In most of North Carolina, if a problem in public policy is recognized, then the authors of that policy are also recognized. After all, why would you ask those who created the problem to fix the problem? Why would you trust people with bad judgment in creating the problem to display good judgment in fixing the problem?
However, Orange County isn’t like most of North Carolina. When a public policy program is so disastrous that even the local Progressive media has to report on it, you can be sure that the Progressive media cheerleaders won’t name names and won’t hold anyone responsible. Moreover, they won’t actually present a viable solution to the problem.
The News & Observer recently published an article bemoaning businesses that could have located and stayed in Chapelboro, but chose to leave Orange County. The reporting comes decades late, but at least the problem has been reported by them. Why? It’s so bad, even Progressive cheerleaders can’t hide the truth any more.
But you can sugarcoat it. According to the N&O reporting, the problem in Orange County is that UNC is tax exempt. “Low sales tax revenues force the county and its town governments to rely on property taxes to fund services, and with few high-priced commercial properties to tax, the burden falls to homeowners. As a result, 87 percent of Orange County property tax revenue comes from homes, pushing up an already high cost-of-living driven by high quality-of-life, anti-sprawl development rules and high-performing, well-funded public schools. Wake County, by comparison, collects 72 percent of its property taxes from residential property owners.”
What? What is the connection between sales taxes and the tax exempt status of UNC? Isn’t the problem that Orange County Progressive retail snobbery has sent all of the retail centers first into Durham County and now also into Alamance County? What does that have to do with UNC?
Moreover, doesn’t UNC function as a giant economic pump siphoning money from 99 other North Carolina counties into Orange County? Doesn’t that non-local economic base then provide jobs for those living in Orange County? Shouldn’t those jobs support retail purchasing in Orange County that should be not the equal of Durham County, but greater than Durham County? The answer to all of the above questions is yes, unless you’re trying to sell the Progressive agenda.
So what’s the solution put forward by the N&O? The article cites Mr. Dwight Bassett, Chapel Hill’s ED director. According to Mr. Bassett, it’s about misperceptions regarding available space for businesses to locate. ”We have space available. It's the first time that we've ever had this much available office space in our history.”
Really? Space? What about the perception that Chapelboro and Orange County are not friendly to for-profit businesses? News flash for Mr. Bassett, other counties have space too. Business executives aren’t primarily driven by available space. Which executive in their right mind would pick Orange County over its neighboring counties given a choice? Witness the Tanger Outlet Center being built in Alamance County, right across the Orange County line.
Mr. Bassett is closer to the mark when he says, ”Chapel Hill has an image of being business-unfriendly. We accept that's our baseline. We have to begin telling success stories of how we're working to change that.” How? What precisely are you, Mr. Bassett, the town manager, and the town council doing, other than blathering on about the problem you all created?
When an interview of 16 small-business owners in 2007 found they had ”few, if any, positive things to say about the town government's role in private efforts to open and operate a business in Chapel Hill”, what has been your response these past three years? What have you done?
What’s the solution for Orange County Commishes? You guessed it. (You’re so good.) Taxes! Let’s increase taxes! This fall, they want a referendum on a new 1/4% local sales tax. Earth to Commissioners, high taxes for low services is not a convincing economic development argument for for-profit business executives.
Relying on the people who rode the pony until it was lame to rehabilitate the pony, how Progressive!
Another art gallery leaves Chapelboro. Bill Hester Fine Art has closed its doors after three years. ”My business plan was based on the possibility of creating an arts and cultural complex downtown. I no longer think that's possible. My collectors don't come to downtown Chapel Hill any more.” In a stunning rebuke to those in denial over lost mojo, Mr. Hester charges that the town lacks the vision to incorporate visual arts as part of a vibrating downtown.
The recently hired Chapel Hill public arts administrator, Mr. Jeffrey York, who oversees the whereabouts of about 100 pieces of public art at the cost of $63,000 per year counterdenies. ”Categorically, no. The town doesn't lack vision.
Do we have that big iconic piece that's a draw for downtown? Not yet. Do we have artists working downtown? Not yet. But the idea that the arts are important to downtown Chapel Hill is very much alive.” After all the town hired Mr. York.
Mr. York is backed up by ED guru and fellow town employee Mr. Dwight Bassett. Allegedly he's currently recruiting a nationally renowned, ”incredibly unique” artist to relocate to Chapel Hill. Exactly why such an artist would locate here remains a mystery.
Mr. Hester, who actually works in the for-profit fine arts business arena disagrees with the town experts. ”Someone asked me what is the problem with downtown Chapel Hill when it comes to the arts. I said … denial.”
(See Chapel Hill New Arts ED Leakage Story.)
If you build an ED infrastructure, your taxes will be spent. If you approve a lot of office space to be built, will they come to fill it?
