SPECIAL REPORT: The Carolinas Are Bringing The Business
By Dominique Cantelme
From the May/June 2013 issue
In April, South Carolina’s unemployment rate dropped to 8 percent, its lowest in five years. That same month saw North Carolina’s unemployment rate fall to 8.9 percent, its lowest in four years. A number of companies have announced expansions and/or relocations to the Carolinas in the recent past. If the states can keep drumming up this kind of business, there’s no doubt those numbers will continue to decrease steadily.
Stemming from their wired and wireless network expansion announced last fall, AT&T plans to hire 120 people across South Carolina—filling 50 vacancies and hiring for 70 new positions. The telecommunications giant says it received no state incentives for the jobs and that it has invested more than $800 million in its networks in South Carolina from 2010 through 2012. AT&T’s new Project Velocity IP (VIP) will expand 4G LTE to cover more than 300 million people by year-end 2014, expand and enhance the AT&T wired IP broadband network to cover approximately 75 percent of customer locations in its wireline service area by year-end 2015 and deploy fiber to an additional 1 million business locations by year-end 2015.
“The investment we’re making in our wireless and wireline networks is essential to spurring South Carolina’s economy and creating jobs. In our wireless world, mobile and broadband networks create economic opportunities for health care, manufacturing, education, transportation and public safety, and virtually every other economic section.”
April was when Boeing announced that it would invest another $1 billion in an expansion of its North Charleston manufacturing facility. The plant will double production and assemble two 787 Dreamliners per month, said Jack Jones, the vice president and general manager of Boeing South Carolina. The project will create 2,000 new jobs over eight years.
The Boeing plant also builds mid- and aft-body assemblies for 787s that are made in South Carolina and Everett, Wash. Jones said seven assemblies are put together each month and the number will increase to 10 this fall.
The state is providing $120 million in incentives for upfront expansion costs such as utilities and site preparation.
Senate Finance Chairman Hugh Leatherman said he’s in awe of Boeing’s expansion plans. “Our state could very well become the aerospace hub, when you bring all these suppliers in here to supply not only Boeing but possibly Airbus in Alabama,” he said.
In May, Advanta Southeast announced it will locate a new operating facility in Clarendon County, SC. The company designs and produces reusable packing solutions for clients that include General Motors, Ford, BMW and Yamaha. The 53,000-square-foot location will allow Advanta to streamline manufacturing processes and expand its product line. The $3.5 million investment is expected to generate 30 new jobs.
“These metal working jobs will help reinvigorate that sector in our region and put some of our most skilled employees back to work,” said Clarendon County Development Board Chairman, H. Blake Gibbons.
Also announced in May was Aqua City Inc.’s plan to establish a new production plant in Mullins (Marion County, SC). The producer of bottled water and water filtration products is expected to invest $1.5 million and generate 50 new jobs.
“South Carolina offers us an excellent business environment with a dedicated and skilled workforce. We are overwhelmed by the support and kindness we’ve received from state and local officials and businesses,” said Robert Potts, president of Aqua City Inc.
“Not only does this announcement build on the success of South Carolina’s agribusiness sector, but it also creates new jobs that will help keep Mullins and the surrounding areas sustainable for years to come,” said Secretary of Commerce Bobby Hitt.
General Machine of Anderson will create 20 jobs when it invests $800,000 to expand its metalworking and manufacturing operations in Anderson County, SC. The company plans to add space that will house additional equipment and allow an increase in its machining fabricating, sheet metal and manufacturing capacity.
“Manufacturing continues to be a real wealth and job creator across South Carolina,” said Hitt.
May was also a good month for North Carolina—the month it was announced that Cape Fear Arsenal Inc. will locate a new manufacturing facility in Robeson County. The company plans to create 150 jobs and invest more than $15.2 million in Lumberton over the next three years. Salaries will vary by job function, but the average annual wage for the new jobs will be $41,559, plus benefits. The Robeson County average annual wage is $26,832.
