Saturday, October 23, 2021

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In a first, commissioners turn down economic incentives request

Third request does not go over as well as previous two, which were granted; 2-2 vote with one recusal scraps county’s $600K contribution toward $60M expansion for Lotus in Mebane  

 

It may be going too far to say that it’s just the way the cookie crumbles. But a Belgian confectioner certainly saw its hopes go to crumbs this week when Alamance County’s commissioners declined to approve a package of financial incentives for the potential expansion of an existing production facility in Mebane.

Lotus Bakeries first and so far only U.S. manufacturing plant is located in the North Carolina Industrial Center, off South Third Street, in Mebane.

The board of commissioners ultimately deadlocked 2-to-2 on a proposal that would entitle Lotus Bakeries to receive $600,000 from a proposed $60 million investment into a plant that it already operates at the North Carolina Industrial Center. Had the company’s come-on succeeded, the requested subsidy would’ve been third since Lotus first dangled the prospect of a local production facility before the commissioners nearly five years ago.

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Lotus had no trouble securing the county’s financial support in 2016 when it identified the North Carolina Industrial Center as a finalist for its first ever production facility in the United States. The commissioners ultimately voted 4-to-1 for a $1.5 million enticement that they hoped would convince the Belgian bakery to follow through on its plans for this site. This housewarming gift was followed by another $262,000 in 2018 after Lotus scaled up the anticipated tax value of its new plant from $55.3 million to $72.7 million.

“I’m so thankful they’re here. [But] I’m concerned that this is like the third time. That’s all.”

–county commissioner Pam Thompson

But a third trip to the public cookie jar was too much for commissioner Pam Thompson, who said on Monday what proved to be the definitive statement on Lotus’ latest request for funds from the county.

“I’m so thankful they’re here,” Thompson conceded. “[But] I’m concerned that this is like the third time. That’s all.”

A hearty “thanks, but no thanks,” was indeed all that Lotus would get from the commissioners. The company’s request was effectively doomed once Thompson was joined in her opposition by fellow commissioner Bill Lashley. Lotus’ proposal won over the board’s chairman John Paisley, Jr. and its vice chairman Steve Carter. Yet, their votes weren’t enough to carry the day due to the recusal of the board’s fifth member, Craig Turner, who acknowledged that he had a bona fide conflict of interest in this particular case.

 

A third helping of funds?

Best known for its Biscoff brand cookies, which are served as a midair repast on Delta and other large airlines, Lotus began to roll out this signature product locally once its Mebane facility went operational in 2019. In the meantime, the company’s home office in Belgium decided it needed even more production capacity on the other side of the Pond thanks to the soaring popularity of its existing products and the introduction of a new crème-filled cookie “sandwich,” which debuted in Europe last year.

In order to accommodate the anticipated demand for its wares, Lotus has proposed to install three more production lines and 103,000 extra square feet of floor space to the Mebane facility, which presently boasts two lines and 118,400 square feet. The company expects this expansion to inject at least $60 million into the local property tax base over the next two and a half years and to expand the local workforce by 86 jobs with an average salary of $43,510 a year for these positions.

In order to offset the cost of this project, Lotus has asked the county for a financial enticement of $600,000 to be paid out in five annual installments of $120,000 apiece. The company has reportedly submitted a similar offer to the city of Mebane along with an additional request for the city to waive the planning and development fees it would ordinarily assess on the expansion. Mebane’s city council will likely hear these requests at its next regularly-scheduled meeting on May 3.

“I think we’ve been a stable business that has been able to deliver upon its promises. We of course want to do that again, and I think it will help in bringing additional business to the region here.”

– Michiel Bloemen, Lotus Bakeries

In his presentation to the commissioners, Michiel Bloemen, an executive in Lotus’ American division, had plenty of sugary words to make his company’s pitch go down easier with the county’s decision makers. Bloemen went so far as to contend that Lotus’ mission during its nearly nine decades in business has been “to create small moments of joy and happiness.” Bloemen also offered the commissioners other, more substantive reasons to lend their financial support to his company’s proposed expansion.

“I think we’ve been a stable business that has been able to deliver upon its promises,” he said. “We of course want to do that again, and I think it will help in bringing additional business to the region here.”

 

Changing tastes on incentives

Bloemen’s request for funds from the public coffers nevertheless left a bitter aftertaste for the only two residents who addressed the commissioners about the company’s request. Lifelong area resident Sammy Moser was particularly blunt in his criticism of Lotus’ return to the county’s serving line.

