Column for April 28, 2011

For a long time, I have heard of Selma wanting to come up with some sort of method of business district enhancement. I thought it a worthy matter, so I joined the Selma Development Partnership several years ago. I gave it a couple of years of investment of my time and effort and quite frankly found the organization to be lackluster and ineffective. There was a lot of myopia on the part of the leadership at the time, I believe, and that caused the organization to flounder and dwindle. Since then, the leadership has changed and I hope that the organization goes in a different direction. From what I could see by the common sense changes made to the recent antiques and car show efforts, the group may be correcting its course.

In Smithfield, there is an effective organization, the Downtown Smithfield Development Corporation. The DSDC markets available properties and works to develop the downtown business district. They also put on such successful events as the upcoming Ham & Yam Festival. The corporation is funded by a special tax district that levies additional property taxes on local business properties. For some time, I have heard rumblings from Selma merchants that they would like the town to do more to promote downtown business. Is the implementation of a special tax district and the formation of a development corporation for the town the proper method? Quite honestly, I am not sure either way. Though it works in Smithfield, I am not sure it will work here or not.

There are several differences between the two towns. Smithfield has a much more diverse downtown than does Selma. For years, I have disagreed with the focus on antique shops in Selma as a way to “re-invent itself”. I have always maintained that diversity is the key to a better business climate for the town. We've had several restaurants fail, primarily because of poor management or implementation. I do patronize the local antique shops when I am searching for something in particular. Other than that, I only go to downtown to pay my electricity bill, pick up a prescription, mail a package, or dine at one of the only restaurants left in downtown.

Basic economics dictates that business patrons will ultimately be the ones who pay the tax, regardless of in which form it is levied. A property tax will jack up the taxation of the retail properties, which will end up in increased prices to consumers. Even if a business leases the property, the property owner will pass along the increased cost to the tenant, who will in turn increase prices to compensate for the increased cost of doing business. For that reason, perhaps a special district consumption tax would be more appropriate, but I suspect that there are state government approvals that are necessary for that to happen.

I will say this, though. I have been told that the business district is taxed at a lower rate than my residential property. I don't know that validity of that claim, but if it is true, I have no problem with evening up the two rates and putting the revenue from the rate differential into a development fund.

I am not sure how the town would administrate the funding nor the personnel. I do know that the news articles I have read indicate that Selma or a non-profit corporation would hire a part-time person for the development efforts. That seems appropriate considering the size of the town. However, I still wonder about the concept of whether or not someone could devote sufficient time and energy to be effective in a part-time position. If not, then the extra taxation would be in vain.

I can only hope that Selma will arise to the occasion should the town's leadership and the merchants agree to move forward with this concept. Since we have a successful example for guidance in the next town over, perhaps if the idea moves forward, it may work out. Personally, I am rarely supportive of increased taxation, but I also see the need of better downtown development and planning in Selma, so I am torn on this issue. Selma has a lot to overcome in terms of its image and in location with respect to the rest of the area's business districts. I would have to learn more in order to be persuaded either way, but I do tend to lean towards the cynical side when it comes to governmental efforts.

Column for Dec. 30, 2010

“This would have doubled our tax base overnight.” We have heard that sort of claim before, and I am dubious. We heard that sort of claim when Sysco was looking to relocated to Selma. We heard figures about how many jobs this would bring to the town and how many homes would be built to accommodate the influx of laborers. That didn’t happen with the construction and operation of the Sysco facility. Even the executive in charge of the Selma facility bought a house in Clayton, not Selma. When large companies want to come to a town with promises of an increased tax base, jobs, and more residents, towns tend to get excited. They tend to make tax concessions, agreements to provide infrastructure, and other tax payer funded incentives. Basically, it amounts to providing corporate welfare. I don’t blame a business for going with the location that is to its greatest economic benefit.

As you may have read, Electrolux was looking at Selma as a possible location to build a new manufacturing plant. Electrolux used to be known in America only for its vacuum cleaners. I remember when my parents bought an Electrolux with the 1976 Olympics sponsorship logo decal on it. The woman who sold the vacuum was doing door to door, in home demonstrations. But the Swedish manufacturer makes a lot more than just vacuum cleaners. They also make a lot of appliances that have been showing up more and more in stores here in North America.

I am all for wooing a large business like Electrolux to build its factory in town. Though I did not necessarily want an ethanol plant in Selma a few years ago, I was all for their freedom to build one. If an area has the ability to provide the water, streets, natural gas, labor force, and real estate necessary to sustain a company, then I am all for it.

I do get concerned, however, when promises are made and plants like the Dell facility in Winston-Salem end up closing shortly after opening. I also get concerned when promises are made to be able to provide the 500 acres necessary for development. I have to be honest and say that if I was a property owner in the way of construction, I may very well take the offer to sell my property and leave. Money talks. But not everyone is willing to abandon land that may have been in the family for generations or is making money for their family, such as farm or timber land. You are only going to find 500 acre parcels in what was or is farm land around here.

