Work Session of the Town of Cary , North Carolina

February 7, 2006

 

Subject: Economic Development

Location: Town Hall Conference Room #11130, 316 N. Academy St. , Cary

 

Present: Mayor Ernie McAlister, Council Members Marla Dorrel, Jennifer Robinson and Julie Robison; Mayor Pro Tem Smith arrived at 4:45 p.m. , and Council Member Roseland arrived at 4:50 p.m. Council Member Mike Joyce was absent.

 

Mayor McAlister called the meeting to order at 4:40 p.m. and dispensed with formalities. The consultant’s presentation (Sanford-Holshouser) is attached to these minutes as Exhibit A, and their report is attached to and incorporated in these minutes as Exhibit B.

 

Mrs. Robison asked if certain conditions need to be in place in order to launch an incubator, and she asked about preferred locations for this type of use. She further asked if the downtown area could be a potential location. She noted that the RTP currently has an incubator, and she asked the difference in the RTP existing incubator and the potential Cary incubator. The consultant stated that it’s important to begin with a feasibility study, and it’s important to get a wide range of input. Cary could possibly marry this service with what’s currently offered in the RTP, and in doing so it’s possible for Cary to create a virtual incubator. The consultant noted that the location of the incubator is not really important. It was noted that incubators have a high failure rate. The consultant gave Germany as a good example. They have a wet lab incubator where innovative products are being developed, and they use common equipment for this purpose. The consultant believes that Cary has the entrepreneurial spirit to grow a successful incubator. The consultant stressed the importance of partnering with the community college, because they have the resources to lend to an incubator. Mayor McAlister stated that he believes the community college at Millpond Village is a natural fit.

 

Mr. Roseland stated he doesn’t understand the different economic development structure options. He stated the chamber of commerce is a non-profit, and they have a clear economic development mission. He asked how a separate non-profit would differ from the existing chamber. He also asked if it would be better for the Town to provide the chamber more assistance instead of developing yet another non-profit. The consultant stated that the chamber is a 501(c)(6), and contributions to them are business contributions; a 501(c) (3) organization solicits charitable contributions. The consultant stated that the chamber has many functions and could take on full plan implementation with the support of the Town (including additional staff, etc.).  A separate 501(c)(3) could be a bridge between the chamber and Town, and has historically resulted in success in other jurisdictions. This structure gives insulation between different organizations and leadership groups and can become important over time. The consultant noted that 501(c)(3) organizations are the trend in the state, and they have success at fundraising, limited liability, etc.

 

Mayor McAlister thinks that structure is the starting point. He stated the chamber has successfully launched a number of groups that are organized as 501(c)(3) (including Cary Visual Arts, Veteran’s Freedom Park , etc.). He suggested allowing the chamber to continue with this work but to expand with more Town support

 

Mrs. Robinson wants to learn why it’s better to go with another organization instead of using the chamber. She wants more detail about how to move resources under the chamber. She stated a different organization will result in very expensive administrative costs. She believes it is reasonable to house economic development under the chamber instead of recreating something we already have.

 

Mayor McAlister suggested that the consultant spend time with Howard Johnson of the chamber, who can advise them of any potential impacts to the chamber if they undertake this role.

 

Ms. Dorrel asked how the Town would be assured that its economic development goals and strategies are fully implemented if the chamber or another group handles economic development. The consultant stated that local governments who do this typically enter into service agreements in order to provide the necessary economic development funding. She stated these service agreements require an annual report to show that goals are met.

 

Mayor Pro Tem Smith stated he is not familiar with the fundraising aspect. He stated the Cary region does not have a lot of corporate entities, and he asked how to reach out for funds in this environment. The consultant stated it would be important to create an investor relations model that shows the existing business base how it works. He stated that professional fundraisers have had success with this, and often they don’t get paid if they don’t raise funds.

 

Mrs. Robison asked the difference in a separate 501(c)(3) and a regional economic development corporation (which are common throughout the state). She asked if a 501(c)(3) would have authority to leverage a local option project through borrowing, etc. The consultant stated most county organizations have moved to a public/private partnership, and most municipalities are doing the same, because it is critical to have private sector leaders involved in the economic development program. Regarding the loan question, the consultant stated there are various options, and loans can be done based on the project and the willingness of the banking community. The Town would have one or two seats on the board of directors (traditionally elected officials).

 

Ms. Dorrel stated the consultant’s recommendation on product development was different than other opinions. She stated the report does a good job explaining Sanford-Holshouser’s view, but she questioned the differing viewpoints. The consultant stated it could be a lack of knowledge, which also explains the gaps, especially the high importance placed on recruiting new business and growing existing business, but lack of business space as a high priority. The participants had a pro-business attitude. Sometimes people are not familiar with multi-jurisdictional parks (MJP), which do not have to be in the Town. These MJPs are great partnerships where several jurisdictions share in the cost and the benefits. The consultant stated that Cary has great business parks, but Cary lacks industrial parks and they believe this gap should be corrected. There is not a lot of industrial land left in Cary , and this land is very expensive.

