AAIPharma will get $275,000 from New Hanover County and is seeking $225,000 from the city of Wilmington for an expansion of the company’s headquarters here. The county commissioners approved their share of the payments by a 4-1 vote Monday.
Commissioner Woody White voted against the incentive offering, saying while there are times incentives are justified, he believes they are overused and unfairly distributed. AAI is expected to ask the Wilmington City Council for the remaining share of a one-half million dollar total investment during Tuesday’s council meeting.
But the majority of the board supported the allocation as furthering the county’s economic development goals. Economic development officials have identified the pharmaceutical industry and headquarters expansions or recruitment as the types of businesses that will benefit the area.
“This is a growing sector,” said Scott Satterfield, chief executive officer of Wilmington Business Development, which recruits businesses for the county. AAI already has a substantial investment and more than 4,00 employees in Wilmington, he said, and the expansion will only increase its economic impact.
“There are a lot of communities that would love to have this project,” he said.
He also noted the types of jobs AAI provides have an average annual salary of $77,000.
In return for the incentive payments, which would be distributed over five years, the company must invest no less than $20 million and provide 50 additional jobs over that period. The annual grants would not begin until construction is completed.
The expansion would involve a new, 40,000-square-foot headquarters and extensive renovations to a 30,000-square-foot building for lab space. The incentives are an important step, but AAI has not announced a final decision yet. The company has labs in several other places, including St. Louis, New Jersey and the Milwaukee area, and is fielding offers from state and local governments there.
Eric Evans, AAI’s chief financial officer, confirmed the company has been approached by other areas that are offering money.
“It does not seem like a large amount of money,” he said, but added that it is “difficult to say no” when another area is offering money.
But he said AAI has a longstanding commitment to Wilmington. He said the company will have a decision “fairly quickly.”
White, who stressed he appreciates the company’s economic contributions, was skeptical. Considering the size of the investment, he said he is not sure that $500,000 is going to be critical to that. He also said it seems as though the decision already has been made.
Evans said many factors make Wilmington attractive, among them the strength of University of North Carolina system.
“We hire extensively out of the chemistry department at UNCW,” he said. But he also said incentives are an important consideration.
The other commissioners did not share White’s objections. Commissioner Beth Dawson pointed to an analysis from Coudriet that projects — conservatively, according to the county manager — at least a 200 percent return on investment over 10 years.
In other business Monday, the commissioners:
— Approved a contract with Bordeaux Construction to renovate the shuttered WASTEC plant for use as a recycling facility to be operated by Sonoco, a packaging company that will process and sell the county’s recyclables. White noted the bid of $1.157 million is roughly 40 percent higher than budgeted, characterizing it as a whiff. Coudriet and Environmental Management Director Joe Suleyman both declared responsibility for the miscalculation. But Coudriet also noted construction costs are going up considerably as the economy improves, and the complexity and the short timetable for the project require a substantial commitment of manpower by the contractor, which also has other projects in the works. The board voted unanimously to accept the bid despite concerns about the missed estimate.
— Tabled a policy on naming and sponsorships for county-owned facilities and assets. The policy is intended to standardize the process for recognizing financial sponsorships and naming facilities, but Commissioners Woody White and Beth Dawson were concerned that as proposed, it would allow those decisions to be made by department heads or the county manager unless they reached a certain level of giving. Both commissioners said elected officials should sign off on all such decisions as an accountability measure.
— Approved rezoning a -2.39-acre tract off Carolina Beach Road just south of the Tregembo Animal Park from large-lot residential (R-15) to highway business (B-2). The surrounding property is already used for commercial purposes.
— Approved issuing $92 million in voter-approved bonds for completion of the humanities and emerging technology buildings at Cape Fear Community College and several public school projects, including a new elementary school, replacement of two schools and major renovations at Hoggard and Laney high schools. Voters approved the bonds in 2008 and 2014, respectively.
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