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HomeMy WebLinkAbout6/7/2005 - Special June 7, 2005 661 Roanoke County Administration Center 5204 Bernard Drive Roanoke, Virginia 24018 June 7, 2005 The Board of Supervisors of Roanoke County, Virginia, met this day atthe Roanoke County Administration Center, this being a work session to discuss the Economic Development Incentive Policy. IN RE: CALL TO ORDER Chairman Altizer called the meeting to order at 5:41 p.m. The roll call was taken. MEMBERS PRESENT: Chairman Michael W. Altizer, Vice-Chairman Michael A. Wray, Supervisors Joseph B. “Butch” Church, Joseph McNamara, Richard C. Flora MEMBERS ABSENT: None STAFF PRESENT: Elmer C. Hodge, County Administrator; Paul M. Mahoney, County Attorney; Doug Chittum, Director of Economic Development; Mary V. Brandt, Acting Clerk to the Board IN RE: REQUESTS TO POSTPONE, ADD TO, OR CHANGE THE ORDER OF AGENDA ITEMS Mr. Mahoney advised that he was adding an additional closed meeting item pursuant to the Code of Virginia Section 2.2-3711 A (3) discussion of the acquisition of several parcels of real property for a variety of public uses. June 7, 2005 662 IN RE: WORK SESSION 1. Work session to discuss Economic Development Incentive Policy. (Elmer Hodge, County Administrator; Paul Mahoney, County Attorney; Doug Chittum, Director of Economic Development) The work session was held from 5:42 p.m. until 7:44 p.m. Staff present at the meeting included Elmer Hodge and Doug Chittum. Mr. Mahoney advised that this work session was being held at the Board’s request to review the Public Private Partnerships Policy. He further advised that the Board had been provided with a copy of the Public Private Partnership Policy (revised June 2002), excerpts from Economic Development Incentives in Virginia: A Local Practitioners Handbook, and a list of public private partnership projects from 2001 through 2005. Mr. Mahoney added that staff had also provided recommendations for the Board to consider. Supervisor Wray requested clarification of the liberal construction clause on page 24 of the handbook. Mr. Mahoney responded that in Virginia local governments work under a rule of judicial construction called the Dillon rule. The liberal construction clause was the General Assembly’s response to that ruling to ensure that Industrial Development Authorities (IDA’s) are able to function as intended to achieve the public purposes for which they were created without undue restraint. Supervisor McNamara suggested that the Board concentrate on modifications to the policy itself so that staff can articulate to potential prospects what they can expect and how staff determines the worth of potential projects. Supervisor June 7, 2005 663 Altizer requested that the Board consider the industrial aspects of the policy separately from the commercial/retail aspects. Supervisor McNamara responded that since the Board is in agreement on the industrial side, that issue does not need be discussed. Supervisor Wray suggested that the Board focus on manufacturing industries since Roanoke is strategically located. Mr. Hodge inquired if the Board was comfortable with the way policy has been applied to existing industries expanding locally. Supervisor McNamara responded that he did not see a problem. He added that he believed the target industry listing on page 2 of the policy is irrelevant as any industry that would benefit the citizens could be considered a target industry. Supervisor Wray inquired how Item 5 on page 2 related to the new biomedical center. Supervisor McNamara stated this item is only effective if the surrounding jurisdictions agree to a similar policy. He reported that the jurisdictions in the Norfolk, Virginia, area have a non-competition policy, and he thinks it makes sense to adopt a similar policy with the cities of Roanoke and Salem. Supervisor Wray agreed that such a policy made sense. Supervisor Church stated that he would like the last sentence in the first paragraph of the policy’s guiding principles rewritten as follows: This is an investment program, whereby the County seeks to ensure a reasonable return on its investment of and funds or other assets as measured by tax revenues and quality jobs created or retained. He added that new jobs should not replace existing jobs as sometimes June 7, 2005 664 happens. Mr. Hodge agreed that is an important issue. He suggested that the Board be consulted for guidance in cases where this could be a concern. Supervisor Altizer added that job turnover is also an issue. Supervisor Altizer stated that agreeing on an incentive policy for retail projects is the key issue. He added that the concerns previously discussed are a part of the retail issue. If the County does not manage retail growth properly, jobs and taxes could be lost to other