Reign maker

The Queen City showers riches on its region
but critics say it's all wet.

While Charlotte calls itself the Queen City, the rest of North Carolina calls it other names: The Great State of Mecklenburg is the nicest. Why the hard feelings? Thatís what Senior Editor Arthur O. Murray asked five leaders who live and work in Charlotte or its surrounding counties: Walter McDowell, North Carolina president of Charlotte-based Wachovia Corp.; Joan Lorden, UNC Charlotte provost; Jerry Orr, aviation director of Charlotte/Douglas International Airport; Lynne Scott Safrit, president of Atlantic American Properties Inc. in Kannapolis and the person overseeing development of California billionaire David Murdockís proposed biotechnology project there; and Ronnie Bryant, chairman and CEO of the Charlotte Regional Partnership.

Why is Charlotte so disliked?

Orr: My family has been here in Charlotte since 1830, and that concept seemed to have been around when I was a little boy. I donít think itís gotten a whole lot better. Itís a disservice to us. Thereís an attitude that we need to help everybody but ourselves.

Safrit: Some of that is just natural competition between economic areas.

Bryant: But I donít think you need to consider it a North Carolina problem. Iíve lived in Missouri and Pennsylvania. In Missouri, I was in St. Louis, which is the dominant city. Like Charlotte, itís the city that everyone else takes potshots at. Mov-ing to Pennsylvania, being in the little-brother city, Pittsburgh, while Philadelphia was the big city, itís a totally different perspective. But there was still that jealousy between Pittsburgh and Philadelphia, just like there was between Kansas City and St. Louis.

Why?

Bryant:Thereís this belief that being the largest city more of the stateís resources will come to that particular city, and then thereís a belief that thereís a particular degree of arrogance that comes with being from the dominant city, and that might even be true. Charlotte has done a tremendous job of being very aggressive in promoting itself and raising its profile. The Research Triangle has a very significant national reputation, but not like Charlotte since itís much more focused within a particular industry sector.

McDowell:As I travel across North Carolina and talk to business leaders, I donít sense that thereís quite as much conflict between Charlotte and other regions in North Carolina. From an economic-development point of view, whatís important is that North Carolina wins the battle to be considered first. Because our competitors are not the Triangle versus Charlotte versus the Triad, our competitors are the other states and other regions.

Lorden:What youíre talking about is really a rural/urban divide. Cities tend to be places where people ó and resources ó aggregate. So healthy cities are really important to the state, but it does tend to drain resources from rural areas. Thatís something that North Carolina hasnít fully come to grips with.

How does the state avoid favoring one region when itís preparing incentives to attract Dell or any large business?

Safrit: Having just gone through the whole search for the Dole plant, we didnít sense any of that. The state does look at trying to bring industry and people into areas that have been hardest hit by job losses ó and rightfully so.

But at times it does become a competition between regions.

Bryant: Itís definitely incumbent upon the state to be objective in its application of incentives from the state perspective. The subjectivity of the incentive comes at the local level.

Safrit: That was certainly what we experienced. The final decision didnít come down to what was happening on the statewide level. It was the consideration of the local incentives that the various counties were willing to offer.

One thing Charlotte has that makes others jealous ó even in the Triangle ó is the airport. What does it have that they need?

Orr: What we have here in Charlotte is the US Airways hub, which allows us to have an airport and a level of service and nonstop destinations unparalleled by any city near our size anywhere in the country. For the business traveler, the direct flights are very, very important.

How will the proposed biotech project in Kannapolis help the region?

Safrit: What weíre seeing created here is sort of a biotechnology highway that can connect the Research Triangle Park with the Charlotte region for the recruitment of biotechnology. I hope that the companies who come into our park in their infancy can grow and that the region will start to look at the areas surrounding Kannapolis as places where these companies can move. Because the last thing you want is to have a company come into the area, do its research in the laboratories that Mr. Murdock builds, create its technology and then move to South Carolina.

What planning should be done right now?

Safrit: Cabarrus County and Kannapolis are already looking at pockets of land that will be designated for these companies to move into. But it needs to be even broader.

Lorden: The Murdock project is going to bring the facilities so that companies are attracted and you donít have each company having to build its own facility. So the shared laboratory that will be there is important. And whatís hugely important is the plans for a $100 million venture-capital fund, because what you see happening around a lot of universities is that you have faculty that develop new intellectual property and start companies, and the first thing that happens is they move to Boston because the communities theyíre in donít have any venture capital. So if you want the companies to come, you provide the buildings and the labs. If you want them to stay, you need to provide the venture capital.

Why would they come to the Charlotte region rather than other biotech centers?

