Chapel Hill News

Chapel Hill leaders sign on with county for $4M Wegmans incentive

Wegmans may add grocery stores in Chapel Hill, Cary, Raleigh

News and Observer reporter Kathryn Trogdon discusses how Wegmans Food Markets is looking to open its first North Carolina stores in Cary. Video by Wegmans Food Markets, Inc.
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News and Observer reporter Kathryn Trogdon discusses how Wegmans Food Markets is looking to open its first North Carolina stores in Cary. Video by Wegmans Food Markets, Inc.

The Town Council voted unanimously Monday to endorse a $4 million tax incentive partnership with Orange County to land Wegmans Food Market.

The Orange County Board of Commissioners will discuss the incentive at 7 p.m. Tuesday in the Southern Human Services Center, 2501 Homestead Road in Chapel Hill.

Wegmans could replace the 14-acre Performance AutoMall dealership on U.S. 15-501 with a 130,000-square-foot store and 770 parking spaces. The dealership has been planning to move next year to a new location near the Streets at Southpoint in Durham.

Wegmans has not submitted a formal application, which would face advisory board meetings, public hearings and require the council’s final approval. The town’s economic development director Dwight Bassett said that process could take at least a year. A concept plan is online now.

The incentive would help the company clean up the site, develop it and build the store. It requires Wegmans to create 185 full-time jobs – starting a $12 an hour with health insurance – and 413 part-time jobs. Wegmans also would have to meet property and sales tax revenue goals.

The town and county would reimburse $4 million in tax revenues generated by the project – up to $800,000 a year for five years.

The $30 million project could more than double the property tax revenues. Hendrick Automotive Group now pays $211,279 in property taxes for the AutoMall property, valued at $13.1 million. Wegmans also could generate up to $1.5 million in sales tax revenues, Bassett said; current sales tax revenues are minimal.

Residents were generally supportive but concerned about the incentive. Karen Trout said she was excited at first.

“But it’s also, as you pointed out, a billion-dollar corporation,” Karen Trout said. “Why do we need to pay them. I don’t get that ... and in five years, we’re only going to have about $600,000 in profit from having them come because of the incentive.”

Terri Vance added the store could worsen traffic and cost existing grocers business. Cary hasn’t offered an incentive to get Wegmans, she said.

The grocer has committed to one Cary location, with another under consideration, said Dan Aken, Wegmans director of real estate and site development. They asked about incentives in Cary but have not been successful, he said.

Council member Maria Palmer said residents’ concerns may be overly cautious.

“For anybody else who has shopped at Trader Joe’s on the weekends like I do, where you have to wait for somebody to pull out of the parking lot for somebody to pull in, I don’t think they run the risk of going out of business in Chapel Hill,” Palmer said.

Wegmans tends to bring other commercial with it and will add to Chapel Hill’s growing reputation as a foodie destination, Mayor Pam Hemminger said. The store could become the county’s largest sales tax producer, she said.

But council members noted there also are issues to consider, including traffic. Council member Ed Harrison asked staff and Wegmans officials to bring detailed traffic numbers when the concept plan comes for review. That meeting is tentatively set for Nov. 14.

Wegmans also needs to be included in a traffic study of the adjacent Ephesus-Fordham redevelopment district, he said, and in the context of a future Blue Cross campus redevelopment. The State Employees Credit Union now owns that site.

Council members supported using Wegmans as a test framework for future incentives. A policy should address multiple criteria, Council member Jessica Anderson said, including the type of development the town wants, the data that could be required, and ways to ensure accurate information and accountability.

The final guidelines may look different than what’s proposed now, Council member George Cianciolo said.

“I think we have to evaluate it right now on this individual project, how important do we think this is for Chapel Hill, to the economic development of Chapel Hill, and are we willing to take a step,” he said. “The question is is Chapel Hill going to continue to be risk averse or is it willing to take a chance to have something that other communities don’t and something that might bring retail traffic to Chapel Hill that we don’t usually get.”

Tammy Grubb: 919-829-8926, @TammyGrubb