2002 - 2005 Accomplishments

• Office of Urban Development created 
• Small Towns Improvement Program developed
• Self-financing bonds measure approved by the legislature
• Multi-jurisdictional revenue sharing enacted

Next Steps

• Develop new strategies for development hubs that generate regional economic influence
• Continue funding for existing development programs
  

Along with Governor Easley and the General Assembly, the following organizations are partners in the Economic Development Board's Urban Development Initiatives:

Public Organizations and Educational Institutions:

• The North Carolina Department of Commerce
• The North Carolina Department of Environment and Natural Resources (DENR)
• The North Carolina Housing Finance Agency
• The North Carolina Department of Transportation
• The North Carolina Department of Public Instruction (DPI)
• The University of North Carolina Institute of Government
  

 
Private and Non-Profit Organizations:

• The North Carolina Association of County Commissioners
• The North Carolina League of Municipalities 
• Downtown Durham, Inc.
• The North Carolina Metropolitan Coalition
  

Promote a State growth framework that stimulates urban development with beneficial regional economic influences.

Action 4.1.1: Coordinate State investments toward existing downtowns and promote sound urban and regional development.

1. Responsibility: Department of Commerce’s Office of Urban Development
2. Deadline: 2006
3. Funding Source: Additional appropriations for office administration and program implementation
4. Expected Outcome/Return on Investment:  robust downtowns with less blight and fewer brownfields more consistent investments

2007 Update

This action step is being actively developed, The Office of Urban Develop has worked continuously with other organizations and agencies to develop partnerships. This action step has been aided by the new 3J tax credit program which has created Urban Progress Zones to encourage businesses to locate in urban cores. The Mill Rehabilitation Credit established in the 2006 Legislative Session also will support reinvestment.

Action 4.1.2: Identify development hubs with regional significance (beyond the three largest metropolitan areas) and develop strategies to strengthen them and make them more competitive.

1. Responsibility: Department of Commerce Division of Policy, Research, and Strategic Planning, and the Office of Urban Development, and other government and non-profit development agencies. State agencies and legislature identify and allocate or reallocate resources to strengthen hubs
2. Deadline: Ongoing
3. Funding Source: State agencies reallocate existing resources and legislature appropriate new funds
4. Expected Outcome/Return on Investment: Strengthened “economic engines” in mid-sized development areas that will generate more jobs for multi-county regions that they serve

2006 Update

A presentation on development hubs was presented at the August 2004 board meeting. No consensus on the development hub concept was reached. 

The Division of Community Assistance in the Department of Commerce has begun collecting investment data from large cities to document and quantify their financial impact. This project should allow the department to evaluate the economic profile of North Carolina’s metropolitan areas.

Promote more efficient use of existing buildings, sites, facilities, and infrastructure.

Action 4.2.1: Provide additional State incentives and local options to promote Brownfield redevelopment under the Brownfield Property Reuse Act of 1997 [G.S. 130A-310.30], redevelopment of brown buildings, and productive reuse of “White Elephant” buildings.

1. Responsibility: Department of Commerce and the Department of Environment and Natural Resources (DENR)
2. Deadline: Ongoing
3. Funding Source: Depending on nature of new incentives, funding could come from tax credits, fees, insurance surcharges, or enhanced local property tax deferments
4. Expected Outcome/Return on Investment: Commerce and DENR staff will continue workshops on brownfields development to promote program.  Higher numbers of rehabilitated buildings and reused sites than would be expected without the enhancements, thereby reducing public costs of developing infrastructure for “Greenfield sites.”

2007 Update

The Department of Commerce has worked with DENR on one joint brownfields development workshop, the DENR program has its own resources and staff dedicated to brownfields redevelopment. The 2006 General Assembly passed the Mill Rehabilitation Income Tax Credit which supports the reuse of abandoned mills, many of which are in urban areas.

Strengthen central cities to reestablish their role as the economic core and engine of metropolitan areas.

Action 4.3.1: Expand and improve State Development Zone (SDZ) incentives.

1. Add central administrative offices to those eligible for tax credits
2. Provide enhanced tax credits for high poverty portions of SDZ’s
3. Market incentives available in SDZ’s more actively

1. Responsibility: Department of Commerce's Finance Center and Division of Community Assistance
2. Deadline: Propose legislative changes by November 2004 for consideration in 2005 session
3. Funding: Existing resources can be used to modify proposal generated in 2002
4. Expected Outcome/Return on Investment: More investment and jobs attracted to target areas

2007 Update

During the 2006 legislative session the 3J tax credit program was approved which created urban progress zones and agrarian zones to replace the existing state development zones. The urban progress zones will be geographically smaller to better focus state incentives on potential urban areas which may suffer from blight or high unemployment. Credits will be provided for employing people and for real business property investments.

Action 4.3.2: Request new funding to recapitalize the Main Street Financial Incentive Fund with its 10:1 leverage to increase the number of buildings rehabilitated in downtowns.

