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HomeMy WebLinkAboutAgenda - 10-18-2007-3ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 18, 2007 Action Agenda Item No. 3 SUBJECT: Orange County Economic Development Presentation DEPARTMENT: Economic Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): The Flow of Dough North Carolina Department of Commerce Economic Funding Sources BOCC April 2007 Economic Development Goal Investing in Innovation — Orange County Economic Development Commission Five Year Strategic Plan: 2005-2010 Business Needs in Orange County INFORMATION CONTACT: Willie A. Best, Assistant County Manager, 245-2308 PURPOSE: To provide information on current economic development initiatives to expand Orange County's effort to attract business enterprises that will add to the County's tax base, create public/private partnerships for high paying jobs, and contribute to the diversity of economic opportunities that will foster a sustainable economy. BACKGROUND: Orange County needs to recruit a new Economic Development Director. This is the opportunity to select the type of professional personnel who would be most beneficial to increase the overall tax base and assist with the development of a diversified economy. Traditionally Economic Development leads to job creation, a larger tax base and improve quality of life for communities. It can mean anything from the improvement of services, economic incentives in order to lure businesses or retailers to a workforce development and programs to improve job skill levels of individuals. Several key questions should be considered before the hiring of an Economic Development Director. • What does economic development mean to Orange County? • How does Orange County compare regionally? • How do state incentives compare with other local incentives? • What type of economic development does the BOCC desire? I FINANCIAL IMPACT: None RECOMMENDATION(S): The Manager recommends that the Board discuss the information provided and give direction to staff regarding the future of economic development in Orange County. EN 0 i F Dough William H. Fruth is the President of POLICOM Corporation, an independent economics research firm located in Palm City, Florida, which specializes in studying the dynamics of local economies. Through his analysis, he determines if the economy is growing or declining, what is causing this to happen, and offers solutions to maintain or improve the situation. He has personally evaluated the data for more than 600 local economies in the United States, created more than 200 economic and community studies, and has provided presentations and workshops for state associations and local communities in 31 states. What 9s, Economic Deve men? All of the discussion regarding how local economies work now brings us to "economic development." Economic development is the. activity, which is directed toward improving the overall economic strength of a community and the economic quality of life for all the residents in the area. Economic development differs from community development. Community development, while also an important activity for an area, is designed to relieve or cure socio- economic problems within the community. It is targeted to assist a specific geographic section or economically distressed class of residents. Programs which eliminate urban blight, revitalize crime- ridden neighborhoods, or provide housing assistance to the poor are community development activities. However, they are not economic development activities. A successful economic development program will improve the standard of living for all the residents. Oftentimes, when successful., the need for community development programs begins to fade. There are three basic economic development programs, which focus directly on creating primary industry jobs: 1) existing industry program, 2) attraction - recruitment program, and 3) start -up program. The Ex§sAm - Indus¢ff is designed to foster the retention and cause the expansion of the existing primary - contributory businesses in the community. It is the most important yet least expensive of the three programs. Many communities have fallen into economic distress simply because their existing primary industries have reduced employment or left the area entirely. Sometimes the reason the company has curtailed its operation is the result of a declining national or regional marketplace or foreign competition. Fbw OF bough - Page 23 - Vepsion August 20, 2007 An existing industry program focuses on ways to reduce the costs to primary businesses as much as possible, thus causing them to be as profitable as possible. Additionally, a community can help a company, especially smaller companies, expand the market for its product or service. As profitability increases, the companies not only do not leave the area, but they expand and employ more people, creating economic growth. The secret to a successful existing industry program is to build trust between the primary employers and the community at large. As a result of this trust, the company will willingly communicate problems caused locally with community leaders, who, in turn., work to solve these issues. ........... Few people realize that aside from market conditions, the most frequent reason a company will leave one area and move to another is "local community attitude." Essentially, if a company has been treated poorly by the community over a period of years, and this treatment has added costs to the operation, when it comes time to expand or "retool," the company will seek a community in which it is better appreciated. Some areas have been so successful in causing their local companies. to expand they do not focus a great deal on an Attraction - Recruitment Program. The Ateraction or Recruitment encourages new contributory companies to locate in the area. The program is designed to increase the amount and quality of money flowing into the area and to make the economy more consistent through diversifying the types of contributory businesses. A recruitment program is time consuming, expensive and results may take years. Yet, even for growing economies the program is desirable if for no other reason than to offset the eventual curtailment of its existing companies. For areas which are in decline, recruitment is absolutely necessary. An Attraction — Recruitment Program is designed in a similar fashion to the marketing program of most businesses. The following steps are taken: 1. Determine what you have to sell. 2. Identify who will want to buy what you have to sell. 3. Then, repeatedly, overall a long period of time, ask them to buy your product. Now, your product is not your community. A lot of people think it is. For many, where they live is the best place in the world. They believe, since it is a great place to live, companies will move there. Sorry. This is not the case. Now of bough - Page 24 - Version August 20, 2007 What you have to sell is a geographic location which has certain economic assets which will cause a company to be profitable if they are located there. So, when you "determine what you have to sell," you are actually making an inventory of these assets. In order to "identify who will want to buy what you have to sell," you need to examine the various industrial sectors to determine what types of companies need what you have. These are the companies to which you market. The Start -Up is designed to cause the creation of new contributory companies, which have a chance to grow and develop as the years pass. Several communities in the United States have created dynamic economies by "growing their own" primary businesses. By assisting and coaching imaginative entrepreneurs, an idea can grow into a thriving business. Dell Computer was once a "Start -Up" company. The visible and financial rewards to the community of such a program are in the future. Patience is required. Essentially, a Start -Up Program assists a local person who has an idea for a new product or service which can be marketed outside the area (primary.) Most of the time the individual does not have the financial resources or the knowledge to take this "great new idea" from a great thought to a great product. This is where the community comes in. A community should have a team of professionals, ready to guide the individual through the process of determining if the idea has merit, the development of the product, and the eventual marketing of the product. Usually a building (incubator) is needed along with venture, investment capital to convert the idea into an active business. Typically, a Start -Up program requires a relationship with an institution of higher learning (university or large community college), but it is not absolutely necessary. Usually areas with a major research university have an active start -up program as university related research oftentimes can be commercialized. Overall, an economic development program should limit its activities to servicing existing, attracting new, and causing the creation of primary, wealth generating employers. All of the other jobs in the area, which consume the money flowing into the area, will "take care of themselves" as a result of the expanding marketplace. Flocs of Dough - Page 25 - Vwsfaa Augwst 20, 2007 *Tw does the work? Implementing an economic development program is usually done by .... an economic development organization. There are at least 6,000 economic development organizations in the United States trying to keep their existing primary employers in their community, attract new companies to their town, and grow new primary businesses. These organizations come in different sizes and shapes. Some are- branchesWc the county -or= city government = - Others are=a division of the Chamber of Commerce. However, the most frequent is a free standing, not- for -profit economic development corporation. The economic development corporation is usually funded by investments from the private sector along with money from city and county governments. In some places in the United States, citizens have voted to increase their taxes to pay for an economic development program. Nationally, some economic development organizations are very successful in improving the area's economy, while others are not. The organization must be adequately funded and have the support of the community along with city and county governments. Most residents in an area are not aware of the activities of their economic development organization. This is because its activities "confidential" in nature. - When a business is looking for a community to relocate to, it needs to keep the process a "secret." are usually expand or If it is known publicly, the business will receive thousands of calls and visits from economic development organizations from all around the world, the cost of property many times escalates, and the workers "back- home" become anxious about their jobs, fearing a closure. As a result, most companies use private consultants and usually the economic development organization does not even .know the name of the company until the end of the process. It is a characteristic of the strongest local economies in the United States to have had an active, well funded, economic development organization for quite some time. Flow ®$ bough - Page 26 - Version August 20, 2007 YIPWIch Opes of bvesINIesses sold a comma ity oc m upon OF When a community conducts its economic development program, it should focus upon enterprises which will enhance the economy. For areas which are growing and dynamic, the "bar" should be set high; targeting the best and highest paying companies, so all can be drawn upward. However, areas which are chronically distressed, with high unemployment, need to first increase the size of the economy, to absorb the existing workforce and to get more money into the bucket of wealth. The focus for such a community should be upon increasing the number of primary businesses, with less attention to the wages paid. Earlier we talked about the economic impact upon .a community of a 1,000 job manufacturing company. The amount of impact, spin -off jobs created, taxes paid, and local purchases is different for each business. The overall impact is determined by the wages paid, the amount of local support (local purchases of products or services), capital investment (taxes paid), and the potential for ancillary companies to be formed as a result of the presence of the business in the community. For example, an automobile assembly plant will likely employ about 1,000 workers, piecing together lots of parts to make the car. The cost of building the factory could very well have been $1 billion and wages are very high. Also, it is quite likely another 5,000 people are employed in the area manufacturing the parts for assemblage. As a result, the assembly plant has a significant overall economic impact upon the local economy. Suppose there is a headquarters for a major insurance company which employs 1,000 workers. The wages are very high for this company as insurance actuaries and corporate executive are paid well, due to their "value" to the company. However, this type of enterprise does not need very many support companies, like the automobile manufacturer. Typically it will occupy a general office building which costs much less than an auto factory. While is it a very desirable business to have in a community, the overall economic impact is much, much less than the car manufacturer. Continuing, a manufacturer of simple plastic products such as milk jugs or tubing requires few if any support companies and a relatively low - skilled, low -wage workforce. MOW of bough - Pop 2*' -- VersUan August 20, 2008 up While it contributes to the economy, there is much less "ripple effect" or impact as a result of its presence compared to the insurance company. The following is a list of contributory businesses which serves as a guide relative to the amount of impact upon a local economy: Manufacturing of high value, high DvaaN p roa ucts> High wages, large capital investment, and a large number of support businesses are needed. Examples include automobile assembly, commercial aircraft, ship building, energy production facilities, chemical manufacturing, and petroleum refineries. Manufacturing of high value, mid to low bulk products.