What disturbs me is the possibility of eminent domain by a municipality to take land from one private property owner and give it to another private entity such as a developer or corporation on the promise of higher tax revenue for the municipality. In one of the greatest travesties of American juris prudence, that very thing was the result of Kelo vs. the City of New London, Connecticut just five years ago. The Supreme Court upheld New London’s decision to take land from a private citizen and give it to a developer for the sole purpose of potential greater revenue from land usage. The irony is that the financials never panned out for the developer and the taken land sits empty. That is, to me, one of the biggest abuses of eminent domain and unethical decisions to ever come along. Then again, that sort of dilemma may never have been an issue had Electrolux determined to build in Selma. I am, however, always vigilant in looking at such potential government abuse.

The bottom line is that though I support industrial development, feel that it is overall a good thing for the area, and would like to have seen the factory come to our little town, I would want to see all things done honestly and ethically. I would want to see development that would not cause us to give away all of our potential revenue increases as tax incentives to lure a company here and would not want to see private lands taken forcibly and given to private business in the name of the public good. Hopefully, that is how things would have gone.

It is good to see that industry is taking notice of our little gem of a location. We have railroads, easy interstate access, land, and an available labor force. Selma has now been through this drill a few times over the years. Sometimes the effort has worked, other times not. Perhaps with this unsuccessful bid, Selma will be ready for future endeavors here and other businesses will take note of the consideration of Selma for the Electrolux plant and also give us a look. I also hope that the puffery of promises of benefits to the town do not fail to deliver, as in times past.

Column for Aug. 14, 2008

I have heard for almost two years about a possible new large shopping center coming to town at exit 97 and Hwy 70 near JR's. The major story was on the front page of last week's paper about the proposed project. Originally, the rumor was that a Home Depot and maybe a Target store were coming. Recently, I have heard more rumors. As you may have read, the developer has made a presentation to the town council.

The developer mentioned possible tenants such as Target, Bass Pro Shop, Cabellas, JC Penney, and IKEA, along with up-scale restaurants and motels. Keep in mind that these are just suggested possibilities. I am all for such a development, so don't get me wrong. However, keep in mind at this point, the developer is selling the idea and soliciting to get $15 million or so in reimbursements from the town for infrastructure improvements.

Personally, I am dubious over the claim of a Cabella's. I would absolutely love to have a Cabella's nearby. I may want to live in one. However, one already was proposed for Four Oaks and that project crashed and burned. Cabella's announced that they were going to put one in to Richmond, VA and figured that one here would be too close to their other proposed location. I find that claim fallacious, however. One can look at the map of their existing locations on their web site and shoot holes through that philosophy. I am not going to drive three hours to go to a Cabella's if that is indeed their strategy. If they reconsider Johnston County because of a better location, highway access, and other development, then hallelujah. I would be thrilled with a Bass Pro Shops, as well.

Anyway, this development would certainly be good for the town for several reasons. First, the developer wants to be voluntarily annexed. Great. They would bring a lot of revenue for electricity and water, if development and subsequent tenants were to become Selma utility customers. The tax revenue would be wonderful, but there is a problem - the developer wants 60% of the sales tax revenues generated for 15 years plus a refund of the difference in property tax values between the property taxes now versus the value of the developed land. To me, this is the rub.

I have no problem with the concept that if the entire development and the subsequent businesses are going to be Selma utility customers, that the town needs to extend the utilities to the customers who would be using our services. That is no different to me than the idea of having to extend water and sewer to a subdivision that would be annexed by the town or when Cisco went in it present location.

I do not even have an issue with the concept of sharing in the expense of any other infrastructure such as roadway improvements that will mutually benefit both the town and the developer. I do not consider those things to be corporate welfare. I consider them to be mutually beneficial and the cost of doing business to service customers. I may not like the idea that a town is in business to sell products and services such as water and electricity that are available from private industry, but that is another discussion for another day.

I do, however, consider total reimbursement for all related improvements to be a corporate welfare program. Taxpayer dollars should not be spent on woo a development, especially in an area that they find to be enticing even without our monetary support. If the facilities that the developer is going to build and the prime location are so attractive to the businesses that were bantered about, then it should not be a large risk to the developer. Furthermore, it should add to his revenue and not be the burden of the town.


As a town, we can certainly assist with expediency of zoning, utility, and other regulatory issues. However, I do not believe in paying someone to come to our town, especially for fifteen years.

In the interest of fairness, however, there were previously offered incentives for development in town, such as on East Anderson Street. If we offered them to one party, we should extend the same offer to any other development planners that come along. I may not like it, but fair is fair. As I recall, the offer tendered for that proposed development zone was a tax break for five years, and that included property taxes only.

It will certainly be interesting to see what "develops" in this situation. I am all for development of fallow ground and expanding this area. I am dubious as to the claims that "as much as $500 million in sales tax is leaving the county each year to go to Wake, Wayne, Wilson and Nash counties." That sounds like an excessively high estimate. It is part of the sales pitch.

I do agree with this quote, though. "Dougherty added that Selma is unique in the county in that it is ideally situated to host such a regional complex. He cited I-95 and US 70 and major thoroughfares. He said Exit 98 is excellent for such a complex because it has great access. "There’s no other city right on the an interchange like this," said the developer".

Either way, I am looking forward to seeing the addition to the town.