County approves new rules for economic incentives
The Union County Board of Commissioners adopted official economic development grant criteria during its Monday meeting.
As part of the county’s economic development merger with the City of Monroe, Chris Platé, director of the new Monroe-Union County Economic Development group, started on a plan of work encompassing the whole county. One aspect was to revise Union County’s policy on incentives offered to businesses looking to move to or expand in Union County.
“The incentive program that you currently have has been in place for probably about 20 years or so,” Platé said. “But it’s not written and from a client’s standpoint it’s very hard to compare Union County to other counties around us.”
The old program was specific for investment amounts. Other successful incentive programs allow companies to work with investment estimates when starting projects. Many of the new policies were proven successful in Monroe’s economic development program, Platé said.
Economic development staff worked with county administration officials and commissioners on the plan that balanced an attractive incentive policy with what the county can afford. Particular attention was paid to return on investment, or what the companies agree to produce in exchange for the incentive.
The new program will extend grant periods from three to five years, starting in the year specified in the agreement. The award amount, or grant factor, depends on the county’s annual capital investment percentage, as adopted by the commission.
Grant qualifications depend on the applicant producing the minimum jobs, taxable buildings or equipment, expansions or land improvements in the grant agreement.
The new plan also lowered the investment thresholds for projects, a different dollar amount for new and existing companies respectively. If the company already has a Union County location, its planned expansion must be $2 million or more. Companies opening new locations must invest a minimum of $3 million.
“The lower threshold opens it up to smaller companies,” Platé said.
New companies must agree to create 10 full time positions. Those positions must remain funded and filled for the duration of the grant. New industry grant applicants must also pay those employees a minimum of 110 percent of the county’s weekly average industrial wage tracked by the N.C. Employment Security Commission. Existing companies are exempt from these requirements.
Qualifying applicants must be a principal employer, not a third-party speculators or developers.
Only businesses in the fields of manufacturing, processing, research and development, warehousing, distribution, data processing, office or tourism qualify for the grants. Retail businesses are not eligible for the incentive program.
Applicants must provide the county with an itemized list of machinery and equipment for each project when requesting county payment. One project is eligible for only one grant. Companies awarded the grant must keep in good standing with the county by paying all taxes and fees. And payment will only made when the company invests the minimum capital investment amount to qualify.
The grant program establishes a tiered incentive award schedule. If a company falls short of the incentive level originally agreed upon but still invests the minimum amount required to participate in the program, the county can choose to award a smaller grant. A company invests $15 million, but agreed to invest $30 million by the end of the grant period, it is still eligible. The county will proportionally reduce its grant amount to the company.
Under the guidelines, county staff will estimate the maximum amount an applicant is eligible for before bringing the grant application to commissioners for approval.
While it is an official county adoption, the guidelines are flexible. Commissioners can tailor qualifications and requirements on a case-by-case basis. The board also has the final say whether a company gets the incentive, whether or not it has met all requirements.
“The company may, through value engineering, find reductions. The economy could change and there could be reductions,” Platé said.
The total grant awarded might differ from the actual payments from the county, depending on criteria like the tax value of the company’s assets.
The new program makes Union County competitive with surrounding local governments while ensuring both parties will benefit.
“It insulates the county from reevaluation and depreciation and other things. It also insulates the company from assessment values that may be different from the market value of their investment as well as tax rate fluctuations,” Platé said.
Commissioners approved the new economic development program by unanimous vote.