High ambition

Western leaders look for new ways to level the playing field.

Western North Carolina is a great place to live but a hard place to make a living. Its assets include rugged mountain beauty and a willing work force, but much of it is isolated, geographically and politically. New companies barely keep pace with plant closings. But initiatives such as the Education and Research Consortium, which bonds the region’s institutions of higher learning, are bringing a new economic force to bear: high-speed Internet service. Senior Editor Edward Martin recently discussed the region’s economy with Anthony Almeida, vice president for economic development of Duke Power Co.; William Cecil Jr., CEO of The Biltmore Co., which owns Biltmore Estate — one of the top tourist attractions in the state — near Asheville; Gordon Myers, chairman of AdvantageWest economic-development agency; Kenneth Peacock, chancellor of Appalachian State University in Boone; and U.S. Rep. Charles Taylor, a Brevard Republican who also is chairman of Asheville-based Blue Ridge Savings Bank.

How's business up here?

Cecil: We had a lot of concern after two 100-year floods in September, but we came back strong. By December, we were within about 10,000 visitors a month of our projections. Then we had a record February, and that was on top of a record February a year ago. One reason is the state provided a lot of support to keep tourism going. Another thing I’ve been fascinated with in the past 10 or 15 years is the rebirth of downtown Asheville. It used to be a shell of its former self with no restaurants or galleries. Now there are probably 40 or 50 of these trendy, “great-idea” restaurants. It has come to life.

Almeida: We’ve had good growth in residential, commercial and institutional electricity sales, but we’ve clearly been impacted by the decline of the textile, apparel, furniture and tobacco industries. In 1993, 43% of our total sales were from industrial customers. In 2003, that was down to 33%. Western North Carolina still has some capability to support the manufacturing sector. In terms of our hydroelectric projects in the Nantahala area and Cherokee, Jackson and Graham counties, we’ve recently gone through the federal relicensing process. We’ve agreed to maintain some lake levels beyond what we’ve done in the past, which will be good for recreation and tourism, and that will help balance the economy. An interesting data point: 25% of the bills of our customers in the Nantahala area go to out-of-state addresses. That shows the impact out-of-state people have there.

Peacock: In the northwest, we’ve got pockets that are very strong, but when you come out of those, you find some real challenges. In Boone, Appalachian State is a real driving force of the economy. Fortunately, young people want and need higher education, so demand continues up and up. We’ve been having about 12,000 — almost 13,000 — applications a year for 2,500 openings.

Taylor: We’re beginning to redefine western North Carolina as the 30 counties west of I-77, and some of them do very well. When I take my congressional hat off and look at things from our bank’s perspective, I find that areas like Chancellor Peacock’s Appalachian State and Boone are prosperous. But you can go to parts of Mitchell, Caldwell and Alleghany counties, and we’ve lost a lot of jobs in textiles and furniture. That impacts our wood industry. Agriculture is not as strong as it might be, although wineries are a positive development. The price of land is high here. The next generation is going to be paying $20,000 an acre. Tourism is strong, but we are both blessed and cursed with government land.

What do you mean?

Taylor: We’ve got the Blue Ridge Parkway and the National Park Service, with 1.5 million acres in federal forest, plus the Tennessee Valley Authority and the Cherokee reservation. But with large percentages of our counties in federal hands, it’s not taxed. That makes it hard to pay for local functions such as schools, water and sewer and landfills.

What about industry?

Taylor: We’ve lost a lot of these 3,000- and 4,000-job plants like Ecusta, the paper mill in Pisgah Forest, which is down to about nothing, and DuPont, which is closed entirely. We’re not going to get them back. Our strengths are in tourism and areas such as that, but we’ve got to bolster it with technology and manufacturing to have a good economy across the population.

Peacock: We’ve got a strong educational system with three universities, community colleges and public schools, and yet we’re small enough to know each other and get things done. We can provide a seamless transition between high schools, community colleges and four-year schools. Our people have a tremendous work ethic and entrepreneurial spirit. But we need jobs — particularly moderate-paying ones. In Watauga County, 38.9% of the people have a job that pays $9 an hour or less. We have to address that.

