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HomeMy WebLinkAboutAgenda - 02-24-2011 - 1a BUILDING 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 Boazd 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 Taz 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, UNC, 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, healthcaze and affordable housing. 5. Support lifelong learning and retraining opportunities. 10 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 taz 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 1/ cent sales and use taz 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 fiz 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. 11 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" • lobs 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 12 "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 Morean'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 . 13 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 ashoe-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 14 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 staffto 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. *~**~ 15 STATUS OF' ORANGE COUNTY ECONONIIC DEVELOPMENT EFFORTS Employment of an Interim Duector 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 Buckhom 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 refuting 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 properly tax to assist in funding utility infrastructure. 8. A need exists to provide high speed Internet 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. Thy 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. 16 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 prepazed 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 reseazch 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. . 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% 20% 2. Food Sales (inc. resturants) 35% 20% 15% 21 3. General Merchandise 20% 25% 22% 28% 4. Lumber and Bldg Materials 12% 11 % 6% 17% 5. Automotive Supplies 0.05% 0.07% 0.04% 0.08% 6, Apparel 0.04% 0.05% 0.05% 0.01 7. Furniture 0.02% 0.03% 0.02% 0.06% Total Sales $946,263,485 $1,382,375,460 $3,778,439,315 $321,040,737 Multiple of Orange Taxable Sales 100%~ 146% 399% 34% Sales Tax Related Items of Interest Worth Noting: 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 J 18 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 (1.00%) RESIDENTIAL VALUATION =$12,139,498,221(84.6%) (Includes agricultural lands) COMII~RCIAL VALUATION = $2,217,021,247 (15.4%) • This number includes residential apartment completes and any residential property used etclusively as investment property for lease or rent (IF) the property owner files accordingly. • Currently, County records indicate the listed valuation of apartment completes 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 approtimately 12.2% of Real Property Valuation • This does not account for residential rental completes 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 tares paid equates to direct tares paid by Non Residential tatpayers (Commercial Interests, etcluding 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 WOUIID HAVE A DII2ECT IlVIPACT ON ORANGE COUNTY RESIDENTS AND TAXPAYERS. (No impact for sales tat generation is included in this analysis.) (fwc 1-31-11) . 19 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, commerciaUretail 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 withthe-Towns and Cities of Orange County. Partner when joint resources can be maximised. 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.) ~~ ~ ~~ zo 10 County and Municipal Government in North Carolina are useful for economic development may be financed by project development (or tax increment) bonds, for which the primary security is tax proceeds on new private development generated because of the public investment $nanced by the bonds. All these forms of debt financing are detailed in Article 17. Interlocal Cooperation on Economic Development Many smaller, rural jurisdictions find it difficult to develop large-scale projects like industrial parks alone. When municipalities and counties collaborate on such ventures they can enjoy economies of scale and cost savings and pursue projects that otherwise might not be feasible. The General Assembly has enacted legislation to encourage and facilitate interlocal cooperation on economic development. G.S. 158 7.4 authorizes two or more units of local govern- ment to enter into a contract or agreement to share financing, expenditures, and revenues related to joint development projects. It specifically authorizes the sharing of property tax revenues generated from a joint industriaUcommercial park or site. Two recent examples illustrate how cities and counties might utilize this provision. The first is the Kerr-Tar Hub Project involving Franklin, Granville, Vance, and Warren counties. In December 2005, county officials signed an interlacal agreement to share the costs of developing a specialized industrial park on one site that will benefit alI four counties. The interlocal agreement stipulates how the counties will share costs and allocate revenues created by the industrial park. According to the agreement, the four counties will be equally represented on the board. of the newly created Kerr Tar Regional Economic Development Corporation, a nonprofit charged with developing and managing the first of four planned hub sites. The Kerr Tar Regional Council of Government spearheaded and helped facilitate this process. The second example is the North Mecklenburg Industrial Park being jointly developed by the mostly residen- tial towns of Cornelius, Davidson, and Huntersville in Mecklenburg County. In March 2005, the three towns signed an interlocal agreement that sets forth a process for joint ownership of the industrial park and a plan for revenue sharing. Organization for Economic Development A local economic development program_requires effective coordination and management. Conducting an effective pro- gram requires widespread community involvement on the one hand and concentrated executive control of a complex set of activities on the other. There is no single administrative structure in common use; rather counties and cities have turned to a variety of structures, either singly or collectively. The starting point for organizing economic development activities is the unit's governing board, which has the au- thority either to undertake directly, or to appoint one or more appropriate bodies to undertake on its behalf, the various activities