By Lee Burlett

Extremely low overall operating costs, little if no congestion on the roadways, character, an outstanding work ethic, lower taxes and in some cases a higher quality of life are certainly factors to take into account when comparing a rural South location with a more urban one.

Yet, for years the aforementioned advantages, tangible and intangible, were the only items the South had in its battle to recruit industry. It was how the rural South was sold to prospective industry for decades. The only problem was that most rural regions in the South were broke. It wasn’t a matter of the rural South being viewed as unattractive to industry, but rather the cold-hearted fact that there was little investment capital available in the rural South.

That’s changing and it’s changing fast. Now, the rural South has something else to offer industry: cash infusions in the form of new incentives for qualified employers landing in rural regions of the South and low interest loans specifically designed for investment in rural projects.

In regards to incentives, some states in the South are trying to lure you to their rural regions with as much as $10,000 more per job in tax credits. Even in Florida — certainly not a state known for its liberal incentive policies simply because it has other significant attractions — you can garner $3,000 more per job in tax refunds in that state’s Qualified Industry Target Program.

Higher incentives to locate the jobs and investments you create in rural areas of the South are not new. But they work. Prior to the State of North Carolina adopting the William S. Lee Act, legislation designed to make it highly profitable to land in rural areas of the Tar Heel State, the region east of Interstate 95 was as economically distressed as any in the South. That’s changed dramatically in just the last two years. In fact, it is estimated that more corporate deals have been announced east of I-95 in North Carolina in the last two years than in the last 10 years, significantly reducing unemployment in that region of the state.

While weighted rural incentives are not new, private investment in rural regions by banks and the like is relatively new. South Carolina Gov. Jim Hodges announced this summer of new legislation that will promote community development corporations in rural and underdeveloped areas of the Palmetto State. The legislation gives financial institutions more incentive to invest in rural projects.

The new South Carolina law will create tax-exempt CDCs designed to provide rural areas with access to capital, affordable housing, and enhance economic opportunities in low-income rural regions of the state. In addition, the new legislation provides tax credits to lenders who invest in rural CDCs.

In North Carolina, through the combined efforts of the state and large North Carolina-based banks, rural regions of that state are in for some much needed economic assistance. First Union Corp., Bank of America, Wachovia Corp., and BB&T have committed $50 million towards funding for small businesses in rural regions. Thanks to a federal fund, the available money could triple to $150 million.

Called the Rural Economic Opportunity Fund, the banks’ commitments make it the nation’s largest rural investment fund. The fund is part of a larger initiative from the Rural Prosperity Task Force that’s centering on obstacles to growth in rural regions of North Carolina. State leaders maintain that rural regions of the state are suffering from a lack of capital, not a lack of attractiveness to industry.