Economic Development Plan

Understanding the difference between Economic Growth and Economic Development creates the foundation for any substantive discussion of Chapel Hill’s future – both its fiscal soundness and its quality of life.

Economic growth reflects a quantitative increase in budget sectors related to fiscal health. Economic development, by contrast, represents a qualitative increase in the collective well-being of the community. How does this apply to Chapel Hill?

Currently, the Town’s “Economic Development” activity focuses mainly on economic growth in the residential market, both luxury apartments and high-end student residences. The property tax revenue generated by these developments will represent a growth of our tax base. However, while the tax base increases, no mention is made of the services costs directly associated with the corresponding increase in population or of the consequences of that increase. The most easily seen impacts will be more traffic and increased school enrollment. This narrow plan of population growth does not represent “economic development” because there will be no increase in the collective well being of the community, which should be the primary objective of any governing body.

We need instead an Economic Development plan that will support a net increase in the tax base after services costs are counted and bring improvements to the Town as a whole, as opposed to enriching a few individuals at the expense of existing Chapel Hill citizens.

Since UNC-CH is “the industrial engine” of Chapel Hill, initial specific recommendations include:

  • Re-energize plans for the Carolina North Innovation Center by searching jointly with UNC for business partners to kick-off this “keystone” Carolina North development.
  • Establish a Multi-use Compact Convention Center using Carolina North donated land as a “jumpstart” for this facility which features a small (500 seat) auditorium/theatre, convention floor space, a dozen conference rooms, a “fast” and a “quality” restaurant, a small (100 room) hotel, and most importantly a full function transportation hub featuring scheduled linkage to RDU airport.
  • Formulate an incentive plan to retain UNC and entrepreneur start- ups. Currently, as companies grow from the incubator stage, acquire venture capital or angel funding and are thus able to hire more employees, they are forced to leave the area. This is a direct consequence of development approvals that do not provide the types of facilities that are appropriate. Support Town-Gown connections by working with UNC to facilitate the process.
  • Create “Commercial/Industrial Development Opportunity Zones” via rezoning portions of all the 2020 Focus Areas. This zoning would support uses such as internet data centers, high tech medical and bio-tech development and manufacturing (pills, etc.) and in general support “facilities” for successful startups.
  • Provide affordable local retail entrepreneurial opportunities by incentivizing major development plan approval based on a percentage of total square footage. In order to keep our community diverse, shopping options must be available and affordable to shoppers at every income level.
  • Establish a maximum allowable percentage of residential space in large mixed-use developments in order to increase the net revenue benefit of commercial structures and decrease the negative burden of residential service costs, including schools and social services.

The above recommendations are all components of the overall CHALT goal of adding the missing leg of stable municipal government operation which requires three legs. Chapel Hill only has residential and commercial revenue sources and is missing entirely the industrial leg needed for long-term stability.