Development

Tax incentives, transportation, cooperation: Here’s what economic developers are focused on for the coming year

Gov. Pat McCrory congratulates David Booth, chairman and CEO of Dimensional Fund Advisors, on the announcement that they are bringing 316 jobs to Charlotte. Such projects, fueled in large part by tax incentives, are something the Charlotte Chamber hopes to see more of this year.
Gov. Pat McCrory congratulates David Booth, chairman and CEO of Dimensional Fund Advisors, on the announcement that they are bringing 316 jobs to Charlotte. Such projects, fueled in large part by tax incentives, are something the Charlotte Chamber hopes to see more of this year.

Charlotte’s favorite word could well be “growth,” and business and political leaders this week were focused on what they think the city needs to keep the boom going.

But the city could face obstacles: Competition between different economic development groups, an urban-rural divide, tax incentives and a lack of adequate transportation funding.

At the Charlotte Chamber’s fall planning retreat, held in Durham at the Washington Duke Inn, local officials focused on those issues. Here are some of the biggest challenges and opportunities economic developers are focused on for the coming year:

Tax incentives

Love them or hate them, incentives are driving some of the biggest economic development projects in Charlotte. Dimensional Fund Advisors, Sealed Air Corporation and AvidXchange are all building major new headquarters in Charlotte, spurred in large part by tax breaks from state and local governments.

For economic developers at organizations like the Chamber and the Charlotte Regional Partnership, such announcements are major wins. That’s why economic developers and business leaders will be watching the legislature in Raleigh closely this coming week. Gov. Pat McCrory said he expects a new incentives bill to be passed Monday or Tuesday.

“This crowd likes incentives,” said Ned Curran, Bissell CEO and incoming Chamber chairman. “It’s had a huge impact when we look at projects we missed.”

The state’s main tax-break program, the Job Development Investment Grant, has been up in the air since March, when the House and the Senate unveiled competing proposals. The Senate’s original version would have given Mecklenburg County less money and directed more to rural areas.

The compromise plan, unveiled Friday, doesn’t cap the percentage of incentives money Mecklenburg and other large, urban counties can be awarded and includes an exemption from sales tax for jet fuel, which American Airlines had long sought for its Charlotte hub.

Economic developers at the Chamber retreat said they were satisfied with the bill. Expect them to turn quickly to the business of trying to lure corporate headquarters to Charlotte – something the builders of new, speculative office towers in Ballantyne, SouthPark and uptown would certainly relish.

Coordinating Chamber, Charlotte Regional Partnership efforts

Charlotte and its regions have two main economic development groups, and they haven’t always played well together. That’s one reason the Charlotte Chamber and the Charlotte Regional Partnership, which represents Mecklenburg and 15 surrounding counties, signed a memorandum of understanding to better coordinate their efforts in the coming years.

The groups said they would work together more on luring businesses, define their roles more clearly and plan a joint fund raising campaign for the first time, which should kick off in 2017.

“It’s going to be complicated. It’s going to be messy,” said Chamber CEO Bob Morgan. “The answer to our business community throughout the region is we need you to continue funding both our organizations.”

The groups have also started sharing business leads for the first time. Economic developers prize secrecy about what projects they’re working on, so opening their books to each other is a big deal. But Morgan said it’s worth it in order to stop duplicating efforts and contacting the same companies – something that’s all too easy to do, especially because economic developers typically use code names to hide the identities of companies they’re courting.

“Say Ronnie’s working ‘Project Red,’ we’re working ‘Project Blue,’” said Morgan. “It becomes an opportunity to step on each other’s toes.”

Ronnie Bryant, CEO of the Charlotte Regional Partnership, said the groups’ agreement to focus on using the Partnership’s “Charlotte USA” branding is also significant.

“This is a big deal from our perspective...positioning us internationally, as well as nationally, as an international city,” said Bryant.

Urban-rural divide?

As a fast-growing, urban county, Mecklenburg leaders opposed a Senate plan that would have shifted sales tax money to more rural counties. That, and other spats such as the fight over control of Charlotte’s airport, have helped fuel the perception that the Republican-dominated legislature is hostile to Democrat-majority Charlotte.

Lawmakers at the Chamber retreat played that down this week, emphasizing the need for more regional cooperation on economic development issues. They called for more cooperation between Charlotte and its outlying areas on issues such as transportation.

“If we kill the rural areas, the cities die,” said Rep. Bill Brawley, a Mecklenburg Republican. “If we kill the cities, the rural areas die. Whether we like it or not, our fates are intertwined.”

McCrory said struggling areas such as Wadesboro need stronger economic and transportation connections to urban hubs, which will in turn strengthen cities as well.

“I actually don’t use the words urban and rural because I think those are 20th century words,” said McCrory. “No town can live on an island by itself, including Charlotte.”

Transportation funding

As Charlotte keeps growing, traffic keeps growing with it. Moving people around in the city and the region could be a challenge, especially with funding for many projects uncertain.

The Charlotte Area Transit System is building a nearly 10-mile extension of the Blue Line light rail to UNC Charlotte, set to open in 2017. The Gold Line streetcar recently opened its first 1.5-mile segment from uptown to Novant Presbyterian Hospital, and is building another leg to Johnson C. Smith University.

But there’s no funding for the Red Line commuter rail north of Charlotte, and the price tag keeps rising.

“How do we do the Red Line?” said former UNC Charlotte Chancellor James Woodward. “If you want to make it more costly, wait another 10 years.”

Proposed toll lanes on Interstate 77, Interstate 485 and Independence Boulevard have stirred controversy, and the streetcar remains a politically divisive issue. The legislature’s new budget, passed last week, also caps state funding for future light rail projects at $500,000 per project. That won’t impact the current Blue Line extension, but could stop future Charlotte rail projects.

City manager Ron Carlee said the region will have to come up with new, ambitious transportation plans.

“The Blue Line is transformational,” said Carlee. “If we stop there, we’re going to begin losing ground. We’re going to have to have another major transportation effort.”

Ely Portillo: 704-358-5041, @ESPortillo

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