Mecklenburg County has long stood on the sidelines in luring companies to the region, leaving most of the work to the city of Charlotte and playing the role of rubber stamp, rather than negotiator, when offering incentives.
But now it has a new economic development director who wants to create programs, bring entry-level jobs to the county and attract companies seeking more than just sizable tax breaks.
“The county has always been a partner in economic development – a silent partner,” said Peter Zeiler, who was hired five months ago after stints at similar jobs in Detroit and Austin, and a five-year stretch with Charlotte’s economic development office. “The city of Charlotte is clearly out there doing a lot of good work. However, at the end of the day, the county is two-thirds of the incentive value of any project. The towns, especially the northern towns, are really in this game as well.”
It has to go beyond how much money I can give you to come here.
Mecklenburg County Commissioner Jim Puckett
And the game – at least across the border – is heating up. Earlier this month, the county contributed $297,000 of a $1.1 million incentives package that enticed the Nutec Group, a Mexican insulation company, to pass over York County, S.C., and build its first U.S. manufacturing facility in Huntersville. The $19.2 million facility comes with 61 jobs.
It wasn’t the biggest deal to hit the area this year. But it’s an example of what leaders hope becomes a trend of courting high-capital companies to land in the county’s seven towns rather than in other cities in the Southeast, such as Nashville, Tenn., or Dallas and Austin, Texas.
Zeiler, who makes $120,000 a year, thinks of his new job as a startup that’s still budding.
He and staffer who focuses primarily on minority-owned and small businesses are the only employees. He hopes to soon hire an administrative coordinator who will handle the day-to-day grind of the office, freeing him to focus on developing a “coherent economic system” for the county. Within the next year, he wants to create programs that support entrepreneurship and spur workforce development.
Dimensional Fund Advisors, an investment firm, considered Rock Hill for its East Coast headquarters before settling on South End.
County Commissioner Jim Puckett applauds the county’s longing to take a role in its own business development. But he’s wary of a system set up to recruit companies based solely on offering incentives.
Instead, it should flaunt what services the county offers, such as schools, arts and natural resources, he said.
“It has to go beyond how much money I can give you to come here,” said Puckett, who sits on the Board of County Commissioners’ economic development committee. “If the most important thing to you is how much I’ll give you to move here, I don’t know if I want you to move here.”
Filling the gaps
For years, the county has partnered with the city, towns, Charlotte Chamber and Charlotte Regional Partnership to issue investment grants that bestowed companies with property tax rebates based on their capital investment. In return, those companies brought high-paying jobs to the area that drew a skilled workforce.
County Manager Dena Diorio said the county values those kinds of companies but also wants to see firms participate in programs centered on entrepreneurship and apprenticeship.
“We deal with our responsibility with moving people from dependence to independence (through) workforce development, small business creation (to) really try to help people in our community get jobs,” she said.
I’m a big believer in incentives. I think they work.
Mecklenburg County Commissioner Chairman Trevor Fuller
Now there’s a push for the county to carve its own niche around economic development that creates entry-level jobs for people who live here, Diorio said.
It’s a trend that’s been developing across the state in the last few years as local municipalities try to shake off the effects of the recession, said Jonathan Morgan, a professor in UNC’s School of Government who studies the intersection of economic development and public administration.
“There’s an interest in wanting to be intentional about it rather than sitting back passively and taking whatever comes along,” he said. “Unincorporated parts of (Mecklenburg County) may have special needs and distinctive situations that the city’s efforts may not necessarily address. Having a strategy that will create jobs for entry-level workers is a reasonable gap to want to try to fill.”
Some say continuing to offer incentives is a critical part of that strategy. State lawmakers on Friday unveiled an incentives bill that doesn’t include limits on the amount of incentives money Mecklenburg and other counties could receive from the state’s Jobs Development Investment Grant.
$4.8 million Mecklenburg Co. contribution
$2.8 million City of Charlotte contribution
$11.9 million N.C. Job Investment Grant contributionSource: Peter Zeiler
“I’m a big believer in incentives. I think they work,” board chair Trevor Fuller said. “Do we need some standards around it? Yes. Do we need to make it not just a giveaway? Yes. There should be some conditions on it but not onerous conditions.”
Because it collects more in taxes, any incentives offered by the county are generally larger than the city’s. The county often has “more skin in the game” when companies move in because they bring employees, who bring families and use services the county pays for, Fuller said.
Still, he said incentives make “perfect business sense” and not using them is risky.
“If we unilaterally disarm, so to speak, when other municipalities are clearly in the business of trying to recruit businesses, I think it puts us at a competitive disadvantage for no reason,” he said.
Diorio agrees incentives should be part of the county’s business development thrust but called them “one tool in the toolbox.”
“There are others we need to be exploring,” she said. “We have a lot to offer in Mecklenburg County, and there should be value placed on the fact that we have great quality of life here.”
‘Upsetting the applecart’
County leaders are still working to determine how this new economic engine will look and operate. The biggest challenge will be coordinating with all the area’s economic organizations to ensure the county isn’t duplicating what’s already being done, said Morgan of UNC.
“We have to identify where is the niche we can play, where can we take a leadership role without stepping on toes,” Zeiler said. “It’s a delicate balancing act of trying to grow without upsetting the applecart.”
Bill Cronin, economic development director for Charlotte, said he’s not concerned about overlapping projects with the county since any company’s investment in the area is a win for the city and county’s regional workforce.
“When there’s a prospective investor looking to locate in the city, we always include the county,” he said. “If they happen to be approached first, they will include us.”
The more smart people we have around the table, the better off we are.
Ronnie Bryant, CEO of the Charlotte Regional Partnership
Charlotte Chamber CEO Bob Morgan echoed that sentiment, saying, “Our view is that the more involvement from the city and the county in economic development, then the stronger we’re going to be.”
He added: “There’s not a need for them to do what we do, ... but (to) partner even more strongly around things like incentives.”
More engagement from the county “brings more value to our process and it really makes our effort that much more stronger,” said Ronnie Bryant, CEO of the Charlotte Regional Partnership. “We’re a very competitive environment. The more smart people we have around the table, the better off we are.”
Incentives offered in the Nutec deal
As part of an agreement that Peter Zeiler called an “outlier,” the town of Huntersville, Lake Norman Economic Development Corp., Mecklenburg County and other agencies worked together to create a multi-layered incentives package that drew the Nutec Group to Huntersville, where it will build its first U.S. manufacturing facility. The package included money from the N.C. Department of Transportation for road widening, Charlotte Water for sewer service and local incentives that included engineering and feasibility studies on the site. Here’s the breakdown (figures are approximate):
▪ Mecklenburg County Business Investment Grant: $297,000
▪ Town of Huntersville business grant: $123,000
▪ N.C. Job Development Investment Grant: $100,000
▪ N.C. DOT: $400,000
▪ Charlotte Water: $150,000
▪ Town of Huntersville & Lake Norman EDC: $34,000