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Saturday, April 13, 2024

Project plans: State effort spurs rural growth by promoting spec buildings

“Build it and they will come” is more than a slogan for seven low-wealth counties in
North Carolina.

The state budget included $10 million to jump-start the process of adding buildings in those counties that would be available for new or expanding businesses. Normally, developers work with companies to establish a structure
for manufacturing or distribution that is
privately owned.

Under the state’s new program, counties are incentivized to add publicly owned structures ahead of commitments by businesses. State lawmakers authorized the Rocky Mount-based Golden Leaf Foundation to administer the program as part of the 2023-24 state budget. It should “increase the number of available, publicly owned industrial buildings suitable for new or expanding businesses, other than retail, entertainment or sports projects,” according to a foundation release.

“This will give those counties some space to market to new companies and create new jobs,” says Steve Yost, president of North Carolina’s Southeast economic development group, which promotes about 20 counties. Four of the seven countries – Bladen, Columbus, Robeson and Scotland – in the program are in Yost’s region. The other three are Franklin and Halifax in northeast North Carolina and Ashe in western North Carolina.

“Our four of the seven counties in the program are Tier 1 economically distressed counties, and they have very little available industrial space that is marketable to advanced industry,” Yost says. “There are older buildings out there, but they don’t tend to be conducive to
modern manufacturing.”

Having so-called “shell buildings” is an advantage that helps avert delays related to zoning, construction and inspection issues, says Loren Hill, regional economic development director for the Carolina Core group based in Greensboro. “Most clients are on a very fast timeline, and having a building already up saves months of time ­ and thus also money – for a company looking to become operational as soon as possible.”

How the seven counties were selected by lawmakers is unclear, though the assumption is that political influence at the legislature was vital. There are 40 counties classified as Tier 1 under N.C. Commerce Department rules.

It’s the first time the Golden Leaf Foundation has been involved in a shell-building program. The foundation has assets of about $1.3 billion, providing combined grants ranging from about $40 million to $70 million annually. It isn’t obligated to put up its own money for
the program.

The foundation was established in 1999 with funding from the Master Settlement Agreement with cigarette manufacturers that wanted to avoid further litigation over public health concerns. While its main mission is aiding distressed rural areas of the state that historically relied on the tobacco industry, its scope in economic development has broadened in recent years.

In early February, the foundation approved
$360,500 from the state funds for eight projects in the program. An example is $50,000 to Robeson County to develop plans for a 140,000-square-foot building at the COMtech Business Park, which is about halfway between Lumberton and Pembroke. The county expects it can attract a business that may invest $9.2 million and add 75 jobs with average salaries of $45,000.

“There’s solid data behind those projections,” says Yost. His organization worked with the counties to analyze some of the applications approved by Golden Leaf.

How will anyone know if this program is effective? “The only measure is to see a company in the building that has generated private investment, economic impact and some new job creation,” Yost says.

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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