EDC considering changes to grow jobs

By SETH STRATTON
The Dispatch

The Davidson County Economic Development Commission is considering changes to its grant process in order to spur more job growth and lower the county's unemployment rate.

Lexington, Thomasville, Denton and Davidson County have all thrown their support behind changes in the EDC's guidelines to allow for more businesses to be eligible for economic development incentives. Steve Googe, the executive director of the EDC, is hoping to gain across-the-board support by encouraging Midway and Wallburg to back the changes in the next couple of weeks, too.

"Unemployment is in the double digits," Googe said. "It's critical we do everything we can do to help any businesses looking to invest here."

Googe and the EDC have previously only focused on offering incentives to existing or new businesses looking to invest a minimum of $1 million toward an economic development project. They also only really dealt with industrial projects, leaving smaller retail and commercial developments to the local chambers of commerce around the county. But that may all change.

Thanks in part to Commissioner Sam Watford, who in a Jerry Maguire-like "Help me, help you," moment at a Davidson County Board of Commissioners' meeting in April, wondered aloud what the county could do to help struggling businesses in the economic recession.

Googe said he and Watford later met for about two and a half hours to discuss ideas on how the EDC could assist smaller businesses in addition to the large industries for which the commission is used to designing grant packages. In the past five months, the EDC, with input from its board, governments and agencies, has come up with a few ideas to stimulate the local economy.

First, Googe said the EDC is considering economic development projects of an investment of $50,000 or more, far less than the $1 million it usually set as a guideline for the projects in which it became involved.

Under the proposal, qualifying businesses would have to pay for the applicable legal notices and other fees for it to be placed on the county or a municipality's public hearing schedule. The EDC is also considering a clause to new or existing economic development incentive contracts to allow businesses to waive wage and job requirements if the unemployment rate in the previous six months prior to the grant's approval is above 9.9 percent.

"It's an aggressive thought process," Googe said. "I know we're going to be inundated with requests."

Googe and the EDC board aren't quite ready to roll out the plan, but it could be put into place shortly. He said the purpose of the plan is to put people back to work and spending money, which has an immediate impact for the county and its workers. Performance-based job grants have worked in the past, but if an industry signed a contract today, the county nor the business would see any tax revenues or rebates back until 2011.

The EDC is also considering a proposal to anyone who builds a shell building not to pay any taxes for the first three years and 50 percent property taxes for the fourth and fifth years of its construction if is not leased in hopes to encourage construction of buildings that are ready to move in, like the Diebold and Vitacost.com buildings in the Lexington Business Center.

Sales tax revenues are more important today now that the state has taken a half-cent of sales tax revenues back from the county to compensate for the state taking over the county's portion of Medicaid payments.

North Carolina has changed the way sales tax funds are redistributed. On Tuesday, the state sales tax increased to 7.75 cents, up a penny. Next month, Davidson County will see another quarter-cent of sales tax revenues relinquished to the state, leaving just two cents of the 7.75 cents returned to the county. And the redistribution system has changed, too. Sales tax revenues used to be distributed back to counties and municipalities and on a per-capita basis, but now the state has changed the redistribution system to point-of-purchase.

Googe said this new type of system makes it more important, especially to smaller communities located around metro areas that can draw shoppers away.

"We didn't have a clue in 1995 or 1996 we were going to have this sales tax change," Googe said.

The EDC has helped in some retail projects - most notably the Food Lion shopping centers at the intersections of U.S. Highway 64 West and U.S. Highway 52 and the one at the intersection of U.S. Highway 64 East and N.C. Highway 109.

Googe said the EDC has been busier this year than last and hopes the new economic development parameters will set up the county for booming growth after the economy rebounds.

"Internally we're going through a process ... to analyze our position in life," Googe said about the EDC, "if what we're doing today and yesterday is what we're going to be doing tomorrow."

Googe said recruiting more retail businesses is a "double-edged sword" because it helps build local tax bases but usually provides jobs that are lower-paying than manufacturing-type jobs the EDC is used to attracting. Each business will still be taken on a case-by-case basis, like it is now, and be left up to each local governing board whether it wants to approve an incentive agreement.

"If we should move forward on this, I don't know what it's going to do tomorrow, but I hope at least it will help stimulate some interest here," Googe said.

Seth Stratton can be reached at 249-3981, ext. 226, or seth.stratton@the-dispatch.com.

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