 

Mr. Coleman stated the implication in the report is that the Town becomes very active in business park development. He stated there are a wide range of options to do this ranging from ensuring appropriate zoning at one end of the spectrum to forming a non-profit and building it ourselves at the opposite end of the spectrum. He pointed out that there is no direction in the report for how aggressive the Town should become in this process. He stated historically these have been built by private developers. The consultant prefers that the private sector take as big a role as possible in private development. Cary must make sure property is available for this use (either in the Town or through a MJP) and must ensure that infrastructure is in place and that there is a vision for development. The Town could contract with a private developer to develop the property. The consultant stated it is important to distinguish between a business park and an industrial park, since there are only about 67 acres available in the zoning plan for industry.

 

Mrs. Robinson stated the council may fear the extreme industrial use, and the council does not want the “smokestack” industries. She stated it may be important to redefine the definition of industrial in the zoning code in order to clarify a light industrial use vs. a heavy industrial use. The consultant stated in today’s environment if a Town doesn’t want a particular use, then they won’t get that use because someone else will recruit them. The consultant spoke in favor of having restrictive covenants, but noted that these should not be overly restrictive.

 

Mayor McAlister believes that the industrial development is more a function of land cost vs. how the zoning code defines the term industrial. He suggested that a MJP may be a solution to overcome the high land cost in Cary , and he believes this is the direction that Cary should take.

The consultant clarified that “publicly initiated” doesn’t have to mean “publicly led.”

 

Mr. Roseland stated the RTP is the biggest business park in the state, and he questioned the need for another. The consultant stated that the Town needs a park in which Cary shares the tax base. RTP is already planning for their next steps, and Cary needs to have long range vision as well, and a MJP could be a future vision.

 

Mr. Roseland asked the potential buildout of the major business parks in Cary . Mayor McAlister stated that David Finger has data that indicates Cary has a 10-year inventory of unbuilt business property.

 

Ms. Dorrel stated the council should be clear with its economic development goals.

 

Mrs. Robinson asked if the downtown area could potentially be a Department of Commerce (DOC) approved area for a business park. The consultant stated that DOC typically only certifies Greenfield space and not redevelopment space, and in most instances downtown space is redevelopment. The Town could create a development zone and offer special incentives or grants to target and encourage development within the downtown development zone.

 

Mrs. Robinson stated the report doesn’t reflect Sanford-Holshouser opinions or priorities, but she’d like a better understanding of the consultant’s professional opinions. The consultant will add comments to this section.

 

Mrs. Robison stated the report contains concepts, but they are not weighted with tradeoffs, costs, etc. She stated it is important for the council to maximize opportunities and to understand what these actual opportunities are. She expects the final action plan to provide direction on this issue. She questioned the next exercise (prioritizing importance of economic development tasks) without the council having enough information. The consultant replied that they need the council to reach a consensus of what’s important to them as a group. The consultant needs to understand council priorities in order to make recommendations. The plan will be a five-year plan, and whoever implements it needs to know council priorities. Priorities for each year can be done by council in subsequent work sessions, and the council is allowed to change their decisions. Several things can be worked on simultaneously.

 

Mayor McAlister stated what’s most important to the council may not have the greatest opportunity for the Town. He stated the council doesn’t necessarily understand the best avenue. He expects the consultant to provide input into this.

 

Ms. Dorrel stated she doesn’t know the effort and cost relative to the level of impact the Town can get. She stated it is hard to prioritize without this information. The consultant can go back through the action steps to identify things easy to implement with a high impact (the most results).

 

At this time the council and the economic development commission members who were present ranked their economic development priorities by points, with the highest points representing the highest priority. The rough tally follows, and the consultant will formalize these results at the next meeting.

 

 

The consultant will formalize the above results. The meeting participants should send additional comments to Budget Director Scott Fogleman no later than the morning of Thursday, February 9, 2006 , and then the consultants will send the information to a professional editor.

 

The consultant stated it will take them at least two weeks to be prepared to present the final report. It will take at least one hour, and the venue should be large enough for everyone who participated in this process (including focus group participants). Mayor McAlister stated staff will identify a time and place for the meeting.

 

Mayor McAlister invited the economic development commission members who were present to comment. Comments included:

 

 

The consultant referenced general statute references that may be of interest to the council. They will send them to Scott Fogleman and will include them in the final report.

 

Mayor McAlister adjourned the meeting at 6:30 p.m.