Do NC Laws hurt Charlotte in Recruiting Business?

[BobbyRobert]

Maybe you missed they can't be annexed by the surrounding cities and hence don't pay city property taxes. In

[monsoon]

you are correct, thy can't be annexed by a city, but this does not preclude them from paying either Durham or Wake county property taxes.

[BobbyRobert]

Then that is a tax advantage over being located in Charlotte, would you not agree?

[monsoon]

We are not discussing Watauga county. Someone said the reason that Charlotte lost this Westinghouse project was because high tech companies choose to locate in RTP because that is where the "smart" people are. That was a silly response which I can only put into the boosterism camp. I instead offered the more reasonable explaination that high tech companies choose to locate there because of the tax adavantages over being in Charlotte. You and others have said there were no tax advantages which there clearly are and now have agreed to.

In any case it is completely irrelevant to the topic at hand. i.e. Is Charlotte at a disadvantage at recruiting because the state limits what it can offer in incentives?

[BobbyRobert]

We are not discussing Watauga county.

[crispin]

We are not discussing Watauga county. Someone said the reason that Charlotte lost this Westinghouse project was because high tech companies choose to locate in RTP because that is where the "smart" people are. That was a silly response which I can only put into the boosterism camp. I instead offered the more reasonable explaination that high tech companies choose to locate there because of the tax adavantages over being in Charlotte. You and others have said there were no tax advantages which there clearly are and now have agreed to.

In any case it is completely irrelevant to the topic at hand. i.e. Is Charlotte at a disadvantage at recruiting because the state limits what it can offer in incentives?

[Miesian Corners]

RTP has an advantage over Charlotte for high-tech jobs due to the availability of knowledge workers (both from the three large universities and the labor pool that's already there due to the clustering of other high-tech firms.

That said, when the state, a county and a city are serious about wanting a relocation, they will find the money, especially when the area is depressed economically. Dell is the perfect case in point. Winston-Salem and Forsyth County have lost thousands of jobs over the past two decades. Along with the state, they gave Dell a package worth almost $242 million. These are not high-tech jobs; they are assembly line jobs. The 1,200 positions at Dell will cost the State nearly $200K per job (average wage at Dell is somewhere in the range of $26K to $28K per year). IMO, a bad deal for NC taxpayers.

Here's what I wonder in the world of incentives and corporate wellfare. Lenovo (formerly IBM) makes computers in RTP. Should Lenovo be peeved that NC gave one of its competitors a big subsidy when it didn't get much of anything (for the record, Lenovo did get a measly $1.2 million deal out of Morrisville when the Feds told the Chinese company it couldn't stay in RTP due to the possibility of high tech spies lurking around the campus--it's moving to a site adjacent to RTP near the RDU airport)? If I were them, I'd be holding my hand out for a payout now.

[monsoon]

2. You asked whether high tech companies avoid Charlotte because of a lack of incentives. The Triangle is working with the same set of incentives -- the bulk of which are in the form reductions in state taxes -- and it has no problem attracting high-tech companies.

3. You posited that RTP has an advantage over Charlotte because its real estate taxes are lower. It was noted that the taxes are the same as in Mecklenburg.

[BobbyRobert]

Add to that the state tax breaks that a business gets for locating in RTP and that is why high tech companies go there.

[crispin]

We have clearly demonstrated that RTP has a lower tax rate than the city of Charlotte or any other municipality in CLT. Add to that the other tax breaks that a business gets for locating in RTP and that is why high tech companies go there. It isn't because that area has "smart" people which is what you said. The people will come to the jobs.

[DanRNC]

We have clearly demonstrated that RTP has a lower property tax rate than the city of Charlotte or any other municipality in CLT. Add to that the state tax breaks that a business gets for locating in RTP and that is why high tech companies go there. It isn't because that area has "smart" people which is what you said. The people will come to the jobs.

[monsoon]

But the point, for the purposes of the original discussion, is that it's clearly not the incentives that make the difference.

[crispin]

From the original article posted to star this topic:

"Staubach officials have told the Charlotte Chamber that Mecklenburg County is no longer in the running, says Kati Hynes, chamber vice president of economic development.

"Pennsylvania had a stronger incentives package, which apparently was a big part of their decision," she says.

[BobbyRobert]

From the original article posted to star this topic:

"Staubach officials have told the Charlotte Chamber that Mecklenburg County is no longer in the running, says Kati Hynes, chamber vice president of economic development.

"Pennsylvania had a stronger incentives package, which apparently was a big part of their decision," she says.