1. Responsibility:  Department of Commerce’s Division of Community Assistance
2. Deadline:  July 1, 2005 (contingent upon General Assembly budget)
3. Funding:  ".0 million from General Fund to leverage millions from private sources
4. Expected Outcome/Return on Investment: Increased number of buildings being rehabilitated in Main Street community downtowns, increased job creation, business development.  The Main Street Financial Incentive Fund used a $1 million appropriation in 1989 to leverage $22 million in private investment

2007 Update

No request for funds is anticipated.

Action 4.3.3: Expand the Department of Commerce’s successful small towns improvement program statewide.

1. Responsibility:  Department of Commerce’s Division of Community Assistance and Office of Urban Development
2. Deadline: July 1, 2005
3. Funding: Two positions needed to provide added services, plus Legislative appropriation to maintain program. The initial pilot version of this program was funded with a grant from the Z. Smith Reynolds Foundation. That grant supported the implementation of the program in Eastern NC, but is not intended to maintain or expand the program
4. Expected Outcome/Return on Investment: The program will increase the number of small towns involved with downtown development and increased reinvestment within small town downtowns.

2007 Update

The Small Town Main Street Program has expanded statewide. The 2006 session of the General Assembly approved the creation of a position for Western North Carolina to reach western small towns in downtown development. There is a request in the 2007 Governor’s budget for a second staff position for the West.

Action 4.3.4: Provide tax credits for homeowners that purchase and/or renovate downtown housing.

1. Responsibility:  NCHFA and Housing Coordination and Policy Council
2. Deadline: Introduce legislation for consideration in 2007 session
3. Funding: fiscal note to be calculated
4. Expected Outcome/Return on Investment: more housing investment in state’s downtowns

2006 Update

The Division of Community Assistance met with staff of the Housing Finance Agency, committee members, developers and Department of Revenue staff and presented several ideas for discussion. The committee decided to put this idea on hold because of fiscal costs and legal issues as to how to define ‘downtown’ in statute. A mill rehabilitation tax credit, which could potentially include housing, was passed in 2006.

Action 4.3.5: Establish an Urban Development Incentive Fund within the North Carolina Department of Transportation, similar to the Industrial Access Fund, to provide money for parking, sidewalks, and other public improvements necessary to solidify private development commitments.

1. Responsibility: Department of Commerce and Department of Transportation
2. Deadline:  January 1, 2007
3. Funding: $5.0 million available to leverage private investments from the North Carolina Department of Transportation
4. Expected Outcome/Return on Investment: Increased number of private projects in urban areas.

2006 Update

No progress has been made on this action step.

Action 4.3.6: Promote school site standards to make it easier to build and rehabilitate public schools in central cities.

1. Responsibility:  The Department of Public Instruction (DPI), the Department of Commerce’s Office of Urban Development
2. Deadline:  January 1, 2007
3. Funding:  Underwriting for a series of workshops and support material to promote rehabilitation and new construction within central cities. [DPI publication, Making Current Trends in School Design Feasible, is a sound basis for workshops (DPI)
4. Expected Outcome/Return on Investment: More rehabilitation of older schools, more new construction in central cities, fewer new schools in ‘greenfield’ sites.

2006 Update

This action step is being implemented.

Provide local governments with a more complete set of development tools.

Action 4.4.1: Continue to develop legislative proposals that allow local governments to finance development projects through alternative revenue producing methods.

1. Responsibility: Association of County Commissioners and the League of Municipalities in conjunction with the Department of Commerce and other interested parties
2. Deadline: Ongoing
3. Funding: Existing
4. Expected Outcome/Return on Investment: Legislative proposals, including self-financing bonds,  that will improve North Carolina’s competitiveness with neighboring states.

2006 Update

A significant step to improve metropolitan growth centers was taken in 2004 with the passage of an amendment to the state constitution that allows the use of self-financing bonds. This amendment has been the most significant finance tool to emerge from the General Assembly in several years. It lets local governments finance development projects through alternative revenue-producing methods and will therefore enhance North Carolina’s competitiveness with neighboring states.

Action 4.4.2: Develop a legislative proposal to give local governments broader authority to defer increases in tax value for redeveloped property beyond that currently available for Brownfield projects

1. Responsibility: the Department of Commerce will develop recommendations in collaboration with League of Municipalities and Association of County Commissioners
2. Deadline: January 2006 for recommendations. July 2006 for legislation
3. Funding Source: None required
4. Expected Outcome/Return on Investment: Greater number of redevelopment projects – both buildings and sites – in central cities. Greater tax base as enhanced tax value is phased in

2006 Update

This action step has not been acted upon in 2006.

Action 4.4.3: Develop a legislative proposal to give local governments explicit authority to use local funds for downtown housing.

1. Responsibility:  Institute of Government to prepare brief, draft legislation
2. Deadline: Committee to review the School of Government brief by October 2006; draft legislation by January 2007
3. Funding:  no state funds required
4. Expected Outcome/Return on Investment: A few more cities may initiate housing programs in 2008

2007 Update

This action step has not been pursued.