May 8, 2017
Since the early 1990s, when the use of incentives to stimulate economic growth began to be used more frequently in North Carolina, there has been a question as to whether state or local government incentive programs can and should be used to attract retail projects.
With one exception, at the state level, incentive programs by statute or administrative rules exclude retail projects from incentive support. In the mid 1980s, the General Assembly adopted the first job creation tax credit program. That statute did not exclude retail as a type of project that could obtain the tax credits. After a company that built a fast food restaurant claimed the tax credits, the statute was amended to exclude retail projects. Since then, all state incentive grant and tax credit programs have excluded retail projects from consideration.
Consequently, the focus of this article is on local incentive support for retail projects. It addresses two questions. First, is there legal authority for local governments (counties or municipalities) to provide incentive support for retail projects? And second, aside from the legal authority for this, is it advisable or good policy to provide financial support to induce the development of retail projects?
This article was originally published by the North Carolina Bar Association
Ernie Pearson is former Assistant Secretary for Economic Development in North Carolina. His broad experience allows him to understand and coordinate all legal issues connected with siting a new facility or expanding an existing one. After a move or expansion, he provides continuing assistance on various legal matters.