Earlier this month, town commissioners approved a first-of-its-kind economic development incentive package, approving an application that saved a Wendell business owner more than $700 in fees associated with locating his new business in a former warehouse located outside the town limits.
Commissioners approved an application from Dr. Mark Vardy Nov. 9 that stripped or reduced fees for administrative reviews of the property’s firewall permits, future renovation fees and signage fees.
The town’s approval of the request is unusual on two accounts. It marks the first time a business owner has tried to make use of the new policy designed to encourage the creation of new small businesses in Wendell. Commissioners created the policy in 2013. Vardy’s new business, Vardy Human Performance Center, will employ eight full time workers and four part-time employees when it is in full operation.
The approval is also unique because it provides a benefit to a business that’s not located within the town’s corporate limits. That means Vardy pays no property taxes to the town. The 4.5 acre property, at 2555 Wendell Boulevard, is valued on Wake County’s tax rolls at $787,000. Vardy purchased the property in April for $875,000. Based on the tax value, Vardy would pay the town nearly $3,900 per year in property taxes if the land was inside the corporate limits.
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Under the town’s policy that’s allowed because the language in the policy doesn’t differentiate between development inside the town limits and outside the town’s borders. The policy does restrict the zoning areas where the policy will be implemented. One of those zoning designations is Commercial Highway, which is how the Vardy property is zoned.
Though Vardy’s property isn’t in the town limits, it does lie within the town’s extraterritorial jurisdiction, which means the town controls land use and development and requires property owners to follow the town’s rules for development.
Application met all the rules
Town manager Teresa Piner said Monday that Vardy’s application met all the town’s criteria, which prompted the town’s planning department to recommend approval of the request. Commissioners unanimously OK’d the request. Piner said the town may not see any direct benefit from granting the fee waivers, but she said the decision was a good one because the town’s corporate limits lie both east and west of the property, which is just east of the Knott’s Square Shopping Center.
“People coming from the west will go through part of town to get to the facility and people who come from the east will also have to travel through the town’s limits to reach the business so it’s likely they will stop at other businesses along the way when they come to the fitness center,” Piner said.
She also said future growth could ultimately require Vardy to seek annexation into the town’s corporate limits. “He has city water out there, but the building is on a septic system, so it may come to a point where he needs to expand or that septic system isn’t getting the job done and he needs to hook up to city sewer. At that point he would have to come into the town’s limits,” Piner said.
Wendell’s policy is different from incentive policies in other Wake County towns. Zebulon’s policy requires that businesses be located within the corporate limits to take advantage of incentive offerings. But Town Manager Joe Moore said property owners whose land is outside the corporate limits could qualify for incentives if they ask to be annexed into the town limits.
The same rules apply in Knightdale, Garner and Cary.
Susan Moran, a spokeswoman for the town of Cary said the town’s incentive policy “contemplates encouraging tax base employment growth within the town’s limits.”
She said the town of Cary has not been approached about granting an incentive policy for land outside the town’s corporate limits, but she said town leaders would most likely look to other precedents for extending services such as water and sewer, which require the property owner to seek annexation into the town’s corporate limits.
Joe Stallings, Garner’s Economic Development Director, said his town’s incentive program is designed to recoup the cost of incentives by increasing the town’s tax base.
‘He’s a Wendell business’
Wendell commissioner John Boyette said he was aware that Vardy’s business was located outside the corporate limits when he voted to approve the deal.
But he defended the decision by pointing out that Vardy didn’t have to locate his new business anywhere near Wendell.
“For all intents and purposes, he’s a Wendell business. I think it might be an olive branch sort of thing. Wendell hasn’t enjoyed the best reputation in the past for being business friendly,” Boyette said.
Boyette agreed that the policy might bear some review as the town grows. “It gets sticky when you start talking about businesses in or out of town. It becomes sort of a judgment call,” Boyette said.
But he said Vardy has earned the benefit of the doubt. “I think there are few people that would argue that Vardy’s business is not an asset to the people of the town,” Boyette said.
Though Vardy is the first person to avail himself of the policy, there could soon be more. At the Nov. 9 meeting in which commissioners approved the request, Commissioner Sam Laughery said the town should promote the offer.
“If this is the first time we have used the incentive policy for small businesses, we aren’t advertising it enough. We need to get the word out that this is available for local businesses.”