With the Dell computer plant in Winston-Salem having remained open past its scheduled closings, the company's refund of $15.5 million in incentives is gravy for the city. But, despite increased demand for the desktop computers the company makes, the plant will eventually close, as have so many others in Northwest North Carolina. Mayor Allen Joines has a good plan about how to best use the refund to create jobs, a plan that should lead to public debate on the issue.
In tight economic times, some council members might want to use some of the money for more immediate needs, such as avoiding a tax increase. But for the sake of the city's future economic success, this money should be returned to its original use -- economic development. And yes, that means much of it may be spent on incentives to attract new companies -- an unavoidable part of doing business in today's economy.
The city council would have to approve the separate aspects of Joines' plan, which he estimates could create at least 1,000 jobs and would also have a goal of increasing the tax base. It would divide up the refund, which has earned about $210,000 in interest. Joines said it's hard to calculate the total number of jobs his plan would create, but a proposed $1 million for a technology and jobs fund has a goal of creating one job for each $1,000 invested, he said, or about a thousand jobs. Incentives from the fund would be given to technology companies, either existing or new ones, to create high-paying jobs, Joines said.
About $6.7 million would be used to improve infrastructure such as roadways and utility lines as incentives for new companies or for existing companies that want to expand. About $2.5 million would be used to increase the city's Revitalizing Urban Commercial Areas, or RUCA, fund, created in 2006 to revitalize neighborhoods and help small businesses and retailers.
The city has already used $272,000 of the refund to reimburse Winston-Salem Business Inc. for the land it bought for the Dell plant. About $1.5 million of the money has been used to repay the city's general fund for payments made to Dell. The city should work with the county, which received a $7.9-million refund from Dell, in putting some of the refund money to work in finding a new tenant for the Dell plant.
With Joines' plan, $3.7 million of the city's refund would be used as incentives to bring companies to the area, and would be set up in a revolving fund to be paid back by taxes from the companies. The city has a few projects in mind, Joines said, but he declined to provide details.
We look forward to hearing more as soon as possible. And if by chance one of the projects should come to fruition, we expect that any incentives deal the city reaches will be done in the open -- and that it will contain the strong claw-back provisions that helped secure the Dell refund.
Joines' plan could put the city on a good track toward using that refund wisely.
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