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GREENSBORO — As Guilford County faces another tough budget year, some county commissioners are questioning the effectiveness of a relatively new grant program designed to foster more growth in the local tax base.

The program, adopted in October, offers grants to businesses for the amount of county taxes it paid on any improvements to real property — a  new construction or building expansion, for instance — for three years.

It was hoped the program would spur new construction and help small businesses improve and expand.

So far, however, only one property has applied for a grant: a shopping center already under construction in the 5800 block of North Church Street.

Last month Commissioners Vice-Chairman Steve Arnold, the policy’s author, found himself defending the program to his fellow commissioners. They said Granite Church Street, the company behind the shopping center, would have built it there anyway, regardless of the incentive program.

The developers are applying for a grant of $41,504 per year, or $124,512 over three years.

Arnold believes the county will see more applicants — and greater tax-base growth — once the economy rebounds.

“There are things that you can definitely do to create business growth and development in Guilford County across the board,” Arnold said. “Have the lowest taxes, have a planning department that’s easy to work with and give tax breaks if you can. The county commissioners as a whole are very interested in creating that growth.”

County Commissioner Paul Gibson said so far the program has yielded few results.

“The whole impetus behind that was to give small businesses — mom-and-pop type companies was the term used — some incentives, create some jobs,” Gibson said. “But there’s not any job requirement. If you don’t create any jobs, you still get the grant.”

Dan Lynch, president of the Greensboro Economic Development Alliance, said the business recruitment group supports the tax incentive plan.

He’s not distressed that more small businesses haven’t stepped up for the benefit.

“The fact that the economy hasn’t gotten any better,” Lynch said, has a lot to do with that. It “doesn’t surprise me that smaller businesses haven’t taken advantage of this,” he said.

Lynch said he understands Gibson’s argument, however.

“Paul (Gibson’s) position has been the minimum was really low and a lot of the commissioners were struggling with how it wasn’t tied to job creation, and we really need jobs right now,” Lynch added.

Any incentives policy should manage development, helping to encourage some types of growth that add more to the economy, said Rob Bencini, the former director of Guilford County’s economic policy and now an independent business consultant.

Policies in the past have not typically granted incentives for such projects as the Church Street development, with its emphasis on retail.

Retail jobs, he said, offer lower wages and are not the solution to this region’s employment problems, he said. Incentives should be targeted toward more lucrative jobs.

“I’m not against the project itself,” Bencini said. “Is it worth everyone’s while to give a tax subsidy for this project? It’s been on the books to be started for years. This wasn’t induced by Steve Arnold’s incentives. This thing’s been out there for a long time. They see an opportunity to grab some incentive money that wasn’t there before.”

Bencini said whether small or large businesses apply for the incentive, the policy should address more complex issues.

“The concept of incentivizing construction of already overbuilt sectors of the market, whether commercial or residential, is not economically wise and sustainable,” he said.

Commissioner Kirk Perkins said the county has real budget problems and that giving back tax money that would otherwise go toward helping isn’t the smart move.

“The textbook way that counties help pay their bills is increase tax revenue base and everyone pays their bills,” Perkins said. “When you take a class of property owners and say we’re going to give you a pass on taxes for three years, that’s not helping.”

In a year that’s already seeing county employees furloughed and laid off, Perkins said he can’t see the logic in forgoing revenue from businesses.

Contact Joe Killian at 373-7023 or joe.killian@news-record.com

Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com