Businesses, for the most part, like to get bigger. When you hire more staff or increase the physical size of your operation, you give yourself more opportunities to serve more customers. Growth, done smartly, is usually good for the bottom line.
So it’s encouraging news that the parent company of Carowinds, Cedar Fair Entertainment, is planning a $43.5 million expansion on 61 adjoining acres it purchased in 2011. The company plans to put more rides on that land, of course, because doing so will attract more families and dollars to the park. The expansion also will create jobs – albeit most of them low-paying – and the company will pay more annually in property taxes to Mecklenburg and York counties, which Carowinds straddles.
But are those reasons enough to reward Cedar Fair with almost a million dollars of city and county tax breaks? The Charlotte City Council will vote Monday on whether to give Cedar Fair a 90 percent refund of new property taxes for three years after its Carowinds expansion is complete. The tax break is worth about $330,000, and Mecklenburg County is ready to contribute about $600,000 more.
Such incentives – called Business Investment Grants – are regularly used to lure companies to our city and county, or to stop businesses from moving away. But neither is an issue here. Carowinds isn’t going to dismantle the Intimidator and put it up elsewhere. The grants would be a reward for doing something the company wants to do anyway.
The city’s economic development director, Brad Richardson, thinks otherwise. He told the Observer this week that Cedar Fair was considering another park in Virginia for expansion. “We wanted that investment at Carowinds,” he said. But does anyone believe Cedar Fair bought that 61-acre spread to let it sit there?
Nor does anyone think the company is hurting for money. Cedar Fair took in $1.068 billion in revenue in 2012 and had a net income of $102 million. While incentives can be a valuable way to help companies expand their job force – and our tax base – they should be used for businesses that legitimately need help. Those that can grow on their own will do so. Remember, it’s good for business.
We can hear some of you now: What about the Carolina Panthers, who were given a controversial $87.5 million by the City Council this year for stadium renovations and other needs? This editorial board preferred an even bigger number – $144 million – because it came with a meaningful tether that would’ve kept the Panthers in Charlotte for 15 years. That’s the last, and maybe best, reason for incentives: to keep a valuable corporate community member firmly anchored here.
For public officials, just as with company execs, incentives are ultimately a bottom line decision. With each case, city and county officials must ask: What will happen if we don’t grant incentives? The Panthers might be moved. Chiquita might not come. A small business might not decide to get bigger.
But Carowinds? They’ll be building on that 61 acres, incentives or not. It’s good business to do so. It’s bad business for us to help.
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