Area counties and the City of Wilmington have paid incentives to businesses ranging from a honey processor to a global conglomerate.
SOUTHEASTERN NC (WECT) – Local governments in southeastern North Carolina paid more than $7 million in incentives to businesses ranging from a honey processor to a global conglomerate over the past five years, a WECT investigation revealed.
New Hanover County paid the most, nearly $4 million; followed by Bladen County, $1.6 million; Columbus, $1.1 million; the City of Wilmington, nearly $700,000; and Pender County, almost $200,000.
Although Brunswick County recruited businesses, including the Coca-Cola distribution facility in the Leland Industrial Park, it didn't pay any incentives, according to Jim Bradshaw, executive director of the Brunswick County Economic Development Commission.
Later this month, Brunswick county commissioners will vote on a $85,000 incentive package for Lee Controls, a manufacturing company that Gov. Pat McCrory announced would be relocating from New Jersey to Southport. The company, which manufactures linear shafting, bearings and other linear productions, said it will create 77 jobs in the area in the next three years, and as many as 100 in the next five.
WECT's investigation found that sometimes companies don't receive the full incentives initially outlined in their contracts with local governments. That's because most incentives in our area are based on performance.
"You have to sign contracts saying ‘I'm going to create a certain number of jobs and I'm going invest a certain about of money' and then as you perform against that commitment, you get the incentives," said Chuck Heustess, director of the Bladen County Economic Development Commission.
Heustess stressed that incentives don't initially draw companies to a community. An area has to have the real estate, infrastructure and workforce that the prospect requires, he said.
"If they start out with a three or four state search, they will find one or two buildings in each state that meet their needs, so at that point is where the incentives kick in, and at that point you can lose the project if you don't have the correct incentives," Heustess. "So, it's kind of like a tie-breaker."
To those who question if those tax-money tie breakers are worth it, Heustess explains that in Bladen County, the local government always comes out ahead.
For example, if a new company pays the county $100,000 in property taxes on its building and equipment, the maximum incentive it would receive would be $75,000, leaving the county with $25,000 it didn't have before, plus the new jobs.
Critics argues that counties could simply band together and agree to stop offering incentives. But it's an idea Heustess says is unrealistic.
"We compete with China more than we do with Columbus County, so it really doesn't matter if Columbus County and Bladen County decide they're not going to do incentives because you're still competing with China or Mexico or maybe a European country for that investment," he said."
Incentives paid and new contracts signed 2008-2013:
Total amount paid: $1.6 million
Company that received the most: Dupont, $1.1 million
New Incentive Contracts Signed: Dynapar Corporation, Dec. 2008; Superior Fibers, 2008; Carolina Retread, August 2009; Dupont, Nov. 2009
Company that received the most: Top Tobacco, $391,298
New Incentive Contracts Signed: Piramide Mexican Foods, July 2009; Atlantic Automotive, Oct. 2009; Atlantic Corporation, Nov. 2010; Filtec Precise, Feb. 2012; West Fraser Timber, March 2012; Nice Blends Corp., April 2012; Top Tobacco, May 2012; Direct Market Access, Dec. 2012; Ply Gem, July 2013.