PROSPECTS FOR GROWTH

How can Chatham attract new commerce? Incentives.

Posted 6/16/21

PROSPECTS FOR GROWTH

As real estate development barrels on across the county, commercial growth has seemed to lag behind.

But county leaders and Chatham’s Economic Development Corporation …

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PROSPECTS FOR GROWTH

How can Chatham attract new commerce? Incentives.

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Posted

As real estate development barrels on across the county, commercial growth has seemed to lag behind.

But county leaders and Chatham’s Economic Development Corporation are confident that’s about to change — and they’re enacting policies to make sure of it.

Chatham has long functioned as a “bedroom community;” many of its residents commute to other sections of the greater Triangle area for work. Without a strong commercial backbone, the county and municipalities rely heavily on residential taxes and utilities to fund government activity and infrastructure. Right now, about 85% to 90% of the county’s tax revenue comes from residential property owners, according to the EDC, Chatham’s leading business recruitment agency. In a healthier local economy, about 70% of the tax burden would fall to homeowners with the rest covered by a robust business community, EDC President Michael Smith told the News + Record.

In the immediate future, with developments such as Chatham Park attracting tens of thousands of new residents and substantial infrastructure expansion underway across the county, the revenue imbalance could temporarily worsen. But Chatham is poised to rival its bigger Triangle neighbors as the go-to destination for major corporations.

Its first advantage: two megasites.

The Chatham-Siler City Advanced Manufacturing (CAM) site, a 1,802-acre industrial megasite in western Chatham County, is nearing completion and courting prospective tenants. Triangle Innovation Point (TIP), previously the Moncure Megasite, could support dozens of new life science and manufacturing companies in coming years on its 2,150-acre complex in Moncure.

Both have been under development for several years, and their infrastructures are almost finished. The biggest thing left to do is find companies to move in, and Chatham policymakers are doing everything they can to entice the country’s most desirable companies. They hope to distinguish Chatham from similar destinations with a second advantage — a unique incentives package.

“One thing that I feel sets Chatham apart is that we have two incentive policies,” County Manager Dan LaMontagne told the News + Record.

The first covers a large swath of businesses that might establish operations in Chatham. Based on company size, Chatham offers five “differing levels of grants-based ad valorem taxes paid,” LaMontagne said, each of which span five years. In other words, businesses can be refunded part of the ad valorem taxes they pay over a five-year span according to the value they offer Chatham.

The second incentives policy is for “transformational projects” which bring 1,000 or more new jobs.

“Grants in this policy can be awarded at three different levels and span 10, 15 and 20 years, respectively,” LaMontagne said. “Both policies score a project on the number of jobs, the wage level of the new jobs, the quality of the new jobs (benefits), level of capital investment, potential attraction of other businesses, number of county residents hired and environmental impact.”

Last week, Siler City’s board of commissioners adopted an incentives policy to match what Chatham County has offered for several years, hoping to further establish the CAM site as one of the nation’s most attractive locations for heavy industrial companies.

“Right now the CAM site is not annexed as part of (Siler City’s) jurisdiction,” said Sam Rauf, EDC project manager. “But it can be and probably will be as it gets developed, so we consider CAM just to be tied in with Siler City.”

The TIP site, which re-branded itself in the last year as a life sciences campus, falls under direct county supervision.

Based on a series of factors, companies might qualify for rebates of as much as 90% of their county or municipal taxes over the course of many years. To be clear, Rauf said, the county and Siler City is not paying companies to settle in Chatham.

“The incentives are really misunderstood,” he said. “A lot of times people think it’s just a pot of money that the county is paying out to these companies ... You see the headlines where it’s, ‘Company receives $60 million in incentives,’ and the initial thought if you don’t work in this industry is, ‘Oh the county’s paying them $60 million? Why not use $60 million for education, or for something else?’ But the truth is that company is generating maybe $100 million or probably more for the county, and just getting $60 million of that back.”

While monetary incentives can enhance Chatham’s chances of landing major employers, they’re not the first thing EDC representatives hold out when they’re courting prospective companies.

“Incentives are not everything in projects,” Rauf said. “But if you’ve got two identical sites companies are looking at, they sometimes can be the difference maker. But there are a lot of things you have to do to get to that point, so really, we’re just trying to make us as prepared as possible for when large projects do come.”

And they will come, LaMontagne says. It’s early yet to make reliable projections for Chatham’s commercial development in coming years, but he’s confident Chatham is setting itself apart from the competition.

“We feel that our incentive policies are very competitive currently,” LaMontagne said. “We continue to look at our incentive policies and have not seen a need to change them as a result of growth in the region. We continue to get a great deal of interest in both our sites ... It is difficult to project the impact that an industry may have on commercial growth in Chatham, (but) one thing is for certain — Chatham County is becoming much more well known in the region and nationally.”

Reporter D. Lars Dolder can be reached at dldolder@chathamnr.com and on Twitter @dldolder.

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