The Community and Economic Development program at the School of Government provides public officials with training, research, and assistance that support local efforts to create jobs and wealth, expand the tax base, and maintain vibrant communities. We deploy the resources of the University to support the development goals of communities in North Carolina.
Recent Blog Posts
Imagine a county wondering what to do with its old courthouse that is sitting vacant in the middle of downtown. Perhaps the county wants to use part of the building as the commissioners’ meeting room, but the rest of the courthouse would sit unused, literally gathering dust, because the county doesn’t have the funds to renovate and up fit the entire building (it can barely afford to renovate one courtroom for the commissioners’ meeting room). Now imagine the county partnering with a private developer who would enter into a long-term lease for the unused space, renovate it, and rent it to a local businesswoman who will turn that space into a quaint bookstore and café, brightening up the downtown district (and providing a convenient place for commissioners to grab a quick bite to eat before meetings). The developer will finance 60% of the entire cost of the project and get a return on his investment from the rental income generated by the bookstore and café. Sounds good, right? How does the county structure this kind of contract? Who handles the bidding for the construction and renovation work? Who is responsible for ongoing maintenance? Can a private developer even finance improvements to a public building? How on earth does the county bid this kind of contract?
The new P3 contracting method sets out a statutory framework for this and similar public-private partnerships (“P3”). This contracting method was authorized by the General Assembly during the 2013 legislative session in the same bill that authorized the design-build and design-build bridging alternative construction delivery methods (S.L. 2013-401/H857 ). Codified in the new G.S. 143-128.1C, P3 contracting is available to all public entities in the state. Read more »
In his Inferno, Dante places usurers in the seventh circle of Hell along with profligates, blasphemers, and those violent towards people and property. These damned souls dwell in the innermost ring of the seventh circle, where they must sit in a flaming desert surrounded by falling tongues of fire. Considering there are only nine circles in Dante’s Hell, this placement speaks volumes about his attitude towards these “financiers.” Few would begrudge an individual for expecting a reasonable interest on a loan payment today; indeed, our entire international banking system has been built upon the idea of lending money on interest. Millions have benefitted from bank loans to help with everything from home purchases to small business creation. However, increasing disparity and barriers to traditional capital markets have given birth to an entity that would make even the Inferno’s usurers cringe: payday loans.
Payday loans were created in the 1990s as a way of providing fast cash without the need for a credit check. Payday loans, in their simplest form, work like this: A borrower goes to a payday loan storefront to get a small loan, typically around $300. The loan usually has a term of 2 weeks or the next payday. On payday, the borrower owes the loan, interest, and any associated fees back to the lender. These products have traditionally thrived in low-income communities because of a need for cash without the complications of the traditional banking system. Read more »
There are calls from many quarters to reform higher education and make it more accessible, affordable, and relevant in the dynamic, global economy of the 21st century. A recent study produced jointly by the Lumina Foundation and Gallup reinforces this theme. The study reports the results from both a general poll of public opinion and a targeted survey of U.S. business leaders. The findings provide some interesting perspectives on many of the critical issues currently facing higher education: Read more »
The following are articles and reports on the web that the Community and Economic Development Program at the UNC School of Government shared through social media over the past month. Follow us on twitter or facebook to receive regular updates.
The North Carolina Department of Commerce continued to move forward with its plans to transfer economic development functions to a new public-private nonprofit entity.
