Orange County and Chapel Hill leaders talked Thursday about economic challenges and ways to collaborate for more businesses and jobs.
Dwight Bassett and Steve Brantley, the town and county economic development directors respectively, have been creating a draft list of business incentives. The state won’t be much help, they said, because the county is considered well-off.
A final policy isn’t ready, but Brantley noted options such as performance agreements that save firms money in return for creating jobs and government financing for business-related projects, including parking decks and roads, that are repaid with new property taxes.
Larger projects could attract a corporate headquarters, a research lab or big store, Brantley said. Smaller and more moderate possibilities include restaurants, smaller retail and start-ups. It depends on the local goals, what incentives are economically feasibility and the potential for jobs, he said.
The county already offers grant and loan programs for businesses and farmers, while the town has a small art business loan program. Council members did suggest during recent budget discussions that the town could create its own business loan program.
The governments also could collaborate to find low-cost and larger commercial spaces. A report shows the county had 68 inquiries about economic investment in the last year. Just over 40 potential investors got information about buildings and sites; 27 fell through because necessary buildings, land or utilities were unavailable.
Chapel Hill has 2.4 million square feet of office space and a 9 percent vacancy rate, Bassett said, meaning it needs more to stay competitive. Roughly 1 million square feet of future office space has been approved, he said.
The vacancy rate for retail space is 6 percent, he added, and the town is capturing only about two-thirds of its potential market in a little less than 2 million square feet. More retail space is in the pipeline.
The county and town could identify and provide space for growing companies, such as those coming out of the Launch incubator downtown, Commissioners Chairman Earl McKee said.
Mayor Pam Hemminger also pointed to land around Millhouse and Eubanks roads, near Interstate 40, that lies in both the town and county planning areas. The area could host light industrial operations, she said.
It’s also near Carraway Village (the former Edge project) – a 55-acre office, retail and residential development – which has been approved but has four major issues that are being worked out. The biggest is the developer’s request that the town help pay for $3 million in required road improvements.
“We have the ability to look at some kind of incentive, help, toward the developer actually doing the road and that’s contributing, and we’re hopeful that you would be interested in partnering with us to make that get off the ground,” Hemminger said. “There could be some bigger pieces of office space there that would benefit everyone.”
The county usually doesn’t build roads, commissioners said, but it does have influence with the N.C. Department of Transportation.
The Greene tract, located nearby, is another option and is owned jointly by the towns and county, Commissioner Barry Jacobs said. The land has been identified as a place for future affordable housing, but it also could prove attractive to businesses, he said.
It also may be a question of chicken vs. egg, Council member Nancy Oates said.
“In my informal conversations with developers, I’m hearing that it’s very difficult to get lenders to approve funding for (speculative) office space and some of the developers (who could do it) probably don’t want to do it because they are anticipating a recession,” she said, “but it sounds like if we could do some matchmaking so we could get the two together, it might work.”
The conversation also should consider commuting, housing costs and other details, such as where different companies best fit in rural and urban areas, Commissioner Mark Dorosin said. Council member Maria Palmer suggested also looking at the possibility of a tech business center.
Chapel Hill’s pending commercial development strategy, which grew out of meetings with consultants last year, could pose additional options, officials said. One suggestion was a retail strategy built on Chapel Hill’s name recognition and its unique identity.
Another outcome, Bassett said, was a proposed zoning district for flexible, advanced manufacturing, research and maker space.
“We’ve been having very intense conversations with UNC about how we can partner, how we can accommodate some of that interest in spaces downtown, and we’ve been working for six months to craft that plan,” he said. “So we think the university’s going to be a great partner in helping to accommodate some of that need, but we think the longer term need is for land like out on Millhouse.”