- High wages, large capital investment, but fewer support businesses than high bulk. Examples include satellites, sophisticated electronic devises, medical equipment, and pharmaceuticals. Sophisticated Infooronaatrion or Technical Services.- High wages, average capital investment, but few support companies are needed. These businesses perform tasks which require highly educated and experienced individuals in the disciple of the company. Examples include insurance actuaries, financial management, major engineering and architectural firms, software development, computer systems design, and marketing research. Transportation of products. High wages, large capital investment. Examples include major trucking, rail, air, and port facilities dedicated to the handling and movement of products. Research and Development. High wages and oftentimes high capital investment. Support companies are usually few in number but high in quality. Examples include the development of pharmaceuticals, electronic components, nuclear energy, industrial metals, and photonics. An ancillary "testing facility" ' adds more impact. One of the greatest benefits is the opportunity for "Start -Up" companies as result of the research. Federal Gove'rn�rr ent. One of the highest average wages of any industrial sector. Typically a consistent employer with annual wage increases greater than the rate of inflation. Difficult to recruit, however, as oftentimes locations are determined via the "political" process. Examples include a regional headquarters for the IRS, major postal distribution facility, military installations, and research facilities. Corporate Heaadquaarrters. High to medium wages, depending on the activity at the headquarters. Few support companies needed. Some headquarters house all the top, highly paid executives, with a minimal number of low paid support positions. Others, Move of bough - Page 28 - Version August 20, 2 however, have few high paid positions and a large number of low -wage support workers. The number of high -wage jobs determines the impact. Included in headquarters are the administrative centers for banking, healthcare, manufacturers, insurance, and a host of other businesses. Manufacturing of mid value products: Middle -wage jobs, sometimes a large capital investment and sometimes support industries are needed. Examples include computer assembly, metal fabrication, food processing, boat building, household appliances, and building materials. State Gover6'd1YB eng Middle -wage jobs but typically higher than the local average. Most state government employment operations are usually located in the state capital, bolstering its economy. However, some states have distributed the employment centers throughout the state to provide benefit to more than one area. Information p rocessi g and telecommunication centers: Middle to low wage jobs, low capital investment, and usually few support industries are needed. Many of the businesses perform repetitious work and require a moderate to low skilled workforce. Examples include subscription fulfillment, telemarketing centers, and the processing and collating of information for a host of industries such as banking and insurance. Manufacturing g of low value products: Low -wages and relatively low or average capital investment. Few support companies are needed. Examples include apparel, household appliances, food packaging, low value plastics, and animal slaughtering. Retirement indushy Low wages with little capital investment except by the healthcare industry. This industry typically promulgates the formation of low wage, low skill service and retail jobs. It is very consistent, but economic growth is dependent upon the in- migration of more retirees. Tourism dndusewy Low wages and little capital investment except by hotels. This industry typically promulgates the formation of low skill service and retail jobs and is very inconsistent as a result of seasonal employment. A strong tourism sector can, however, cause the formation of recreational and hospitality amenities in the community, enjoyed by the local residents, which would not normally be created. Within each of the above categories are exceptions as to their impact upon a local economy based upon the wage level paid and the consistency of the employment of each business enterprise. Mom ®f D.6ugh - Page 29 - Vgosian August 20, 2007 So how do we do 1P The first step in trying to get primary employers to expand in or locate to your community is to understand the most important concern of these companies which is "urofl " Companies do not exist to provide jobs for a community, to pay taxes to local government, to add money to the bucket of wealth. Primary businesses exist for only one purpose... to make money. If they don't, they close. Period. While the sales for a primary employer are generated from outside your area, many or most of its costs (expenditures) are driven locally. When a business conducts its community — site selection evaluation, it will consider a host of issues including wage rates, the cost of utilities, highway, airport, and seaport systems, local and state taxes, higher educational resources, and on and on and on. However, usually a business will have one or two major geographic economic issues which must be satisfied to locate in an area. As an example, if a company needs an abundant supply of inexpensive electricity, then communities with low electric rates will be given priority consideration. A major distribution center will locate only in areas with direct access to the interstate highway system. A corporate headquarters typically will not locate fiu-ther than sixty minutes from a major airport. For a business which will invest hundreds of millions of dollars in its facility, such as a drug manufacturing facility, the local property tax rate is of great concern. A software development company usually needs to locate close to a university which offers advanced degrees in computer science. While there are specific needs which must be considered, for most site selection projects, more than 100 economic issues relative to the state or the community will be measured to determine their effect upon the cost of producing the product or service. A company is not necessarily looking for the "cheapest" area, but the one which offers the best "value." Communities, which are the most profitable location for companies, will be the ones considered. Flory of Dough - Pone 30 - Version August 20, 200.7 he Secand Most Important lases There are two issues which are more important than the others. The second most important issue regarding the site selection process is the "ava ilabiRityT of trained or trAnable 12bor." Without people to do the work, a business cannot succeed. However, having a "bunch of bodies" available to be hired is not sufficient for most primary employers. The previous list of businesses which had the greatest, impact upon a local economy also was a list of skills levels. The top several businesses pay high wages. This is also a reflection of the skills needed to produce the product or service. As a result, the top tier businesses will seek a community in which the workforce is either trained or has the aptitude to be trained for the tasks they demand. They will evaluate the availability of workers and the current skills which they possess. The "Wage Ladder" on Page 13 is also a "Skill Ladder." A worker is paid in direct proportion to the "value of service." Higher. wages are paid to workers with the most experience, education, and overall knowledge as these are'the traits necessary to perform the work required by the high -wage employer. In the modern day high -wage manufacturing facility, there are few general laborers employed. Most of the workers perform highly technical tasks and need to be proficient in mathematics, computers, or science with an "associate's" or college degree. The same educational requirements apply to almost all of the top tier wage sectors. The opposite also occurs. Low -wage employers typically need workers with modest skills who can be quickly trained to perform minimal tasks. Little education is required for these jobs. As a result, the best educated individuals with the widest array of experiences will have the best chance to earn high wages. This has been the case for the last 3,000 years. Throughout history the best educated people have always earned more money as they were able to provide a more valuable service than those who do not have the knowledge to perform complicated tasks. Maw of Doug h - Page 31 - Version August 20, ZOD7 The least educated people have always performed menial tasks. This is one of the reasons education is as important today as ever for an individual in order to succeed and enjoy a good standard of living. So, when a primary employer is examining a community, it will review the current industries to determine if a potential workforce is available. If it requires an array of high skilled people who can be trained to perform its specific tasks and such a workforce is not present, it will not locate in the area. During this process, the company will also use a strategy which is directly related to the wage ladder. Suppose the company intends to pay $45,000. The business will review the type of industries which pay around $35,000. If, from this group, it is determined the skills, education and aptitude of the $35,000 workforce are sufficient for its operation, then they will seriously consider this community. There are several reasons they target "one step down" on the wage ladder. First, there will be a large number of people applying for a job at their company, as they will be offering about 30% more pay than the workers presently receive. 13 ee The company also realizes if they drop down too many steps, the skills and work experience will not be suitable. (By the way, if this employer does come to town, the force pulling everyone up the ladder will begin, as the $35,000 employers will replace their people from the $25,000 pool and so forth.) A low -wage employer will shun areas which have an abundance of high -wage employers. The company will likely conclude it will not be able to attract a sufficient number of low - skilled workers for its operation. It will therefore target communities which have a large number of low -wage businesses or which are in economic distress. Therefore, if a community wants to improve the quality of its economy by attracting higher paying companies, the skill and education level of its workforce needs to be addressed. Now of bough - Poge 32 - Version August 20, 2007 r aT ea, i ss. The most Il issue relative to the "site selection99 Process is hav ctURN 66 site." In fact, absent available improved, approved real estate for primary employers, a local economy will decline. Economic development is ultimately a real estate transaction. In order for an existing company to expand, a new employer to move to the area, or a start-up business to grow, each needs a place to do it. They need a building. If a vacant, modern facility is not standing ready to be occupied (usually there are not any suitable buildings available), a structure needs to be constructed. This means land must be ready. All of the other geographic issues, such as transportation access, utilities, labor availability, or taxes are not considered if a place, to operate the business cannot be provided. A local economy will indeed decline if land is not available. Existing primary employers, when they need to expand, will have to leave the area causing a loss of money flowing into the economy. Additionally, new, high -wage companies cannot come to the community as there is not a place to build a modern facility. Spin -off businesses coming out of the incubator will have to grow in another town. There are examples of economic decline caused by the absence of improved, approved real estate throughout the United States. The term "improved, approved" has been used continuously. What does it mean? "Improved" real estate has the entire horizontal infrastructure in place. The roadways leading to the property, electric service, sewer and water lines are "to the site." Essentially, the property is "building- ready" and there will not be any site preparation delays. Just as important, the land needs to be "approved" by the local government. All planning and zoning issues need to have been resolved in advance. How of bough - Page; 33 - Version August 20, 2007 When a company is looking to locate in. a community, it typically does not have the time to wait for a community to construct the infrastructure to the real estate or pass local legislation regarding land use and zoning. This process could consume one to two years (even longer in some states and counties). As a result, site seekers will summarily dismiss communities which do not have a building -ready site upon which it can construct a facility, regardless of all the other geographic economic assets in the area. This is a major problem for many communities. Private'- industrial developers will invest in private industrial or office- parks: Tliey will oftentimes construct speculative buildings, both office and industrial. However, the principal clients or users for this property are "consumptive" businesses. Every community needs space for doctors and lawyers, engineers and accountants. Industrial areas are used by auto body shops, plumbing and electrical wholesalers, or dry cleaning plants. The growth of these businesses can be predicted. However, no one knows when a new primary employer will come to town. As a result, the private developer will not wait. Land and buildings are sold or leased to the first business who wants to pay. The land for future primary employers is absorbed. Many communities in the United States fully understand this issue. This is why hundreds of counties and cities have invested in community owned industrial parks or employment centers. The property is reserved for primary employers and is not available for consumptive businesses.. The land is looked upon by the community as a long term investment in their economic future. It might take ten to twenty years for the land to be fully absorbed. Of course, once it is absorbed, the community is right back in the position of not having any land available. This is why community leaders should look far out on the time horizon. For their long -term planning, they should identify today a 40 -year supply of potential real estate to provide for long -term economic growth. How oe bough - Page 34 - Version August 20, 20,07 o geed BUSITI ss Incentives Nationally, there are thousands of economic development organizations all attempting to improve the condition of their local economies. Competition for a limited number of expanding or relocating "contributory" businesses is extremely fierce. So, market forces, a limited supply of companies and a large demand by communities, have fostered the creation of business incentives. Incentives or financial inducements offered by communities and states are designed to reduce the initial set -up and long term operating costs for primary employers, to help them be profitable. If a local area is in chronic economic distress, community leaders many times will do anything they possibly can to lure a contributory employer to the area, including giving a company a free building. However, offering incentives is not limited to distressed areas. Almost all of the most dynamic, growing economies in the United States offer an array of incentives. Why? Because community leaders know they must continuously attempt to grow economically, or they will surely decline. The most frequent questions raised by citizens in a community are whether incentives are necessary and are they worth the expense. Sometimes offering incentives, government money, to a private concern can be controversial. Determining whether or not the financial investment made by the community is worthwhile can be mathematically calculated. Let's revisit the economic impact of the 1,000 job manufacturer. Suppose the local government offers an inducement package to this company worth $1,000,000 a year for ten years, or $10,000,000 total. Sounds like a lot of money. However, remember the company will generate $8,500,000 in local taxes and $85,000,000 in payrolls each ye You do the math. Incentives should only be offered to "qualified" companies. To be competitive in the economic development marketplace, most communities need to have some type of incentive program available. Move of bough -- Pagge 35 - Version august 20, 20-07 Let "s Sgmeeze the Water Out of he Fat..... Let's review what we have learned so far: • A local economy is a place where people live and work, earn and spend. Its growth is dependent upon money flowing into the area, principally imported by the primary industries. This money circulates and drives the profits and earning of all other businesses, including local government. • To improve -a local economy, an area needs to increase the number of primary businesses which hopefully will pay a wage higher than the area average. To do this, the economic development organization should focus on companies which can utilize the area's geographic assets and have the greatest impact. Given the two most important site selection criteria, does this mean if your community has hundreds of acres of improved, approved real estate and a trained or trainable workforce, you are guaranteed to have economic growth? No. What it means is ®u have a chance. Without both, however, you have none. But there is one more issue, believe it or not, which will determine if your area grows or declines. It is "local community attitude." In order to do all the things necessary to build an economy, the support of the "people" and all local governments is necessary. Local. laws need to encourage economic growth, not stifle it. Funding, from the private and public sector, needs to be available to pay for an aggressive economic development program, land, training, transportation systems, incentives, and all the other issues which influence profitability. Existing companies need to be encouraged, not berated. New companies need to be welcomed, not protested. It is a characteristic of the strongest economies to have the full support of the people and local government to cause and drive it to happen. M Usually a sour community attitude toward economic development is the result of the people not understanding what it is. Perhaps The Mwe of bough will change this. Flow of bough - Page 36 - Veg-s6on August 20, 2007 .� 18 NORTH CAROLINA the state of minds Targeted, performance -based incentive " ". programs complement the state's competitive cost structure and low business tax burden to offer businesses;a cost-effective place to locate or expand. The state's Article 3) Tax Credit Program '( offers credits for creating jobs, investing m business. property and m some cases `investing in" real property Other tax credits available,rr,, North Carolina address research_ arid`'evelopment and the use of the ; :::: st.gideep -water ports. ^,Infrastructure financing programs, ;wj, including bonds, grants and loans, provide important resources necessary for some projects. North Carolina also offers funds 'I(;( to construct access roads. and railroad access tracks required by a new or expanding industry. Finally, a number of important discretionary incentive programs, including the One North Carolina Fund and job Development Investment Grants, are available to high - impact new and expanding businesses for which the grant is needed to carry out the project in the state. Though simply an overview, this presentation is a valuable starting point to understanding the state's incentive programs. The expert counsel of competent advisors, including contacts at key North Carolina state agencies, is advised to address the needs of individual businesses. For more information about the state's targeted, performance -based incentives programs, contact a B &i representative. •:ails "I "'? _ € ?� "sn i;,�:;::r:::.... 8 NORTH CAROLINA the state of minds " - ARTiCLE3j TAX CREDITS In July 2006, the NC General Assembly passed legislation (House Bill 270) that created a new tax credit program, Article 3J Credits. Article 3J provides three types of tax credits to eligible taxpayers that undertake qualifying activities in North Carolina: • Credit for Creating Jobs • Credit for Investing in Business Property Credit fns Investing in Real Property (Ter 1 only) These credits may be cotrltped to offset up to 50 percent of the taxpayers state incoM,,, and franchise liability, and unused credits may be carried forwar,:d:f:ocup "to five years (15 -year carry- forwards apply to the Credit for Irw "esting in Real Property and 20 -year cant'- forwards exist for taXpavers'that invest at least $150 million over a two -year period). lity Requirements business establishment must be eligible. • The average wage of all full -time workers employed by the taxpayer at the establishment during the taxable year must meet or exceed the applicable wage standard of the county in which the establishment is located. • The taxpayer must offer qualifying health insurance for all full -time positions at the establishment and pay at least 50 percent of employee premiums. • The taxpayer must not have received any significant environmental Violations with the N.C. Department of Environment and Natural Resources within the prior five years. • The taxpayer must not have received any "willful" or "failure to abate" serious OSHA violations at the establishment within the prior three years. • The taxpayer may not have overdue taxes. This summary is not meant to be exhaustive. Taxpayers should review the Article 3j statutes prior to claiming credits. Taxpayers that are uncertain abot their eligibility or ineligibility to claim credits after reviewing the Article 3j statues should consult with the N.0 Department of Revenue. No application required to claim Article 3 j credits. North Carolina Department of Commerce Incentives 1 2 �0-1 INCENTIVES - ARTICLE 3J TAX CREDITS Credit for Creating jobs Eligible taxpayers that meet a minimum threshold of new full -time jobs created during the taxable year may claim a credit for each new job created. The credit is taken in equal installments over four years following the year the jobs are created. The job threshold and the credit amount per job determined by the tier designation of the county in which the jobs are created. County Tier ©esignaton 11 * If the job is filled by a resident of the zone or a long -term unemployed worker, add an additional $2,000. Credit for Investing in Business Property Eligible taxpayers may claim a credit based on a percentage of the cost of capitalized tangible personal property that is placed in service during the taxable year, in excess of an applicable threshold. This credit is taken in equal installments over four years, beginning the year after the property is first placed in service. The credit percentage and threshold are based on the tier designation of the county where the property is placed in service. Countv,Tier Designation:. ' * If the job is filled by a resident of the zone or a long -term unemployed worker,: add an additional $2,000. Credit for Investing in Real Property Eligible taxpayers that invest at least $10 million in real property within a three -year period and create at least 200 new jobs within two years at an establishment located in a Tier 1 county are allowed a credit equal to 30 percent of the eligible real property investment. This credit is taken in equal installments over seven years, beginning the year after the property is used in an eligible business. To qualify for this credit, the taxpayer must obtain a written determination from the N.C. Department of Commerce. Statue of Limitations and Sunset The taxpayer must claim Article 3) Tax Credits within six months after the date set by statue for the filing of the tax return. The taxpayer has up to three years to claim adjustments to previous tax re- turns. This article is repealed effective for business activities that occur on or after January 1, 2010. North. Carolina Department of Commerce Incentives 1 3 � NCENTQVES � NORTH CAROLINA the state of minds ~ ARTiCLE3) Am REDUTS Coun���Ram�mg N.C. DeparLmentofConmmenceannua||«ranksthestate'slO0counbashasedonecmnomicweU- beingandass' -satierdes' nabontneach' The 40 most distressed counties are designated asllcr l. the next 4O are Tier 2, and the 2O least distressed are Tier 3. This tier system is incorporated into various state programs to encourage economic, activity in the less prosperous areas of the state. Tier 3 ''^^^`''^'''`^^`^`'-^^^^''`^-^`-'^-^''^'-`^^''-`^^^''^^^^`'-^'-''-^'^^'^'^`'^'^^^''''^``^^'''~^''`'^^`'`''^^'-^'` Urban Progress Zones (UP_) a ' nd Agrarian Growth Zones (AGZ) Kunidpa|itieswith a population of least lQ,OOQ have the ability to define qualifying areas ofpoverty as Urban Progress Zones. Counties that do not have a municipality with a population of at least 10,000, have the ability to define qualifying areas of poverty as Agrarian Growth Zones. Projects |ocatedwithin these zones receive enhanced Article 3| Credits. In order to establish a zone, a qualifying unit of local government must apply for zone designation to the N.C. Department of Commerce, Division of Community Assistance. Zones become effective on the date the zone application is approved, and remain in effect through December 31 of the subs equentyear NORTH CAROLINA the state of minds INCENTIVES - ARTICLE 31 T CREDITS 2007 Wage Standards The figures below are the lowest eligible wage alternatives (private sector) and represent the state average wage for all counties in which the state wage is lower than the county wage. 2007 Tier 1 Richmond No Wage Standard .7 Edgern e No Wage Standard Robeson No Wage5tandarrl � E Currituck $380 Pamlico $364 Alleghany No Wage Standard LG Rockingham No Wage Standard Graham No Wage Standard R"WO ...... - Beaufott :NoWage: I � m'-A U, - Scotland No Wage Standard Halifax No Wage Standard ............................................................... I ..................................... ............................................................... i!!PN MIP" Bladen No Wagd SandardHett{ott� NoWagc Standard Tyrrell No Wage Standard Standard fiance No WageStarldard Hyde No Wage , NNr Ca ;H i Wage Standard Warren No Wage Standard Y":::, Lenior No Wage Standard W as MINN- Caswell No Wage Standard Wayne No Wage Standard McDowell No Wage Standard 'Nis Cleveland No Wage Standard Yancey No Wage Standard Montgomery No Wage Standard 'AI 'a" Standard n`d-:,:;1-- 4:6i .?.. i�- ..... . ............. , , - , , ........................ ................................ 