North Carolina Department of Commerce delays the shift of economic development functions to new nonprofit entity until 3rd quarter 2014: bit.ly/1a4v8Xl
On agenda at first board meeting of new nonprofit entity: Develop plan for transfer of functions and staff from the North Carolina Department of Commerce. bit.ly/1kZJN9X
Can North Carolina’s proposed public-private partnership for economic development raise more private funds than Arizona’s similar effort? bit.ly/NjcqAK
North Carolina General Assembly’s Fiscal Research Division: “no conclusive study” can say that a public-private partnership is better or worse at economic development than a public agency. Read more »
The business model of electric utilities has remained largely unchanged in nearly 100 years. Until now, this capital-intensive industry has primarily recovered revenues through the sale of energy units, or kilowatt-hours: a use more, pay more approach. Most electric utilities operate as state-regulated monopolies because of the amount of capital required to build energy generation and distribution (in other words, it’s not an easy entry market). But an increase in electricity costs combined with increased capability and decreased costs of decentralized generation solutions (like rooftop solar) threaten the way in which big utilities conduct their business. Read more »
In our series on the Town of Hillsborough’s use of special assessments for project development financing we left by contrasting the tool with tax increment financing in Part I of this series. Part II reviews some of the unique aspects of the implementation process. The School of Government’s Kara Millonzi provides a detailed description of special assessments here, which also details the statutory procedure for using the special assessment method and outlines eleven steps in the implementation process. The Town of Hillsborough’s case provides an example of caveats to consider in this process.
On January 27, 2014, the North Carolina General Assembly’s House Committee on Food Desert Zones heard testimony about food deserts in North Carolina. A “food desert” is defined in the Food, Conservation, and Energy Act of 2008 as an area “with limited access to affordable and nutritious food.” Maps and census tract data about food deserts can be found in the Food Access Research Atlas compiled by the U.S. Department of Agriculture (USDA).
Food deserts are often found in low-income areas. A recent media report pointed out that North Carolina contains 349 low-income food deserts; that is, communities with a high proportion of low-income residents and containing no supermarkets (1) within one mile in urban areas or (2) within 10 miles in rural areas. While it might seem counter-intuitive for farming communities to lack access to food, rural areas are particularly susceptible to food deserts. As pointed out in my 2010 report on rural asset-building strategies (co-authored with Lisa Stifler), looking forward, food deserts are expected to increase in number in rural areas as rural populations decline and food industries continue to shift food distribution channels to larger superstores in more populous communities. With low-income food deserts now located in 80 out of North Carolina’s 100 counties, food deserts are increasingly being viewed as a statewide issue requiring a coordinated policy response. This post describes some of the policy approaches presented to the House Committee on Food Desert Zones and then takes a closer look at a proposed approach involving development finance tools, such as loans and grants. Read more »
Recently, developers and investors in historic rehabilitation projects—and the communities in which they work—let out a big sigh of relief. After months of uncertainty, the Internal Revenue Service issued guidance on January 9, 2014 that cleared up the terms by which developers can allocate to their investors the federal income tax credit that has been a linchpin of the financing—and ultimate viability—of historic rehabilitation projects. Before we explain the main takeaways from the IRS guidance, some context is necessary for the uninitiated… Read more »
One of the cases I have students read in the leadership class I teach is the story of the Endurance expedition to Antarctica, led by famed polar explorer Ernest Shackleton. This story has received a tremendous amount of attention in the last several years, with several books and documentaries, a four hour BBC film starring Kenneth Branagh, and most recently (last month), a three hour PBS documentary called “Chasing Shackleton.” The attention this story has received though was not about the success of the audacious mission to make the first land crossing of the Antarctic continent. The ship never made it to shore. Rather, the story is an awe-inspiring saga of survival, and Shackleton’s efforts to make sure his entire crew made it home safely is frequently cited of one of the greatest examples of leadership ever. But while the Endurance expedition is an incredible epic, and Shackleton an inspiring hero, one might legitimately ask how such an extreme story—so out of time and place with our day-to-day experience—can offer lessons for leadership today. I actually think we can learn a lot about leadership in general and community leadership specifically from the Shackleton story if we think about the crisis the Endurance crew faced as a metaphor for community crises today. This post explores a few of the lessons we might learn from this amazing story. Read more »
In the fall of 2013, a blog post on special assessments for financing infrastructure included a short description of the Town of Hillsborough’s use of this finance strategy. Hillsborough was the first local government in North Carolina to borrow money and pledge special assessments as security for a loan. In learning more about this tool, we have conducted informational interviews with the local elected and administrative leadership. A series of blog posts will differentiate special assessments from other project financing tools, shed light on unique aspects of the implementation process, and review the town’s areas for deliberation.
The following provides background on the Town of Hillsborough’s case, and then discusses various financing options for project infrastructure. Read more »