Monday’s County Commission Closed Session about Rescuing Tuscarora Yarns from a Taxpayer-Protecting “Clawback Provision”

Posted on August 1, 2016

Todd Paris, Staff Writer and Salisbury Attorney

♦ I received an instant message on Facebook Sunday Morning, drawing my attention to a county commission agenda item on for Monday. There may be a closed session discussion about rescuing Tuscarora Yarns from a taxpayer-protecting “clawback provision” in their economic development tax incentives contract with the county.

The whole proposition is foolish from the start. When Tuscarora Yarns forced the tax abatement scheme upon our county commission, we were reassured by the EDC and a majority of county commissioners that a ‘fail-safe’ existed in the form of the ‘claw-back provision’, and that if they did not perform as promised, with the requisite number of ‘good-paying’ jobs, then they would lose the tax break, and even have to refund some of the already abated taxes the county had reimbursed them.

Jim Sides fought for and won the additions of the “claw-back” provisions to these incentive agreements. If the county did everything we were supposed to do and the corporation didn’t, why would we refund them money?

So now, under Greg Edds’s leadership, the Commission turns their eyes toward the corporate welfare out of the county’s coffers.

While I have no proof, and it’s just conjecture thus far, I was told that often these incentives are said to be set up between the companies and private “site selectors” to allow the site selectors to receive a large percentage of the tax abatements that the public thinks are going to the company. I’ve further been told these agreements between the site selectors and the corporation are private and not part of the public record. Tuscarora Yarns, should this be the case and if forced to repay taxes already abated, might renege on the incentives they pay to the intermediary third-party who lubricated the wheels of government for them in the first place. It might make some wonder if tomorrow the commissioners are just rescuing a “site selector.”

Were I on the Commission, before I would consider any waiver of sums due, I’d demand a full copy of any agreement that might exist with any “site selector” or private actor that benefited from this tax abatement and would release it to the public.

If this is going on, whether with Tuscarora or others, this practice needs to be exposed to the bright light of public inquiry to determine if this is an effective way of luring new industry. Do these private site selectors and consultants provide valuable services or could their job be done by city and county employees who are pro-development? If potential businesses are approached by these people does it give the impression that Rowan is a “closed shop? Who checks for conflicts of interest?

Of course, this is all going to be discussed in “closed session.” Is this legal? N.C. Gen. Stat. 143-318.11. (4) allows closed meetings:

“To discuss matters relating to the location or expansion of industries or other businesses in the area served by the public body, including agreement on a tentative list of economic development incentives that may be offered by the public body in negotiations, or to discuss matters relating to military installation closure or realignment. Any action to approving the signing of an economic development contract or commitment, or the action authorizing the payment of economic development expenditures, shall be taken in an open session.”

It would seem that discussing an agreement to rebate or not seek monies to be paid under an incentive agreement which is already public record, would be an action approving the signing of an economic development contract’s modification and require a public meeting.

I call on the Commission to dispel the rumors and handle this issue in open session and “get to the bottom of it.” The public deserves to know where its money their money is going.

The RFP article announcing the closing of Tuscarora Yarns and the tragic loss of 123 jobs:

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