Monday, June 24, 2024

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Commissioners OK incentives for Chick-fil-A distribution center, 4-1


Alamance County’s board of commissioners has signed off on a six-figure package of financial incentives to persuade Chick-fil-A to establish a new distribution center in Mebane.

During a regularly-scheduled meeting on Monday, a majority of the commissioners agreed to give Chick-fil-A a total of $390,000 over five years provided that the restaurant chain follows through on its plans for a $52 million facility within an industrial park off of Mebane’s Third Street.

Two days later, the board reiterated its 4-to-1 decision during a virtual meeting they held on the advice of Alamance County’s attorney Clyde Albright. Albright had urged the commissioners to conduct the second vote after a 24-hour period for written comments that he said state law demanded since one of the board’s members had taken part in Monday’s proceedings over the Internet.

The commissioners initially gave these incentives their imprimatur after David Fader, the senior director for corporate financial services at Chick-fil-A, approached them on Monday with the particulars of his company’s proposed distribution center.

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Fader said that, with some 2,600 locations in 47 states, Chick-fil-A is in desperate need of a new distribution center to augment one that it recently set up in its home state of Georgia. Fader noted that the chain has traditionally relied on third party distribution centers, but has increasingly found it necessary to set up its own warehouses due to its runaway growth.

“We are the fastest growing chicken restaurant at the moment,” he told the commissioners. “That’s putting constraints on our distribution network.”

The distribution center that Chick-fil-A has on the drawing board in Mebane would occupy roughly 78 acres within the North Carolina Industrial Center, a corporate park that the Samet Corporation of Greensboro has been developing off of Third Street. This facility would boast 182,000 square feet of floor space and employ at least 160 people ranging from warehouse workers and truck drivers to the administrative staff. The company expects the average salary of these employees to be slightly in excess of $63,000.

Under an incentives agreement with Alamance County, Chick-fil-A’s warehouse must have an assessed tax value of at least $52 million – $22 million of which would derive from equipment and other movable property.

In return for the company’s pledge to add $52 million to the local tax base and at least 160 more jobs to the community’s workforce, the county has agreed to pay out $390,000 in five annual installments of $78,000 apiece. These grants are comparable to a series of payments that Mebane’s city council authorized earlier this month, although the council has also agreed to sweeten the pot by waiving another $150,000 or so in planning and inspection fees.

According to Alamance County’s manager Bryan Hagood, the county would net $1,479,300 in additional tax revenue during the five year term of the agreement even after the proposed incentives have been factored out.

In a brief interview after the hearing, Fader told The Alamance News that his company has also been eyeing some out-of-state sites for its new distribution center – including one potential location in Ohio. He added that the prospects for Mebane would hinge on Wednesday’s vote to confirm the county’s incentives, which ultimately went as the company hoped, as well as a forthcoming decision on a state-level package of financial enticements.

“We’ll wait for the outcome of [Wednesday’s] meeting,” he said, “and then we’ll regroup and see where the state lands on its package.”

With these commitments in hand, Fader told the commissioners that Chick-fil-A would break ground on the proposed facility early next year in anticipation of having the new distribution center operational by 2022.

Although Chick-fil-A is seeking public funds to defer the cost of this particular project, Fader tried to assure the commissioners that his company is just as eager to show its own generosity to the wider community. To this end, he briefed the county’s governing board on the chain’s hunger-relief program, its anti-homelessness efforts, and the college scholarships that it distributes to employees.

Chick-fil-A’s charitable tendencies were acknowledged by Henry Vines, a farmer from Snow Camp as well as a one-time Democratic candidate for the board of commissioners. Vines, who has since defected to the GOP, said that he is well aware of the company’s reputation for giving back through his involvement with the Alamance County Farm Bureau.

“They are a good partner for the community,” he told the current board of commissioners. “They’ve sponsored many things that we’ve done at the Farm Bureau…I really wish they would come because revenue will become important over the next five years.”

Vines nevertheless cautioned the commissioners that the tax value the company’s equipment is likely to depreciate considerably from its initial assessment of $22 million during the course of its five-year agreement with Alamance County.

Other, more general misgivings about the proposed incentives were raised by county commissioner Tim Sutton, who has repeatedly voted against “cash incentives” as a matter of principle.

“I have consistently voted against cash incentives,” he stressed. “I’m not against any business but I also know good government. It doesn’t make sense for something to be legal that a banker can go to jail for.”

Sutton also emphasized that the legality of cash incentives in North Carolina flies in the face of the state’s long-standing ban on cash abatements. He went on to urge the board’s chairman Amy Scott Galey, who was recently elected to North Carolina’s state senate, to solve this public policy “Rubik’s cube” when she takes her position in January.

Sutton scruples weren’t shared by fellow commissioner Eddie Boswell, who voiced his own, unreserved support for the incentives before the board’s preliminary decision on Monday.

“Chick-fil-A’s of course a great company,” Boswell told the rest of the board, “and it would be great to have them.”

In addition to Boswell, the agreement with Chick-fil-A won favor with the board’s chairman Amy Scott Galey, its vice chairman Steve Carter, and commissioner Bill Lashley, who had made the motion to approve the proposed incentives on Monday. Sutton cast the only vote against the deal that evening and during the follow-up meeting on Wednesday.

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