Building the Bureaucratic Field of Dreams
Over the past five years Pulp readers may have noticed an awful lot of activity on the economic development (ED) front in Orange County. No, there’s not been a lot of activity actually recruiting for profit businesses to Orange County. The activity has been to build ED bureaucratic infrastructure. First Carrboro had an ED official and a revolving loan fund. Then Orange County got a new ED official. Now Chapel Hill has an ED office too. Instead of a unified, regional governmental approach, southern Orange is spending over $500,000 a year in your taxes just to maintain a tripartite, divisive, and flaccid ED infrastructure.
Once you have a bureaucratic function, it must seek to justify its cost and expand. So now the latest buzz in Chapel Hill is to lament how the town failed to capture the latest ED prize catch in the Raleigh metro area, a company called Optimal Technologies. In the words of former Chapel Hill mayor, Developer Dream Team member, and real estate profiteer Rosemary Waldorf, “How are we going to fill all the space [recently approved by the Chapel Hill politicians]”. (See Chapel Hill News ED Story.)
In southern Orange there are few business conflicts of interest that aren’t tolerated. So it’s not surprising that Ms. Waldorf, involved in the mega retail project Buckhorn Village, is asking about government money possibly for her future tenants in Buckhorn Village as well as the spate of office buildings being built.
The One That Got Away
Optimal Technologies US Inc. (OT) is a software and technology provider for electrical utilities and consumers. It is moving its headquarters (18 jobs) from Canada to downtown Raleigh. It will invest $2.4 million over the next three years. It plans to create at least 325 jobs. The new jobs will include highly specialized circuit (ASIC) designers, software programmers, engineers and management and marketing positions. While wages will vary according to job function, the overall average annual wage for the 325 new jobs will be $71,250 not including benefits, which is higher than the Wake County average of $40,092.
The grant to OT is $325,000 from the One North Carolina Fund (Fund). The City of Raleigh matches that grant with another $325,000. OT must have at least 325 employees within three years in order to receive the full grant.
OT can spend the money on: 1) installation or purchase of equipment, structural repairs, 2) improvements, or renovations of existing buildings to be used for expansion, construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines; or 3) equipment for existing buildings.
Readers should note that Fund grants are also available to existing businesses for adding jobs.
The Local Solution to Flaccid ED
Why use a more proven technique with bureaucratic controls to eliminate favoritism if you can create a more expensive and ineffective way that rewards those in the palocracy?
Instead of joining in Fund grant programs, Chapel Hill ED leaders (with an awesome track record of sub-par ED job growth) are taking the southern Orange Progressive approach. For example, according to Chapel Hill ED guru Dwight Bassett, Chapel Hill is discussing paying a percentage of a lease for downtown businesses, helping to inflate already high lease rates. Or town taxes might go to pay for merchant marketing programs as a matching grant, aiding the bottom line of local media businesses, the staunchest supporters of town politicians. Finally, Councilor Mark Kleinschmidt is eyeing the Carrboro loan revolver as a cure for stiffening local ED successes, despite the fact that Carrboro subsidized a business that moved to Chapel Hill when it got on its feet, Phydeaux Pulp Story.
No word on why Orange County ED leaders thought that a computer circuit hardware/software company associated with electrical power generation should prefer Chapel Hill's UNC over North Carolina State University, a renowned computer engineering school, located in… Raleigh.
Unfortunately, small business owners who rent space can forget to negotiate with the landlord on a lease extension before the lease is close to running out and they have few options. After 18 years in Eastgate Shopping Center, Joe Rowand learned in February 2008 that his Somerhill Gallery's lease wouldn’t be renewed with 45 days to vacate.
Trying to stay in Chapel Hill, Mr. Rowand needed 9,000 square feet, a lower rent pricing, a vehicular traffic location, and accessible. Finding that combination in Chapel Hill is like finding a shrine to Jesse Helms in Chapel Hill. See N&O Somerhill Gallery Story 1.
So, the gallery is moving to Durham in the old American Tobacco complex. See N&O Somerhill Gallery Story 2.
In the words of the crackerjack Chapel Hill municipal tax paid ED manager Dwight Bassett (who works in close coordination with the crackerjack Orange County municipal tax paid ED manager, who works in close coordination with the crackerjack Carrboro municipal tax paid ED manager, who works in close coordination with… well, you get the picture) “there wasn’t enough property selection for Somerhill to consider in relocating in Chapel Hill and that there were specific needs that could not be accommodated with our existing inventory”.
Having lost this premier art gallery, Chapel Hill compensated by hiring a Public Arts administrator for the 50 pieces of Chapel Hill public art, yet another full time employee added onto the swelling public job rolls, with a salary of $63,000 annually.