Cape Fear Arsenal is a privately held corporation that provides ammunition products in the Southeast U.S. Its products will be primarily sold to law enforcement but the company also anticipates bidding on contracts for the military and state agencies.
The project was made possible in part by a performance-based grant from the One North Carolina Fund of up to $490,000. The One NC Fund provides financial assistance, through local governments, to attract business projects that will stimulate economic activity and create new jobs in the state. Companies receive no money up front and must meet job creation and investment performance standards to qualify for grant funds. These grants also require, and are contingent, upon local matches.
Borghetti Turbos North America, Inc., a manufacturer of turbochargers, gas turbines, compressors and other related automotive parts, will open its first North American manufacturing facility in Lincoln County, NC. The company plans to create 127 jobs and invest more than $3.7 million in Lincolnton over the next three years. The average annual payroll for the new jobs will be nearly $4.1 million.
Borghetti Turbos’ products are marketed under the Master Power brand and used in commercial trucks, high-performance automobiles and marine and industrial applications.
“Secretary Decker and I are working together to ensure that we’re attracting new companies to North Carolina that fit with the job sectors we want to promote,” said Governor Pat McCrory. “Advanced automotive manufacturing is a strong industry for us…”
“The State of North Carolina understood that other states and regions were offering comparable incentive packages…Quality of life attractions including professional sports, a similar year-round climate as Brazil, cultural arts and proximity to the beach and the mountains were among some of the key reasons that led to our final selection,” said Eduardo Borghetti, President of Borghetti Turbos North America.
The company will received a performance-based grant from the One North Carolina Fund of up to $99,000.
Ipreo Holdings plans to create 250 new jobs by the end of 2017 when it establishes a business center in Wake County, NC. The company that provides market intelligence, data and technology solutions to capital markets and corporate professionals around the world will invest more than $3 million in its Raleigh location.
“The new IT and financial jobs will strengthen the downtown Raleigh corporate mix and be an example to others of the strong talent pool and attractive quality of life that characterizes Raleigh, Wake County and the state,” said Governor McCrory.
“The North Carolina Research Triangle combines one of the deepest pools of technology talent in the U.S. with a highly respected university system from which we can recruit the caliber of individual that we at Ipreo demand, and our clients expect,” said Scott Ganeles, CEO of Ipreo. “This, along with support from the North Carolina Department of Commerce and the initial warm reception we have received from the local universities, have led us to our decision to make a major commitment to the region.”
The project was made possible in part by an award to Ipreo from the state Job Development Investment Grant (JDIG) program, as voted by the state Economic Investment Committee. JDIGs are awarded only to new and expanding businesses and industrial projects whose benefits exceed the costs to the state, and which would not be undertaken in North Carolina without the grant.
Under the terms of the award, Ipreo is eligible to receive up to nine annual grants equal to 65 percent of the state personal income tax withholdings from the eligible new jobs created since the date of the initial award. Receipt of each annual grant is based on state-certified proof that the company has fulfilled incremental job creation requirements. Over nine years, the JDIG award could yield aggregate benefits to Ipreo of up to $3,783,000.
Another North Carolina win was MetLife, Inc.’s intention to create 2,600 jobs in Charlotte and Cary by the end of 2015. The leading global life insurance and employee benefits company expects to invest (or cause to be invested) $125.5 million into its new Mecklenburg and Wake County campuses.
MetLife plans to establish hubs for its U.S. Retail Business in Charlotte and for its Global Technology & Operations organization in Cary. New positions would include product management, marketing, sales and customer support in Charlotte and information technology positions in Cary.
“We’re proud that a strong corporate partner like MetLife has decided to invest in North Carolina,” said Governor McCrory. “These jobs will complement our financial services sector in Charlotte and our high-tech hub in Wake County, two distinct sectors we want to expand.”
MetLife received an award from the state Job Development Investment Grant (JDIG) program that could yield them aggregate benefits of up to $87.2 million over 12 years, and from the One North Carolina Fund for up to $2 million.