2007 Tier 2 Alamance $542 Ashe $437 gg Catawba $555 Gaston $547 Harnett $460 Jackson $448 Macon $461 Nash $531 Person $548 Polk $438 Rowan $564 Stanly $476 EM Swain $389 Chowan $461 N t7 Craven $SDN' Watauga $420 Currituck $380 Pamlico $364 $456 , Yadkin 5422 Fender $429 Davidson $498 ............................................................... I ..................................... ............................................................... Brunswick $488 Cabarrus $594 PCaiteret MMERN MR, Chatham $485 Forsyth $657 P 2 Guilford $635 Henderson $520 )ohnston $531 Mecklenburg $755 1-n- New Hanover $556 L Union $579 North Carolina Department of Commerce Incentives 1 5 percent. • Other research: For expenses not covered above, the percentages provided in the table to the right apply to the taxpayer's qualified North Carolina research expenses during the taxable year The R &D credit incorporates the Internal Revenue Code definition of qualified research expenses. The expense must meet federal R &D definitions of either "qualified research" or "basic research." The credit is not limited to research increases, but applies to every dollar of research expense. In addition, there is no eligible business test for this credit. Any corporate taxpayer may claim the R &D credits provided they meet certain wage standards, health insurance, envir6nmental impact, and safety and health program reouirements. R &D credits may be used to offset up to 50 percent of state income or franchise tax after all other credits against that tax are applied. Taxpayers may elect to claim the credit against either the income or the franchise tax. Any unused portion of the credits may be carried forward for 15 years. The R &D tax credit sunsets on January 1, 2009. North Carolina Departrnen.t of Commerce Incentives 1 6 As part of the R &D tax credit, taxpayers that have qualified North Carolina research expenses during a taxable year are allowed a credit equal to a percentage of those expenses determined in the following ._ .:.:.....:.::..:: manner. 5rriall business (annual 1 , . receipts less tha& 1 million): If the taxpayer. a small bush ess!aslof the last day of the taxable year, the business is allowed a credit of three percent. • Other research: For expenses not covered above, the percentages provided in the table to the right apply to the taxpayer's qualified North Carolina research expenses during the taxable year The R &D credit incorporates the Internal Revenue Code definition of qualified research expenses. The expense must meet federal R &D definitions of either "qualified research" or "basic research." The credit is not limited to research increases, but applies to every dollar of research expense. In addition, there is no eligible business test for this credit. Any corporate taxpayer may claim the R &D credits provided they meet certain wage standards, health insurance, envir6nmental impact, and safety and health program reouirements. R &D credits may be used to offset up to 50 percent of state income or franchise tax after all other credits against that tax are applied. Taxpayers may elect to claim the credit against either the income or the franchise tax. Any unused portion of the credits may be carried forward for 15 years. The R &D tax credit sunsets on January 1, 2009. North Carolina Departrnen.t of Commerce Incentives 1 6 INCENTIVES - QUALIFIEDBUSINESS INVESTMENT TAX CREDIT The Qualified Business Investment Tax Credit Program offers qualified businesses tax credits against income tax return for qualifying investments made in the equity securities or subordinated debt of a qualified business. The credit is 25 percent of the amount invested or $50,000, whichever is less. The total credits allowable to all taxpayers for each year may not exceed $7,000,000. In order for the investor to be eligible for the credit, the investment must be made in a business registered with the Secretary of State's Securities Division as a Qualified Business Venture or a Qualified Grantee Business. Qualified Business Venture iQBV) , �i, • Business engaged primarily in manufacturing, processing, warehousing, wholesaling, research and developmen or'al'service- related industry. $ulstness1 11111=1-1. ust have been organized in the same year as the year in which it applies for registration, or it must not have generated more than $5,000,000 in gross revenues as of its last fiscal year • Business cannot engage to any substantial degree in the following. providing professional services, contracting or construction, selling or leasing at retail, investing, entertainment or recreation, or managing or operating real estate. Qualified Grantee Business (QGB) • Must have received a grant from one of the following agencies three years prior to registration: the North Carolina Technological Development Authority, the North Carolina Technological Development Authority, Inc, North Carolina First Flight, Inc., the North Carolina Biotechnology Center, the Microelectronics Center of North Carolina, the Kenan Institute for Engineering, Technology and Science, or the Federal Small Business Innovation Research Program. This program will expire in 2010. To receive the credit, you must file Form D -499 Application For Tax Credit For Qualified Business Investments on or before October 15th in the year after you made the investment. North Carolina. Department 4f Commerce Incentives 1 7 CD NORTH CAROLINA e state of minds Any customer — business or individual — of the N.C. Ports at Morehead Ci ty and Wilmington who is subject to payment of North Carolina income taxes can qualify for a tax credit. Basically, by increasing use of ports facilities, a customer —.new or existing — can take a credit on income taxes due to the state. • The tax credit is earned on cargo whgfage and handling fees — in or out — charged by the N.C. Ports Authority. 4R. The credit is • ....... .... The credit al for each tax current-year fees exceed the average of the past three years. to income taxes due to the state — up to 50 percent of the total tax liability Any, unused credit may be carried forward for five years. FThe OR: maximum cumulative credit that may be taken may not exceed $2 million. 1� iiiiii,"-.',.-":i';i-There are some limitations to this credit. For example, bulk cargo through the Port of Wilmington is M11 excluded rhig:::ctedifls�scheduldd to expire for taxable ears beginning on or after January 1, 2009. U. :: : * y HT it ljj:'ti�:j�!. ional::detii sare::av'ailable from the N.C. Ports Authority by calling (800) 334-0682 or visiting www.ncports.com. Example 1 N Example 2 New North Carolina State Port User '2 Year 2 $100,000 Or bb" TOTAL FEES $250,000 $250,000 $83,333 Year 3 fees $100,000 TAX CREDIT* $16,667 Current User - Increased Volume 11INN Year 2 $0 TOTAL FEES $100,000 L $100,000 $33,333 Year 3 fees $100,000 TAX CREDIT* North Carolina Department of Commerce Incentives 1 8 ! I !i'.; FORTH CAROLINA the state of minds INCENTIVES - FOREIGNTRADE ZONES i;! < What is a Foreign Trade Zone? A Foreign or Free Trade Zone is a neutral, secured area legally outside of U.S. Customs territory. Foreign or domestic merchandise may enter this enclave without a formal customs entry or the payment of customs duties or government excise taxes, and without a thorough examination. If the final product is exported from the UnitedStates, no Customs duty is levied. If the final product is imported into the U.S., duty and excise,,:., axes are due at the time of transfer from the foreign trade zone and formal entry is made into.-the U.S. Duty is paid on the product itself or its imported parts, whichever is lower. Spoiled, or damaged goods or waste materials may be disposed or re- exported without payment;of duty, — Economic Benefit?of Foreign Trade Zones Foreign. Tadones provide a myriad of economic advantages for businesses involved in international "trade. Primarily, merchandise may be manipulated, used in a manufacturing process, ';21jnspecte'd, combined with other domestic or foreign materials, displayed for sale and /or re- exported thout payment of duty. Savings on personal property, � sales and use taxes are possible since state and local governments generally do not impose such taxes on items in an FTZ. Additional savings on interest, labor and shipping costs may also result. rvrr1611 n auc wuca North Carolina Deparbizent of Commerce Incentives 19 North Carolina's commitment bo responsible stewardship and sustainable development of its environment and natural resources extends past regulations. The brings business industry credits and incentives related to recycling, waste and energy as well as active support services to encourage environ..j'nientally conscious tance 'North Carolina Recycling Busines$- SIS C ter, the state offers rougb -ycling.. Business Assistance en assistanceto business and o promote environmentally h he reuse and remanufacture of recyclable mated this objective, the center ' . recycling businesses Vith markets research, I selection, permitting and obtaining equipment Provides technical assistance to recycling businesses With `. Processing and nemanufactuhng secondary materials, and marketing ` ���ne6v funding sources, funding demonstration projects, andn cos sharing arrangements * Aggressively promotes to potential customers the need to purchase products With recycled content . . . °Promotes the need todeve�p,tmns#� and aoo�techno| ' that Vill increase the use of recycled materials Promotes partnerships among government and industry tostimulate and facilitate the recovery and reuse of secondary materials �Fosters the development ofa supply infrastructure that is capable of providing industry Withdean, readily usable and available raw materials � Promotes waste prevention and reuse Vithin both the public and private sectors to reduce business costs and the consumption of � virgin materials I �0� NORTH CAROLINA the state of ritinds - INCENTIVES -SALES AND USETAx EXEMPTIONS, REFUNDS AND DISCOUNTS North Carolina offers reduced rate allowances for certain business items. For example: Exemptions .':,. • Purchases of ingredients or component parts of manufactured products are exempt from sales or use tax. • Packaging containers and items that become part of a manufactured product and are delivered with the product to the customer are exempt from sales and.use tax. Sales of electricity and eligible busing :properly to an internet service provider or web search portal business that invests;at least,$250.mil6onm private funds are exempt from sales and use tax. .:::::::::.::::::� • Sales of industrial machinery: and equipment are exempt from sales and use tax but are subject to an excise tax. i`til!!ti;;h: This rate is one peirceitwith a maximum of $80 per item. Sales of maclinery'and equipment to be located and used in a Tier IV data center are exempt from sales and use tax bufare subject to an excise tax. This rate is one percent with a maximum of $80 per article. ®,Piped natural gas is exempt from sales and use tax but is subject to an excise tax. This tax rate is based on the number of therms of gas consumed in a month. Motor vehicles are exempt.fi-orn sales and use tax but are subject to the highway use tax. Highway use tax is three percent of ft a retail'value of the motor vehicle with a maximum tax of $1,500 per vehicle. Refunds • The owner of an eligible facility is allowed an annual refund of sales and use taxes on purchases of building materials, fixtures and equipment if the facility costs at least $50 million in Tier 1 counties and $100 million in Tier 2 and 3 counties. Eligible industries include: • Air courier services • Aircraft manufacturing • Bioprocessing • Computer manufacturing • Financial services, securities operations, and related systems development • Motor vehicle manufacturing • Pharmaceutical and medicine manufacturing and distribution of pharmaceuticals and medicines • Semiconductor manufacturing See 6.5.105 - 164.14 6) (3) for more detailed industry descriptions • Testing labs or medical labs engaged in analytical services are eligible for a 50% refund on sales and use taxes paid on purchases of supplies used or consumed for analytical activities. North Carolina Department of Commerce Incentives 1 11 INCENTIVES -SALES AND USETAx EXEMPTIONS', REFUNDS AND DISCOUNTS Discounts • Parts and accessories to manufacturing machinery, which include most supplies used in the manufacturing process but not becoming a part of the manufactured product, including pollution abatement equipment, are taxed at one percent • Coal, coke and fuel oil used in manufacturing is taxed at one percent • Sales of electricity to manufacturers are taxed at a rate of 2.6 percent • Aircraft, boats, railway cars and mobile offices are taxed at 3 percent with a maximum tax of $1,500 per item. • All telecommunications services are taxed at a rate of 6.5 percent North Carolina offers sales and use tax exemptions, refunds and discounts to eligible companies. North Carolina Department of Commerce Incentives 1 12 NORTH CAROLINA the state of niftids The One North Carolina Fund consists of nonrecurring appropriations made available to the governor as a flexible and discretionary tool allowing North Carolina to respond quickly to enable job creation and/or retention. Awards are based on jobs created, economic impact of the project, the importance of the project to the state, quality of industry, and environmental impact. Awards are allocated to local units of government as part of a negotiated challenge grant. Local governments are n required to match the One North Carolk a award with cash, fee waivers, in-kind services, donations of land, building or other assets, or provision of kffirastn. : fi'66inp�inyto:b6:conside'red.f'or'..E��' F .,a grant, the d test as required by the Articl B]"Tax Credit Act. • Installing or company must agree to meet the weighted hourly average wage Funds allocated through One North Carolina are used for improvements, or renovations of existing buildings to be used for expansion ,-, 7" 4sGiction of or improvements to new or existing