Council OKs incentives for Spinrite upgrade

Published 7:45 pm Wednesday, May 16, 2012

Washington’s City Council, with a 4-1 vote Monday, authorized the city to participate in and contribute incentives to an economic-development project involving Spinrite Services Inc. and Spinrite Acquisition Corp.

Councilman Doug Mercer opposed the measure.

The council’s action came after a required public hearing. That hearing was to discuss the possibility of providing an economic-development incentive “to maintain the employment with Spinrite here in Beaufort County and the city of Washington,” City Manager Josh Kay explained.

The $90,000 authorized by the council will be used by Spinrite to upgrade the former Caron International craft-yarn manufacturing plant in the city, according to a city document. The $90,000 would come from transfers from the city’s general fund ($45,000), water fund ($22,500) and sewer fund ($22,500).

Late last year, Beaufort County allocated $90,000 for the project.

The $180,000 provided by the city and county match a $180,000 grant from the One North Carolina Fund to help Spinrite expand its operations in North Carolina, a move that would retain about 90 jobs in Beaufort County over the next three years and lead to a $9.1 million investment over that same time period in the local plant, according to information about the project.

“Again, the City of Washington is not a party of the grant agreement between the state and the county and Spinrite. The city is really a secondary party,” Kay said. “Our dollars will go to the county for their match. That’s the way this is set up.

The last part that I talked about is that agreement that deals with how those funds will be distributed, how the city’s funds will be distributed to the county. … In regards to payback, we certainly would also would be very likely to add that into that agreement should Spinrite not fulfill its statutory or legal responsibilities with this grant, if it’s possible.”

Although Mercer voted against providing the incentives, he did like some provisions in the agreements.

“Section 4.1 … tells you how you’re going to recover your money if they don’t create the jobs,” Mercer said. “The other point that I like in here is that, in effect, the number of jobs is above what was discussed in our earlier discussions. It’s 81 versus 60.”

Spinrite’s president, Ryan Newell, has said the incentives were a key part of Spinrite’s decision to select Washington over other sites for its expansion.

“Without the City of Washington, without the county commissioners and without One North Carolina, these jobs would have been gone,” he said during an interview in January when project details were unveiled publicly.

Some opponents of providing the incentives to Spinrite argue doing so does nothing but subsidize the sale of an existing industry to another industry, with the new owner eliminating jobs.

In a letter to the Beaufort County Board of Commissioners, Beaufort County resident Warren Smith questions if the state and local governments should provide money to a private entity to expand.

“Understanding that Beaufort County taxpayers remit millions of dollars to Raleigh as income and sales taxes, it seems prudent to help local businesses and community organizations to repatriate these funds by means of grants from Raleigh.

They are our taxes. Why shouldn’t we use them?” Smith wrote. “If Raleigh had not taken our money in the first place, then local businesses might well have a healthy enough local economy to solve their own problems. However, asking local residents to then match these grants for the further benefit of private, profit-seeking corporations seems overdone.

“Is there a reason taxpayers would not require these investors to provide their own matching funding?”

About Mike Voss

Mike Voss is the contributing editor at the Washington Daily News. He has a daughter and four grandchildren. Except for nearly six years he worked at the Free Lance-Star in Fredericksburg, Va., in the early to mid-1990s, he has been at the Daily News since April 1986.
Journalism awards:
• Pulitzer Prize for Meritorious Public Service, 1990.
• Society of Professional Journalists: Sigma Delta Chi Award, Bronze Medallion.
• Associated Press Managing Editors’ Public Service Award.
• Investigative Reporters & Editors’ Award.
• North Carolina Press Association, First Place, Public Service Award, 1989.
• North Carolina Press Association, Second Place, Investigative Reporting, 1990.
All those were for the articles he and Betty Gray wrote about the city’s contaminated water system in 1989-1990.
• North Carolina Press Association, First Place, Investigative Reporting, 1991.
• North Carolina Press Association, Third Place, General News Reporting, 2005.
• North Carolina Press Association, Second Place, Lighter Columns, 2006.
Recently learned he will receive another award.
• North Carolina Press Association, First Place, Lighter Columns, 2010.
4. Lectured at or served on seminar panels at journalism schools at UNC-Chapel Hill, University of Maryland, Columbia University, Mary Washington University and Francis Marion University.

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