THE CAROLINAS GATEWAY PARTNERSHIP: REGION OF ACTIVITY
The Carolinas Gateway Partnership is a public-private partnership for the North Carolina Counties of Edgecombe and Nash, which is the Rocky Mount metropolitan area, including the Town of Tarboro and the Town of Nashville. Recently, food processing, distribution and advanced manufacturing projects have taken center stage, as well as PNC’s decision to make Rocky Mount one its operations centers.
In August 2012, pharmaceutical maker Hospira announced a major expansion of its facilities in Rocky Mount with a $270 million and 200 job increase. Hospira is the world’s largest maker of injectable pharmaceuticals and the Rocky Mount facility is its largest. The announcement was a result of efforts by the company and representatives of the state and local governments of Rocky Mount and Nash County. Average annual wages of the new jobs will be $51,780 plus benefits, well above the area’s average manufacturing wage.
In 2012, CSX Transportation named Edgecombe County’s Kingsboro “mega site” one of its “CSX Select Sites.” The designation followed years of efforts by local officials, CSX, Golden LEAF, Edgecombe-Martin Electric Cooperative and North Carolina’s Eastern Region to get all the pieces in place—land options, engineering studies, environmental studies and infrastructure. The North Carolina Department of Commerce has also assisted in land acquisition. Now, the 1,300-acre rail served site is ready-to-go and the only CSX Select Site in North Carolina. Located about equidistant between the ports of Norfolk, Wilmington and Morehead City, with easy access to Interstate 95 the site is currently home to QVC Rocky Mount.
COLLABORATION, INNOVATION IN WINSTON-SALEM
Winston-Salem, NC keeps popping up in conversations among site consultants, economic development professionals and, most importantly, business leaders looking to expand or relocate their operations—and for good reason.
In particular, Winston-Salem has become a prime spot for several key industries: life sciences and health care, advanced manufacturing and financial services. It also has a growing presence in logistics and data centers. The city’s location, along with a robust infrastructure tends to help. However, it is the overall combination of several unique qualities and attributes that make Winston-Salem a competitive place to do business.
The way educational institutions, city and county government organizations, and community and business leaders all work together is a true difference maker in creating an ideal, pro-business climate in Winston-Salem. This ability to collaborate easily allows area leadership to both serve the community’s best interests and nurture business development.
A recent example of the community’s collaborative spirit is the construction of the Wake Forest Biotech Place, a state-of-the-art multipurpose biotechnology research and innovation center. The new research facility is a world-class 242,000-square-foot redeveloped historic structure. This modern biotech research laboratory, opened in 2012, is where internationally recognized researchers are pioneering new fields of medicine. However, the redevelopment of the property was only possible through close collaboration between Wake Forest Baptist Health, Wake Forest Innovation Quarter, Wexford Science & Technology, government, community and business leaders. The success of this project has created a great deal of momentum in the Wake Forest Innovation Quarter, downtown Winston-Salem’s urban research campus.
Wexford Science & Technology recently announced they will invest an additional $150 million in the renovation of two former Reynolds Tobacco buildings that will be developed for multi-tenant use that includes state-of-the-art labs, offices and educational facilities. This brings Wexford’s total investment in the Innovation Quarter to more than $250 million, the largest capital investment in the history of downtown Winston-Salem.
As every economic development professional knows, getting these community “planets” to align anywhere is, at best, difficult. The fact that Winston-Salem does it on a consistent basis is downright extraordinary. The combination of available workforce and advanced education programs puts Winston-Salem on many companies’ short lists for expansion and relocation. The training programs being developed by Forsyth Technical Community College have even attracted the attention of the last two Presidents of the United States, with both dropping by for visits during their respective terms.
A prime example is Herbalife’s decision to locate their east coast manufacturing and distribution operations to Winston-Salem in December. Workforce availability, customizable training and education capabilities, coupled with an ideal building and sensible business incentives, all combined to make the decision an easy one for Herbalife’s management team.
