North Carolina Economic Development Guide

2016

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12 North Carolina Economic Development Guide Fort Bragg near Fayetteville is one of several military bases in the state, which of er opportunities for defense contractors and a workforce boost. Photo courtesy of U.S. Army, Spc. Kevin Sterling Payne / Released. sites for their work and then partners with regional and local organizations, which use their intimate knowledge of the local business climate to make the fi t seamless. No matter his experience or how many North Carolina assets are available, Chung still needs one in particular. "We always need to be cognizant that as great as North Carolina is, there is a role for incentives to play," he says. "We have a great workforce, great location, good tax climate. … But when companies narrow down, we need to make sure our toolbox of resources is competitive with other states and parts of this country and parts of the world. … It has gotten to be a very competitive landscape out there, and we're surrounded by states that are competitive for some of the same industries that we are pursuing." Yost sees the power of incentives fi rsthand. His region's biggest selling point is Port of Wilmington, which has deep water, nine container cranes and more than 1 million square feet of warehouses. It's mentioned in more than half of the relocation conversations he and his staf have with companies. But Savannah, Ga., and Charleston, S.C., also have ports centrally located on the East Coast. Sometimes, he says, only a strong incentive package can break that tie. "A company is trying to make money wherever they locate. If they can reduce the bottom-line costs, that's what they're going to do. That's a key component of incentives, and that's just a matter-of-fact process. It's not a philosophical level of right or wrong; it's just a necessity to be successful in economic development today." Lawmakers agree. McCrory signed 2015 legislation that increases the state's Job Development Investment Grant by one-third — to $20 million. Its cap rises to $35 million if a project invests at least $500 million and creates 1,750 or more jobs. When economic-development thresholds are met by a new or expanding business, JDIG refunds a percentage of its income- tax withholdings. The legislation also phases in "single sales factor" apportionment for corporations starting this year, which complements a corporate income tax that drops to 4% this year and 3% in 2017 if the state's tax revenue goals are met. Yost's group targets companies in the defense, aerospace, metalworking, energy and consumer foods sectors. About 30% of the organization's current recruitment conversations involve foreign-owned companies. In addition, many U.S.- based companies are returning operations to the region from overseas. Increased transportation costs and demands for faster turnarounds have made "reshoring" necessary. "It's not a big tidal wave trend. I would categorize it more as a 6-foot wave coming in at Wrightsville Beach, but it continues to get a little bit bigger." To bathe in that increase, the region will rely on its workforce. It is strong on metalworking, which played a role in Wilmington- based Vertex Rail Technologies recently announcing it was hiring more than 1,300 people to build railroad tank cars. Agricultural and food-processing skills also are readily available, but advanced technical skills and those classifi ed as STEM — science, technology, engineering and math — are relegated to certain pockets. If the region hopes to land aerospace companies and other advanced manufacturers, more of those skills are needed. Luckily, they are not dif cult to cultivate. The N.C. Community College system of ers no-cost workforce training customized to company needs through its 58 campuses, including Cape Fear Community College in Wilmington.

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