Businesses contemplating a move to Raleigh will soon know exactly how much they need to invest to receive substantial incentives from city government.
The city currently negotiates with businesses looking to move here or expand their presence here on a case-by-case basis. But it offers no guidelines or minimum standard for qualifying for incentives other than those set forth by the state’s Job Development Investment Grant program.
The proposed Business Investment Grant program endorsed by the city’s Budget and Economic Development Committee on Tuesday morning could go before the City Council at its meeting on Nov. 17.
It already has support from each of the four council members who make up the committee: Mayor Nancy McFarlane, Kay Crowder, Russ Stephenson and Eugene Weeks.
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“You have to give businesses a baseline and then you can customize from there,” Crowder said.
Under the proposal, Raleigh would offer property tax reimbursements to businesses on a sliding scale depending on how much they invest, how many jobs they create and where they do so. The city would offer more grants to businesses that develop in one of 18 target areas around the city.
Inside one of the target areas, businesses that invest $20 million and create 20 jobs would qualify for a 75 percent property tax “grant,” or reimbursement, from the city during each year of a seven-year period.
Outside the target areas, businesses that invest $50 million and create 50 jobs would qualify for a 50 percent property tax grant from the city each year over five years.
The city would offer a 75 percent property tax grant each year for seven years to any business that opens a headquarters here – in or out of a target area – so long as the business invests $10 million and creates 50 jobs. The headquarters could be divisional, regional, national or international.
The proposed policy requires businesses to pay each of the jobs the average annual county wage, which is about $52,000, said James Sauls, Raleigh’s economic development manager.
City staff developed the policy after reviewing policies in other North Carolina cities and speaking with site selection experts who often consult for relocating businesses, he said.
City staff considers its proposal to be more conservative than programs in other cities because Raleigh requires businesses to meet stricter performance goals before it grants the incentives, and the policy doesn’t include cash offerings.
“They have to meet these thresholds before they receive a penny,” said Jim Greene, assistant city manager for economic development.
The proposal instructs the city staff and City Council to place higher priority and consider more incentives for certain industries, including: manufacturing, transportation, professional services, design and creative industries, biotech and pharmaceutical companies, information technology companies, emerging industries and those that partner with local universities.
Under the proposal, the City Council would maintain final authority over all incentive offers.
Target areas for business growth
A proposed incentives policy endorsed by the city’s Budget and Economic Development Tuesday would offer a higher property tax reimbursement to businesses that develop inside one of 18 target areas around the city.
OTB target areas: Glenwood Avenue from Pleasant Valley to Ebenezer Church Road, Falls of Neuse Road from Lynn Road to Newton Road, around the Mini-City shopping center, Atlantic Avenue from Interstate 440 to Spring Forest Road, Capital Boulevard from I-440 to Mini-City, New Bern Avenue from I-440 to the eastern city limit, Wilmington Street from Tryon Road to I-440, I-440 southeast, Auburn Church, I-440 South from Lake Wheeler Road to South Saunders Street, the area near the intersection of N.C. Highway 54 and Jones Franklin Road.
ITB target areas: Capital Boulevard from downtown to I-440, North Saunders Street, Southeast downtown Raleigh, Poole Road south, Oberlin Village, the University West area on Western Boulevard.