“You want everybody to be loving and happy,” Moser said aping the confectioner’s mission statement, “but I’m wondering if we can do something about all that the money you keep asking the commissioners for, we could be a little bit happier.

“I assumed that if you got the money in 2016, you would be here for a hundred years [with no need for more subsidies]. Two years later in 2018, more money was asked for from the county…and here we are again today [with the company asking for more money from the county].”

– resident Sammy Moser

“I assumed that if you got the money in 2016, you would be here for a hundred years [with no need for more subsidies],” he added. “Two years later in 2018, more money was asked for from the county…and here we are again today asking [for money from the county].”

Moser’s complaints were later reiterated by Henry Vines, a Snow Camp resident who waged unsuccessful campaigns for the board of commissioners as a Democrat before his recent defection to the GOP.

“I wish we would stop giving this money away, and I don’t think that we ought to be threatened with ‘if we don’t get this money, we’re going back to Belgium.’”

– resident Henry Vines

“I wish we would stop giving this money away,” the one-time commissioner candidate said, “and I don’t think that we ought to be threatened with ‘if we don’t get this money, we’re going back to Belgium.’”

Monday’s hearing also saw the commissioners make an about-face from their previously receptive attitude to corporate incentives. This volta face was due, in large part, to some sweeping changes in the makeup of the county’s governing board, which lost four of its five members after last year’s election due to their scheduled retirements or election to higher office. Much like their predecessors, the board’s current members are all members of the Republican Party. But the present lineup appears to have a somewhat different tack when it comes to the subject of corporate incentives.

“I cannot vote for incentives. This is a hard decision for me because I am pro-business…But the taxpayers have already shown their consideration twice, and I think Mrs. Thompson may be right that the third time is too much.”

– county commissioner Bill Lashley

Prior to last year’s election, the only commissioner who could be relied on to oppose corporate subsidies had been Tim Sutton, who left the dais along with two other long-serving commissioners at the end of 2020. A potential claimant to Sutton’s mantle may nevertheless have emerged in newcomer Bill Lashley. The son and namesake of another former county commissioner, who died mere weeks before his son’s swearing in last fall, Lashley had previously told The Alamance News that he would part ways with the father when it came to corporate incentives, which the elder Lashley had always embraced. The younger Lashley lived up to his pledge on Monday after Thompson had shared her own qualms about Lotus’ recurring requests for funds from the county.

“I cannot vote for incentives,” Lashley declared that evening. “This is a hard decision for me because I am pro-business…But the taxpayers have already shown their consideration twice, and I think Mrs. Thompson may be right that the third time is too much.”

 

A tough break for Lotus

The company’s pitch went over better with the board’s present chairman John Paisley, Jr. A local attorney who briefly served on the board of commissioners some years ago, Paisley insisted that he has no trouble supporting the Belgian confectioner’s request because the county’s payments would be offset by the additional tax revenue that the proposed expansion would generate.  This same rationale was also put forward by Steve Carter, the board’s lone holdover from before last year’s election.

“I realize the reality of the business world,” the board’s senior-most member asserted. “It’s a competitive environment. Sometimes we have to do what we have to do to make it work. My rule of thumb has always been that if the cash flow to the county was positive, I would vote to support it.”

But Carter and Paisley weren’t enough to salvage the moment for Lotus, who was unable to get the required majority with Turner sidelined by his recusal.

An attorney by trade, Turner had opted to step back from Monday’s decision because his Greensboro law firm’s business relationship with Lotus.

“Lotus is a client of my firm,” he acknowledged before the board opened its public hearing on the company’s proposal, “and I have represented them before I became a county commissioner, so the outcome of this vote would have a direct financial benefit to me.”

WHAT WILL THE CO. DO? “We’re going to have to evaluate. We didn’t have a plan ready for not getting it.”

– Bart Vanterwyngen, Lotus Bakeries

In a subsequent conversation with The Alamance News, Lotus’ executives acknowledged that they’re still slated to go before Mebane’s city council next month in spite of the disappointing results of their pitch to the commissioners.  Even so, Bart Vanterwyngen, a top-ranking figure in the company’s stateside operations, added that he isn’t quite sure how Monday’s vote will affect the arithmetic for the proposed expansion in Mebane.

“We’re going to have to evaluate,” he said. “We didn’t have a plan ready for not getting it.”

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