water, sewer, gas or electric utility distribution lines • Equipment for existing buildings The One North Carolina Fund may provide financial assistance to businesses deemed by the governor to be vital to a healthy state economy. North Carolina Department of Commerce Incentives 1 13 NI 0] INCENTIVES -ONE NORTH CAROLINA SMALL The North Carolina incentive program and the matching program comprise The One North Carolina Small Business Program, which is administered by the North Carolina Board of Science and Technology. The Board advises and makes recommendations to the governor, the General Assembly, the Secretary of Commerce, and the Economic Development Board on the role of science and technology in the economic growth and development of North Carolina. The Board publishes a Solicitation and Announcement of the Availability of Funds for each program when they are offered; the Solicitations incorporate the programs' Guidelines, in addition to application forms, specific instructions, and eligibility requirements for the programs. Applications for funding submitted before a Solicitation is issued will not be considered; Applications must conform to the requirements and procedures listed in both the Guidelines and the Solicitations to be eligible for funding under these programs. For more information, see: http://www.ncscienceandtechnology. com. The One North Carolina Small Business Program provides reimbursement or matching funds to businesses conducting feasibility research leading to the development of commercially viable innovations. Nortli Carolina Department of Cormerce Incentives 1 14 FORTH CAROLINA the state of minds " )OBDEVELOPMENT INVESTMENTGRANT The Job Development Investment Grant (JDIG) is a discretionary incentive program that provides a limited number of cash grants directly to new and expanding businesses that will provide economic benefits to the State, and need the grant to . carry out the project in North Carolina. Grants are based on the job creation and investment commitment made by companies in their formal applrcations to:;the State prior to i location decision. Grant funds are disbdl'sed annually to approved companiesliased on a percentage of withholding taxes! Paiel'by new employees, following satisfaction of performance criteria set A,fi- 'member Economic Investment Committee (EIC) evaluates projects and makes decisions r..egarding )DIG awards, funding levels, grant period, and other terms of the grants: The EIC is autl,6', ized to award grants to be disbursed annually for a period of up to 12 years, ranging from 10 to 75 percent of the withholdings associated with eligible positions created by a Sec. Pain welcomes new employees at Credit Suisse' RTP operations center. Credit Suisse is the 12th JDIG recipient. company over a specified period of time. For projects located in Tier 2 counties, 15 percent of the total JDIG grant is transferred to the state's Utility Account to fund infrastructure projects in the state's economically distressed counties. In Tier 3 counties, 25 percent of the total )DIG grant is transferred to the Utility Account. The )DIG program is subject to a legislative cap on grants made by the EIC in a given year, based on the cumulative financial impact of those grants in any future grant year Up to 25 grants can be made annually. The maximum amount of total liability for grants provided for in agreements entered into in any single calendar year may not exceed $15 million. The amount of a grant associated with any specific position may not exceed $6,500 in any year Currently, the authority of the EIC to enter into new agreements expires January 1, 2009. Nortli Carolina Department of Commerce Incentives 1 15 Funds are available through the N.C. Board of Transportation to construct roads to provide access to new or expanded industrial or manufacturing facilities, including mills, processing facilities, and laboratories and other industrial research operations. The board also may consider requests for access road improvements to recreational facilities if they are expected to produce additional jobs and attract people to the facilities from other sections <of North Carolina and from out of state. Other eligible projects include: • Construction of public school dnves • Construction of drneway';!af`public medical facilities and public ai orts Pavement :ofntrance aprons at volunteer fire departments and ;rescue squads that are located inside an incorporated municipality le,;N.C. Board of Transportation individually reviews the economic i.!n rt of the location of distnbution,facilities for manufactured goods !, pproval.prnmany �s based on a comparison of the initial number of jobs gained with the road improvement cost. The initial investment in the project, the precedent of past approvals by the board for similar projects, and the economic development needs of the county involved factor into these approvals as well. Access road improvements eligible to be approved by the board must be along an alignment determined by the N.C. Department of Transportation (DOT), and the right-of-way must be dedicated at no cost. Such access road improvements terminate at the property line of the project and become a part of the state maintained system. The N.C. Board of Transportation may consider adding an access road constructed by others to the state maintenance system if it is justifiable based on the existing access and public service road policy. The construction standards for such a road are dependent on the intended use of the roadway and determined by the division engineer. North C irolina Deparirnent of Commerce Incentives 1 16 The Rail Industrial Access Program provides grant funding to aid in financing the construction or rehabilitation of railroad access tracks required by a new or expanding industry that will result in a significant number of new jobs or capital {! ii investment. Organizations eligible to apply for funding include , • Municipal and r for -profit development organizations • Railroads to encourage firms to choose a location or expand in North Carolina as opposed to another state. It is not intended to fund projects when only an in -state location is considered or when an expansion will not have a significant economic impact. Project Costs Eligible project costs include: • Site preparation, including grading and drainage • Track construction • Switches • Grade crossings and signals Ineligible project costs include: Relocation of utilities, Acquisition of fight-of-way, and Unloading facilities Allocation of Funding Grant.-recipients may receive a maximum of SO percent of total project costs depending on the DOT evaluation of economic benefits and the funding available. No more than 20 percent of the annual budgeted funding for this program may be allocated to any one project in any fiscal year Ownership and Maintenance Responsibility The rail industrial access tracks, once constructed, are owned by the grantee or by the industry served. The track owner is responsible for maintenance and liability on the project tracks. Repayment If the project tracks are abandoned, relocated or sold without a grant assignment, the grantee will be required to repay to the N.C. Board of Transportation its contribution to the cost of construction and materials, less depreciation. The grantee also may be required to repay the N.C. Board of Transportation if rail use falls significantly below the commitment levels specified in the grant application during the first five years of the grant assignment or if job commitments are not met during the first two years of the grant assignment. North Carolina Department of Commerce Incentives 1 17 INCENTIVES 35 NORTH CAROLINA the state of minds " The state's bond program presents new and expanding industry with flexibility in securing financing and added tax benefits. North Carolina is one of the few states virtually unaffected . by the state volume cap, and its anticipated annual volume of tax exempt bonds forirdustria) purposes subject to the cap is less than the allowance of approximately $500 million. Unlike most conventional;loans, industrial revenue bonds (IRBs) can offe ` usmesses a convenient, ft long -term, and oerr'fixed -rate financing package. In additiona;t!he interest earned on IRBs is exempt from federal'income taxes. As a result, the bond buyer is willing to accept a lower rate of interest exchange for tax -free income. Typically, 4 t interest rates on IRBs range between 1.5 and 2.5 below corporate bonds. Terms percentage points p of; the bond issue are negotiable; and the costs of issuing bori -M can`be'spread out over the term of the bond issue. Eligibility & Statutory Requirements Only companies engaged in some type of manufacturing can use IRB funds. The proceeds of the bond issue may be used to finance the entire project, including the cost of land, construction of new or expanded facilities, purchase of equipment, and the payment of certain costs incurred in the issuance of the bonds. The regulations governing bond issuance are a combination of federal regulations and North Carolina statutes, and dictate several requirements be met before the issuance of IRBs: Bond programs offer new and expanding industry with financing flexibility and added tax benefits. North Carolina Department of Commerce • jobs Test The business must create or retain a certain number of jobs based on the size of the financing currently, one job is required for every $250,000 in financing. • Abandonment The business must certify that in building the facility, it is not abandoning another facility in North Carolina (or, if it is, that it is impossible for it to remain at its present location because of limitations on land use, etc). • No "junk Bonds: Bonds must be sold to a sophisticated investor (i.e., a bank) or be backed by a letter of credit or other credit enhancement Therefore, the Company must be able to borrow on its own credit • Environmental Approval: The business must secure any required environmental certifications or permits. Limitations Federal tax law imposes some limitations on IRBs. Capital expenditures at the business' location(s) in the municipality during the three years before and after the date the bonds are issued cannot exceed $20 million. The total amount of IRBs outstanding at all related operations of the business, in all states, may_not exceed $40 million. Incentives I 18 INCENTIVES - INDUSTRIALREVENUEBONDS Other Types of Bond Issuances • Tax Exempt (Exempt Facility /Solid Waste Disposal) — These bonds are used to finance solid waste disposal facilities which include facilities for the collection, storage, treatment, utilization, processing or final disposal of solid waste (typically, either private landfills or solid waste disposal from manufacturing facilities.) Volume cap is required, but there is no restriction on amount of issuance in any jurisdiction or nationwide. The interest paid on these bonds is exempt from federal and state income tax. • Taxable (Industrial or Pollution Control Facilities)— In North Carolina taxable bonds can be issued to finance industrial or solid pollution control facilities that do not meet the requirements for tax exemption under federal law. These bonds are not exempt from federal tax, but are exempt from state income tax. The taxable bond interest rate is more costly to the borrower. There is no limit on bond account North Carolina Department of Commerce Incentives 1 19 3� NORTH CAROLINA the state of minds INCENTIVES - INDUSTRIALIDEVELOPMENTFUNP The Industrial Development Fund provides grants and loans for infrastructure development in the 65 most distressed counties. Eligible units of local government may apply for the funds in conjunction with a company that commits to create new jobs in North Carolina. To qualify,,:;, companies must meet the same eligibility . !