localities. Supervisor Altizer noted that he had issues with the one-year payback time frame for retail. He felt that the policy should be flexible in this respect. Supervisor Church stated that the Board has been conservative in providing incentives to retail in the past. He added that incentives are not an important factor in a retail business’ decision to expand or relocate. Supervisor Church suggested that the County should benchmark job retention if possible so that businesses receiving incentives are accountable. Supervisor Altizer stated that the decision to provide incentives on retail projects should be made by the Board on a case by case basis and more restrictive in the retail sector than in the industrial sector. He requested that the one-year payback time frame for incentives be removed from the policy. Supervisor McNamara requested Item A on page 3 under Review have “or less” added at the end. He also suggested that prospects be made aware that retail incentives are not a certainty and he indicated that these cases should be discussed in closed session. Supervisor Church agreed that retail incentives should not be June 7, 2005 665 guaranteed but considered on a case by case basis. He added that Item A on page 4 should not apply when jobs are shifted locally. He also stated that the policy is fine; the Board just has to apply it more consistently. Supervisor Church requested clarification on how the County has applied this policy with regard to smaller projects. Mr. Hodge responded that in the past incentives have been given to smaller projects when they exhibited growth potential and, on occasion, the County has worked on joint projects with other localities. He advised that staff currently brings every project to the Board for approval. He inquired if the Board wanted to continue that process. Supervisor McNamara stated that it did not seem fair that small projects get incentives automatically and larger projects have to get approval from the Board. Mr. Hodge responded that the County needs to send a message to the existing business community that the Board is open to working with them as well as new businesses, regardless of the size of the business. Mr. Mahoney advised that the only caveat is that the IDA must be utilized as the conduit. Mr. Hodge inquired if all projects should come to the Board. He stated that he wanted to be sure that existing as well as new businesses receive consideration. Supervisor McNamara requested that staff look at the multi-jurisdictional policy in place in Norfolk, Virginia, to see if it would be possible to adopt a similar policy locally. Mr. Hodge noted that in other localities if a site has the necessary zoning, June 7, 2005 666 there’s the assumption that the infrastructure is in place. The County has to deal with infrastructure issues in a way that a city does not. Supervisor Flora stated that if an incentive is to be considered an investment, it has to be for new business or the expansion of an existing business that wouldn’t have happened without the incentive. He added that giving incentives to site developers rather than to a specific business should be considered in the future. The developer creates the sites necessary for new businesses. He noted that incentives can not be given to both the developer and the business for the same development. Supervisor Flora stated that retail incentives should be on a case by case basis and that all projects should come to the Board as a policy decision. He agreed that an intergovernmental agreement to limit competition was worth researching. Supervisor Altizer inquired how the Board would handle a request for incentives for a retail business moving from one end of a complex to the other end. Would the Board consider incentives in this case? Supervisor Wray stated that would not be appropriate. Supervisor Flora noted that incentives are for public improvements, and there would be none in this case. Mr. Hodge inquired if the Board would apply this rationale to manufacturing projects that may have value added but no infrastructure. It was the consensus of the Board that such a project would be appropriate for incentives and that this limitation would only apply to retail. Supervisor McNamara stated that the policy is only a guideline. If a project makes sense, then the Board will approve it. June 7, 2005 667 Supervisor Church asked if a business has ever had to pay back incentives because its tax revenue didn’t meet the payback formula. Mr. Chittum responded that it had happened in the past, and the County was reimbursed. Mr. Hodge added that the County has had success in the past with this part of the policy. Supervisor Altizer requested that the Board consider establishing something similar to the CIP for future infrastructure projects. He