Economic development is a rat race if ever there was one. Towns and counties compete against each other. States compete against each other. Even nations are battling to secure their own piece of the growth pie.
Like them or not, economic development incentives are part of the growth strategy of all those levels of government, including even the smallest of communities like Wendell, Knightdale and Zebulon.
Last week’s news that the town of Wendell had approved an incentive package for a business located outside the town’s corporate limits was notable because it flies in the face of commonly accepted practices of offering incentives to companies that will locate within the town’s corporate limits and add to a town’s tax base.
In this case, Wendell’s incentive package was not only extended to a business outside the corporate limits, but it was offered after the decision had been made to locate the business in the site. Incentives are typically a sales tool, used to tip the scales with a business owner who may be considering several communities for the location of a new business.
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The approval of the incentives doesn’t appear to violate the town’s policy. The rules require only that the property be located within certain zoning districts, but it does not speak to its location within the corporate limits. Nor does it address timing.
In both cases, we think the policy should be reexamined before the next instance of its use. It is folly to suggest that the town should do away with the policy entirely. Indeed, Wendell was late coming to the economic incentive game, but in doing so, it joins virtually every other incorporated community in the state. Economic incentives, by their definition, should be reasons to bring a business to the community, not a reward to be considered after the fact.
And, to be sure, we believe the town should reap the direct reward for extending such an offer. Certainly, taxpayers would feel better knowing their tax money was being used to help the town grow in a distinctive way.
We suspect, honestly, that the idea of a business outside the corporate limits seeking those incentives was most likely never contemplated by the town staff and commissioners who developed and approved the policy. Now that such a precedent has been set, it makes sense to reconsider the intent of the incentives and ensure that taxpayers and the town’s financial coffers will reap long-term benefits from the extension of incentives.