` requirements as those outlined in the Article 3) Tax. Credits for Growing Businesses Funding Level and Use i',:4 i Funding is based on th%.Avidbility of monies and the merits of...a:::p""WE' t. IDF grants and loans ,,. for any one protect cannot exceed a total of lob created up to a maximum of $;500;0{10 per project. Grants may be awarded to local governments for 11!1!2!4n stru ctu re improvements that are publicly p "owned and maintained ,mcludine construction or improvement of wgter,.sewer gas, rail and electrical utility systems. Loans with a 4 percent fixed interest rate may be awarded to the project business - through the unit of local government applicant — for investments in privately owned or maintained assets such as the purchase of machinery and equipment, or building renovations. OF loan funds may not be used to acquire land or North Carolina,Deparhnent of Commerce buildings, or to construct new buildings. All IDF loans must be made in participation with a North Carolina bank that originates 50 percent of the loan, and shares equal risk and collateral with the unit of local government. Match Requirements . In the 25 most distressed counties, there is no local match requirement. Federal or state grant funds may not be used to meet the local match requirement, with the exception of funds granted through the N.C. Rural Economic Development Center. Utility Account Units of local government in the 65 most distressed counties• may apply for utility account funding. Most requirements of the utility account are the same as the Industrial Development Fund. However, as there is no job commitment requirement, it is not necessary to apply for the funds in conjunction with a company. The applicant must demonstrate the project is expected to lead to job creation in eligible industries in the near future. No local match is required for utility account funding. North Carolina offers grants and loans for infrastructure development to eligible companies committed to creating new jobs in distressed counties. Incentives 1 20 The Community Development Block Grant :;;..:.. Program provides grants for infrastructure development. Funds available are based on an annual federal allocation to North Carolina from the U.S. Department of Housing and Urban Development and may be applied for by a local government for economic development projects. Private businesses cannot applyidirectly for this t;. ,;fundingbut instead,;work col.latioiatively with a IocaI'government and receive a loan or grant through the local .,99M, for the project. g g:::. , P 1 ,,,,-:::,;:: Funded pro e;icts'leid to the creation or retention of jobs . Economic development category projects inay;ffivolve assistance for public facilities needed to serve the target business, or loans to the private business to fund items such as machinery and equipment, property acquisition or • Service or manufacturing industries must meet the Article 3) Tax Credits wage standards. • Grants must be made to applicants for infrastructure improvements that are publicly owned and maintained including construction or improvements to water, sewer, streets, gas lines, rail or municipal electrical utility systems. • At least 60 percent of the jobs created or retained through the CDBG funds must be filled by persons who earned less than 80 percent of the median income for that county in the previous 12 months. • A pre- application meeting is required for the CDBG program. A CDBG program officer should be contacted for assistance early in the incentive planning process. • jobs transferred within the state or from another state do not qualify as new jobs. In addition, CDBG funds may not be used to assist directly in the relocation of any industrial or commercial plant, facility or operation from one area to North Carolina Deparhnen.t of Commerce another area if the relocation is likely to result in a significant loss of employment in the area from which the relocation occurs. Funding Levels Businesses eligible for Article 3) Tax Credits can receive a maximum of $10, 000 to $15,000 per job committed depending on the tier level of the county. Businesses not eligible for Article 3j Tax Credits can receive a maximum of $4,000 to $10,000 per job. Grant and loan amounts are determined by the cost of the project and the availability of funding. Tier 1 and 2 counties may apply for up to $1 million per project during the funding year Tier 3 counties can receive a maximum of $750,000 per project per funding year. There is a $1.25 million limit on CDBG funds — whether economic development, housing or a combination of the two — per fund year for each eligible government. Grants and loans for infrastructure development —and to enhance a community's economy —are also available to companies that apply in collaboration with a local government. Incentives 1 21 INCENTIVES - COMMUNITY DEVELOPMENTBLOCKGRANT Match Requirements Tier 2 and 3 counties must match the CDBG grant with local funds on a 1:3 ratio. The 25 most economically distressed counties and 21 st Century Communities, are riot required to provide a match. Eligible Applicants All county or municipal governments in the state are eligible to apply for CDBG funds, except those listed below. These entitlement communities go directly to HUD for assistance because they are larger urban communities: Asheville, Burlington, Chapel Hill, Charlotte, Concord, Durham, Fayetteville, Gastonia, Greensboro, Greenville, Hickory, High Point, Jacksonville, Kannapolis, Lenoir, Morganton, Raleigh, Rocky Mount, Salisbury, Wilmington, and Winston- Salem. Wake and Cumberland counties also are ineligible, except for the towns of Holly Springs and Linden, which opted to participate in the state's program instead of their county's program. 160-1 North Carolina Department of Commerce Incentives 1 22 Created 4116107 Approved 4124107 Economic Development Goal Goal Statement — Promote viable and sustainable commercial development that contributes to both property and sales tax and enhances high-quality employment opportunities for County residents. Objectives 1) Support the Economic Development Commission (EDC) Five-Year Strategic Plan, Investing in Innovation, which has an overall goal to create 5,000 new private sector jobs and add $125,000,000 in new commercial property by June 201.0. a) Work with Business Climate Work Group to identify desirable businesses, continue move to central permitting, and review regulations in commercial areas of county. b) Work with Infrastructure Work Group to secure water/sewer for Eno EDD and to expand cell coverage and broadband coverage throughout county. c) Work with Workforce Development Work Group to identify high growth occupations and make sure that training programs (including Durham Technical Community College programs) are in place to provide for vocational needs. d) Work with Quality of Place Work Group on collaborative efforts to build community, support arts and culture and celebrate diversity so that the county continues to attract creative/entrepreneurial individuals. 2) Support EDC research efforts, including: a) Feasibility study for regional value-added agricultural processing facility. b) Investigation of retail leakages. c) Complete inventory of commercial space and land in the county. d) Explore creation of incubator at Breeze Farm. 3) Support EDC retention and business development goals: a) Partner with UNC to explore creation of early seed fund and support technology transfer. b) Ensure that EDC is aware of upcoming space needs of existing `businesses. c) Focus on expansion of medium-sized industrial/manufacturing businesses. d) Work with economic development partners to ensure that county is a preferred location for desirable businesses. e) Expand Buy Local campaign to include local government purchasing preference. 4) Help market economic development successes, such as: a) Closing of first Orange County Small Business Loan Program Company loan. z 41 b) Completion of small area planning work for commercial areas and zoning changes that make commercial ventures easier to pursue. c) Grand opening of Hillsborough Farmers .Market structure. d) Participation in at least one major business relocation or expansion project. 5) Demonstrate county's commitment to economic development through support of EDC Board and Staff: a). Encourage EDC participation in update of Comprehensive Plan, other special projects. b) Participate in collaborative economic development efforts with neighboring jurisdictions. c) Support development of online and printed "how to" guide for businesses. d) Support overhaul of EDC web site and enhancement of department's GIS resources. INVESTING IN INNOVATION Orange County Economic Development Commission Five -Year Strategic Plan: 2005 -2010 u ORANGE COUNTY Economic Development Commission The Economic Development Commission (EDC) gratefully acknowledges the efforts of the more than 120 county residents who contributed over 1500 volunteer hours to help craft a strategic vision for economic development in Orange County. The EDC particularly thanks the work group co- chairs who gave so freely of their time and energy. The plan has been endorsed by the Orange County Board of Commissioners, the Carrboro Board of Aldermen, the Chapel Hill - Carrboro Chamber of Commerce, and the Hillsborough/Orange County Chamber of Commerce. The plan has also been presented to the Hillsborough Town Board, the Chapel Hill Town Board, the Orange County School Board, and the Chapel Hill Carrboro School Board; formal support is anticipated from these bodies as well. Letter from the EDC Chair At its annual board retreat in October 2002, the Orange County Economic Development Commission (EDC) resolved to complete a new strategic plan to guide the organization. A subcommittee formed to work with staff on development of the planning process. The group engaged Leslie Scott Stewart of the UNC- Chapel Hill Office of Economic Development to assist in the effort. In the period since the last economic development strategic plan was adopted in 1996, several plans and studies were completed within the towns of Orange County and the surrounding region. The EDC decided to build directly on that work to help frame the issues for the county's current planning process. The EDC also decided to undertake a web -based survey on broad questions related to the Orange County economy. The EDC used the sum_ mary and the survey results as background information for an Economic Development Summit for Orange County, held on January 7, 2004 at the Friday Center and attended by 120 people. Following a keynote speech by Mary Jo Waits, Associate Director of the Morrison Institute for Public Policy at Arizona State University, participants broke into four groups to prioritize and develop 5 -year strategies. Based on the small group work, four key areas emerged: • Business Climate • Infrastructure • Workforce Development • Quality of Place After lunch, participants attended an initial work group session (based on individual interest) in the four issue areas. The four work groups continued to meet during the months of February through June, 2005, with each group meeting at least eight times. In addition, the co- chairs of the work groups have met five times to consider the overall strategy, and the Directors of the EDC have devoted substantial portions of sixteen meetings over the past two years. Conservatively, we estimate the number of volunteer hours involved in the strategic planning effort to date to exceed 1,500. We are pleased to present this document, and encourage you to help us refine and further strengthen the economic development five -year plan for Orange County. Please forward any comments or suggestions to the Orange County Economic Development Commission via email (edcmail @co.drange.nc.us) or telephone the office at 919- 245 -2325. You may also submit comments to: Economic Development Commission P.O. Box 1177 Hillsborough, NC 27278 We look forward to hearing from you and working together to attain our goal of creating 5,000 new private sector jobs and $125,000,000 in new commercial tax base by June 2010. Ruffin Slater Chair, Economic Development Commission July 2005 0A Strategic Vision for Orange County Orange County Economic Development Commission Five -Year Plan: 2005 -2010 EDC Mission: Our purpose is to make Orange County a smart, innovative place — a great place in which to live and work. We encourage public - private investments to provide jobs for county residents and to increase the non - residential tax base. Through these investments, we enhance the financial well -being and quality of life of county residents, and the ability of their local governments to provide high - quality services. Overall Goal: To create 5,000 new private sector jobs in Orange County and add $125,000,000 in new commercial property by June 2010 Justification for Goal: Orange County has wonderful assets *, including: • a well- educated workforce (almost 57 percent of adults are college graduates) • historically low unemployment (3.6 percent in May 2005) • high per capita income (4`h out of the 100 counties in North Carolina) • public schools that rank among the highest in the state on various performance measures • the University of North Carolina at Chapel Hill, consistently rated as one of the nation's top research universities • proximity to two major airports • location approximately midway between the Piedmont Triad and the heart of the Research Triangle, with interstate highway connections to both • vibrant and distinct towns (Chapel Hill, Carrboro, Hillsborough, and part of Mebane) • protected rural areas, parks, and greenways But the County has challenges* as well: • a tax base primarily composed of residential property (86.4 percent of total assessed value) • location within EPA non - attainment region due to ground level ozone • heavy reliance upon public sector for jobs (44.7 percent of all jobs are in government sector) • retail sales per capita well below the state average • high housing prices; average home sales price of $279,996 • cost of living (at 111.8 percent of national average) well above neighboring counties • perception among many business owners that the county is not business - friendly • continuing underemployment ** • under 60 percent of county workers employed within the county • about 40 percent of county jobs filled by residents of other counties '''All data reported are most recent available as of June 2005. "Underemployment includes workers overqualified for available jobs, those working part time because full time employment is not available, and discouraged workers no longer looking for work. IMW60 By creating 5,000 new jobs (and working to ensure that at least 75 percent of those jobs are filled by county residents) and encouraging new investments in commercial property, the EDC can begin to address some of the challenges. Further, we need to make sure that county residents are able to move into the new jobs. And we need to help stop the leakage of retail sales dollars out of the county. Workgroups: Coming out of the Economic Summit in January 2004, participants identified four areas that needed work: 1) Improved Business Climate (to enable businesses to create the needed jobs) 2) Infrastructure (to ensure that businesses can flourish) 3) Workforce Development (to make sure workers have the skills needed to assume the new jobs) 4) Quality of Place (to ensure that Orange County remains a great place to live and work) Volunteer workgroups formed around each of these areas, and they have developed goal statements as follows: Business Climate: By June 2010, public - private partnerships will have formed to create a stronger business climate and Orange County will have a clear set of guidelines and regulatory standards designed to sustain and nurture existing businesses, encourage entrepreneurship, and attract targeted employers. Infrastructure: By June 2010, infrastructure will be in place to support the county's economic development goals of increasing the commercial tax base and retaining and attracting targeted businesses. Workforce Development: By June 2010, effective systems will be in place to train and support residents and those who work in Orange County. At least 75 percent of all new jobs in the county (for both new and expanding businesses) will be filled by county residents. Quality of Place: By June 2010, Orange County will have thriving partnerships ensuring that the county is a great place in which to live and work, attracting and retaining the creative community of innovators, artists and civic leaders that will drive the desired economy. 