City of Asheville’s economic development toolbox: Incentives and infrastructure

Sam Powers knows there’s a boom of manufacturing growth going on in Asheville – something on the order of a 100-year flood of it.

“We’ve had this wave of catalytic projects that are over $100 million and that’s unheard of,” said Powers, director of Asheville’s Community & Economic Development Department. “Most communities see a project of this magnitude once in a generation – and we’ve seen several of them in the past five years.”

While Powers and his department juggle the multiple priorities such development brings, he’s quick to point out partnerships that work in concert with each other to make the magic happen. And he’s happy to explain the City’s role in landing big or even medium-sized industry.

“Clearly no project like a New Belgium Brewery is any single entity,” Powers said. “It’s always a team effort.”

The “team,” in this case is centered around the Asheville-Buncombe County Economic Development Coalition, also called the EDC ( Buncombe County provides substantial funds for it and has a contract with the Asheville Area Chamber of Commerce to administer the program. The City helps fund the Economic Development Coalition through an annual payment. For budget year 2015-16 the City appropriated $100,000 to the coalition. That’s up from $60,000 the previous year. There are also private sector funding partners.

The coalition’s primary responsibility is to recruit and manage projects.

When the City receives an inquiry from a business considering whether it might locate here, it passes them along to the EDC. They then manage that project. “If that project evolves within the City limits we will be involved,” Powers explained. “We work closely with EDC for projects within the City.”


Economic development incentives and infrastructure

The New Belgium Brewing plant under construction in the River Arts District gets a lot of attention, of course. But Powers said it’s not the biggest project the City has partnered with to help locate or grow in the City. In some cases that may include economic incentives. And just how do those incentives work?

They come in the form of performance-based grants or infrastructure improvements that sometimes literally pave the way for a company that wants to do business in the City of Asheville. And those grants are paid only after a company has built its plant and hired workers in scale and timeline with what it said it was going to do. Even so, the grants offered end up making the City money in the long run.

“Property is regularly assessed by the county and worth a certain amount of money,” Powers explained. “If you improve it and it becomes more valuable, then it generates more tax revenue.”

This is the case with the New Belgium project, being constructed on brownfield land formerly used as a stockyard. The City and Buncombe County will realize increased ad valorem taxes on that property once the brewery is built; these are taxes based on the value of real estate and personal property.

“There will be a dramatic difference in the ad valorem tax value on that property,” Powers said.

City infrastructure associated with the New Belgium project came by way of road improvements, stormwater improvements, a greenway project and public parking. Sometimes waterline improvements are also needed but that was not the case with New Belgium.

When New Belgium came to Asheville, its managers said and greenways and river access were important to their location.

“They expect people who paddle down the river will stop and visit them,” Powers said.

The City’s greenway master plan already had a greenway adjacent to the brewery site on the drawing board. New Belgium partnered with the City to get it under construction. Other funding partners on the project included the US Department of Commerce Economic Development Administration, and RiverLink, through a grant with the North Carolina Clean Water Management Trust Fund, as well as the GoldenLEAF foundation and Duke Energy.

“They are all public funding for infrastructure that will benefit everybody,” said Powers. “The improvements to public streets and greenways will benefit everybody.”


Other important projects

SoCon: A $12 million renovation to the US Cellular Center, including a new NCAA competition basketball floor, stadium seats on the lower level, scoreboard and sound system, helped secure this nationally televised basketball tournament to Asheville through 2021. Every other event that comes to the USCC benefits from those improvements. And the center generates revenue for businesses in the City and County as well.

GE Aviation: This project represents a $126 million investment and creation of 400 advanced manufacturing jobs in the aerospace industry cluster. Buncombe County acquired property and constructed a new manufacturing facility that GE Aviation is occupying. The city participated in a performance-based incentive grant and some public improvements.

Linamar: Linamar Corporation, a Canadian automotive components/heavy construction equipment component manufacturer, located in the former Volvo Equipment facility in Skyland in 2011. To date Linamar has announced investments in new machinery and equipment and up-fits to the building of over $315 million and the creation of over 400 jobs, with many jobs being made available to former Volvo employees.


A shifting landscape

The recently announced closing of AdvantageWest, a regional economic development organization with 20 years of experience in the Asheville area, will be felt, but will not affect the City’s efforts. The organization had shifted its much of focus to helping small entrepreneurs, such as its success in launching Blue Ridge Food Ventures.

“There are several organizations whose primary charge is economic development. AdvantageWest was certainly one of those,” Powers said. The community is fortunate that some of their programs will transition to other organizations.


Looking ahead

The City’s Community & Economic Development Department continues to work with new businesses in expanding the economic landscape.

“We don’t have a crystal ball but the future remains bright,” Powers said.

Manufacturing is on the rise locally. Lending has opened up.

Among trends Powers sees is what he describes as a “fermentation science cluster and the supply chain around it.” He points to the growth of new cideries, Kombucha, distilled spirits and White Labs, which is slated to bring 65 jobs to a Charlotte Street site in spring 2016. In that case, the San Diego-based company wanted to locate in Asheville but couldn’t find a suitable site or building. The City is leasing as an option to purchase a surplus warehouse it was not using to the company.

While Kombucha is a fermented tea, White Labs makes yeast that’s supplied largely to the craft brewing industry but also to wineries and bakeries.

It all ties back to collaboration between the City, Buncombe County and the EDC, with groups working in concert to connect the dots.

“Our primary role at the City is not to recruit, market or manage economic development projects,” Powers said. “Our role is what we call product development and placemaking. We want to add value, and to do things the EDC doesn’t do.”

“The EDC can’t improve public infrastructure, for example, but we can. We can improve the streets around a new manufacturing facility.”

The goal is for the City’s capital investments toward economic development to translate those efforts into good jobs, an increased tax base and an enhanced quality of life for the citizens of Asheville.


CAPTION, above:

Sam Powers overlooks New Belgium Brewing’s Asheville construction site. As director of Asheville’s Community & Economic Development Department he’s instrumental in helping businesses that want to locate in Asheville get the infrastructure they need.