The Onslow County Board of Commissioners is at odds with Jacksonville Onslow Economic Development (JOED) after commissioners shot down a request from JOED to return $250,000 of donated economic development funds.
Commissioners Chairman Jack Bright received a letter from JOED last month requesting that the county return the funds after the county sold a shell building at Burton Industrial Park. The building sold in February for $1.45 million, of which $1,232,500 will be paid out to the county over a seven-year term.
“The grand total that we have is $1.89 million that we’ve invested to make the shell building come to life in order to promote JOED projects,” said County Manager Sharon Russell.
Construction of the building began in 2016. The county donated land and contributed grant funding from its economic development fund. JOED chipped in a quarter of a million dollars of funding, both with the goal of attracting investors who can inject new jobs and tax revenue into the local economy.
But the property sold at a loss of over $400,000 for the county after carrying the costs of construction, engineering, appraisals, utilities, maintenance and a real estate agent. There is no shell building left for JOED to market to new investors. Being without speculative buildings is a showstopper when trying to attract new industry in Onslow.
All proceeds from the sale are going back into the county’s economic development fund. After closing costs, the county only received $199,529.25 up front.
With that money in the balance, JOED members approached commissioners during the public comment section of the meeting to plead for those funds to go back into the hands of those tasked with coming up with a plan for a speculative building, including its location, a design, a target audience and plan for funding the project.
“I can tell you that our plans for funding is to find somebody that has some money,” said Bob Warden, a Jacksonville city councilman and JOED building committee chairman. “We’re looking for partners, obviously. We have no money.”
Ward told commissioners that JOED is looking to partner with North Carolina’s Southeast regional economic development partnership and is seeking funding sources that all require local matching.
“We’re basically out of the game without some sort of a building,” said Warden. Without infrastructure and funding to secure grants, JOED is unable to respond to requests for proposals from investors.
Ward said there had been 48 recent requests that would have been an ideal fit for Onslow, but they were only able to respond to two of them. They had to pass on 29 of those requiring a speculative building. Others needed transportation access to ports, airports and railroads. Shell buildings take a lot of upfront money and sometimes years to erect.
Matt Ray, JOED vice chairman, echoed Ward in saying they cannot respond to 90 percent of requests for proposals because they do not have a product to move.
Also on JOED’s behalf, treasurer Melissa Anderson, told commissioners the $250,000 JOED donated came from Onslow investors and the Onward Onslow campaign, which was partially based on development of a speculative building.
Commissioners first responded by reviewing meeting coverage from Aug. 1, 2016, when the resolution was adopted to add JOED’s contribution to the county’s economic development fund that exists within its general revolving fund.
In the review, then-county manager Jeffrey Hudson summarized that Onslow received grant funds from North Carolina’s Southeast and former commission chairwoman Barbara Ikner clarified how funding would be used. Specifically, the resolution stated any proceeds from the sale of a shell building would be returned to the county’s fund to support future economic initiatives.
The vote that followed was not entirely unanimous. Commissioners voted 6-1 in favor of keeping the proceeds in the county’s economic development fund. Commissioner Royce Bennett, who was not on the commission when the project began in 2016, cast the lone vote to return the funds to JOED.
“This is a different board, and I don’t believe this board has the intention of building another shell building. I personally don’t believe the county needs to be in the shell building business,” Bennett said.
Bennett pointed out the loss the county took on the Burton Industrial Park building as proof the county should not oversee development of shell buildings. He said the funding would be better placed with JOED to seed private funding and matching grants.
Commissioner Mark Price disagreed.
“I don’t see an obligation of the county to return the $250,000,” Price said.
Price said that since the original resolution clearly stated JOED funds were a donation and did not include language to indicate any terms of repayment that JOED should have understood their investment may come with the risk of loss.
Bright pointed out that other organizations donate to the county regularly, and he does not want to set a new precedent for others to ask for their money back in the future.
“We’re not saying we’re closing the door on building buildings,” said Price. He added that moving forward JOED should bring proposals for consideration on a case-by-case basis.
Commissioners vice chairman Tim Foster said they are ultimately in the same boat in their desire for economic development.
“The one thing that bothers me more than anything else is the building of a contentious relationship between JOED and the Onslow County Board of Commissioners,” said Foster. He would like both entities to come back to the table to discuss a specific plan for funding rather than JOED making a blanket request for the $250,000 to be returned.
At the end of the day, neither the county nor JOED have much money to invest in new economic development projects.
“Without a building of our own to market, we’re going to see a lot of investors go to other counties that do have speculative buildings, and that’s going to be a loss of our tax base,” Anderson said.