11 0 U O O N N I- u O O N ta O O v c°7 a o O � O � U C �071 a� on .G U G �� 0 �U � a cd ' 0� a� S J:i crs ° a0 a� N >� w b 0 0 a ao cd ,� 0 ° t o O O a to 0 �U � � C3i 0 yeir �O as ,!R co �071 a� on .G U G �� 0 a cd o a� S J:i crs ° a0 a� N >� w b 0 0 a ao cd ,� 0 ° t i to 0 �U d I 0 .1 �O p Cl co >y O �071 a� on .G U G �� 0 i) 14 a� rl N >� a� o ao o ao ,� 0 ° t O to d I v .1 �O �071 0 14 a� rl ti o ao o ao ,� 0 ° t O to �O �071 M b 4-A 4 j �cn b cd «t o cd bp U � 04 U Qa cn N O aA o o CA U cn co cd •.ncn . CCS (n 0 a cn a� 4 � p N i� U En � M b cd «t cd bp ° U Qa N O V CA cd o LZ b o 74' O a � � U U 4 U "CS cct ��• ��, U� U o 4, a En o a 5 as U p M Workgroup on Business Climate Overall Strategy: By June 2010, public - private partnerships will have formed to create a stronger business climate and Orange County will have a clear set of guidelines, standards, and procedures designed to sustain and nurture existing businesses, encourage entrepreneurship, and attract targeted employers Why the strategy is critical: Orange County is widely viewed as being unfriendly to business. Regardless of whether the perception reflects reality, it creates a difficult environment for business retention and expansion, for business recruitment, and for entrepreneurship. By improving the business climate, Orange County can demonstrate its support for the private sector creation of good jobs and increased commercial tax base. This investment will, in turn, result in increased tax revenues to support quality education and enhanced government services. Key Sub - Elements and Action Steps: A. Develop clear criteria defining desirable businesses for the next five years, including agricultural businesses 1) Utilize community values as expressed in previous planning efforts (and Economic Summit) as basis for promulgating criteria for desirable businesses Potential criteria include': ➢ Builds upon or supports existing assets in the county ➢ Creates high quality jobs for Orange County residents (jobs pay well, offer career advancement potential, offer good benefits) ➢ Increases commercial tax revenues (property and/or sales tax) ➢ Creates minimal impact on the environment ➢ Possesses viable business plan ➢ Preference for local ownership ➢ Commitment to remain in county ➢ Preference for headquarters ➢ Growth potential, particularly jobs ➢ Preference for business in one of ten industry clusters identified in Research Triangle Regional Partnership's competitiveness plan (Staying on Top)2. 2) Engage in open discussion with elected boards, business groups, and other community organizations to develop criteria • Identify and justify RTRP clusters with potential in Orange County • Inventory existing assets in county 3) Develop a consensus for these criteria 1 The following are potential businesses/sectors: life sciences /medical technology effort; capture and retain commercialization of technology out of UNQ agricultural biotechnology focus; tourism, conferences and sports tournament, including cross marketing opportunities between urban and rural attraction; agricultural entrepreneurship (with associated loan program ?) 2 The areas are pharmaceuticals; biological agents and infectious diseases; agricultural biotechnology; pervasive computing; advanced medical care; analytical instrumentation, nanoscale technologies; informatics; vehicle component parts; logistics and distribution. 4R B. Identify barriers 1) Convene focus group(s) with business owners and design/development professionals. If defined as a barrier, examine development ordinances to ensure they are not discouraging business C. Provide outreach, recognition, and/or expedited service to new and existing businesses that meet the development criteria. The focus of public regulatory bodies should be making projects that fit the criteria work, giving clear expectations and timelines for project approval. (One possibility, establish economic development facilitator to work with business clients) 1) Establish recognition/reward program for businesses that meet desired criteria 2) Conduct outreach to businesses meeting criteria (in cooperation with Chambers of Commerce, Research Triangle Regional Partnership, and N.C. Department of Commerce) 3) Clarify approval processes — development approval and business permitting process should be clear, concise and timely 4) Target loan pool and any available incentives to businesses meeting criteria 5) Document work by ED staff as facilitators assisting companies through the development, planning, and permitting process D. Form partnerships both within and outside the county to create a stronger business climate and market the change to existing and potential employers 1) Work with UNC to: • Document requirements of UNC spin -off businesses, including spec sheet for basic facility needs • Obtain list of UNC spin -off companies needing space in the near future • Document any appropriate facilities and those that could be retrofitted • Develop an economic development portal and single point of contact 2) Encourage Chambers of Commerce, UNC, County, and Town economic development organizations to meet at least semi - annually to develop collaboration on issues of common concern (Tasks include enhancement of existing shopping districts and identification of future employment zones, e.g., existing /zoned commercial areas, Economic Development Districts, transit corridors) 3) Increase funding for EDC to enhance its website and develop other marketing materials 4) Form public- private committee of 100 E. Focus public educational efforts on sustainability issues, looking at the social, economic and environmental contributions of local businesses 1) Continue and expand the Orange County Business Expo 2) Conduct educational campaign around issues of sustainability (in coordination with Council for a Sustainable Community). Examples include print/radio media, op -ed pieces, meeting with editorial boards, connecting buyers and suppliers, speaker's bureaus 3) Enhance Buy Local Campaign to increase retail sales and keep sales tax revenue in Orange County b U �C U O � COO Cd ci 3 4-4 O O � bJJ O 00 v Q O N Q O W U c� O N N b N W 0 U O O �bA O O N O CIS W 'o a P4 N .4 ccS O C13 O .Cd P. U cC O W AIDA a) O U 'b N c� O a� 0 NN rA 0 O al O O U N 3 c� O b b N b O U bA O � W � O U Cd O 'O Q., a� -d bq O U W «i O .4-J Cd O O N O U cd c� O O a a O a O .� «3 N 'r 0 O U IDD O U N 0 U «3 b O U C/] O V1 w U w w w C7 z 5( Workgroup on Infrastructure Overall Strategy: By June 2010, infrastructure will be in place to support the county's economic development goals of increasing the commercial tax base and retaining and attracting targeted businesses. Why the strategy is critical: Infrastructure helps support desired growth patterns and economic goals. Orange County and its municipalities have led the state in establishing an urban growth boundary that limits expansion of utilities to prevent low- density sprawl throughout rural areas. Area governments now need to encourage and accommodate higher density in appropriate areas, including the county's three Economic Development Districts. Key Sub - Elements and Action Steps: A. Extend water and sewer into all three Economic Development Districts 1) Continue to facilitate expansion of water, sewer, and other utilities to Buckhorn Economic Development District 2) Continue to facilitate expansion of water, sewer, and other utilities to the Hillsborough Economic Development District 3) Continue to work with the City of Durham to establish a water and sewer extension agreement for the Durham/Eno Economic Development District while maintaining high standards for development in the EDD and remaining sensitive to the nearby Eno River State Park 4) Meet with property owners 5) Revisit permitted uses (primary and secondary, other standards) 6) Revisit developable square footage in each EDD B. Establish adequate information networks (e.g., high -speed Internet, cellular towers) throughout the towns and the county 1) Encourage the expansion of affordable high -speed Internet access, fiber -optic lines, and other high -speed communication networks to rural and un- served/underserved areas • Endorse /support Master Telecommunications Plan (MTP) • Support extension of cable Internet access to rural areas/subdivisions • Support wireless areas (ex. Carrboro, UNC, etc.) C. Encourage participation and input as appropriate in area plans and projects (i.e. storm water plans, plans for the physical infrastructure of Carolina North, including transportation elements for Phase I) 1) Stay abreast of current planning issues and provide input as required 2) Promote maintenance and development of adequate storm water and solid waste reclamation and environmental practices 3) As appropriate, provide input into Carolina North infrastructure, such as transportation (including rail and parking) and synergy with surrounding areas 10 D. Provide input and encourage participation in updated county land use plan and concomitant tools, including provisions for transfer of development rights, to conserve and protect resources and open space 1) Encourage the adoption of ordinances and policies transferring development rights from rural to urban areas (to conserve rural areas and farmland) E. Encourage compact and higher density development in areas served by water and sewer 1) Review and revise as needed permitted land uses in EDDs and activity nodes to encourage the desired businesses identified by Business Climate work group 2) Ensure continued collaboration between municipalities and the county to maintain the Urban Growth Boundary to prevent low - density sprawl in rural areas 3) Promote redevelopment and re -use of underused and vacant properties 4) Coordinate and enhance housing and transportation options in downtown areas 5) Support towns in exploring parking needs for downtowns 6) Inventory water supply resources and agreements F. Encourage mixed use projects that support walkable communities 1) Create opportunities and incentives for people to live close to their workplace 2) Examine efficacy of establishing rural activity nodes G. Promote public transportation, alternative modes of transportation, and encourage car pooling and park and ride participation to reduce reliance on single occupant vehicles 1) Promote telecommuting and flex -time (ex. EPA reward program) 2) Preserve land and right -of -ways around existing and future rail line and/or other transportation corridors that could serve as a future mass transit rail line 3) Promote density strategy integrating economic development and transportation 4) Work to site schools near high- density residential areas, redevelopment sites, and existing transportation networks 5) Work to promote high density development along transportation corridors 6) Work to expand service area, service hours and frequency, and ridership for area public transportation services 7) Promote and develop alternative and regional transportation infrastructure 8) Work with employers on travel demand management strategies H. Support Schools Adequate Public Facilities Ordinance to ensure appropriate pace of development 1) Permit residential development in accordance with School Adequate Public Facilities Ordinance 2) Build and open schools in accordance with School Adequate Public Facilities Ordinance 11 � b o U � � U C/1 U � .4 m p o a � � 0 O O ccf C 0 '4- tb o con O O U is U cu Cd � � O 3 0 � U O � N N U O U 00 . `n .. U CIS N U a� O O U U U O O U O rn U sA4 O CIS a� � U o � N O U � O U w Q W b � o 75 0 0 3 � oc w O � o b 0.'8 O N c� Q w .o O 0 U O N 53 N � � O C N � � U U �� ct a� a� 3 'n ; 4 aA O 404 a� 44 - W o 4 O4� 4J N �. cn �i 0 r MO � b o U � � U C/1 U � .4 m p o a � � 0 O O ccf C 0 '4- tb o con O O U is U cu Cd � � O 3 0 � U O � N N U O U 00 . `n .. U CIS N U a� O O U U U O O U O rn U sA4 O CIS a� � U o � N O U � O U w Q W b � o 75 0 0 3 � oc w O � o b 0.'8 O N c� Q w .o O 0 U O N 53 N C � U U �� o a� 3 'n ; 4 aA � b o U � � U C/1 U � .4 m p o a � � 0 O O ccf C 0 '4- tb o con O O U is U cu Cd � � O 3 0 � U O � N N U O U 00 . `n .. U CIS N U a� O O U U U O O U O rn U sA4 O CIS a� � U o � N O U � O U w Q W b � o 75 0 0 3 � oc w O � o b 0.'8 O N c� Q w .o O 0 U O N 53 N 1701 Workgroup on Work Force Development Overall Strategy: By June 2010, effective systems will be in place to adequately train and support residents and those who work in Orange County. At least 75 percent of all new jobs in the county (for both new and expanding businesses) will be filled by county residents. Why the strategy is critical: As the cost of living (particularly the cost of housing) has increased in the county, it has become difficult for low- and moderate - income workers to live here. Without more training and support, county workers will be unable to support themselves and their families and will be forced to seek various forms of public and private assistance to meet their basic needs for food, shelter, clothing, and transportation. In the long run, these workers may choose to leave the county, which may result in a worker shortage for certain businesses. Key Sub - Elements and Action Steps: A. Form partnerships with Durham Tech, UNC Chapel Hill, the Chapel Hiil/Carrboro Schools, Orange County Schools, and others to provide adequate training and education to enable county workers to obtain high quality jobs (i.e. jobs that pay a living wage and offer comprehensive employee benefits and career advancement potential). 