discussed earlier. Some larger cities like Asheville, Charlotte, Greensboro, Wilmington, and Winston-Salem have economic development units and staff within the manager's office. Although a local government can rely on the governing board and in=house staff for large-scale and long-term economic development efforts, most counties and many cities rely on an appointed commission to do the work on their behalf. G.S. Chapter I58, Article 2, allows the governing board to appoint an economic development commission. Such a commission is a public agency, but once it is created and members are appointed, it may act with some independence from the government that created it. Advantages of such a commission include the opportunity to ensure that local business leaders have an active role on the commission through their membership and the possibility of setting such a commission up cooperatively with other jurisdictions to coordinate. efforts in one body. One disadvantage is that an economic development commission does not enjoy any authority to own real property and therefore cannot duectly undertake some of the incentive programs authorized to cities and counties by G.S. 158 7.i(b). Counties with economic development commissions include: Davidson, Gaston, Harnett, Orange, Robeson, Sampson, Stanly, Vance, Watauga, and Warren. Some counties and cities delegate their economic development acrivities to chambers of commerce, committees of 100, or other private nonprofit corporations, limiting the direct role of the public body to one of providing funding in some measure (and, in some cases, appointing some of the members of the nonprofit's board of directors). For example, the Alamance County Area Chamber of Commerce is the lead agency responsible for economic development in that county. Similarly, Durham County contracts with the Greater Durham Chamber of Commerce to implement economic development for the county. The Greater Raleigh Chamber of Commerce administers the Wake County Economic Development program on behalf of twelve municipalities in the county. Onslow County, the City of Jacksonville, and the local Committee of 100 provide funding to the Jacksonville-Onsiow Office of Economic Development to carry out development activities for both the city and county. The Carteret Economic Development Council is a nonprofit ® 2007 UNC-Chapel Hill School of Government. Do not duplicate. 21 Economic Deve{opment 11 membership organization that receives most of its funds from Carteret County to engage in economic development activities. The Catawba County Economic Development Corporation is chartered as a nonprofit, SOlc(3) organiza- tion that receives local government funding but also generates substantial revenue from private sources including the local Committee of 100. A last example is the City of High Point, which relies on the nonprofit, High Point Economic Development Corporation to run its economic development program. ' These private groups share the benefits of an economic development commission in that they permit the involve- ment of the local business community and facilitate cooperation among several local governments. They also bear two advantages not found with economic development commissions. First, there is no bar to their owning real property; thus they can act directly as developers of industrial parks or shell buildings or can hold industrial sites for conveyance to newly locating companies. Second, because they are private organizations, they can raise private funds within the community and spend those funds without concern for the possible constitutional or statutory limitations that ac- company public funds. (Any public moneys appropriated to these organizations, however, retain their public character and remain subject to such limitations.) A possible disadvantage of using these private organizations, depending on how their governing boards are selected, is that they may have considerable independence from local government, and therefore might sometimes pursue goals and strategies inconsistent with the wishes of local government officials. Over time, some counties and cities modify how they organize and structure their economic development activi- ties in order to clarify roles and responsibilities; improve services, streamline programs, and create cost savings (see Table 26-1). For example, Wayne County recently announced that. its Economic Development Commission, in exis- tence since 1966, will be replaced by a new, nonprofit, public/private organization to perform economic development countywide effective July 2006. This new entity will represent a formal partnership between the Wayne County Board of Commissioners, the Goldsboro Committee of 100, and the Mount Olive Committee of 100. A second example is the Carolinas Gateway Partnership, which was created in 1995 to merge the economic development.activities of two coun- ties, Edgecombe and Nash, into one nonprofit organization. Conclusion: Challenges for Local Government Economic development is a long-term process that involves numerous organizational players and a variety of tools and strategies. Much of what happens in the global, new economy appears beyond the control of individual local govern- ments. Yet local officials will do what they can to help their communities adapt, respond, and prosper in the midst of changing economic conditions and fiscal uncertainty. Counties and cities face several challenges as they seek to stimu- late private investment, promote job creation, and expand the tax base in their jurisdictions: 1. Strategic visioning, organization, and the role of local government. More communities recognize the need to be proactive and deliberate in their economic development efforts. This is evident in the increase in strategic visioning and planning efforts across the state. These planning efforts help communities be more systematic in choosing the right mix of strategies and tools. They also connect a community's goals and objectives to what is actually done in economic deveIopinent. A good strategic plan for economic development specifies which organizations will be responsible for different action steps and delineates the role of local government in the process. 2. Taking along-term view. There are no quick fixes or silver bullets in economic development. An effective approach includes a mix of strategies and tools that are consistent with a community's long-term vision and goals. Immediate results are more the exception than the norm. Counties and cities that make strategic public investments over time and implement a program that looks beyond the next election cycle are better posi- tioned to withstand the ups and downs of the new economy. 