Myers: A huge number of people move here because of the quality of life — the aesthetics — and they take whatever they can get. But they’re continually looking to improve their financial condition and get better jobs. A lot go back to school — community colleges and colleges and universities — but they’re willing to take a lesser job on the front end to find something down the road.

It has been said that broadband technology is as important to economic development today as roads were 50 years ago.

Peacock: We’ve been limited in what we could do because we didn’t have access to this. As Gordon said, people get to Boone and are willing to take lower-paying jobs because they don’t want to leave. Broadband would open up barriers to companies that now want to come in but don’t because we don’t have it.

Is the Internet really that important?

Taylor: It’s absolutely essential for education, health care and modern business. There’s no manufacturing company that doesn’t realize how important it is, either at the beginning of the business or certainly as they expand.

Almeida: We’re already supporting this trend with DukeNet, a subsidiary that maintains our fiber-optic network and leases the fiber we have in North and South Carolina. I’d like to underscore what the congressman said about the importance of manufacturing. It’s so complex today that you’ve got robotics with links back to data centers that might be hundreds of miles away. So it’s critical you have that information highway here.

Myers: Not only that, but the ability to provide broadband infrastructure is going to allow us to continue to expand small and midsize entrepreneurs. The venture capitalists are going to come in, and you can operate virtually anywhere as long as you have connectivity and the ability to communicate with the rest of the world. Growth of small businesses is going to be phenomenal in western North Carolina.

But didn't a consulting report you commissioned several years ago criticize you for not supporting startups?

Myers: We’ve realized in the last few years that there are many facets of job creation. It’s not just going out and recruiting business and industry. It’s creating your own jobs. We made a specific, philosophical decision to go into entrepreneurship programs and support them with venture capital. We set up the Blue Ridge Entrepreneurial Council and Blue Ridge Angel Investors Network. We have the short-term objective of recruiting industry but the long-term objective of creating jobs by creating an environment where entrepreneurs can come in, find a place where they want to live, raise venture capital and settle here.

Congressman, you've said your goal is to obtain about $100 million for broadband.

Taylor: We’re working with DukeNet and putting in fiber ourselves. We stress that the Education and Research Consortium is not in a situation to compete with anybody. We’re somewhat like the airport, rail and highways. Someone has to put in the system. We’ve brought in about $30 million already. When we started the consortium in 1997, we thought it would take about 10 years. We’ve already got links to Asheville, Cullowhee, Greenville, Spartanburg and Charlotte, and we want to expand on up to Hickory and Boone. We expect in a few months to have more federal money available.

Does the Region's isolation hamper you?

Taylor: It might be a plus. For example, in Washington the government now requires that its secondary source of information be stored at least 75 miles outside the capital. At Western Carolina University, they now have four tracks of engineering — optometrics, bioinformatics, computer science and, of course, mechanical. At UNC Asheville, they’re working in bioinformatics. And Chancellor Peacock’s university is focusing on science. With a broadband network, we can centralize information so you don’t have to have every piece of expensive equipment at every site, but everybody has access. With broadband, it’s not necessary to have universities as close as they did in the Research Triangle when it started in the 1960s.

Businesses with low barriers to entry draw competitors. Are you risking the same with broadband?

Cecil: No, I don’t think so. Let me tell you how we use it at Biltmore. It’s a huge information-delivery system for us, not just for broad information about Biltmore but real specific information — people want to know the blooming schedules for specific flowers, for example. When azaleas are in bloom, click on “blooming schedule,” and we’ll give you accurate info. We don’t count hits. We count users, and it used to be that we got excited if had 100,000 or 120,000 users a year. Now we’re averaging about 350,000 a month. We have a visit planner, so you can plan your whole visit. We’re getting into more sophisticated stuff, like a shopping cart. And we’d like to go to scannable tickets in the next three or four months. That way, we don’t have to mail the ticket and charge you $10 more for it.

