Lawmakers announce new incentives as Apple, Amazon look at North Carolina
RALEIGH, NC (WTVD) -- Republican leaders in the General Assembly on Thursday announced their intention to include a series of new incentives in the next budget to lure large companies to open new projects in North Carolina.
The announcement comes as two tech giants - Apple and Amazon - consider the Tar Heel State for its new campuses.
"We believe these modifications will be attractive to large private-sector employers who want to invest substantial dollars in North Carolina," Senate President Phil Berger (R-Rockingham) declared at a news conference. "Based on our direct conversations with companies, we know those reforms have made us more competitive than ever before - and we believe this change to our business incentives is the final piece of the puzzle that is needed to put us over the top when it comes to recruiting thousands of new jobs and billions in new investment to our state."
In a statement sent to ABC11, a spokesman for Gov. Roy Cooper said there was some communication between the governor and GOP leaders.
"As we do on many economic development efforts, the Governor's office worked closely with the legislature and other interested parties on this change that can help bring even more jobs to North Carolina. We believe this is important enough to be voted on as a standalone measure."
A North Carolina government official and an economic development official told The Associated Press that Apple will decide soon whether to build a planned hub near Raleigh. They spoke on condition of anonymity because of the confidentiality of business recruitment. The economic development official said Apple could create 5,000 jobs, with a later target of 10,000 jobs.
Amazon, meanwhile, continues to vet the Raleigh-Durham area among a shortlist of 20 locations for its second headquarters, dubbed "HQ2," which is expected to create 50,000 jobs and include $5 billion worth of investments.
RELATED: Can Raleigh's 10-year plans handle Amazon's HQ2?
Michael Walden, an N.C. State Economics professor, said he believes Research Triangle Park would be a perfect fit for Apple.
"Apple means a future with a lot of possibilities. I can't offhand of think another company that illustrates the future more than Apple," Walden told ABC11. "The reason this area developed as a tech sector is the very unusual nature of having three major universities in such a short distance."
Some fear companies such as Apple and Amazon would create a housing shortage and drive up real-estate prices.
"I think the county is adding 60-some people a day," Walden said.
He'd like to see more housing to be built around RTP to lessen the already explosive housing market and mitigate traffic.
"It's an area that's already experiencing growing pains," Walden said. "So anything we can do to mitigate those growing pains with something like an Apple coming is certainly worthwhile."
North Carolina lawmakers certainly think the pursuit is worthwhile, despite the state coming up short on several other high-profile companies.
"We learned a lot of valuable lessons in near-misses," House Speaker Tim Moore(R-Cleveland) sai, referring to North Carolina's fruitless chase of a new Mazda and Toyota plant (the automakers ultimately chose Alabama). "You look at overall what we've done with the tax code and regulatory environment. We can check those boxes. We are the most competitive in the country for that. We want to make sure we're the best game in town."
Among other changes Republicans will propose in the upcoming budget:
*Enable a company that commits to investing at least $1 billion and creating at least 3,000 new jobs in North Carolina to be eligible for a transformative project award under the state's Job Development Investment Grants (JDIG) program. These thresholds are based on research conducted by the General Assembly's economic team regarding the level at which a major corporate relocation will have an immediate positive impact on state revenues.
*Allow transformative projects to receive credit for "expansion positions" above the 3,000 job minimum that are created during the term of a JDIG agreement. This will encourage companies to grow in North Carolina beyond an initial jobs commitment.
*Lengthen the base period for transformative projects to 10 years and also extend the maximum JDIG term for transformative projects to the base period plus an additional 30 years. This will provide more long-term certainty to companies considering North Carolina.
*Eliminate the $6,500 cap per job for JDIG awards for transformative projects. This will help attract higher-paying jobs.
*Modify the award that is available to high-yield and transformative projects so that 10 percent of that benefit is directed to the state Utility Account - the fund designed to support economic development projects in rural North Carolina. Previously, the company received 100 percent of the award. This will help make certain that the positive impact of major job recruitment is felt by the entire state.
"RTP has been undergoing some changes," Walden said. "They've lost a couple of tenants, they've been trying to reshape themselves so I think it's a natural fit for Apple to go to RTP. There's the space there and it obviously gives Apple the access to all the universities and all the talent in the area as well as very close to the airport."
Both Moore and Berger declined to talk specifics about both Apple and Amazon, and instead insisted that these proposed incentives are just a base to show all international companies that "North Carolina is open for business."
The 2018-2019 proposed budget is the primary focus of the Legislature's short session, which began on Wednesday. Republican leaders have already announced a spending target of $23.9 billion - $600 million less than Governor Roy Cooper's proposal. The proposed budget also calls for wide-ranging tax cuts and an average 6.2% raise in teacher salaries, among several other provisions.