reported that VDOT is discussing the possibility of eliminating rural additions and turning over all secondary road maintenance to the counties. He stated that the County needs to develop a funding stream to prepare for this possibility and other infrastructure related projects such as drainage and stormwater management. Supervisor Altizer suggested creating a revenue stream similar to the one used by the County and school system to pay for capital projects. This new revenue stream could be funded with a percentage of the first year’s revenue generated by retail and/or commercial projects. Supervisor Wray inquired how much would be generated by this program. Supervisor McNamara responded that it could be approximately $1 million annually. He added that the revenue generated by retail and commercial projects could be allowed to accumulate. The revenue would be surplus at the end of the year, and 40% of surplus funds are allocated to capital improvements. This might work as well as a specific funding stream. June 7, 2005 668 Supervisor Altizer asked how much is spent annually on stormwater management. Mr. Hodge responded that the total was $700,000 annually with $400,000 allocated to maintenance and repairs. Supervisor Wray reported that the County’s infrastructure needs to be updated to meet current standards. Supervisor Flora agreed that infrastructure issues need to be addressed. Supervisor Altizer advised that was why he believed the Board should set aside funding to start working on these issues. Mr. Hodge asked Mr. Chittum if he had anything he would like to discuss. Mr. Chittum responded that he was satisfied with the direction he has received from the Board. Supervisor Wray stated that Roanoke County is strategically located to attract international business, and requested Mr. Chittum to advise the Board on the Economic Development Department’s international marketing efforts. Mr. Chittum replied that the area’s major marketing effort is handled by the Economic Development Partnership (EDP) and that the County contributed $140,000 to the EDP for their marketing efforts. He reported that EDP’s marketing representative attends trade shows and participates in marketing missions to meet with prospects that have been identified as having an interest in a southeast location. However, Roanoke County’s Economic Development Department markets itself in addition to the efforts made on its behalf by the EDP. He advised that Roanoke County has a small marketing budget that is managed by Jill Loope, assistant director. Mr. Chittum added that he also June 7, 2005 669 participates in the County’s marketing efforts and reported that he and Ms. Loope attended trade shows in conjunction with the EDP. He added that the County will participate in marketing missions to two trade shows, one of which is international. Mr. Chittum reported that he is concerned about the County’s need to acquire land for site development to attract new business. Since he has been with the County, four industrial sites have been sold; and they have not been replaced. He advised that the County is constantly searching for replacement property to develop as sites for prospects and indicated that this issue is just as important as revising the Public Private Partnership policy. He noted that there are commercial realtors in the County who are having difficulty finding suitable sites for interested prospects which is why localities are giving incentives to developers instead of individual businesses. Mr. Chittum stated that the County needs to partner with the private sector to develop sites to show interested prospects. He added that he is a proponent of working with developers to bring this type of project to the Board. Mr. Chittum asked if the policy should be revised and brought back to the Board for approval. Supervisor McNamara stated that he thought the existing policy was fine. Supervisor Wray advised that as long as the revision concerning the Board approving all projects on a case by case regardless of the funding involved was included, he was satisfied with the policy as well. 670 June 7, 2005 IN RE: CLOSED MEETING At 7:49 p.m., Supervisor Altizer moved to go into closed session pursuant to the Code of Virginia Section 2.2-3711 A (1) personnel matter, namely the performance evaluations of the County Administrator and County Attorney; and Section 2.2-3711 A (3) discussion of the acquisition of several parcels of real property for a variety of public uses. The motion carried by the following recorded vote: AYES: Supervisors McNamara, Church, Wray, Flora, Altizer NAYS: None The closed meeting was held from 7:49 p.m. until 8:10 p.m. IN RE: ADJOURNMENT Chairman Altizer adjourned the meeting at 8:11 p.m. Submitted by: Approved by: .t/~ M~andt Acting Clerk to the Board