Call it North Carolina’s money pit. The North Carolina Global Transpark (GTP) in Kinston describes itself as “a 2,500-acre industrial/airport site situated strategically in Eastern North Carolina.”
Located about 30 miles south of Greenville, GTP is a state-subsidized economic development project largely consisting of industrial buildings, airplane hangars and runways. Even at its creation in 1991, GTP was heavily reliant on taxpayer dollars, and since then has gobbled up hundreds of millions of dollars in government subsidies while falling woefully short of fulfilling any job-creation promises.
GTP is run by the Global Transpark Authority, an independent government agency located within the Department of Transportation and governed by a 20-member board of directors. The Authority is exempted by law from property tax, which is supposed to provide savings it can pass along to tenants of its warehouses and office space. As described by a 2011 Joint Legislative Program Evaluation Oversight Committee report, GTP’s mission was “to create skilled, well-paying jobs in Eastern NC,” but in reality those initial job estimates proved to be “overly optimistic,” and these facts “make it appear as if the Authority has fallen short of its adopted mission.”
GTP’s creation was funded in no small part by a $25 million “loan” from North Carolina’s Escheat Fund. The Escheat Fund is funded by the sale of unclaimed property in the state, and excess escheat funds are supposed to go toward educational assistance. GTP has continued that heavy reliance on government funds to stay afloat, receiving another $130 million in funding from local, state, and federal governments from 1991 to 2010, according to the Program Evaluation study. Roughly $93 million of that came from state government funds.
In spite of the massive government subsidies, GTP still proved incapable of paying back its loan from the Escheat Fund. Indeed, in 2013 lawmakers included a provision in the budget bailing out GTP by transferring $26.5 million back to the Escheat Fund and thus wiping GTP’s debt clean, courtesy of North Carolina taxpayers.
After 20-plus years and more than $150 million in government handouts, what has been the result? GTP continues to fail to be self-sufficient. For the fiscal year ending June 30, 2014, it suffered a net operating loss of $6.8 million. It continues to receive millions in state taxpayer dollars, receiving $1 million in state operating aid and $26.6 million in state capitol appropriations in FY 2013-14. (The $1 million appropriation was reduced to $750,000 in the current year budget).
In spite of the General Assembly bailing it out of the $26 million owed to the Escheat Fund, GTP still has more than $11 million in long-term loans due. GTP has failed to entice very many businesses to its location. According to their website, the site currently has only 10 tenants, with three of those being state government offices.
And about those jobs? Major disappointment. According to GTP’s “master plan” in 1994, GTP was supposed to be employing 3,600 people after five years. After 20 years, however, GTP still only employs 486 private sector employees.
Even the “anchor” tenant of GTP, Spirit Aerosystems, has been a major disappointment despite receiving massive government subsidies.
In 2008, Spirit opened up a facility in GTP thanks to an incentive package from local and state government entities totaling more than $125 million. It was one of North Carolina’s largest economic incentive deals on record. Included in that amount was a $100 million grant from the Golden LEAF foundation to build the plant Spirit occupies and leases essentially for free. When Spirit announced its decision, it promised to create 1,000 jobs by 2014 at GTP. By the summer of 2014, however, Spirit reportedly employed only 440 people, with plans for a “small number of layoffs.”
North Carolina’s Global Transpark has been a huge money pit for North Carolina taxpayers. After more than 20 years, $150 million in government subsidies and bailouts, and even an exemption from property tax, GTP is still not close to being self-sufficient. North Carolina taxpayers deserve to be let off the hook for this disappointing boondoggle that hasn’t even come close to living up to its lofty job-creation promises. State lawmakers should seriously consider disinvesting the state from this project and selling it to private interests instead of continuing to shovel more money down this sinkhole.