Agenda Package 4-1-13 - Reg. Meeting

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` +�jredtiVe MEMORANDUM To: John Crumpton From: Crystal Morphis Date: March 22, 2013 Subj: Review of Lee County Proposed Incentive Policy The notes below are my comments, as a consultant to the Lee County EDC, on the draft Lee County incentive policy. Clause 1 "No incentive will be considered for a new or existing business unless Lee County is competing with a jurisdiction outside the state of North Carolina to locate or retain that business in Lee County" • This clause puts the County at a disadvantage. Site searches may start in multiple states, at which time Lee County would propose incentives. Through the course of the site location process, the top two priority sites may both be within the state. • The matter of in -state "line- jumpers," which I believe this clause is meant to address, can be handled by not offering incentives to projects that are non - competitive. There is an effort at the state level to prohibit intrastate competition. I recommend waiting on a state policy to follow and excluding this clause. • There is no incentive policy that I have read or heard about in NC that has a similar clause. Clause 2 "No incentive will be offered to any business or business unit of a company presently operating in another county of North Carolina for the exclusive purpose of recruiting that business or business unit to relocate to Lee County" • This clause is similar to the first. What it is trying to achieve, discouraging in -state "line - jumpers" can be accomplished in other ways that would not put Lee County at a competitive disadvantage. • The School of Government commented that "this policy is not necessary as a matter of law and it could work to NC's and Lee County's disadvantage." • North Carolina recognizes "facility obsolesces" as a justified reason for a company to move within the state. If a company determines their facility to be obsolete, they have no expansion room for example; they will look to areas within and possibly outside the state for relocation. Lee County will lose these projects even though the project was not courted to leave their home county. • Existing business expansions account for approximately 70% of all new investment and job creation in the state. Overlooking expansions within the state could cut Lee County out of significant opportunities. Creative Economic Development Consulting, LLC PO Box 706, Elkin, NC 28621 • 336 - 526 -1332 • www.creativeedc.com