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Spec building hearing draws strong opinions

Former county commissioners speak out both for and against building structure to lure industries

Staff Writer

Three former commissioners were among those to speak up about the county’s proposal to build a $1.8 million speculative building during a public hearing Monday night, with the current Board of Commissioners ultimately deciding to postpone a vote on the matter.
As the Times-News previously reported, the construction of a shell building has been a priority item among county officials for some time, with both commissioners and Lincoln Economic Development Association officials asking County Manager George Wood to look into the possibility in order to help with industrial recruitment and create more local jobs.
While initial attempts were made to have a private developer construct the facility, little interest was received from companies, and those that did respond to a request for proposals were unwilling to carry the full cost, Wood said.
Instead, the county is weighing building the shell facility itself, using a 10-year loan scenario, with hopes of filling the building within three years and recouping the costs. This would then result in the interest cost being the net cost to the county, which would equal roughly $109,350.
With several local industries’ tax-incentive grants expiring this year, Wood believes those savings to the county could help cover some of the initial costs.
Prior to the public hearing, he provided some context regarding the issue, noting that public funds were used 12 years ago to construct the Lincoln County Industrial Park, which, now nearly full, has created a $263 million tax base.
“Lincoln County has an excellent track record,” Wood said of its ability to land prospects over the last few years, despite an economic downturn.
He noted that he would be more reluctant to move forward with the public funding of a spec building if not for that success, listing off the industries that have recently located here, in addition to the 22 expansions that have also taken place.
He additionally cited statistics from the Charlotte Regional Partnership that say 80 percent of companies today are looking for readily available buildings to move into, noting also that publicly funded shell buildings are not uncommon in North Carolina.
Commissioner Carl Robinson stressed that Wood had done what the board asked of him, and said that they must do everything they can to help alleviate the unemployment rate.
In response to a question from Commissioner Carrol Mitchem on whether the money for the building could be pulled out of the county’s fund balance and then put back in once recouped, Wood said that it was a possibility, but it would result in that balance being taken “down below a level we’re comfortable with.”
However, he noted that using a combination of fund balance and borrowed funds might be feasible.
Mitchem likewise questioned Crystal Gettys, LEDA’s business development manager, on how soon she believed the shell building could be filled. While Gettys was hesitant to give a specific time frame, she did note that if the county already had such a facility, it could have been filled “three to four times over.”
Chairman Alex Patton commented that constructing shell buildings is not something the county wants to be in, but the ultimate goal is to “have as many people working in Lincoln County as we possibly can.”
Cliff Brumfield, LEDA’s new executive director, said that “no fewer than 40 requests” from industries had had to be declined recently due to the county’s lack of a spec facility. He also stressed the importance of considering not just the county’s unemployment rate, but also its “underemployment” rate.
Former commissioners speak up
Bruce Carlton was the first of the former commissioners to speak during the public hearing, making very clear his opposition to the proposal.
“When I hear government say it’s going to create jobs, I shudder,” he said.
The commissioners’ job, he said, was to protect the hen house, not sell the eggs.
“Why subsidize people with money at the expense of taxpayers?” he asked.
Meanwhile, former commissioner Terry Brotherton spoke in favor of the shell building, saying the county had also received criticism when it first decided to build the Lincoln County Industrial Park.
“I think the benefit to the people of Lincoln County has been enormous,” he said of the park, encouraging county officials to move forward.
Larry Craig, another former commissioner, likewise spoke in favor of the proposed spec facility, also referencing the benefits reaped from the Lincoln County Industrial Park in his remarks.
“If it takes government to do it, then I say let government do it,” he added.
Also speaking during the public hearing was Denver resident Martin Oakes, who stated that he believed the county could construct a shell building for much cheaper than it was letting on and questioned whether county staff were trying to bury additional money in the proposal to help offset the development costs of Airlie Business Park.
Wood issued a statement Tuesday afternoon rebutting Oakes’ claims.
“As he often does, Mr. Oakes started out with the wrong ‘facts,’ and then impugned other people’s integrity and motives,” Wood said, breaking down the math errors by Oakes that led to his accusation.
“Mr. Oakes owes the county’s management staff an apology for making outrageous accusations based on nothing more than his own inability to do long division,” he added. “He also owes the public an apology for using erroneous information in this public hearing.”
Following Monday night’s public hearing, Robinson made the motion to recess the hearing until the Board of Commission’s next meeting, on February 18, to allow more people to speak on the issue.
In other Board of Commission action at Monday’s meeting:
Commissioners unanimously approved a stripped-down ground lease, with details to be worked out later and subject to a final public hearing and approval by the board, with Delaware-based Borghetti Turbos North America. The company, founded in Brazil, is eyeing a 5.5-acre parcel of land in the Lincoln County Industrial Park. Gettys, who said the state will soon be in the process of considering incentives for Borghetti, noted that most Brazilian companies value land rather than traditional incentives. She additionally noted that the company had not yet made a decision, but that approving the concept of a ground lease would help with their consideration.
A public hearing was conducted regarding a Community Development Block Grant (CDBG) for economic development for Denver Global Products, acquired by China-based RATO as a subsidiary last year. The requested CDBG funding, in the amount of $396,000, would go toward water and sewer infrastructure required to connect RATO’s planned 450,000-square-foot facility, off N.C. 16 near Airlie Business Park in Denver, with existing water and sewer lines. The company plans to invest more than $40 million and create hundreds of jobs locally.
Commissioners unanimously approved executing a contract, in the amount of $819,200, for the construction of Rock Springs Park.
Commissioners unanimously approved the Community Transportation Program.
Commissioners unanimously approved of authorizing the county attorney and county manager to exercise the purchase option for the Bank of America property on East Main Street in Lincolnton, which houses some county offices and on which significant upgrades have already been performed by the county. Previous lease payments have all gone to the purchase price, with a $200,000 discount for early purchase.
Commissioners unanimously approved a revised schedule of fees and charges for the combined water and sewer system of Lincoln County, which will reduce the rates for commercial customers beginning July 1.
Commissioners unanimously approved a ground lease with Alexis Fire Department for an emergency communications tower.
Commissioners conducted a closed-session discussion, but no action was taken.

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