By Richard Sullins | firstname.lastname@example.org
The part Sanford played in helping close the deal on one of the state’s largest-ever economic development projects could be considered as a back story, but it’s one that deserves to be told.
Were it not for the vision city leaders showed as far back as four years ago, today’s announcement of Vietnamese electric automaker investing $4 billion and adding 7,500 jobs to the region wouldn’t have happened.
Chatham County had lots of available land, but what it didn’t have was easy access to the one natural resource that makes economic development projects sink or swim in the third decade of the 21st Century — water. Chatham officials recognized that a neighboring city had the water capacity needed. So, they reached out to their neighbors in Sanford for help.
Water is a critical component for any developing industry, particularly those focused on heavy manufacturing like VinFast, and Sanford has it in abundance. Four years ago, Mayor Chet Mann and the Sanford City Council made a critical decision to build a water line that will help bring service to the site as construction takes place over the next three years, a call that later became one of the determining factors in VinFast’s decision to come to central North Carolina.
The northeastern end of Lee County, and just across the Deep River into Chatham County, had long been a desert for water and sewer services, and no water means no development. Building on Mann’s Open for Business platform put forth when he was first elected in 2013, the city leveraged grants from the state, the GoldenLeaf Foundation and a budget allocation of $3.9 million in 2018 to build water and sewer lines from Sanford to Pittsboro, as well as a second loop to provide services to the Raleigh Executive Jetport in Lee County and the Moncure area.
Mann said, “It was a huge leap of faith by the city council, but boy did it ever pay off.”
The deal negotiated on behalf of the city by Mann and City Manager Hal Hegwer does more than provide Chatham County with the water they need. In addition to the sale of water and sewer services and in exchange for their provision, Sanford will receive 20 percent of all property taxes that Chatham County collects from every home, business, or industry that connects to the water line. Even better, Sanford will continue to receive those funds for the next 50 years after the line goes into service, meaning millions of dollars that will flow annually into the city’s coffers every year for the next half-century.
In a genuine coup for the city, the arrangement negotiated with Chatham County allows for that same money to flow into the city’s general fund. That means it can be used to provide a supplementary level of funding for the next 50 years that the city would otherwise not have had.
“That’s one of the many nuggets of gold in this story for Sanford,” Mann told The Rant. “By the time that money stops flowing, I’ll be gone from the scene. But by the time that spigot finally gets turned off, Sanford will have millions of additional dollars coming in. And by going into the general fund, it can be used to address our housing shortage, build and expand our parks and trail systems, we can continue revitalizing our downtown and lifting up neighborhoods, and a whole host of things that will come along to make Sanford a place that people want to call home.”
It was Public Works Director Victor Czar who came up with the engineering needed to connect the existing loops and lines, and then extend them to Triangle Innovation Point and on into Pittsboro. It was this kind of thinking that previously brought Sanford to the verge of winning another economic development project that ultimately it didn’t get.
“Another company told us that Sanford was only city that had cracked the code on how to do this, on how to get the water up to a site like this and back, but other factors led them to choose somewhere else. But it’s one of the implements we are now keeping in our toolkit as future projects come along,” Mann continued.
The mayor said just the water and sewer infrastructure needed to connect the new plant site to the city’s system and then over to Pittsboro could exceed $135 million. But the news just keeps getting better, Mann said. The state will pick up the tab for almost all of it – $132 million, leaving the remaining $3 million to be split between Sanford and Pittsboro. Sanford’s share of the entire project could come to be just $1.5 million, itself another huge win for the city.
Sanford has been planning for expansion of its water and sewer services for just this moment. Its system today treats about 12 million gallons of water and turns it into drinking water-grade, with an equal amount of sewage treated and returned to the Cape Fear River in a form cleaner than what is drawn from it daily.
To accommodate the city’s and the surrounding region’s anticipated growth, it is planning to expand its water treatment capacities, both intake and discharge, to 30 million gallons per day, an increase of 18 million gallons of water every day, through a major engineering project funded in large measure by state grants.