It sounds as if broadband is necessary merely to survive.

Myers: We just worked to get Navigational Sciences Inc. to locate here from Charleston, S.C. They use global-positioning chips in containerized freight to track it, tell you where it is, the temperature in the container — everything. This company is moving to Asheville because we had a venture-capital program in place, we had the Blue Ridge angel network, and we had broadband. They’ll open an operations-and-engineering center with 12 people and a $2 million investment this year. Another thing is the Blue Ridge National Heritage Area that Congress created last year. It’s one of 23 heritage areas in the U.S., and it could revitalize our area of western North Carolina. We’re looking not just at industry recruitment but jobs creation.

Taylor: That’s right. The heritage area and the new $1 million Blue Ridge Parkway marketing center are examples of how to turn broadband technology into money. There are 15 million people on the parkway each year. Now they stop and spend about three-tenths of a day, maybe to come off the parkway, get gas and have lunch. If we can get them for eight-tenths of a day, it’ll bring in $1 billion a year in those 30 counties of western North Carolina. If I come out of the Visitor Center with all the information I need on the Biltmore Estate or whatever that I need, there’ll be a way for me to swipe my card, and a sale will be recorded then. If you’re just passing out brochures, you can’t do that.

You've described industrial and commercial growth, but tourists don't come to look at suburbia. Can you have it both ways?

Cecil: I’ve lived here all my life, and I have mixed feelings when I see a beautiful area that used to be undeveloped. I can’t help but say, ‘Gosh, you know, I remember ... ’ But I talk to people who live there, and they say it’s beautiful and they’re glad to be there. One thing is, we now have a good transportation system. In the last 18 months or two years, a lot more people are using the Asheville Regional Airport. That’s huge for the folks I work with, who need to be able to go to, say, New York, and they can fly out in the morning and back at night. We used to have to go to Greenville or Johnson City, and find our way to Cincinnati to do that.

What about this concept of expanding western North Carolina to Interstate 77?

Taylor: It’s up to the local counties. But we in western North Carolina want to have a market large enough, populous enough, to look past just the congressional district.

Myers: Collectively, we have a larger voice. And we have a certain amount of self-reliance in the west, so that we think we’re going to have to look out for ourselves.

You seem to feel like an orphan.

Peacock: Well, we are some-what forgotten. In Raleigh, when people think about North Carolina, they say, ‘It’s a great place — you’ve got Raleigh, Durham, Greensboro, Winston-Salem, Asheville.’ What about the rest of us? Up there in Boone, out of the way, I sometimes feel like we have to wave our hands and say, ‘Hey, look! We’re up here.’

Almeida: The marketplace just doesn’t recognize city lines, county lines or states any more. Workers are flowing over county lines. Air quality, water quality and other problems flow over state lines. The dollar flows anywhere it wants to. We need to understand that and market the region.

What's the region's future?

Almeida: I’m bullish. We’re developing a much more balanced economy — a strong tourism industry, strong small-business development and industry that’s moving toward high-tech manufacturing. The key ingredient at the end of the day is going to be the availability of the work force. We — Duke Power — are doing what we can in that regard. We just started a community-college grant program that commits $3 million a year, from 2004 through 2007, to retooling manufacturing and training employees — $12 million in all.

Peacock: Bullish is a good word. When you think about the quality of life, work ethic, leadership and the partnerships we have, you’ve got a tremendous future. But in many ways, we’ve just scratched the surface. Science is a tremendous need. The health industry is strong, but we can do even more. The viticulture industry is growing. Ride down U.S. 421, and you just pass one vineyard after another. But I’d like to see more testing facilities here, so we don’t have to send our products to California for testing. I’d like to see more high-end resort properties. Northwestern North Carolina, where we are, has a lot of nice moderate — but not upscale — things. People like to be pampered. Science, spas, the sports industry, scenery and the film industry — we have great potential.