Is Interstate Competition Required for Economic Development Incentives?

<p>A company’s sole facility has been located in North Carolina for the past decade, but the company recently decided to move its facility to a new location in order to expand its operations. It has three choices: (1) move to an available facility in the same county in which it is currently located, (2) move to an available facility in the county next door, which is another North Carolina county, or (3) move out of state. The company’s executives determine that moving out of state is not advantageous for the company, so the search is narrowed to the two counties in North Carolina. The company approaches each of the two counties and requests incentives. With no out-of-state competitor in the picture, may the two North Carolina counties offer incentives to the company pursuant to G.S. 158-7.1?</p> <p>This is essentially the situation that plaintiffs presented to the North Carolina Court of Appeals in a case decided at the end of 2010, Haugh v. County of Durham. In that case, a company was purportedly lured from Wake County to Durham with the promise of incentives. Plaintiffs asked the court whether it serves a public purpose for one North Carolina county to use incentives to induce a company to relocate from another county in North Carolina. Before we get to the court’s answer, let’s review what prior courts have said about the importance of interstate competition in determining whether local government incentives pursuant to G.S. 158-7.1 serve a public purpose.</p> <p>Maready v. City of Winston-Salem</p> <p>The seminal case dealing with North Carolina local government incentives is [...]</p>