If Sylva wants a Lowe’s Home Improvement Warehouse, town board members might ought to consider sweetening the pot, said company consultant Jennings Gray Monday.

In a specially called meeting, held just one day prior to Lowe’s’ real estate committee deciding whether or not to purchase land in Sylva, Gray appeared before town board members to request incentives that would increase the company’s return on investment.

Gray said it was his job to look for ways to reduce the company’s cost when opening new stores through the waiver of fees, a sales tax sharing agreement or municipalities applying for grants. In exchange for agreeing to lower costs, the town would increase its chances of getting a Lowe’s, Gray said.

“I’m here to give you guys, the town of Sylva, the opportunity to reduce the site costs,” Gray said.

Gray said that in making their decision, though the process was “somewhat secretive,” the Lowe’s real estate commission would heavily weigh its return on investment. Whatever the decision, Gray said it would be a matter of purchase or not purchase — not “purchase contingent upon ...,” meaning that town board members needed to make up their minds about whether they were willing to supply incentives now.

However, board member Maurice Moody was cautious about committing to anything that would give Lowe’s an unfair advantage over other companies.

“To me it would look like favoritism,” Moody said.

Tom Stovall, owner of the Sylva-based Southern Lumber Co., agreed.

“It was my understanding that the town doesn’t usually give incentives like that because they can’t play favorites,” Stovall said.

Providing incentives to large chain businesses seems unreasonable, since the chain can increase its revenue through stock issuance — an option smaller, locally-owned companies don’t have, Stovall said.

At least one North Carolina town has landed in federal court as a result of incentives arrangements, as two owners of a Wilson Wal Mart filed suit against town leaders for an agreement to provide $2 million in incentives to a new Target.

In an analysis of the case, John Hood, president of the John Locke Foundation and publisher of Carolina Journal wrote, “North Carolina’s escalating use of tax subsidies to ‘close deals’ with potential private employers was destined to provoke the state’s existing businesses. While there are many different arguments, both legal and economic, against such targeted incentives, among the most persuasive is that ‘targeting’ incentives to some firms inevitably means targeting other firms not for benefits but for costs.”

Such costs may come in the form of competition not just for customers, but for workers. In this case, Lowe’s most likely will be able to provide higher wages and better benefits for its employees than smaller, similar businesses. Those smaller businesses will consequently see a rise in their cost of doing business, Hood wrote.

An additional threat is that incentives that lower a company’s tax rate not only give that company an unfair advantage, but such incentives decrease the amount that the business shareholders, employees and customers are paying back into the public services system — services including police protection, schools and parks.

“These are real harms, and actionable ones as far as I’m concerned,” Hood wrote. “With the new federal lawsuit in Wilson, and likely litigation coming soon elsewhere in North Carolina, we’ll find out what the judiciary has to say.”

Before issuing any incentives, Moody said a formal policy should be drafted addressing what kind of incentives the town could offer, what kinds of companies are eligible, and whether the town would apply for grants for companies. Consequently, Lowe’s would not be receiving the answer they were looking for, Moody said.

Mayor Brenda Oliver cautioned Gray not to take the board’s unwillingness to immediately agree to an incentives arrangement as a sign of not wanting Lowe’s to locate in the town.

“We’re pleased to have Lowe’s look at a Sylva location, don’t get us wrong,” Oliver said.

Lowe’s predicts that a Sylva store would generate between $22 and $26 million in sales and a $2.5 million payroll for 125 full-time and 25 to 50 part-time employees. Full-time workers would receive the same level of benefits as corporate employees and part-timers would be entitled to benefits after a certain length of employment, Gray said.

Upon calling for a motion to either enter into a memorandum of understanding with Lowe’s for some sort of incentives arrangement, or to dismiss the issue altogether, Oliver was met with stony silence.

Finally, Moody moved that the town apply for Community Development Block Grants and similar grants of that nature. The grants would be awarded to the town, but used for projects mutually benefiting the town and Lowe’s, such as infrastructure improvements.

The motion unanimously was approved. Town board member Anne Cabe was absent from the meeting.

Stovall said he is not particularly worried about losing business to a new Lowe’s, as those who shop at Lowe’s will just keep on shopping there, and those who shop locally will remain loyal.

“There’s always been a Lowe’s store 20 miles in either direction of Sylva,” Stovall said, referring to locations in Franklin and Waynesville.