. That person will promote and manage the facility which is
ultimately to be leased to a yet undetermined non -profit or not- for - profit.
14. County staff is evaluating the potential to establish one or more small business
incubators in available vacant county owned buildings. This project is being
evaluated for merit and specific proposals will be brought back to County
Commissioners once evaluations are complete.
15. The County is working with the Orange County branch of Durham Technical
Community College on potential job skill training programs that facilitate closer
ties between DTCC and the County. A most recent example is the proposed use
of commercial kitchen facilities at County's Senior Centers for a DTCC culinary
arts program. Further collaborations are possible.
16. Similarly related efforts are being pursued in various County departments. A
primary initiative is to expand partnerships where county resources can be linked
to efforts of other agencies, non - profits and private sector groups to enhance local
economic development and further diversify employment options for residents.
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State Sales and Use Tax Information Inc. Gross Collections and Taxable Sales FY 2009 - 2010 (July 1- June 30)
Classification of Sales: Orange Alamance Durham Chatham
1. Unclassified Sales
21%
28%
45%
2. Food Sales (inc. resturants)
35%
20%
15%
3. General Merchandise
20%
25%
22%
4. Lumber and Bldg Materials
12%
11%
6%
5. Automotive Supplies
0.05%
0.07%
0.04%
6. Apparel
0.04%
0.05%
0.05%
7. Furniture
0.02%
0.03%
0.02%
Total Sales
$946,263,485
$1,382,375,460
$3,778,439,315
Multiple of Orange Taxable Sales
100%
146%
399%
Sales Tax Related Items of Interest Worth Noting:
20%
21%
26%
17%
0.08%
0.01%
0.06%
$321,040,737
34%
Orange County and its Towns have traditionally been reluctant to host large scale retail projects. Without assuming any specific postion with
regards to socio- economic consdierations regarding retail development, it is important to recongnize the impacts of such development.
According to corporate financial reports:
1. The average Walmart Super Store generates annual retail sales of $69 Million per year.
2. The average Sams Wholesale Store generates $79 Million per year.
3. The average COSTCO Store generates $135 Million per year. A COSTCO would equate to 14% of current retail sales in Orange County.
Large scale retail projects "properly" located within Orange County would have major impact on local sales tax revenues and represent
a potential significant economic development opportunity, especially along the Interstate 85 transportation corrider.
1 -28 -11 fwc
N
CD
PROPERTY TAX VALUATIONS IN ORANGE COUNTY — (1- 31 -11)
TOTAL REAL PROPERTY VALUES = $14,356,519,468
TOTAL BUSINESS PERSONAL PROPERTY = $369,676,271
TOTAL PUBLIC UTILITIES = $228,934,751
TOTAL MOTOR VEHICLES = $498,806,282
HOMESTEAD EXEMPTIONS AND OTHER EXEMPTIONS = $61,986,016
(Over 1000 residential properties qualify for senior or disabled releases.)
TOTAL OF 51,700 TAXABLE PARCELS OUT OF 54,000 TOTAL PARCELS
TOTAL REAL PROPERTY VALUATIONS = $14,356,519,468 (100 %)
RESIDENTIAL VALUATION = $12,139,498,221(84.6 %)
(Includes agricultural lands)
COMMERCIAL VALUATION = $2,217,021,247 (15.4 %)
• This number includes residential apartment complexes and any residential
property used exclusively as investment property for lease or rent (IF) the
property owner files accordingly.
• Currently, County records indicate the listed valuation of apartment
complexes with 40 or more units at $456,703,758 (20% of commercial values)
• The NET value of Commercial (NON Residential) is estimated at
$1,760,317,489 or approximately 12.2% of Real Property Valuation
• This does not account for residential rental complexes of 40 units or less.
IN NET TERMS, REAL PROPERTIES WITHIN ORANGE COUNTY ARE
ROUGHLY 88% NON COMERCIAL (RESIDENTIAL AND OTHER). NONE OF
THIS ANALYSIS CONSIDERS THE TAXABLE VALUE OF ALL OF THE
VARIOUS TAX EXEMPT PROPERTIES WITHIN ORANGE COUNTY OTHER
THAN THE HOMESTEAD EXEMPTIONS NOTED ABOVE.
Transferring these numbers to actual taxes paid equates to direct taxes paid by Non
Residential taxpayers (Commercial Interests, excluding Public Utilities) to roughly
13.8% ($18.3 million of a total of $132.6 million).
IN REAL TERMS, EXPANSION OF THE NON RESIDENTIAL TAX BASE
WOULD HAVE A DIRECT IMPACT ON ORANGE COUNTY RESIDENTS AND
TAXPAYERS. (No impact for sales tax generation is included in this analysis.)
(fwc 1- 31 -11) .
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FOCUS POINTS FOR NEAR FUTURE COUNTY EFFORTS
(To be adjusted based upon changing variables within our local economy.)
1. Adopt and monitor a business investment and job creation incentive grant
program targeted toward desired outcomes and supportive of local values.
2. Maintain an accurate system of measuring economic data used to determine if
economic development programs and policies are producing the desired impacts.
3. Implement an economic development corridor along Interstate 85 and Highway
70 seeking those business opportunities that locate near Interstate Highways.
Examples: distribution/warehouse operations, commercial/retail operations,
corporate office /operational centers, and light manufacturing operations where
truck traffic is facilitated by those locations.
4. Move forward with utility related infrastructure needs along the Interstate 85 and
Highway 70 corridor. (Water, sewer and communications technology to support
targeted business operations.) Pursue establishment of utility districts as a basic
method of financing some of the capital costs associated with these needs.
5. Seek professional assistance and partnerships with private developers willing to
invest in the development of speculative or build to suit office, commercial and
retail facilities along the Interstate 85.and Highway 70 corridor.
6. Support the new food processing center with marketing assistance and encourage
it successful transition to non -profit management status.
7. Expand partnerships with UNC for specific economic development research and
data management and advisory services that provide support for new industries
considering Orange County and existing businesses seeking to expand.
8. Remain open to collaborative relationships and interaction with the Towns and
Cities of Orange County. Partner when joint resources can be maximized.
9. Support and expand opportunities for Tourism related development where the
County and Towns can work together to increase visitor expenditures.
10. Ensure that the image of the County, its towns and cities is seen as supportive of
diverse and quality businesses interests that share common values.
11. Commit funding that remains available to ensure programs, policies and
comprehensive economic development are sustainable.
12. Reformulate a new economic development citizen advisory group based upon
recommendations brought forth by UNC and charge that group with tasks
that support planned activities. (Today's discussion.)
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