McCrory’s reversal on CSX site is setback for NC economic development

Gov. Pat McCrory and his fellow Republicans who control the legislature often talk about how their business-friendly policies will spur business development and create jobs. But for all that talk, they haven’t had much to show for it.

Perhaps that’s why McCrory was so eager to hail a proposed CSX freight terminal for rail and truck transfers in Johnston County. The $272 million project includes the state contributing $100 million in transportation funds. In a Jan. 14 news release, the governor said, “I am enthusiastic that CSX, with support from local governments and planning organizations, has proposed this project for North Carolina.”

McCrory didn’t anticipate the opposition from property owners who would lose their land – between Selma and Micro off Interstate 95 – to the 450-acre project. Johnston County’s board of commissioners, initially supportive of the idea, came out against the location, and the governor withdrew his support. A McCrory spokesperson said, “Serious land issues made the Johnston County site no longer a viable option for the project.”

What happened is McCrory got caught between his big-business-is-always-right mantra and conservative Republicans’ don’t-tread-on-me opposition to taking property under eminent domain. Up for re-election this year, McCrory backed off the CSX deal to avoid a fight with the GOP’s tea party wing.

The CSX switch raises a question about the McCrory administration’s competence when it comes to actual economic development as opposed to talking about it. The governor and his staff clearly did not vet the CSX proposal thoroughly, especially in weighing the impact on property owners. And the governor’s reversal will cut into his credibility with other corporations considering expansion and relocation.

While McCrory’s backing off may make short-term political sense, it may not make legal or economic sense. As a railroad, CSX has the power of eminent domain. If the costs and funding line up, it may exercise that power. Otherwise, it will look elsewhere, perhaps in another state. And the governor’s own agency, the State Ports Authority, continues to back the project as a boon to the Port of Wilmington.

Rather than flip-flopping, McCrory should have anticipated the opposition and focused on sweetening the deal for local landowners. Instead, the governor has set himself up as supportive of a possible legal challenge to the CSX project and put himself at odds with one of his own agencies.

Reliability is a key to business success and a key to government efforts to promote corporate relocations and expansions. In this case, McCrory and his administration appear unreliable and unprepared. And that – no matter how many business-friendly claims the governor makes – is bad for business.

This story was originally published January 28, 2016 at 6:39 PM with the headline "McCrory’s reversal on CSX site is setback for NC economic development."