Lorden: What Charlotte has, which a lot of other places donít have, is a lot of managerial expertise. Thatís another place that small startup companies frequently fail.

McDowell: Mr. Murdock will attract emerging businesses. Thatís complementary to whatís going on in the Research Triangle Park and the Piedmont Triad, not in conflict. This is developing a better North Carolina picture so that we can be more competitive with Boston, Atlanta and California.

Is it fair to say it will be bringing the research closer to where the money is?

Lorden: And the managerial talent. Thereís also an issue of critical mass. This notion of a biotech highway is great. Silicone Valley isnít one place. Route 128 around Boston isnít one site. So thereís room here for this industry to spread out.

Aren't there some infrastructure problems?

Bryant: One of the consistent things that I hear is, ďWe donít want to be like Atlanta.Ē I interpret that to mean primarily the traffic problems. My caution is that unless we invest more aggressively in our transportation infrastructure, we will be like Atlanta.

How can it be avoided?

Bryant: Spend more money.

Orr: One of the obvious ways is to move to regional planning so that our efforts donít stop at political jurisdictions. Business doesnít care where the state line is or the county line is. Our customers at the airport donít care. We fly the South Carolina flag in front of the airport. Itís because weíre the largest airport serving South Carolina.

Bryant: We have positioned ourselves as the Charlotte region ó 16 counties across two states, about 2.3 million in population. We need to start thinking about the region not as 16 counties but place the counties together and erase all the lines inside. We need to find ways to eliminate interregional competition and to understand that to move a company within a region is a zero-sum game.

McDowell: But we shouldnít lose sight of the things we have done. Weíve opened more of Interstate 485. Weíve improved interstates 85 and 77. On a competitive and comparative basis, we are in better shape than many of the metropolitan areas outside North Carolina. Our frame of reference is North Carolina convenience, and as we grow, weíre going to lose North Carolina convenience.

But isn't that part of the brand?

McDowell: We are a more desirable place to live and work than the Northeast or Atlanta or other parts of the country.

Lorden: When we recruit faculty, we recruit from all over the country, and they find Charlotte attractive for a lot of reasons: the climate, the airport, the school system. The school system really is a critical decision piece for a lot of people who move, and it is for companies as well. Particularly technology-based companies.

Bryant: One of the tests that really underscores the popularity of the quality of life here is the number of young people who graduated from college in another state and moved here without a job. I never heard of that in Pittsburgh.

Safrit: At a biotechnology conference at UNC Charlotte, the keynote speaker talked about what it would take for North Carolina to bring biotech companies here. According to him, the primary factor these companies are looking for is not incentives, although those are important. Itís not living costs. Itís quality of life.

But Charlotte doesn't do very well in the livability surveys. Why?

Orr: Itís because this community has gotten big so quickly. When I was a little boy, this was a very small town. When you grow that quickly, it takes awhile for things like the arts to catch up.

Lorden: Itís really surprising that this community, given its size, has never until recently pressed for a major research university. Universities bring a lot of young, talented people to the community. In the past six or seven years, as UNC Charlotte has grown exponentially, weíve hired something like 450 young faculty. Thatís a lot of intellectual capital. We have more than 20,000 students and will get to 25,000 in a hurry. About 20% are in graduate programs. But we need to build the breadth and depth of the research programs if weíre going to keep up with what will be happening in Kannapolis.

Bryant: We need to at least be a little skeptical with some national rankings. It depends on what they focus on. If they rank you good, itís a good study. If they rank you bad, itís a bad study.

Mr. McDowell, youíve worked with the Piedmont Triad Partnership, where county and city rivalries run deep. How hard is it to overlook boundary lines?

McDowell: Itís a behavioral change, and we need to develop a new spirit of cooperation across the Carolinas. Weíve made precious little progress over the last 15 years despite all our efforts. But it is worth doing.

Are the lines as heavy in the Charlotte partnership as in the Triad?

McDowell: No. The Charlotte partnership has done a wonderful job of blending communities. The outlying communities understand that their future is tied to Charlotte.

Orr: Itís far better to be lucky than good and to not have the Raleigh/Durham conflicts and the Greensboro/Winston-Salem conflicts. Everybodyís known Charlotte was the town for a long, long time.

Lorden: In some areas, we tend to cooperate pretty well across state lines. The Micro-optics Triangle, which is Clemson, UNC Charlotte and Western Carolina University, is a good example. We just need a lot more of those kinds of things.

Such as?

Lorden: South Carolina allows some residents of North Carolina ó those on the border ó to go to public institutions in South Carolina at in-state rates. North Carolina ought to do the same thing to promote the kind of research opportunities that are generated by collaboration among universities.