[rnc]

Your point that a company can locate anywhere and people will come is simply bogus. Why do high-tech jobs cluster around RTP, Boston, SF, and the like? Its because of the highly educated workforce that is easily accessible in these locales. Tax breaks may help but are not the sole reason companies locate to specific areas.

[Subway Scoundrel]

Maybe you missed they can't be annexed by the surrounding cities and hence don't pay city property taxes. In the above mentioned example of IBM, they threatened to file a law suit against the city of Charlotte which tried to annex them in the 1980s. The issue of course would be the property taxes that would come due on their billion dollar complex. The city backed down and agreed not to annex IBM until the 1990's if they would drop the lawsuit. Charlotte did eventually annex that facility. Subsequently IBM sold off that facility and has dropped their operations here from 8000 employees to little more than 1000 the last time they stated employment in the press. It was a significant loss to the city that get little publicity given the types of jobs that disappeared. During the same period their facility in RTP grew to be their largest location in the world.

[monsoon]

During that same time, they closed many sites not all moving to RTP. It was just the direction the company was going. Move certain businesses to areas while making others smaller. Not sure it can be said because the city wanted to annex. The biggest reason Charlotte lost out was the sale of the the ATM business to Diebold and then the closure of the home networking group.

[Miesian Corners]

I'll bet that the Westinghouse decison had much to do with what Sears did to Charlotte in the late 1980s. Sears courted Charlotte (Ballantyne, before such a thing/place existed) as the new site for its corporate home. In reality, the company did not want to leave Chicago, it simply wanted to scare the Windy City and Illinois into offering them giant wads of cash to stay. They did. Ballantyne is now a collection of cul de sacs and golfers, Sears is still in Illinios.

Likewise, Westinghouse is a Pittsburgh company. The "Circle W" has a prominent office tower directly on the Golden Triangle downtown for 35 years. More than likely, they were playing Charlotte and North Carolina against Pittsburgh and Pennsylvania, the intention being that they really wanted to build this facility in PIT all along.

Westinghouse Tower is the black glass building on the far right

[graydog]

I said this in response to your "smart" comment./

"Tech companies locate to RTP because of the state tax breaks they get for going into that park and people move there to get those jobs. This proposal was for 2000 engineers and presumably they will move to get these jobs. Interestingly, Microsoft built it's largest non-sales technical location in the USA, outside Washington state, here in Charlotte and it employs more people than this. They had no problem finding 'smart' personnel."

We have clearly demonstrated that RTP has a lower property tax rate than the city of Charlotte or any other municipality in CLT. Add to that the state tax breaks that a business gets for locating in RTP and that is why high tech companies go there. It isn't because that area has "smart" people which is what you said. The people will come to the jobs.

In anycase it was completely irrelevant to this topic as Westinghouse was not considering the Triangle. This topic is about Charlotte and the limitations place on it to offer incentives by the state. Maybe you will post something about that.

[Subway Scoundrel]

and I don't think I have ever even seen an IBM home networking device.

[crispin]

Well too bad at any rate that Charlotte won't get a piece of Westinghouse. Looks like the industry has bright times ahead::

BEIJING ( Reuters) DEC 15 -- China and the United States on Saturday signed a memorandum of understanding that Washington said ``will pave the way'' for Westinghouse Electric Co. to build four civilian nuclear power plants in China.

[monsoon]

Well too bad at any rate that Charlotte won't get a piece of Westinghouse. Looks like the industry has bright times ahead::

BEIJING ( Reuters) DEC 15 -- China and the United States on Saturday signed a memorandum of understanding that Washington said ``will pave the way'' for Westinghouse Electric Co. to build four civilian nuclear power plants in China.

[Transplant]

Does state law preclude cities from offering tax breaks?

[ChiefJoJo]

^ Obviously not. Look at Google for an example. They got a sweetheat deal.

[ChiefJoJo]

News & Observer: state incentives benefit urban areaas.

Since 2001, almost $275 million in grants have been promised to companies that agreed to build or expand in Charlotte, Raleigh or other large cities, according to an N.C. Department of Commerce report sent to the General Assembly.

That's 81 percent of all incentives committed from the One North Carolina Fund and the Job Development Investment Grant program in that period.

I believe that the ~$11M grant came out of this fund to recruit NASCAR for the HOF and redo the Caldwell St/277 interchange. I don't think there's any real evidence (ie, not anecdotal comments from local chambers) that NC doen't do it's share to intice industries from locating in this state. As you can see from this article, companies are not going to relocate to certain areas if it doesn't make business sense to do that, even if you throw all the incentive in the world at them.