ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, April 9, 1997 TAG: 9704090034
SECTION: EDITORIAL PAGE: A-10 EDITION: METRO
Maple Leaf Foods is a welcome addition to the Roanoke Valley. But the kind of state incentives that helped bring it here, while not unwarranted, should be approached with caution.
EARLY this year, Kroger Co. announced plans to consolidate its regional operations and expand its warehouse in Roanoke County. On Monday, Maple Leaf Foods announced plans to build a large commercial bakery in Roanoke city, its fifth in the United States and first in the Southeast.
Is the Roanoke Valley on the road toward becoming a regional food-processing and food-distribution center?
If so, credit in part the valley's attractiveness to business and its accessibility to the retail outlets to be served by the Kroger warehouse and the Maple Leaf Foods bakery. But credit also governmental incentives.
Those incentives are mostly infrastructure improvements, particularly the local-government contributions. Such incentives - roads, utility extensions, site preparation and the like - might be seen as the public sector's version of the private-sector concept of just-in-time production and delivery. They are traditional responsibilities of local government, deferred until a specific need arises. They are the kind of investment, too, that stays in a community regardless of what happens to the particular businesses for whom they are initially spent.
But getting the Maple Leaf bakery for Roanoke's Centre for Industry & Technology also involved state tax breaks and grants. The bakery will enjoy the favorable income-tax treatment because it will be located in a state-designated enterprise zone, near the homes of potential employees who are low- or moderate-income.
Enterprise zones are, on balance, a promising experiment. Unlike ad hoc tax breaks, incentives offered via enterprise zones are open to any employer who meets the requisite qualifications and expands in or moves into an enterprise zone. The idea is a form of economics-based (rather than ethnic- or gender-based) affirmative action. The zones are a way for the state to encourage employers to locate near people who most need expanded job opportunities, and in areas already set aside for commercial and industrial uses.
Still, Virginians should keep their eyes open to the drawbacks of tax breaks as an economic-development tool. There's no reason to expect that Maple Leaf Foods will be anything but a long-term corporate citizen of the valley and state. But Virginia should approach with caution any incentive that, once spent, is gone forever.
LENGTH: Short : 50 linesby CNB