RALEIGH — Two Northeastern North Carolina economic development projects seeking more than $8 million from the state’s General Fund will do little to reverse the region’s economic misfortunes, according to a new report released this week by the John Locke Foundation.
Joe Coletti, a fiscal policy analyst for the Raleigh-based think tank, wrote a Spotlight briefing paper that examined feasibility studies for two plans proposed by the Northeastern Partnership, the economic development partnership for 16 counties from the Outer Banks to Halifax County. The plans are for an entertainment district in the City of Roanoke Rapids and a vehicle research center for Northampton County.
Roanoke Rapids’ proposed entertainment district is in collaboration with Randy Parton, brother of Dolly Parton, and includes a 1,500-seat theater, two new hotels, and a 200,000-square-foot retail center. Coletti said that a viability study touted by the Northeastern Partnership focused only on the theater and found it to be viable if the hotels and retail center were completed and operating before the theater.
“These assumptions are like saying I could win a Grammy if I have the right song and talent,” said Coletti.
He stated that another study touted by the Northeastern Partnership attributes 30 percent of the economic impact of the entertainment district to its construction. The study states, “the model does not presume that the jobs created are long-term positions.”
Coletti pointed out that the feasibility and viability study for Northampton’s proposed Advanced Vehicle Research Center (AVRC) was authored by Dick Dell, the chief promoter of the AVRC.
He said that Dell’s study does not state the assumptions underlying its analysis nor any conclusions about the AVRC’s feasibility. The study offers only, “We believe that such an enterprise is needed today and the need will increase in the near future…”
Dell’s study does state that there are significant challenges to the success of the research center that will require state and federal funding assistance. Mr. Dell suggests the center be started as a non-profit corporation to secure public funding but claims, “Private investment will be available as the enterprise reaches a level of profitability.”
Coletti stated, “The problem with this idea is that the feasibility study gives no evidence that the enterprise will become profitable.”
He concluded his analysis with a different economic development plan for state and local officials: create a positive environment that allows all businesses naturally to flourish or wither without handicap or crutch. Coletti pointed to Charlotte’s banking and the Research Triangle’s IT and biotech as examples of such naturally occurring successes.
“If governments were that good at picking winners, they could make enough from investments and not need taxes,” Colletti said.
You can find Coletti’s new Spotlight paper, “Stars and Cars,” by visiting the main JLF website. For more information, contact Joe Coletti (jcoletti@johnlocke.org) or Summer Hood (shood@johnlocke.org) at 919-828-3876.