Both city and county incentives policies are based on projected tax revenues and jobs. How much a company receives is tied to how much it invests in equipment, real estate or renovations, and how many well-paying jobs it provides.
Buncombe’s policy requires at least a $1.5 million investment; Asheville’s, just $250,000. City Development Director John Scaralia adds that eligible companies must have been been in business for at least three years before seeking incentives.
Both policies return a percentage of the company’s property taxes, based on the size of the investment — but only after the investment has been made, the jobs created and all taxes paid. The larger the investment, the larger the percentage of taxes returned.
“We’re not giving away anything — nothing from existing taxes or from our current budget,” former Council member Charles Worley stresses. “What we’re giving … is part of the increase in taxes that result from an expansion or relocation.”
The county’s policy also awards a $100 grant for every Work First Family Assistance recipient a participating company hires.
Whether these new policies will work in the long run remains to be seen.
Some recent local incentives include:
• After holding a December public hearing on the proposal, Asheville offered $76,950 in tax abatements to Lustar Dyeing and Finishing. The company, located on Caribou Road, is planning a $3.6 million facility expansion that includes a major new-equipment purchase and hiring 20 new employees by July 1998.
Scaralia estimates that the city will net an extra $20,520 in property taxes each year, once the expansion is completed.
Once those new taxes are paid and the jobs created, the city will pay $15,390 to Lustar annually for the next five years — if the company remains in business in Asheville.
• The county commissioners also awarded Lustar an incentive last November: a $30,000 infrastructure grant.
• SPS Payment Systems, Inc., received a $40,000 county incentive late last year. SPS has promised to hire up to 500 people, at wages between $6.20 and $8 per hour. Some company employees are part of the county’s Work First program.
County Manager Wanda Greene estimates that the county will collect about $41,000 per year in new property-tax revenues from these companies.