Incentives help Hockmeyer, Telephonics help us
Sunday, August 25, 2019
Economic development can often be a nebulous concept. You know it may be happening, but it’s still hard to wrap your head around and see the benefits.
Not so this month. Not once, but twice, state officials made the trip to Elizabeth City to formally announce business expansion projects that will create a total of 165 good-paying jobs.
The latest announcement came just last week when state Commerce Secretary Tony Copeland said that Hockmeyer Equipment Corp., a longtime employer that makes state-of-the-art process equipment, plans to add 90 jobs as part of a $6 million expansion. That followed an announcement by Gov. Roy Cooper earlier this month that Telephonics, a maker of surveillance and communications equipment, plans to create 75 jobs as part of its own $5.5 million expansion project.
For a community that often feels on the outside looking in when business expansion and job announcements are made elsewhere in the state, and where unemployment still remains too high, the Hockmeyer and Telephonics announcements are a welcome change. We congratulate all those state and local officials involved, particularly new Economic Director Christian Lockamy, who helped shepherd both projects to the point where company officials were ready to announce them this month.
Not surprisingly, both the Hockmeyer and Telephonics expansion projects feature incentive packages that include taxpayer money. According to Lockamy, providing incentives is now “the way of the world” when it comes to luring new jobs, and companies looking to relocate or expand now expect not only incentives from state government but from local governments as well. Increasingly, it’s also an economic development strategy for getting existing businesses to expand their operations and create more jobs. Lockamy says the strategy has proven successful elsewhere and he hopes to continue to pursue it here.
In Hockmeyer’s case, it will be receiving nearly $1 million in state and local incentive dollars to assist with construction of a 35,000-square-foot addition to its current site in a city-county industrial park across from Elizabeth City State University. Telephonics will be receiving nearly an equal amount to help with its conversion of a former bank headquarters building at Pasquotank’s Commerce Park, in the northern part of the county, into a second manufacturing facility. Telephonics’ incentive package includes $200,000 in property tax rebates recently approved by Pasquotank commissioners through the county’s Business Improvement Program. The taxes, which have to be paid first, will rebated over a 10-year period.
While many incentive packages including taxpayer funds are controversial — one thinks, for example, of the billions in tax breaks and grants communities across the country were willing to give Amazon to host its second headquarters — these crafted for Hockmeyer and Telephonics seem reasonable, particularly given the jobs payoff. The 75 highly skilled jobs at Telephonics will pay an average salary of $64,000, nearly twice the average wage of $35,000 in Pasquotank County. The 90 jobs at Hockmeyer are slated to pay an average salary of $37,400, also above what the average worker in Pasquotank brings home now.
Lockamy estimates the total impact from the two projects will be even greater. According to an economic analysis prepared by ElectriCities, the Hockmeyer expansion is expected to lead to creation of an additional 56 jobs in Pasquotank County and another eight in what’s known as Elizabeth City’s three-county Micropolitan Area, which includes Pasquotank, Perquimans and Camden counties. The annual economic impact to Pasquotank from the expansion, according to the analysis, will be $9 million. It also will increase what’s known as “output” — basically its sales and production — by $29 million. What’s more, the expansion is expected to generate $40,152 in annual tax revenues for the city and $47,201 for the county.
The Telephonics expansion will likewise have a huge impact on the community beyond the 75 jobs it creates. According to the ElectriCities analysis, it will lead to creation of an additional 63 jobs in the county and another seven in the three-county Micropolitan Area. The expansion will have an annual economic impact of $14.9 million and increase output in the county by $36.4 million. It will generate $42,350 in new property tax revenue for the county.
And none of that counts the extra economic benefit that will be generated during construction of the two projects.
These longer-term economic impacts will dwarf the incentives the two companies are getting from taxpayers. It’s also good to see these incentives and tax breaks going to companies that are already here. Both Hockmeyer and Telephonics have been operating in Elizabeth City for some time; Hockmeyer, in fact, has been here since 1984. Both have been good corporate citizens, contributing to our community’s prosperity by paying property and sales taxes and employing some 70 people. Both also plan to work out arrangements with our local colleges and universities to help ensure their highly-skilled graduates have a good shot at these new jobs.
Paying out incentives to help these companies expand their operations is a small price to pay for what they’ve already given us and will continue to give us in the future. We’d encourage Lockamy and other local officials to pursue this jobs-creation strategy with other local employers.