Saturday, Dec. 29, 2012

Apex looks to tax breaks to lure businesses

Town has mostly seen residential growth

This town hasn’t been known to give businesses tax breaks to come here, but Apex leaders are rethinking their strategy.

For decades, Apex has been absent in the local economic-incentives race, while other municipalities often promise tax breaks, loans and other aid to recruit major employers.

But Apex, which mostly depends on residential growth, is taking steps to lure in more business.

The town council approved its first official economic incentives policy in November. Town leaders say the policy makes no promises of tax breaks or free help to existing and future companies, but it opens the door for negotiations.

Under the policy, the town council will consider giving businesses partial property-tax rebates, infrastructure assistance and help with permit fees on a case-by-case basis. How much help a company gets could depend on the type of business, how many jobs it would create and the amount of capital investment.

Wake County’s incentives policy includes a $100 million capital-investment threshold and requires companies to bring at least 50 full-time jobs. Apex’s policy signals the town is willing to consider lower thresholds.

“In the beginning, times were different,” said Town Manager Bruce Radford. “We were seeing a reasonable amount of growth without incentives. Then, we saw economic downturn. That’s when we started realizing that we were seeing things go to other places that could come here.”

This year, equipment-component maker JMC Tools left Apex for Sanford, where Lee County offered an incentives package that included $1,000 for every job brought in, up to $50,000. The company, which serves aerospace and other industries, employed about 30 people in Apex and had plans to expand.

‘Forced to address it’

Mayor Keith Weatherly agreed that times have changed, and Apex needs to keep up. When he was elected to the town council in 1993, he said, incentives were not on anyone’s radar. But the town was certainly growing – its proximity to Raleigh and Research Triangle Park led to a housing boom, and Apex’s population has nearly doubled over the past 10 years.

“It’s only in the last decade that (incentives) have become an issue,” Weatherly said. “Other municipalities are using them, like Holly Springs who used it to bring in (pharmaceutical company) Novartis. We’ve been forced to address it.”

Apex has entertained the idea of economic incentives before. The town tried to woo technology firm Red Hat, but the company went to Raleigh instead. Earlier this year, the council decided to offer help with water and sewer expenses to large businesses that would want to develop sites of about 100 acres or more.

But now, Radford said, the town is “willing to entertain a discussion” about an incentives package “with anyone that would propose a project in Apex.”

As part of the new policy, elected leaders hope Apex will become part of the Wake County Economic Development Corporate Relocation Guide. The guide is aimed toward businesses looking for a place to set up.

“If we don’t have anything in there, people are skipping over us,” said Councilman Terry Rowe. “What we are trying to do is bring interest and get people asking questions.”

Too vague?

The Apex council unanimously approved the policy, but Councilman Lance Olive said he is having second thoughts.

He said the policy is vague and allows for “cronyism” and “shady deals.” It leaves too much room for the whims of the council, Olive said.

“It is written specifically to attract interest without any commitment whatsoever that the town will live up to its end of the hoped bargain,” Olive said. “As consumers, we despise bait-and-switch marketing strategies. As taxpayers, we should despise this misuse of trust.”

Councilman Bill Jensen and Apex Chamber of Commerce Director Graham Wilson agreed the new policy is general. But it’s general on purpose, they said.

Putting in too many requirements might turn off potential companies before they can get a chance to hear what Apex has to offer, Wilson said.

Some flexibility will allow town leaders to negotiate, said Jensen, who has pushed for the town to bring in more commercial development.

“For the most part it’s an open policy,” he said. “We’re not locking the town council into anything, especially given it could change next year. In the next election, three council seats are up.”