Safrit: When we first told people weíd have a research building with UNC Chapel Hill, N.C. State, UNC Charlotte and hopefully Duke, people laughed. But itís not a football game to them. Itís about working on research that could change the world.

Bryant: From the outside, the brand equity of Charlotte is prominent, and the other 15 counties within the region truly have an appreciation for it. But in order for us to become even more effective, there has to be a greater level of trust that they will not lose their identity. Thatís a problem when we start talking about erasing the lines.

Lorden: But thereís also a big differential between Mecklenburg County and some of the surrounding counties. Certainly the level of education in Mecklenburg County is very high: 66% of the work force has bachelorís degrees. So the needs of Mecklenburg are at a very different level than they are in the surrounding counties. For those counties to participate in the growth of business and industry in Mecklenburg County is going to take a lot of effort in bringing the work force up to the same educational level.

Bryant: But you have to deliver that message very delicately. As true as it is, you have to be careful.

Orr: Even that 34% is still a very large number of people.

Lorden: Well, sure. As has been said several times, this community is underserved by higher education.

Is that a consequence of the perception that Charlotte gets too much? Is that why thereís no medical school or law school?

Lorden: I donít know that Iíve been in North Carolina long enough to answer that, but states sometimes do use their educational resources as mechanisms of economic development, and so they do spread them around.

McDowell: You havenít asked this, but I want to make a point. I donít think we tout our locational advantage. Thatís a Charlotte comment, but itís also a North Carolina comment. We are the absolute center point of the Eastern Seaboard marketplace. Charlotte and North Carolina are equidistant between Cincinnati, Washington, D.C./Baltimore and Atlanta. So through North Carolina and through Charlotte, we give companies access to the Eastern Seaboard. Iím not sure that either as North Carolina or as regional partnerships, we tout that advantage. But thatís a compelling reason that Dell located in North Carolina. It gives them access to 60% of their customer base.

Bryant: One of our targets is distribution and logistical projects. Itís location that drives it. Maybe the general public might not see how we use it. But to the market thatís involved in that process, they hear it from us on a regular basis.

McDowell: Good. I think youíre on the right track there.

Orr: Weíre successful as an air hub because we are halfway between the Northeast and Florida. But itís also because back in the very, very early í70s we elected to build a parallel runway, which was risky. Everybody said we didnít need that. And had we not provided that infrastructure platform, the hub wouldnít have happened.

A lot of support businesses have sprung up around the Dell plant in Winston-Salem. Will that happen with the biotechnology campus?

Safrit: Weíre already getting phone calls from people who donít necessarily relate directly to our project but want to have a business in the area that they think will feed off of the biotechnology companies ó architects and engineers who design labs, for example. If you look at national statistics, for every one biotech job six support jobs are created. So, although weíre saying we hope to have 5,000 biotechnology employees on this campus, that equates to 35,000 total jobs, and not all of them have to be scientists.

Lorden: Just like in motor sports, youíve got the teams, but then youíve got all the automotive suppliers that feed into them. Biotech has its supply sources we will see migrate into the region.

Bryant: Probably one of the most skeptical aspects of economic development is the multiplier effect. But itís real. A manufacturing project will generate from three to four additional jobs; life sciences, up to six. When youíre fortunate enough to get an anchor such as the Murdock program, the spinoff opportunities are tremendous.

Is the region doing enough to keep racing viable?

Lorden: In the big race teams, it has become a very technical business. UNC Charlotte has one of the few motor-sports programs in the country. It draws students from all over. If you go up to the speedway and look at those teams, they are hiring engineers. Some have as many as 40 engineers, some with Ph.D.s. Weíre certainly looking at our programs to see whether we need to expand. Even for the kids that go into that program and donít go into racing, weíve turned out a lot of mechanical engineers.

Bryant: Iíve just been blown away with the expansiveness of the industry. It is something that we are serious about ó not only retaining what we have but, through analyzing the competition weíre looking to try to grow here with the full support of NASCAR.

How important are sports to the Charlotte brand?

Bryant: Professional sports puts your community on the map. You couldnít buy the kind of exposure that we receive during Monday Night Football. The exposure, the opportunity for buzz, the perception of being a world-class player ó pro sports does all that for you.

McDowell: Add the Wachovia Championship to the list. The exposure that Charlotte gets by vir- tue of that golf tournament just enhances the Charlotte brand.

Orr: Itís like air service gets the name of Charlotte displayed in Frankfurt. Sports gets Charlotte in every newspaper every day.