Market leaders tout economic study
Don’t call it an incentive.
Supporters of the High Point Market shout this from the rooftops to anyone who will listen when it comes to public funding of the furniture trade show.
Some see the money that the market authority gets from the state, the city of High Point, Guilford County and other sources as a type of economic incentive, much like what is given to businesses to convince them to open a plant or hire new workers.
Incentives have a negative connotation, because they involve tax dollars given to private companies that often have healthy bottom lines. Some argue that they amount to corporate welfare.
The market is a different animal though, argues Tom Conley, president and CEO of the High Point Market Authority, which organizes and promotes the semiannual trade show.
He points to a new study that found that the market has an annual economic impact of $5.39 billion.
Conley and others are using the study to show that the market doesn’t just benefit High Point, as it generates hundreds of millions of dollars in communities throughout the region and beyond in spending by visitors and tax money for state and local governments.
They feel that they have ample evidence to back up their message, but the message sometimes falls on deaf ears, they say.
“When you get to some of the remote areas of the state, they don’t get it. So, we invite them to come to market,” Conley said. “Some of them do, and their jaws drop when they see it. But they get confused between incentives and investment. The message that we give constantly is that it’s an investment.”
In times past, market supporters have ventured beyond High Point and Guilford County to make the case that outlying communities should contribute public funding to the market.
In 2006, the market authority adopted a business plan with the goal of securing an additional $4 million a year in public funds to enhance transportation services for marketgoers and allow for better marketing and promotion of the trade show. The city of High Point and the state contributed significant funding, but, outside of Guilford County, no other Triad community appropriated anything.
With this history in mind, market supporters have shifted their mindset from one of seeking new funding to maintaining what they already have.
The market authority’s $4.9 million budget includes $1 million from the city, about $1.85 million from the state, $1.5 million in showroom taxes, $275,000 in hotel tax revenues, $150,000 from the High Point Convention & Visitors Bureau and $75,000 from Guilford County.
Market supporters had to scramble earlier this year, when Gov. Pat McCrory initially recommended cutting state market funding in half. Conley and other furniture leaders impressed upon state leaders how critical the funding is for the network of buses and shuttles that take the 75,000 market attendees from their cars and hotels to showrooms. The network also takes attendees to and from airports in Greensboro, Charlotte and Raleigh.
The other major use of the state funding is for marketing and promotion of High Point’s “global brand” as “Furniture Capital of the World.”
McCrory relented on the proposed cuts, and furniture leaders said they feel confident about the state sustaining its funding.
“The state at one point provided almost $3 million a year to market. It declined over a five-year period to about $1.8 million,” said market authority Chairman Doug Bassett. “Frankly, we’re pretty satisfied with the $1.85 million they provided this year, and we feel that we have a commitment from many of our leaders both in the General Assembly and from the governor’s office to fund this at about that level going forward.”
Bassett and Conley often point out that the state receives $123 million in tax revenues connected to the market, according to the study.
“So if we give them $123 million annually as a result of this market on a $1.8 million investment, thats a 66-to-1 return on investment,” Conley said. “There isn’t a banker in the world that gives those kind of returns.”
The study found that city and county tax revenues linked to the market total $25.5 million annually.
“The city of High Point has been extremely generous for a long period of time with their actual dollars, but more importantly, all of the employees of the city of High Point just do a phenomenal job,” Conley said. “I wish Guilford County would step up a little more and, quite frankly, we’re going to work hard to try to make sure they do.”
Bassett said, “Could we spend a little more money well in trying to attract even more people here? Perhaps, but understanding the budget challenges the state has and everyone else has, our plan going into next year, at least at this point, is to just ask for the same amount they provided this year. I guess if we know the number we’re getting, and it’s a stable number, I think we can do a heck of a job putting on a first-rate market.”