1) Conduct an inventory of existing vocational and language programs at area high schools 2) Develop vocational courses in secondary schools that focus on skill needs for existing and new jobs while ensuring continued training for all levels of jobs in the service sector (i.e. child care, food preparation, etc.) 3) Continue discussions with Durham Tech to ensure the Orange County satellite campus will offer a curriculum that provides training for existing and anticipated jobs in Orange County 4) Continue to ensure appropriate training programs via county participation in Work Force Development Board while providing training for all level of jobs in the service sector (i.e. child care, food preparation, etc.) 5) Connect industry leaders with the higher education community to develop strategies for maintaining industry training and support 6) Develop cooperative education and internship opportunities with UNC Hospitals and other major employers 7) Work with RTRP to establish a regional alliance to develop a strategic plan for curriculum support to targeted clusters B. In coordination with Business Climate work group, help communicate to potential workers the types of jobs the county wants and expects to create so that workers can develop realistic career goals 1) Develop outreach plan that builds on the Business Climate Work Group's definition of desirable businesses. 2) Work with RTRP to develop a regional workforce coordination strategy to anticipate and support the changing needs of business C. Promote access to living wage jobs that offer benefits and career advancement potential 1) Develop an accurate living wage rate for Orange County that reflects child care, housing, transportation and other costs. Promote this living wage rate to employers 13 2) In partnership with other agencies, recognize county businesses that offer family friendly employment, such as • Living Wage • Benefits • Child Care • Health and Wellness Programs 3) Promote these benefits and develop incentives for employers offering them 4) Perform inventory /survey of existing Orange County jobs that pay the living wage and determine training level needed to fill these jobs D. Ensure county workers and those preparing for the workforce access to transportation, child care, elder care, affordable housing, and healthcare 1) Improve access to affordable child care by: • Encouraging employers to provide financial support for employees' day care costs • Working to ensure child care meets employer /employee needs • Promoting adequate after school programs • Ensuring an adequate supply of child care providers exist, particularly for evening, weekend, and sick children 2) Improve access to affordable elder care by: • Encouraging employers to provide financial support for employees' elder care costs • Working to ensure elder care meets employer /employee needs • Promoting access to affordable elder day care 3) Provide diverse housing options for Orange County workforce, especially in areas close to jobs and transportation 4) Encourage increased number of affordable housing units (for example, support existing affordable housing providers, offer density bonuses, require affordable housing in developments of a certain size, etc.) 5) Support transportation to major employers and training programs by • Work with employers to ensure adequate affordable transportation to employment centers • Supporting transportation programs such as Wheels to Work • Developing rural transportation linkages, including park and ride lots, in conjunction with Infrastructure Work Group E. Develop and nurture partnerships that support workers and their families at all stages of their lives and provide opportunities for lifelong learning and retraining in response to changing economic conditions 1) Encourage employers to • Develop apprenticeships • Develop on the job training programs • Provide skills upgrading • Provide educational assistance • Offer flex -time and/or telecommuting 2) Increase availability of early childhood education, English as a Second Language, vocational and avocational training, and continuing education opportunities 14 N 44 un O cn 00 W O CIS bA b.A U N O U cc3 4-4 :S p • o Cd E� a� C b U cc3 _ •� N Cd cd U v O Cl bA to V c O W •� O W C40 � PQ O .0 O O COD •� O 0 ' cu 0 cn .� U .� rd p .O v� ,� j P4 O � U .� 1.4 b � O O 'd O •,� ll O cc3 c�3 0 (5D W) cd $=4 'U U P-4 p to ccc >� a o U cc3 � tb °U C� 4-' O � *� .. U ,� N U 4-4 O �..� to to N 44 un O cn 00 W O CIS bA b.A U N O U cc3 4-4 :S p • o Cd E� a� C b U cc3 _ •� N Cd cd U v O Cl bA to V c O W •� O W C40 � PQ O .0 O O COD •� O 0 ' cu 0 cn .� U .� rd p .O v� ,� j P4 O � U .� 1.4 b � O O 'd O •,� ll O cc3 c�3 0 (5D W) (0 Workgroup on Quality of Place Overall Strategy: By June 2010, Orange County will have thriving partnerships among government, business, the not -for profit sector, UNC, and congregations ensuring that the county is a great place in which to live and work, attracting and retaining the "creative community" of innovators, artists and civic leaders that will drive the desired economy. Why the strategy is critical: Stated simply, place matters. As Mary Jo Waits pointed out in her presentation at the 2004 Economic Development Summit: • The natural environment is important • But natural features aren't enough — urban amenities are required as well • Lifestyle choice matters • Being a smart, innovative place matters • Intangibles such as "hipness," tolerance, entrepreneurial culture are part of the calculation "The creative heart and soul of the economy will continue to be tied to place" Key Sub - Elements and Action Steps: A. Enhance urban character by connecting and supporting existing plans for increasing the commercial tax base and for revitalizing the downtown areas of Carrboro, Chapel Hill and Hillsborough. 1) Promote eclectic mix of vibrant businesses in downtown. 2) Work to include public spaces, art, and parks during the construction of public facilities and in approval of large development/redevelopment projects (e.g. public arts projects at Homestead Aquatics Center and Southern Community Park, also Southern Human Services Center). 3) Target incentives to businesses that enhance quality of place (e.g. arts and entertainment) and encourage towns to do likewise 4) Connect existing neighborhoods and commercial districts with sidewalks and/or bike paths 5) Update County bike plan to accommodate recreational usage 6) Encourage mixed use development that includes neighborhood retail shops 7) Work with local organizations to provide forums for public input on issues such as parks and open space B. Enhance rural character by supporting local agriculture through efforts such as making farming more profitable by encouraging local markets and supporting complementary conservation and management tools. 1) Revise zoning regulations to encourage value -added agricultural businesses 2) Support farmers markets in multiple locations near population or employment centers 3) Promote agritourism 4) Support regional value -added processing facility(ies) 5) Expand funding for conservation easements, purchase of development rights C. Enhance historic character by supporting organizations' efforts to preserve and promote historic structures. 1) Support and promote historic preservation and heritage tourism 16 2) Encourage new businesses to locate in underutilized or abandoned historic buildings or older commercial centers (ex. Old Bellvue Mill, Daniel Boone, North Hills, Hillsborough Commons) 3) Encourage Durham Tech satellite campus to offer historic preservation technical skills training 4) Emphasize importance of historic preservation when acquiring property for conservation and recreation through Lands Legacy program 5) Target historical buildings for revitalization and bring together interested parties to envision joint occupancy (i.e. Bellvue Mill). Also include local communities in visioning process for these structures. D. Provide life -long learning opportunities (early childhood— senior citizen) 1) Increase availability of pre - school, English as a Second Language, vocational and avocational training, continuing education opportunities, and other learning options for all ages (coordinate with Work Force Development). 2) Support public libraries in multiple convenient/accessible locations 3) Promote computer literacy and wireless capability throughout the County E. Welcome and promote greater inclusiveness and diversity 1) Work with Human Rights and Relations Department to promote community dinners, community book clubs /discussion groups, community awards, etc. 2) Celebrate cultural differences and work to address specific needs of all cultural and ethnic populations (with Human Rights and Relations) 3) Establish incubators and enhance support services for • Innovative and socially responsible businesses (e.g., ventures supporting for profit and non - profits) • Minority and women -owned businesses 4) Promote diversity of affordable housing options and ensure open housing laws enforced 5) Provide a wide variety of social and recreational opportunities for youth (ex. Skate parks, summer internships, volunteer, and work opportunities, teen clubs,. etc.) F. Promote hipness by focusing on the uniqueness of each municipality and the county as a whole. 1) Promote tourism and festivals (e.g., promote artists' studio spaces as year round destinations, Hog Day, A Taste of Orange, Pow -Wow, Ag Heritage Festival, etc.) 2) Develop a community of events Internet portal to highlight cultural, community, artistic, and other events (a "one -stop shop" for community outreach) 3) Enhance arts organizations and increase community funding for the arts (ex. establish non - profit art gallery in Carrboro to benefit Arts Center 4) Encourage development of venues that promote informal interaction and exchange (ex. Weaver St. Market, River Park) 5) County and municipal governments develop a master plan including acquisition of land for parks, greenways and open space (focus for example on developing Eno River greenway connecting downtown Hillsborough with West Hillsborough, Eno River State Park, and cultural sites in between) 17 WORKGROUP VOLUNTEERS Business Climate Margaret Cannell, Co -Chair Hillsborough/OC Chamber of Commerce Aaron Nelson, Co -chair Chapel Hill / Carrboro Chamber of Commerce Fletcher Barber Cooperative Extension Service Craig Benedict Orange County Planning Karen Christy Petra Leads Mark Crowell UNC Chapel Hill Emily Dickens Town of Chapel Hill James Harris Town of Carrboro Margaret Hauth Town of Hillsborough Ron Ilinitch SBTDC Donna McCaskill Kane Realty/University Mall Sally McKenzie News of Orange Nathan Milian Carr Mill Mall Dorothy Pennell Employment Security Commission Scott Radway Radway - Weaver Jeff Reid UNC Chapel Hill Van Welch Orange Enterprises Infrastructure Keith Cook, Co -chair Intervest International Paul Snow, Co -chair Analytical Consultants Craig Benedict Orange County Planning Paul Burleson BB & T Ed Harrison Town of Chapel Hill Todd Jones Orange County Information Systems Karen Lincoln. Orange County Planning Patrick McDonough Triangle Transit Authority Beth Myers BB & T AI Terry Orange Public Transportation Work Force Develonment Teresa Smith, Co -chair Child Care Services Association Bob Ward, Co -chair CCB Robert Dowling Orange Community Housing and Land Trust Paul Fendt Adult Educator Robert Gilmore Orange County Social Services Tracy Hager Chapel Hill / Carrboro Chamber of Commerce Maria Hitt Orange County Health Department Virginia Knapp Chapel Hill / Carrboro Chamber of Commerce Malinda Marsh Orange County Social Services Greg Petty Fifty Plus Magazine Michele Rivest OC Partnership for Young Children Yvette Smith Orange County Social Services Ouality of Place Bobby Clapp, Co -chair John Delconte, Co -chair Rene Campbell Heather Delisle Marty Mandell Chris Moran Michele Rivest Martha Shannon Cathleen Turner Duke Health System Compass Communications CHOCVB UNC Chapel Hill Volunteer 1FC OC Partnership for Young Children Orange County Arts Commission Alliance for Historic Hillsborough 19 BUSINESS TYPE SPACE NEEDS Winery 10+/- acres w/ good hwy. Access Din er --ff—xisfing restaurant in Hillsborough area Fast Food Vacant land or structure in Hillsborough Urgent Care Vacant land in Hillsborough Ice Cream Manufacturer Existing Warehouse (5000 +/- sq. ft.) Small Business Incubator --Existing Office (10,000+ sq. ft.) Truss Manufacturer Existing Warehouse of land (10+ acres) Chocolate Manufacturer/Retailer Storefront in downtown Hillsborough Baker . y Existing structure in Hillsborough Professional Services 50,000+ sq. ft. Class A Office Professional Services 8,000 sq. ft. in Hillsborough Storage/Distribution 50,000 sq. ft. in Buckhorn EDD Cabinet maker & showroom Vacant land in Hillsborough Landscaping Business Vacant land for base yard and greenhouses Biodiesel Manufacturer Vacant land in Buckhorn or Durham EDD Deli Existing building in Hillsborough Nightclub Existing building in Chapel Hill Medical Research Facility 100,000+/- sq. ft. near Chapel Hill Dialysis Center Vacant land in Hillsborough Teaching Supply Store 800-1200 square feet Software Company 20,000 — 50,000 sq. ft. Mixed Use Development 100 acres