Winston-Salem revising economic development plan
City officials in Winston-Salem are working hard to revise an economic program that will benefit businesses looking for financial assistance and hopefully create more jobs.
The Finance Committee is reviewing the city’s Economic Development Program Financial Assistance Guidelines.
The revisions are based on what council has expressed and said it wanted economically over the last few years, which include reducing the minimum investment and job creation, increasing the starting wage and providing an incentive for hiring residents that live in low-income areas.
“We were asking them for input based off of things that they’ve said or issues that we’ve seen over the past several years,” said Assistant City Manager Derwick Paige. “We’ve had several projects over the past few years, like Piedmont Proportion for example, that didn’t meet the minimum thresholds for a grant. We did make a loan to them but they didn’t meet our typical guidelines.”
The program is designed to increase the tax base while creating new, full-time jobs in the city by providing financial assistance to businesses that will allow them to locate or expand with the city.
To qualify, the new or existing business must be one of the targeted industries: Medical Technology/Biotechnology/Medical R&D; Information Technology/Telecommunications/Design; Plastics; Medical Products Fabrication; Electronic Assembly; Advanced Manufacturing; and Headquarters/ Services. It must also meet the city’s minimum requirements when concerning investment and jobs. Funds received can be used to purchase land, improve infrastructure or prepare the site, or provided training for employees.
Businesses that fail to meet the terms of the incentive grant will be required to repay some or all of the money received back to the city.
The last update to the program was in 2010 when the Mayor and City Council adopted the changes.
Paige said that, if approved, he hopes the guidelines usher in new opportunities to the city.
“It is intended to create more opportunities for existing companies that are hoping to expand,” he said.
Possible changes include reducing the minimum investment for existing businesses from $1.5 million to $1 million and reducing the minimum job creation requirement from existing businesses from 20 to 15 jobs created or retained within 36 months.
Another change would include increasing the average starting wage from $10 an hour to $10.48 an hour, which is the current living wage for a single person living in Forsyth County. The conversation is one that is currently being had in the nation as several agencies and politicians call for a wage increase.
“Council has talked about needing to have a livable wage for years,” he said.
Councilmember Dan Besse said that he thinks that encouraging higher wages for new jobs in the city is a good idea.
“I think that raising the minimum wage nationwide is a good idea, too. We’ve taken some steps to make sure we pay employees over $10 and this is another element in the picture of what we can do, on the city level, to raise our expectations for what companies receiving incentives from us will be paying their employees,” he said. “In North Carolina, we don’t have the authority to setup a comprehensive minimum wage standard for employers in the city so we have to make our efforts through other measures that are more limited.”
Councilmembers disputed one aspect of the revision. One possible change includes providing a bonus incentive payment of $250 for each qualified employee hired and retained for at least six months that lives in the Neighborhood Revitalization Strategy Area (NRSA) or has a problem getting a job, like a criminal record. Finance committee members felt that the incentive should be increased.
Besse said that the incentive payment is a way for the city to encourage companies to hire locally.
“We heard a couple of reactions from council. It’s frustrating that we can’t require that the companies that we are giving money to guarantee that any of the jobs be provided to Winston-Salem residents. That’s a source of ongoing frustration for us,” he said. “The other point that was kicked around was whether that would be enough to make a difference. That’s still under discussion.”
Paige said that the final draft is still several months away and he hopes to bring it to council in October for consideration.
“We are thinking outside of the box here. We are trying to be creative in addressing some of council’s desires and make sure that our residents get an opportunity for jobs,” he said.
The next Finance Committee meet- ing will be held Sept. 14 at City Hall in Room 239. !