Ernest C. EMERGING EXECUTIVES FORUM YOU CAN’T SELL OUT OF AN EMPTY WAGON: THE IMPORTANCE OF PRODUCT DEVELOPMENT 21 JANUARY 2016

EMERGING EXECUTIVES FORUM IMPORTANCE OF PRODUCT 2 ‣ Certified business/industrial parks ‣ Shell buildings ‣ Renovations of existing buildings/Brownfield Remediation ‣ Special use buildings ‣ Virtual buildings

EMERGING EXECUTIVES FORUM WHEN SHOULD GOVERNMENTS/NDO’S ACT 3 ‣ Private sector may fulfill needs ‣ Political sensitivity of competing with private sector ‣ But one way or the other, the need for product must be met

EMERGING EXECUTIVES FORUM LEGAL AUTHORITY FOR LOCAL GOVERNMENTS 4 ‣ Local Development Act ‣ G.S. § ‣ Subsection (b) gives specific authority to undertake certain actions ‣ G.S. § 153A-149(c) ‣ Lists things counties can expend property taxes for ‣ Subsection (16a) provides authority to expend property taxes for: “Industrial Development – to provide for industrial development as authorized by G.S ” ‣ G.S. § 160A-209 gives similar authority for municipalities

EMERGING EXECUTIVES FORUM CONSIDERATIONS IN CHOOSING A DEVELOPMENT ENTITY 5 ‣ Limiting liability ‣ Private Funding ‣ Confidentiality ‣ Public Records Law ‣ Open Meetings Law ‣ Infusion of expertise

EMERGING EXECUTIVES FORUM CONSIDERATIONS IN CHOOSING A DEVELOPMENT ENTITY 6 ‣ Greater business flexibility ‣ Acquisition of property ‣ Conveyance of property ‣ Public bidding for contracting ‣ Perception ‣ Political repercussions

EMERGING EXECUTIVES FORUM OPTIONS OF DEVELOPMENT ENTITIES 7 ‣ 501(c)(3) nonprofit corporation ‣ 501(c)(6) nonprofit corporation ‣ For profit corporation or limited liability company ‣ Economic development authority ‣ Government agency

EMERGING EXECUTIVES FORUM BEST CHOICE 8 ‣ 501(c)(3) or 501(c)(6) nonprofit corporation ‣ Not a government entity ‣ Limiting liability is reason enough

EMERGING EXECUTIVES FORUM GOVERNMENT/DEVELOPMENT ENTITY INTER-RELATIONSHIPS 9 ‣ G.S. § 160A-20.1 (for municipalities) and G.S. § 153A- 449 (for counties) ‣ Allows a local government to contract with a private entity to carry out any public purpose a local government can undertake ‣ Define roles with an agreement or MOU ‣ Regulatory approvals still go back to government ‣ Incentive approvals still go back to government ‣ Financing by government, private entity, or both

EMERGING EXECUTIVES FORUM WAYS TO FINANCE PRODUCT - GOVERNMENTS 10 ‣ Cash reserves ‣ G.S. § 160A-20 financing ‣ General obligation bonds ‣ Product development (tax increment) financing ‣ Land bank / installment sale ‣ Equity participation with land owners

EMERGING EXECUTIVES FORUM WAYS TO FINANCE PRODUCT – PRIVATE ENTITY 11 ‣ Appropriations from local governments ‣ Bank financing ‣ Land banking / installment sale ‣ Equity participation with land owners ‣ House Bill 108 – possible new state program to provide low or no interest loans

EMERGING EXECUTIVES FORUM MULTI JURISDICTIONAL DEVELOPMENT BASIC CONCEPTS 12 ‣ Two or more local governments share in the costs of developing a business / industrial park ‣ The local governments share in the gains proportional to what they put in

EMERGING EXECUTIVES FORUM MULTI JURISDICTIONAL DEVELOPMENT STATUTORY AUTHORITIES 13 ‣ G.S. § Local Development Act: Authority of a local government to develop product ‣ G.S. § 160A 460 to 464 Local Cooperation Act: Authority for two or more local governments to share in carrying out a public purpose (inter local agreements)

EMERGING EXECUTIVES FORUM MULTI JURISDICTIONAL DEVELOPMENT STATUTORY AUTHORITIES 14 ‣ G.S. § 153A-13 (counties) and G.S. § 160A-17 (municipalities) allow local governments to enter into continuing contracts that bind future boards ‣ G.S. § 153A-449 (counties) and G.S. § 160A-20.1 (municipalities) allow local governments to contract with a private entity to carry out a public purpose

EMERGING EXECUTIVES FORUM MULTI JURISDICTIONAL DEVELOPMENT EXAMPLES 15 ‣ Lake Norman Regional Economic Development (Huntersville, Cornelius, Davidson) ‣ Clay County, NC and Townes County, GA ‣ Burke County and municipalities in County ‣ Four County (Vance, Granville, Warren, Franklin) arrangement (Triangle North) ‣ International Logistics Park (Brunswick and Columbus Counties)

THANK YOU ERNIE PEARSON NEXSEN PRUET MEMBER 4141 PARKLAKE AVE, SUITE 200, RALEIGH, NC