Town might offer business incentives

Businesses that decide to locate on Franklin Street in the future may not have to worry about the traditionally high rent — because Chapel Hill might help pay.

After Optimal Technologies — a Canadian company that focuses on electricity solutions — rejected recruitment from Chapel Hill, town officials began preliminary discussions about how to make the area a more attractive place to do business.

The company chose Raleigh for 325 new jobs that pay about $60,000 to $70,000 per year because of a downtown location and support from the city, said Ken Atkins, executive director of economic development in Wake County.

The company received $325,000 through a state program and a matching grant from Raleigh, he said.

Chapel Hill does not offer similar incentives ­­— something that got town officials talking about a change of policy, said Adam Klein, vice president for economic development and government relations for the Chapel Hill-Carrboro Chamber of Commerce.

“That’s sort of what I think sparked the conversation initially,” he said.

“High-tech sustainable technology businesses like Optimal Technologies is an example of the type of businesses we would want to attract,” Klein said.

Some of the methods tentatively discussed by town officials include grants for businesses that locate in economic development zones, job training, tax abatements and funds to aid certain types of businesses, such as those committed to energy efficiency, officials said.

But none of these are set in stone.

“What it isn’t is large cash payments or based on vague promises for job creation or tax revenue. I personally would not support what I would consider a traditional economic development approach,” Klein said. “I don’t think that incentives that are a big pot of money are the best use of taxpayers’ dollars.”

So Chapel Hill’s incentives may look a little different from, say, Wake County’s, which according to Atkins allows businesses to earn back 2.25 percent of their property taxes if they create $100 million of new tax revenue.

This system is meant to attract businesses with the potential to create thousands of jobs, such as pharmaceutical companies, Atkins said.

Chapel Hill is probably looking to attract companies that will create anywhere from five to 500 jobs, Klein said.

Officials raised incentives as a possibility at an Orange County development meeting a few weeks ago.

But the ideas of how to go about doing that are preliminary and do not necessarily have the support of all Chapel Hill Town Council members and business representatives, said Brad Broadwell, director of the Orange County economic development commission.

“It’s an issue that deserves discussion because it’s a precarious road that you go down when you talk about incentives,” he said. “Do you just want to incentivize green companies? How much is too much? How many resources do you have?

“All of these have to be considered. We’re just not there yet.”

The town hired Dwight Bassett, the town’s first-ever economic development officer, about a year ago to start proactively answering those questions.

 Finding money to use for attracting businesses is one of his tasks, council member Bill Strom said.

In addition to incentives, Bassett also suggested local business partnerships with the Research Triangle Regional Partnership and UNC — something Chapel Hill never has utilized.

The regional partnership does the dirty work, researching prospective businesses and marketing the town, Broadwell said.

 “None of us can do it by ourselves,” he said. “Our budgets aren’t big enough.”

The town also plans to collaborate with existing businesses to learn how to more efficiently meet their needs, council member Mark Kleinschmidt said.

“We need to craft solutions that are responsive to their real needs — not solutions that may only have political expediency,” he said.

And Kleinschmidt said the town has room for improvement when dealing with new and existing businesses.

“We need to be clearer about what we want,” he said. “What we can do is to make sure that we know what our goals are and that they’re clearly articulated and that we have someone in place that can help convey those needs to the community.”

He added that streamlining approval processes and responding quickly to business’s needs are two other ways the town could be more efficient.

“We are aware that the business community has options about where to do their business,” he said. “We want to make sure that Chapel Hill remains an attractive place to do that.”



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