The Greensboro City Council on Tuesday, June 6, unanimously voted to offer a $1.2 million economic incentive grant to Gateway University Research Park, a joint venture of North Carolina A&T State University and the University of North Carolina at Greensboro.

The money will go toward the construction a new building at the Gateway University campus on Gate City Boulevard that will in part be leased to Nanotex, which will move its operation from High Point to Greensboro.

The grant is unusual in several respects. One is that A&T and UNCG are both state universities, and it is abnormal for Greensboro to be giving money to the state. Usually the money flows the other way, from the state to the city.

It’s also unusual to provide funding to build a building. Typically, if any help was coming from the city, it would be in the form of infrastructure – streets, sidewalks, extending water and sewer lines – that would also benefit the city, not just in handing out money for a new structure.

Although the incentive is supposed to help entice Nanotex to move its operation from High Point to Greensboro, the grant is going to Gateway, not to Nanotex, which uses nanotechnology in creating products that make textiles water, odor, stain and wrinkle resistant. Nanotex is part of Crypton Inc., headquartered in Bloomfield Hills, Michigan.

The name of the company has not been officially released, but City Councilmember Sharon Hightower either said “Nanotex” or “nanotech” at the meeting. Whatever she actually said, she did give away the name of the company.

So the $1.2 million economic incentive grant is going to Gateway, which doesn’t pay property taxes. But one of the justifications for granting economic incentives to private businesses is that the money is used to improve the property, which increases the property value, so that the city will get its money back in property taxes.

City Councilmember Justin Outling said that the city would benefit from the 25 jobs and the increased taxes from the employees, but that this was not the way the benefit, from an economic incentive, was ordinarily measured.

He said that in this case, because of the city’s commitment to go after advanced manufacturing, he thought it was “worth doing something a little new.” But he agreed that this was not an ordinary economic incentive.

Outling said, “One thing that popped out at me was the $1.2 million economic incentive request. The exact amount we had for east Greensboro.”

City Councilmember Mike Barber said, “While many of the projects we fund are terrific, we tend to compromise some of our guidelines when it pertains to east Greensboro.”

As Outling noted, the amount of the grant is $1.2 million, which happens to be the exact amount that the City Council set aside on Feb. 16, 2016 to spend in economic incentives in east Greensboro.

An economic incentive grant is supposed to be based on how much the company needs, not how much the city has set aside in an account to give away. But it doesn’t seem like it could be a coincidence that Gateway said that it needed the exact amount that was available.

And reports are that it isn’t a coincidence. The original request from Gateway was for a lesser amount and the City Council raised the amount to $1.2 million. If a lesser amount was enough to get the project underway, then why pay the state $1.2 million? The state has a budget of over $22 billion; Greensboro is not going to buy any friends in state government with a couple hundred thousand. But for some other business considering east Greensboro, a couple hundred thousand could make the difference between Greensboro and some competing town or city such as Graham, which has reeled in a number of companies that also looked at Greensboro.

The city is not taking the $1.2 million from one fund but is using 2006 bonds and 2016 bonds to fund the project so that it doesn’t entirely deplete the money set aside for east Greensboro. But it is the amount the council voted last year to spend on economic development grants in east Greensboro.

If Greensboro is going to start sending money upstream to the state, maybe it should also send a couple million to the federal government.

As noted in the article on the city budget on page 10, Greensboro is flush with money and is not simply giving it away to the City Council’s favorite nonprofits, but is now also giving it away to the state.