At its meeting on Jan. 18, the city approved agreements with Fuquay-Varina, Holly Springs, Pittsboro and Chatham County for the engineering design of a joint water treatment plant to service the new system. The city has also negotiated interlocal agreements with these partners to provide for the construction and operation of new lines that will provide the lifeblood for regional economic development for years to come.
“None of (the VinFast announcement) would have happened without the water and sewer capacity that only Sanford could, and was willing, to bring to the table,” Mann said. “Years ago, no one wanted to extend capacities like these. They didn’t want to have to deal with their competitors. But I’ve always believed that collaboration is the best way to get things done. We got in there and got it done and look at the result — good jobs that will provide a living wage, money that will support our communities and our schools and parks, and money to plow back into our budget to build out even bigger.”
Plant will have a multiplier effect
Mann, who recently decided not to seek a third term as mayor in order to focus on his business and devote more time to his family, believes the VinFast project will have an even greater impact to the region, including Sanford and Lee County, than a BMW plant has meant for Greenville, Greer, and Spartanburg, South Carolina.
“Seriously, this will be the most transformative project in our history,” he said. “It will help lift a lot of people out of poverty and create some new and massive opportunities.”
Just as BMW brought in dozens of supplier companies into the Upstate region of South Carolina, the Chatham County project potentially could have surrounding communities in the running soon for as many as two dozen or more related supplier companies, an indirect effect that will add even more to the economic impact that VinFast will bring.
When BMW originally located in Spartanburg, it was expected to bring approximately 2,000 new jobs with it. Today, BMW Manufacturing has 11,000 workers on site in the Upstate and the total economic impact of the company has a multiplier effect of 4.0, meaning that for every new job that BMW itself creates at its Spartanburg plant, three other jobs are created there or elsewhere in the state. Imagine that kind of impact on central North Carolina, and then imagine it again, because the VinFast plant will be at least twice as large.
A 2017 study done by the University of South Carolina’s Darla Moore School of Business found that BMW’s Spartanburg plant had grown to an annual economic output of $16.6 billion since it moved into the state 25 years before and was by then supporting 31,000 jobs.
How could an investment of this size impact life in the community, far beyond the gates of the plant? Mann said only the limits of our imagination prevent a definitive answer to that question today. Through the corporate charity of VinFast and its cast of companies that will symbiotically support its presence in Chatham County, there will be millions of dollars generated to support nonprofit organizations large and small, from little league uniforms to sponsorships of community organizations and underfunded groups that do good work in the area.
The economic development initiatives of the recent past have, to some degree, left many blue-collar workers behind. VinFast will be looking to hire many of them, as well as students that Central Carolina Community College and other institutions of higher education will train to fill positions that demand highly-trained workers. New training programs, built around new facilities outfitted with the latest equipment, will be a focus of area colleges and universities for the next few decades. CCCC has grown rapidly in recent years. It’s about to do so again.
Who is VinFast?
VinFast is the automotive sector of the VinGroup Joint Stock Company, the largest conglomerate company in Vietnam, that is owned and operated by the company’s richest man, Pham Nhat Vuong, which began rolling out its completely electric vehicles in 2021 as part of its direct challenge to Tesla. The company was started by Vuong in 1993 in Ukraine and originally sold instant noodles before moving operations to Vietnam and diversifying in 2000.
The company debuted two vehicles in the SUV market last year, the VF 8 and the VF 9, both slated for sale in the United States by the end of the year. Three others were rolled out at this year’s Consumer Electronics Show in Las Vegas in January, a first for an automotive manufacturer of any sort. Each of the five are in the SUV market and are all-electric vehicles that are battery powered instead of by an internal combustion engine.
The five vehicles, ranging from a small two-seater to a four-door wagon model, are broadly expected to sell in the American market between $30,000 and $60,000 to be competitive with other high-end electric vehicles in today’s market. The company is offer e-vouchers which early adopters can purchase now for $200 to provide discounts off the sale price of either $3,000 or $5,000 at delivery, depending on the model.