3. Using incentives as a public investment. Though widely used, incentives are considered by most to be a nec- essary evil to compete for im~estment and jobs. Very few jurisdictions are willing to take the risk of losing a potential project on the account of.not offering an incentive package to match that of rival communities. The challenge for those counties and cities that choose to use incentives is how to do so as an investment of public dollars for the greater good rather than as a mere subsidy of private business activities. To achieve this, some communities target incentives at certain Types of industries that are expected to produce higher rates of return on the public investment and tie incentives to specific job creation and investment levels. Other mechanisms to protect the public investment include payback guidelines, performance agreements, clawback provisions, and cost-benefit analysis of incentive projects. ®2007 UNC-Chapel Hill School. of Government. Do not duplicate. 22 12 County and Municipal Government in North Carolina Table 26-1. Characteristics of Organizational Structures for Economic Development Characteristic Line Department Economic Development Commission Dependent Nonprofit Independent Nonprofit Organizational Powers Own property Yes No Yes Yes Develop industrial park Yes No Yes Yes Construct shell building Yes No Yes Yes Borrow money Yes No Yes Yes Guarantee private {oans No No Probably no Yes Finance and Taxation Subject to Budget/Fiscal Control Act Yes Yes No No Income tax status Exempt Exempt Exempt Exempt Contributions deductible Yes Yes !f 501(c)(3) if 501(c)(3) Property tax status Facempt Exempt Taxable Taxable Procedural Issues Subject to open meetings/ public records laws Yes Yes Yes No Follow G.S.158.7.1 Yes N/A No No Policy Coordination/Control Policy coordination High Medium Medium Low Financial control Appropriation Appropriation Contract Contract Employee Benefits Public Public Private Private Private Sector Involvement Low Medium Medium High Examples Anson County; Washington County; Charlotte, Wilmington Bladen County EDC; Sampson County EDC; Stanly Gounty EDC Cartere# County EDC; Catawba County EDC; High Point EDC Alamance County Chamber; Henderson County ED Partnership; Greater Raleigh Chamber Source: Adapted from David Lawrence, Economic Development Law for North Carolina Local Governments. Chapel Hill, N.C.: Institute of Government, The University of North Carolina at Chapel Hill, 2000. 4. Balancing the tax base. Several counties and cities in North Cazolina have experienced rapid population growth and have seen an increase ul residential development as a result. Indeed many "bedroom" communities are taking shape across the state. Local governments must figure out how to pay for the additional public services,that growth requires. The problem is that residential development does not tend to generate sufficient tax revenue to fund expanded public services. By contrast, industrial and commercial development usually more than pays for itself in terms of the ratio of tax revenues to the cost of public services. Therefore, as communities grow, they should pay attention to diversification, or the Lack thereof, in the tax base. ® 2007 UNC--Chapel Hill School of Government. Do not duplicate. 23 Economic Development 13 5. Ensuring that the benefits of economic development are widely sJzared. Using public funds for economic development assumes that doing so serves a larger public interest. Local governments face a challenge in ensuring that public economic development activities extend beyond narrow private interests to benefit the community in a broader sense. More specifically, Ioca1 governments often intervene in the process to steer growth and development to disadvantaged areas and residents. 6. Measuring and evaluating success. So much is done in economic development without ever knowing what difference it has made in communities. Systematic evaluation of economic development programs can shed light on what is working and where resources should be focused. 7. Knowing when to collaborate and when to compete. Though economic development is an inherently competitive process that often pits one jurisdiction against another, there is increasing recognition that regional collaboration makes sense in certain instances. Regional solutions to infrastructure, workforce development, and incentives are difficult to initiate and implement. Yet, the reality is that economies tend to be regional in nature and cut across political boundaries. A major question that arises is how to reconcile the fact that taxation, land use, and infrastructure decisions are tied to Ioca] political jurisdictions, but regional economies are not. Addifiional Resources Publications Austrian, Ziona, and Jill Norton. Strategies and Tools in Economic Development Practice. Center for Economic Development, Cleveland State University, 2002. Available online at http://urban.csuohio. edu/economicdevelopment/knight/index.htm. Bartik, Timothy J. "Economic Development," in Management Policies in Local Government Finance, 5th ed,, ed. 3. Richard Aronson and EIi Schwartz (Washington, D:C.: International City/County Management Association, 2004), 355-90. Blakely, Edward J., and Ted K. Bradshaw. Planning Local Economic Development.• Theory and Practice, 3d ed. Thousand Oaks, Calif.: Sage Publications, 2002. Forman, Maury, and Jim Mooney. Learning to Lead.• A Primer on Economic Development Strategies. Dubuque, Iowa: Kendall/Hunt Publishing Co., 1999. Koven, Steven G., and Thomas S. Lyons. Economic Development: Strategies for State and Local Practice. Washington,.D.C.: International City/County Management Association, 2003. Lawrence, David M. Economic Developmen# Law for North Carolina Local Governments. Chapel Hill, N.C Institute of Government, University of North Carolina at Chapel Hill, 2000. Malizia, Emil, and Edward Feser. Understanding Local Economic Developrnerzt. New Brunswick, N.7.: Center for Urban Policy Research, 1999. Morgan, Jonathan Q. "Clusters and Competitive Advantage: Finding a Niche in the New Economy." Popular Government 69, 3 (Fall 2004): 43-54. Seidman, Karl R Economic DevelopmentFinarzce. Thousand Oaks, Calif.: Sage Publications, 2004. Shively, Robert W. Economic Development for Sma11 Communities: td Handbook for Economic Development Practitioners and Community Leaders. Washington, D.C.: National Center for Small Communities, 2004. ® 2007 UNC-Chapel Hill School of Government. Do not duplicate.