Winston-Salem comes by its creative culture honestly. Dating back to its origin as a Moravian settlement, the city has always placed a high value on the arts. Through the early 20th century, that creativity led to innovation in manufacturing that transformed the area into a booming industrial center. The resulting prosperity brought with it the development of new avenues for creativity, such as the founding of the first Arts Council in the nation in Winston-Salem.
Today, examples of Winston-Salem’s culture of creativity can be seen throughout the community—along the Arts District on Trade Street, in the galleries of the numerous art museums, at performances of the UNC School of the Arts, Milton Rhodes Fine Arts Center, Winston-Salem Symphony and other organizations. The most striking effects of this culture of creativity, however, reach well beyond the art world. The area’s long-standing emphasis on creativity has spawned innovations in life sciences, nanotechnology and advanced manufacturing.
Consider the well-publicized advances of the Wake Forest Institute for Regenerative Medicine, for instance, where scientific discovery meets real world clinical applications. The groundbreaking research teams at the institute created the world’s first laboratory-engineered organ—bladder tissue that has been successfully implanted in children and adults—and are working to engineer more than 20 different organs and tissues. Breakthroughs like these happen not by accident, but when the right people and resources come together in an environment that encourages expression and creativity. And it is no accident that the institute anchors one corner of Wake Forest Innovation Quarter.
Each of the qualities previously described make a huge difference in Winston-Salem’s success. And, depending on the industry, one of the attributes may provide the tipping point for the city getting chosen for a business’s expansion or relocation plans. Together, though, collaboration, workforce quality and innovation make Winston-Salem stand out as a place where businesses thrive. For more information on Winston-Salem, visit www.wsbusinessinc.com or contact Winston-Salem Business, Inc., at 336-723-8955.
OCONEE COUNTY, SC HAS A PATHWAY TO THE FUTURE
Oconee County is no longer Upstate South Carolina’s best kept secret. The message of a business climate built for success is spreading thanks to being home to Fortune 500 Companies such as Duke Energy Corporation, Johnson Controls, Inc., Sandvik, US Engine Valve, Schneider Electric and BorgWarner Automotive. Steeped in history and tradition, Oconee County is home to natural beauty, a low cost of living, a pro-business atmosphere and unparalleled access to the United States.
Not many communities can match the wonderful climate in the beautiful foothills of the Blue Ridge Mountains with which Oconee County is blessed. The area also has world-class lakes—Hartwell, Jocassee and Keowee—and premiere rivers—Chattooga and Chauga, so there is plenty to do from an outdoor sports perspective.
Along with the abundant recreational choices, there are plenty of opportunities to enjoy the culture and fine arts of the communities. Thanks to close neighbors like Clemson University, Greenville and Anderson there are even more entertainment choices available. If quality of life is a driving factor for a personal and/or business choice, then look no further than Oconee County.
Many in the business and economic development community have found that the State of South Carolina has a top-ranked business climate. The cost of living is about 10 percent lower than the national average and there is a solid foundation for business growth due to low taxation. Oconee County, which is midway between Atlanta and Charlotte, boasts the second lowest personal property tax impact in South Carolina.
The state’s northwestern-most county offers companies a workforce that is trained with a strong work ethic. The remnants of the textile age have instilled in the people a knack for being hardworking and dependable. With new career choices emerging, a partnership with the local technical school and the public education system has proven valuable in getting the Oconee County workforce of tomorrow ready today.
In January of 2013, the Oconee County Economic Development Commission released its new five-year strategic plan for economic development. The plan took into account the goals that the County has set for itself and will serve as the roadmap to enhancing the economic potential of the community.
Oconee County is in a period of profound transformation and has a powerful opportunity to reinvent itself as a preferred location for business. As the global economy continues to improve, the county will be in position to meet the demands of the future due to the county investing in itself. Just in the last six months Oconee has moved forward on the build out of two pad-ready sites (50,000 square feet and 300,000 square feet) that are ready for vertical construction and are located in a “South Carolina Certified Industrial Park” just 15 minutes from Interstate 85.
