Raleigh may start business incentives program
Competition for new jobs and business isn’t limited to the states. City staff have drafted a formal program that would offer incentives for businesses to move to Raleigh, to stay here or to expand their presences here.
The proposal comes as part of a yearlong look at the way Raleigh encourages economic development.
“The economy is changing, and economic development is more competitive,” said assistant city manager Jim Greene. “This toolkit is really going to help us address business needs and economic development.”
Raleigh already offers incentives on a case-by-case basis, with companies offered three large financial incentives in the past decade. Red Hat is to receive about $1.2 million, Citrix $600,000 and Xellia $1 million.
The new program would set guidelines on which companies qualify for incentives, also known as business-improvement grants. Those decisions could be based on the number of jobs the company brings, the average salary and/or employee benefits, according to James Sauls, the city’s economic development manager. The incentives also could encourage investment in particular districts.
The city likely would set the grants based on the amount of property tax the business pays, a method similar to the way the state essentially refunds income tax.
In the past, “Everything was case by case,” said Councilwoman Mary-Ann Baldwin, referring to the city’s policies.
The Raleigh City Council would make the ultimate decision on whether to give each incentives grant, even if the companies met the city’s guidelines.
If council approves the new policy, Raleigh would join several North Carolina cities in incentives competition. Charlotte offers incentives for businesses investing more than $3 million, while Durham’s program applies to investments from $300,000 and larger, according to a Raleigh staff report. Greensboro and Winston-Salem also have programs.
The city is waiting for the state Department of Commerce to conclude its talks about incentives before it moves forward, Sauls said. The N.C. House and Senate are at odds on incentives, with competing economic-development proposals in each chamber. The Department of Commerce says it’s out of money to offer incentives and needs the legislature to act soon.
The potential new city policy was one of several ideas that the council considered at a work session Tuesday. The city aims to attract diverse businesses, from small to international, including those led by people of color or women.
In addition, the city could extend the “innovation fund” it created last year, which gave money to business incubators run by N.C. State University and HQ Raleigh.
Baldwin suggested that the city also look at encouraging a mix of different types of business in downtown, beyond the spread of nightlife venues. The city could also consider creating a new unit of government focused on economic development, such as a commission or an authority.
“It’s about quality of life,” Baldwin said of the overall plan. “It makes it easier for us to attract business.”
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This story was originally published April 21, 2015 at 2:55 PM with the headline "Raleigh may start business incentives program."