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Cabarrus board takes aim at incentives, critics say county will lose jobs

CONCORD Cabarrus business leaders say the county is in danger of being effectively “closed for business” by a conservative majority of county commissioners who oppose using financial incentives to attract corporations and jobs.

In August, three of the five commissioners on Cabarrus County’s all-Republican board blocked the Windshear automotive testing firm’s request for a $105,000 tax break. They weren’t moved by assurances that the Concord company’s $5 million expansion project would create seven high-paying jobs and ultimately net the county $15,750 more than the cost of the incentives.

Unhappy Cabarrus business leaders fear it could mark the escalation of some commissioners’ crusade against the kind of incentives other counties, cities and states routinely offer in hopes of landing the next big corporate relocation or expansion.

At a time when incentives are coming under scrutiny at the state level, the battle in Cabarrus is emerging as a particularly vivid local example of how deals traditionally backed by Chamber of Commerce Republicans are taking fire from more conservative Republicans who see them as government meddling in the business arena.

“I do not believe it’s fair for a governing body … to get to pick and choose which companies get these tax incentives,” said board vice chair Chris Measmer.

So worried are business leaders that they’ve taken the unusual step of launching a political action committee, Cabarrus Jobs Now, to take on those opposed to incentives.

Unless the climate changes, they say, Cabarrus will lose jobs to incentive-offering counties around it.

“I’m very concerned,” said commissioner Steve Morris, a former board chairman for the Cabarrus Regional Chamber of Commerce. “We’re in a very precarious situation.”

The commissioners critical of incentives are standing their ground. At a planning retreat scheduled for Thursday, they are slated to discuss incentives. Several say they’re looking to make changes in county policy on the issue.

Larry Burrage, one of the commissioners who opposed the Windshear deal, said more citizens are telling him to oppose incentives than to support them.

Cabarrus Jobs Now doesn’t scare him, he added, because he’s fighting not for a political career but to leave America better for his grandchildren.

“I believe in the tea party, I believe in ‘We the people,’ I believe in taking America back from all this garbage that’s going on now,” said Burrage, an electrical contractor. “Get rid of all these government programs that’s giving everything away.”

Doug Stafford, a hotel company owner and a founding member of Cabarrus Jobs Now, said those opposing incentives are good people. But he added that conservative ideology is blinding them to practical necessity in a county where thousands still need work following the shutdown of major employers like Philip Morris and Pillowtex Corp.

Cabarrus posted a 7.7 percent unemployment rate for August, lower than most counties in the Charlotte region but still comprising more than 7,100 out-of-work citizens.

“I’m a conservative, have been for a number of years,” Stafford said. “I have my values and philosophies, but I also have critical thinking skills. You can’t always force everything into a square hole or a round hole.”

Commissioners Measmer, Burrage and newcomer Jason Oesterreich have enough votes to block future incentives, should they choose.

Asked if they would, Burrage replied: “It’s up to the people. Come election time, if the people want (incentives) done, they can vote us out of office.”

$1.3 billion spent last year

North Carolina state government spends big on economic development – more than $1.3 billion least year, according to research by the General Assembly’s Fiscal Research Division. Tax breaks account for most of that total.

MetLife, which is bringing more than 2,600 total jobs to Charlotte and Cary, will receive $87 million through a state Job Development Investment grant and $2.9 million in incentives from the city of Charlotte and Mecklenburg County.

Virtually every county in the Charlotte region offers incentives of some type, said Ronnie Bryant, head of the Charlotte Regional Partnership, an economic development group promoting 16 counties in the region.

Incentives typically involve a government offering to essentially forgive a portion of the taxes that would have been levied on new investments made by a company.

Basically, Bryant said, it’s government giving back a percentage of the new money a company brings to town.

“It is not corporate welfare,” Bryant said. “Our communities have benefited dramatically.”

But critics say governments haven’t done enough to make sure such investments are tied to job creation. Republican lawmakers in Raleigh, for instance, have voiced opposition to the state’s extensive incentive program for the film industry. Hollywood movies don’t create enough local, long-term jobs, they say.

The Cabarrus fight taps into a broader vein of discontent over incentives, said Brent Lane, director of the Carolina Center for Competitive Economies at UNC Chapel Hill.

He said officials in Raleigh and across the state have increasingly realized they’ve been rewarding corporations for making investments, but not holding them accountable for creating jobs.

That’s been part of the criticism the three Cabarrus commissioners have leveled at incentives in their county.

“There is a legitimate economic rationale for the debate that’s going on in Cabarrus,” Lane said, “but it’s one that isn’t typically being had on the local level.”

Measmer, who’s been on the commission three years, said there used to be 3-2 votes in favor of incentives. But when Oesterreich, a lawyer and outspoken conservative, was appointed to the board and took office at the Aug. 19 meeting, Windshear’s incentive deal lost on a 3-2 vote.

“The way they run the incentives has never been about benefiting the taxpayer,” Oesterreich said. “It’s not been about jobs. It’s been about growing the tax base. I’m in favor of smaller government.”

Expansion plans unclear

Business leaders say incentives have helped Cabarrus’ economy greatly. They point to county statistics showing that 55 incentive packages given to various companies from 1997 to 2012 increased the county’s property tax base by nearly $1.5 billion.

Those incentives were worth $29.8 million, but the firms receiving them helped boost county property tax collections by $188.7 million.

That made for net additional tax revenue to the county of nearly $159 million. According to the Cabarrus Economic Development Corp., incentives given to 19 companies from 2004 to 2011 produced some 2,700 jobs. Business leaders say such progress could be at risk now.

Carroll Gray, interim head of the Cabarrus Regional Chamber of Commerce and the Cabarrus Economic Development Corp., said Windshear officials asked him after the August vote whether they were still welcome in Cabarrus County.

He said he’s not sure if the firm will go through with its planned expansion.

“I’m concerned,” said Gray, a former head of the Charlotte Chamber. “This kind of adversarial approach is divisive and problematic.”

A call to the company wasn’t returned.

Fund-raising stepping up

Measmer, who runs his family’s restaurant and catering business, said it’s wrong to give incentives to incoming big businesses and not to existing small businesses like his. He said some critics have unfairly labeled him “anti-business.”

“I’m the most pro-business person anybody could find,” he said.

He and Burrage said a low tax rate and good quality of life would be enough to attract industry to Cabarrus, even if the county offered no incentives.

But commissioner Morris, who supported the Windshear incentives, called that wishful thinking.

“It is an extremely competitive environment,” he said. “I’m not crazy about the incentive situation … but as long as all our competitors are doing that, if we want to be in the game, then we have to play as well.”

Meanwhile, the Cabarrus Jobs Now group is stepping up its efforts.

With a $150,000 fund-raising goal, leaders behind the effort say they’ve raised more than half the money; they plan an advertising blitz that could include calling out political opponents of incentives come election time next year.

An upcoming luncheon will feature an economic development official from Charleston, which used an incentives package some have valued at as much as $900 million to land a Boeing aircraft plant in 2009. More than 6,000 people work at the plant.

“Our competition is going to go after the business and they’re doing it aggressively,” said Stafford, one of the founders of Cabarrus Jobs Now. “If we don’t have that (incentives) weapon in our arsenal, there’s no way we’re going to win.”

Burrage, however, said he doesn’t believe Cabarrus would lose jobs to other counties.

“If you have to pay somebody to come somewhere,” he said, “then why have them?”

Frazier: 704-358-5145; @Ericfraz on Twitter
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