City Council update: Incentives, business fees, and other business talks

by Jordan Green

The Greensboro City Council unanimously approved $231,000 in corporate incentives to Procter & Gamble on June 5 to help the health and beauty supply giant expand its Brown Summit plant – an island site previously annexed by the city.

Assistant City Manager Ben Brown said the incentive grant would allow the company to justify expanding its operation in Greensboro – adding 25 jobs and $19 million in new capital investment – instead of at another location in Massachusetts. The company has promised that the new jobs will pay an average salary of $40,352. The grant represents an 80 percent tax break for the company over the next three years.

“Why does a company like Procter & Gamble with $69 billion in annual revenue need an incentive?” asked plant manager Brad Andersen. “The product we’re talking about is being competitively bid between here and a separate location.”

He added: “The reason we’re here is that as this project is competitively bid we put together a presentation that was not competitive enough for our corporate office.”

Tom Phillips and Sandy Carmany, longtime foes of corporate incentives who respectively represent districts 3 and 5, joined their fellow council members in voting to approve the grant.

Procter & Gamble has had a presence in Guilford County since the early 1980s, and in addition to its Brown Summit plant operates another plant on Swing Road. The Guilford County plants make NyQuil cold medicine, Pepto Bismol, Crest toothpaste and Old Spice deodorant.

After the vote, Andersen confirmed an assertion by council members that 90 percent of the Crest toothpaste manufactured for the North American market is made in Greensboro. The remainder is made in Mexico, he said. Council members suggested that the company and city should cross-market each other.

“It would be just great if you could put ‘Made in Greensboro’ [on product packaging],” Mayor Keith Holliday said.District 2 Councilwoman Goldie Wells added, “We can put it on our signs.”

“We’re a global city and we want to tell the world that Crest is a great product,” Holliday said.

Andersen remained noncommittal. Before approving the corporate incentives for Procter & Gamble the council spent the day hashing out the budget for Fiscal Year 2006-2007. In a tight budget year with limited revenue and increasing need for fire and police coverage, they decided to kill a plan submitted by the Finance Department to increase business licensing fees.

The real estate lobby let the council know the fees were unacceptable, Phillips said.

“There was a whole new group [affected], which was landlords – anybody in property management,” he said. “[We would be] charging them for a privilege license. What we started hearing is, ‘Hey, no one else charges this.’ We generally try to talk to groups like TREBIC [the Triad Real Estate & Building Industry Coalition] to try to work through some of this. None of that had happened. We sent them back to the drawing board.”

The provision that gave businesses heartburn would have imposed licensing taxes of up to $10,000 for property managers. Other provisions considered unfriendly to business included

• Increasing the licensing fee for promotional displays from $200 to $400;

• Establishing a schedule of privilege license taxes that would impose an additional $1,000 in fees for each additional 10 employees on businesses whose workforce exceeds 40 people;

• Increasing gross receipts taxes for manufacturers; and

• Increasing licensing fees for sexually oriented businesses from $100 to $200.

“Privilege fees are kind of screwy, in my opinion,” Phillips said. “There was also something about businesses being charged on gross receipts. Cities all over do that. It has nothing to do with profitability. You can have a very low-margin business that has high gross receipts. I don’t like that.”

Other proposed changes in the city ordinance related to licensing fees appear to be as much intended to bring the city into the… um, twentieth century, as to shift the tax burden to the business sector.

For instance, vaudeville shows would be removed from the list of entertainments warranting a licensing fee. Still included are motion picture shows, museums, menageries, merry-go-rounds, Ferris wheels and riding devices. Persons selling compact disc players would have to pay licensing fees; Victrolas, currently subject to the fees, could be sold without regulatory interference. Purveyors of video games and DVDs, like those hawking videos, would be required to pay a $25 licensing fee. Licensing fees for tobacco warehouses and telegraph companies would be eliminated. The prohibition against sidewalk popcorn and peanut vendors would be lifted.

Meanwhile, city funding to assist street dwellers and those at risk of losing their housing remains in play, with the council planning another budget work session on Tuesday morning and a vote on the budget at its next scheduled meeting on June 19.

The recommended budget posted on the city’s website as of June 6 shows a $355,141 reduction in the Nussbaum Housing Partnership Revolving Fund, which provides grants and loans to low and middle-income homeowners, funds construction renovation projects, gives counseling to homeowners, and makes emergency shelter and assistance available.

Advocacy by the Homelessness Prevention Coalition of Guilford County held the line on other proposed funding reductions, said Gwen Torain, grant division manager for the city Housing and Community Development Department. Torain said the city had initially planned to pay for a $50,000 contribution for housing vouchers – as part of the local intergovernmental effort known as the 10-Year Plan to End Chronic Homelessness – by reducing funding for other programs to help the homeless.

“We had initially recommended a more substantial cut to emergency assistance in the hopes that the churches would step in,” Torain said. “The coalition came back to us with a recommendation that we not reduce emergency shelter funding at all. If council is able to find additional funding, we would like them to fund all homeless programs.”

The need for assistance to the homeless appears to be increasingly acute, if anecdotal observations are any indication. Early in the morning of June 9 about 10 people were seen sleeping in the parking lot of Greensboro Urban Ministry, some of them using the curb as a pillow. Among the reasons for their presences, advocate Cara Michele Forrest says, are that the number of homeless people exceed the number of shelter beds in Greensboro.

The council also discussed Salvage America, the recycling center on Holts Chapel Road that has raised the ire of the Heath community. The business’ failure to meet conditions imposed when the city council approved a special permit to allow it to continue operations almost a year ago has become a political liability for some council members.

At-large Councilwoman Sandra Anderson Groat, who voted to approve the special use permit, told YES! Weekly that she called Marc Isaacson, lawyer for recycling center operator Chris Triolo, to complain that Salvage America was not meeting conditions such as installing a sprinkler system and planting trees near the property line.

“I am very upset,” she said. “[Triolo] needs to get his conditions done or he needs to get out of here. He was not honorable in his word…. Marc Isaacson was very persuasive.”

Wells, who voted against the special use permit, raised the issue to her fellow council members, suggesting that zoning might be changed from heavy industrial to light industrial along the Holts Chapel Road corridor to reflect the character of most of the businesses – and to zone Triolo out of business.

The discussion ended with a promise by city staff to enforce the conditions.”Their plan was approved,” Assistant City Manager Bob Morgan said. “They have thirty days to come into compliance. We will go out on the eighteenth of June to check on them to see if they’ve met the conditions.”

“And if they haven’t?” asked at-large Councilwoman Yvonne Johnson, who also voted in favor of the special use permit.

“We’ve warned them we will start the process to take away their special use permit.”

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