LEE COUNTY: Incentive policy unpopular among donors, study finds

Jan. 10, 2014 @ 05:01 AM

The Lee County Board of Commissioners's incentive policy was the focal point of a Thursday meeting concerning funding the county's new economic development organization, bringing a debate months in the making to a head.

Convergent Nonprofit Solutions Principal Rick Kiernan presented his company's Fundraising Feasibility Study to the Sanford-Lee County Partnership for Prosperity —  an economic development organization merging the Lee County Economic Development Corporation and the Sanford Area Chamber of Commerce  — Steering Committee, EDC board and chamber board of directors at the McSwain Extension Education and Agriculture Center.

The study, conducted during a three-week period during November and December, highlighted the responses from 58 business and government leaders concerning the Partnership for Prosperity's program of work and whether $1.25 million could be raised to support it.

"It was very thorough and a very good [discussion]," said Interim EDC Director Crystal Morphis. "Incentives in Lee County has been a big topic, and a very thorough discussion on an important subject is always a good thing."

A majority of those interviewed during the feasibility study said the county's economic incentive guidelines — which requires $20 million in new investment and the creation of 25 new jobs, among other stipulations, for a new company to receive an economic incentive grant — made the county noncompetitive and hurt business recruitment, Kiernan said. If the policy was changed, he said, $900,000 to $1 million could be collected for the EDO's program of work. If it wasn't, he projected the fundraising wouldn't exceed $400,000 to $500,000.

"A lot of people didn't feel you were as competitive as you could be, and I have not researched what the other policies are in neighboring counties, but there is a perception that yours is not as competitive as your neighbors," Kiernan said.

Lee County Commissioner Jim Womack, who is a proponent of the current guidelines and has said incentives should be for "game-changers" only, said the results may mean people are not educated about the county's policy.

"I'm not sure we've ever taken the time or effort to educate people about why we put certain provisions in our policy," he said. "They stem from the Maready [N.C.] Supreme Court case. ... We wanted to be very careful. The other things we put in there came from the [N.C.] Department of Commerce and the way they handled the North Carolina funds. We tried to mimic some of that. And in some areas, just by doing our homework and looking at what we tried to do in the past, taking into account what worked and [didn't] work."

However, some businessmen said this was not true.

"As a person who was interviewed and a donor, I can tell you there is not an education problem," said Kirk Bradley, a local developer and steering committee member. "The chamber has spoken out and there is very specific criticism. ... I'll go on record saying it here. I am not going to put money in something if we are not going to [change the policy]." 

Others, including chamber board of directors Chairman Brad Simpson and Central Carolina Hospital CEO Doug Doris, echoed Bradley's sentiments, saying they would not invest unless the incentive policy changed. Sanford Mayor Chet Mann said the organization couldn't afford to leave money on the table.

"I think this group has to decide if we are going to fly in the face of the check writers," he said. "I think that's a dangerous price."

The county is required to fund a number of things, with new requests coming from departments every day, said Lee County Commissioner Charlie Parks.

"We can't do it all," he said. "Our county is not that well off. And people may have $1 million in funds around here somewhere and they can take tax writeoffs, but you got a whole [lot] of people who are low and middle income who can't afford more taxes."

Chamber President Bob Joyce recommended a subcommittee be formed to work on a compromise between the investors and the commissioners concerning the incentive policy, and that it address proposed changes to the guidelines offered by Morphis to the county's current guidelines. Whatever the solution, Kiernan said the group should not move forward before addressing the incentive policy.

"In talking with [Kiernan] about the timing of a campaign, it's important to, if we do more forward, to move forward rather quickly," Morphis said.

The next steering committee meeting is in February.


Quick Facts

What: Presentation of the Convergent Nonprofit Solutions Fundraising Feasibility Study for Sanford-Lee County Partnership for Prosperity, the proposed economic development organization comprised of the Lee County Economic Development Corporation and Sanford Area Chamber of Commerce.

When: Thursday morning at the McSwain Extension Education and Agriculture Center.

Who: The Partnership for Prosperity steering committee, the EDC board and the chamber board of directors.

Convergent representatives held 52 confidential interviews with 58 business and government individuals to determine if $1.25 million could be raised for the Partnership for Prosperity based on its current program of work during a three-week period during November and December.


Challenges for economic growth in Lee County based on interviews:

* The Lee County Commission's position regarding incentives and its current economic incentive guidelines.

* The current economic downturn and slow recovery.

* Attracting senior management professionals to live in Lee County.


Advantages for economic growth in Lee County based on interviews:

* Lee County's central location.

* Quality of life, in particular for families.

* Central Carolina Community College.

* Available water.

* Improving school system.


How the interviewees rated the elements of the proposed program:

There were more than a dozen aspects of the Partnership for Prosperity's program of work, which were then grouped into seven components by Convergent. Each program of work component was ranked by an interviewees on a scale of 1 (low) to 10 (high)

* New Business Recruitment and Marketing Lee County: 80.4 percent rated it a 9 or 10

* Education, Workforce Development and Leadership: 71.2 percent rated it a 9 or 10

* Business Retention and Expansion, and Small Business/Entrepreneur Development: 69.8 percent rated it a 9 or 10

* Fundraising and Investor Relations: 51.3 percent rated it a 9 or 10

* Visitor Attraction, Community Development and Quality of Life: 39.3 percent rated it a 9 or 10

* Infrastructure and Product Development: 35.8 percent rated it a 9 or 10

* Agriculture and Agribusiness Development: 20.4 percent rated it a 9 or 10