The county also approved sewer extensions for the other 270-acre industrial park that is two miles off the interstate. Lastly, the county bought a 100-acre rail-served industrial site within a New Market Tax Credit Zone.
The ingredients for a bright future in Oconee are coming together and the secret is getting out that Oconee is well suited for business. Whether it is an expansion opportunity or relocation decision, Oconee County has a proven record that it possesses a competitive advantage. To learn more, visit www.oconeeSCedc.com.
NC PUBLIC POWER LEADING THE WAY TO ECONOMIC RECOVERY
As business leaders around the world continue to scan the daily headlines for encouraging economic news, at least one is already seeing signs that the global crisis has finally run its course.
“We’ve seen a measurable uptick in interest and activity over the last year and a half,” said Brenda Daniels, economic development manager for ElectriCities, a not-for-profit government service organization representing North Carolina cities and towns that own electric distribution systems.
Daniels isn’t overly surprised to find her organization’s membership playing the role of leading economic indicator.
“Companies that come out of the gate fastest and strongest after a recession are typically those that are most focused on efficiency and cost control,” she said, speaking from ElectriCities headquarters in Raleigh. “Not coincidentally, efficiency and cost control are two areas in which we excel.”
Daniels explained that one of ElectriCities’ many roles is to represent member communities to expanding and relocating companies. Her staff maintains comprehensive databases for all 70+ public power municipalities in North Carolina.
As easily as flipping a switch, a site selection professional can order detailed reports on dozens of North Carolina sites, from mountains to coast. Within 48 hours of a request, ElectriCities will send profiles of locations that precisely match the company’s specifications.
Daniels emphasized that the process is “fast, efficient and entirely confidential.” Using ElectriCities as an introduction to North Carolina, site search managers have a turnkey information source. “They find all the information they need in one place.” ElectriCities’ staff produces a full profile that details infrastructure, site availability (including site and building photos), labor and even lifestyle data such as schools, hospitals and golf courses.
ElectriCities remains a partner through the entire process, helping companies with utility related issues, arranging site visits and facilitating contact with local, county and state officials.
There’s another key factor that’s making the phones ring at ElectriCities: the availability, reliability and affordability of North Carolina public power.
“It’s no coincidence that some of the state’s most dynamic growth has occurred in our public power communities,” said Daniels. “Advanced manufacturing, food processing, metal-working, plastics—any power-intensive industry is going to find significant advantages here.”
Companies based in ElectriCities member communities recognize the cost efficiencies and superior customer service public power provides. Municipal utilities don’t have to pay dividends to shareholders, and those savings can be passed on to the utilities’ customers. Both ElectriCities and the member utilities work closely with companies to help them manage their power usage and keep costs down.
Businesses are also happy to have the personal touch public power provides. “Customers always tell us, we’d much rather work with you. We can call somebody, we can get an answer,” said Larry Cranford, electric department director in Statesville, an ElectriCities member community. “That doesn’t happen with other power providers.”
Daniels believes the optimism she sees is also driven by North Carolina itself, which is renowned for its pro-business climate, excellent job training programs and low labor costs. “People just expect North Carolina to bounce back faster and stronger than other places.”
She cited the examples of Lubrimetal Corp, which will locate in Granite Falls, creating 19 jobs and investing $1.9 million. Also Freightliner/Daimler Trucks in Gastonia will expand with 100 new jobs. “The recent decisions of these companies to locate and expand here shows a lot of confidence in North Carolina and our public power communities,” Daniels said.
North Carolina is perhaps the only state that’s perennially ranked among both the best states for business and the best places to live. People and companies alike are drawn to the Tar Heel State’s universities, beaches and Blue Ridge Mountains; the low cost of living and doing business; and its temperate four-season climate.