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Mark Zimmerman: The 1 percent non-solution

June 9, 2014 

“The trend is not sustainable, obviously.”

Interim Orange County Manager Michael Talbert deserves kudos for doing something public officials have too often avoided – stating the obvious.

Talbert was referring to the Orange County Board of Commissioners’ addiction in recent years to balancing the budget by borrowing from savings. The commissioners have raided savings because they wanted to avoid the alternatives: either raising taxes or making hard decisions to cut spending.

But eventually – actually soon – the excess funds in our piggy bank will be depleted and the commissioners will be forced to make one of those unpopular decisions. Unfortunately for Orange County homeowners, raising taxes will be the course they choose again.

How did we get into this predicament? You need to go back over three decades to find out.

In the 1980s, Orange County adopted a series of land-use plans that segregated future commercial and industrial activity into three small “nodes.” Later, these were designated economic development districts (EDD).

The three areas are the Hillsborough EDD, 637 acres just south of Hillsborough at I-40 exit 261; the Buckhorn EDD, 1,200 acres at the Buckhorn exit off I-85/40; and the Eno EDD, 530 acres where I-85 and U.S. 70 head into Durham.

For context, these areas total 2,367 acres out of over 236,947 acres outside the incorporated towns in the county, just 1 percent of available land.

EDDs can be good if they are being used to enhance an area needing revitalization. They are not so good if they are used to keep development isolated. They are just plain bad if they can’t even be used for economic development.

For decades, Orange County’s EDD’s fell into the latter category. The county commissioners didn’t give the EDDs proper zoning, necessary utilities, or the marketing and incentives needed to compete for good investment. They were EDD’s in name only. Commissioners were able to point to them as evidence of their support of economic development without much risk of incurring any.

But the budget pressures of the last recession changed that attitude. Suddenly, it became apparent that we needed new sources of revenue if we wanted to pay for the schools, social programs and other county obligations the electorate wants. That meant getting more aggressive about economic development in those districts.

The Hillsborough EDD is now well on its way to being a success story. The Town of Hillsborough agreed to provide necessary water and sewer to what has become the Waterstone development, which includes a Durham Tech campus and a new UNC Hospital.

The Buckhorn EDD is just starting to develop after sales tax revenue designated for economic development is being used to provide water and sewer. The Morinaga candy company plans to build a factory there.

The Eno EDD remains dormant, as it needs water and sewer from Durham. Discussions are ongoing about when that will occur.

While it has taken nearly 30 years, it is very good news these EDDs are beginning to bear fruit. But we need a lot more development to help with the budget shortfalls and the property tax burden on homeowners.

Unfortunately, these small tracts of land will not be able to fulfill our ongoing needs by themselves. Making matters worse, the current EDDs are not fully buildable. They include streams, topographic challenges, current uses that are eyesores, privately owned land not for sale and tenants who don’t want to be moved. Attracting enough businesses that we want as neighbors will be challenging.

Fortunately, there is other land in Orange County outside the current EDDs that would be very appealing to good businesses. It’s time we start identifying those opportunities, so we have options planned for the future.

We need to begin working now on what to do when the three current EDDs are full. There will be many obstacles to overcome. Current zoning, buffers, preservation designations and other encumbrances would need to be reevaluated. But our county’s fiscal health will depend on finding ways to responsibly develop more than the 1 percent of land we set aside last century. Only then will we have a more sustainable revenue source for our growing budget needs.

Mark Zimmerman owns a real estate business and lives in Chapel Hill. You can reach him at markzim@gmail.com

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