48 other states use this development tool
Column: Point of View
Author: Ray Moss
October 19, 2004
KANNAPOLIS--The presidential and U.S. Senate races will undoubtedly garner much of the attention as North Carolinians head to the polls, and deservedly so. On that same ballot, though, is another issue that citizens should closely consider -- Amendment One, or self-financing bonds.
Supported by a bipartisan group of former governors -- Jim Holshouser, Jim Hunt and Jim Martin -- self-financing bonds would provide an important business recruitment tool for communities struggling to recover from the loss of our traditional industries.
The N.C. League of Municipalities, a nonpartisan alliance of 530 cities, towns and other communities, also supports Amendment One. According to the league, North Carolina has lost more than 180,000 manufacturing jobs in the past several years. By voting "yes" on self-financing bonds, citizens will give their local governments an important tool to spur job growth and economic development.
Used in 48 other states, the bonds cover projects in designated districts -- an abandoned factory, for example -- to improve and update infrastructure such as sewer systems, water treatment facilities, sidewalks and streets.
With the use of bond money to invest in areas needing new commercial and industrial development and redevelopment, the districts become attractive to private investors. The bonds are then paid back by the increased property values created by the new development that is encouraged by the improvements in infrastructure. In other words, the businesses that locate in new development districts pay off the bonds by paying their property taxes. The citizens would not see an increase in their local property tax rate, or sales tax, to repay the bonds.
If passed by the voters, self-financing bonds will allow local governments in North Carolina to work more effectively with the private sector to renovate old factory complexes, revitalize downtown districts, develop affordable housing and, in the process, create new jobs.
In Kannapolis, self-financing bonds could be used to support a redevelopment project in an empty textile mill or other former manufacturing facility.
Creating a mechanism to help fund demolition, cleanup and the necessary infrastructure improvements would help create jobs and expand our tax base. The same can be said for our older business districts. If the city can improve the attractiveness of these areas for new investment, it helps businesses grow and create new jobs. It would also help our city recruit new business organizations from other states and regions.
Our neighbors South Carolina and Virginia have already made good use of self-financing bond programs. In South Carolina, the City of Rock Hill issued a $6.1 million self-financed bond to help create the Red River development. The projected private investment in this area is more than $140 million, including a mall, hotel and theater. By making infrastructure improvements to lure the private development, Rock Hill will add $2.1 million in tax revenues each year.
Virginia Beach issued an $11.5 million bond to expand public parking and improve traffic flow in the Lynnhaven Mall District. The property value increased by $155 million and 400 new jobs were created.
Greenville, S.C., used $4 million in bonds to improve the West End District by adding landscaping, lighting and improving the streets. Since the improvements were made the district has attracted 30 businesses that have invested nearly $19 million.
As a mayor, I am acutely aware of how the globalization of North Carolina's economy has impacted the state. Not only are we losing jobs to offshore outsourcing, but we are also facing increased competition from other states as they try to lure new business development.
Self-financing bonds will be on the ballot Nov. 2 as a state constitutional amendment. Citizens have the choice to allow local governments to compete on an equal playing field with neighboring states as we try to lure new industries, redevelop abandoned factories and bring new life into downtowns. I urge voters to thoughtfully consider the issue.
Copyright 2004 by The News & Observer Pub. Co.
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