Up Front: Turning a page
I started work here two days before Christmas 1985 — which happened to be my son’s 16th birthday — but my first Up Front column didn’t appear until the May 1987 issue, after I became editor. This will be my last. Ben — now 45 and the magazine’s publisher — and I are selling the business. He’ll run it for the new owners; I’m retiring.
It’s time. I turn 66 this spring, and nearly three decades in a job should be enough for anyone. Plus, this puts Business North Carolina in good hands — and not just because they’re the kind that can slide into deeper pockets than the narrow one binding my billfold to my butt. The buyer is Old North State Magazines LLC, formed by the five men who own The Pilot LLC, which publishes the newspaper in Southern Pines and local magazines there and in Greensboro and Wilmington. Three are members of the family that owned the Raleigh News & Observer for 101 years — and this magazine for 13 of those. Talk about meet the new boss, same as the old boss: This, in effect, makes the third time that Frank Daniels Jr., the group’s majority investor, has bought BNC.
He was president of The News and Observer Publishing Co. when it acquired the 4-year-old magazine just weeks before I arrived. And not only did he back me when I bought it in 1998, but the wherewithal came from shares in the parent company I got before it was sold to the McClatchy chain three years earlier. He stuck with us until 2006, when we bought out him and another minority partner — retired McClatchy Chairman and CEO Erwin Potts.
Every one of Frank Jr.’s partners also has ties to the magazine. His son, Frank III, was publisher from 1987 to ’89, when he returned to Raleigh and that title was added to mine. Nephew David Woronoff — now publisher of The Pilot — worked here from 1991 to ’96 in several roles, including special projects manager. Jack Andrews was the N&O’s vice president for subsidiaries when we were one. Lee Dirks brokered the sale of the company, including the magazine, to McClatchy.
These guys know their business and, more important, know Business North Carolina. I trust them. They will be good stewards of the magazine, which provides them an established, respected brand and a statewide footprint to build upon. As David, manager of the group’s limited-liability companies, notes, “Our core purpose has always been to serve our community, and we accomplish that by producing world-class publications. With the acquisition of Business North Carolina, we’re able to expand our community from Currituck to Cherokee and all 98 counties in between.”
In closing, let’s not forget those, the names too many to mention, who have invested something more precious than capital in this venture. Working for only a paycheck, they provided the labor, talent, creativity and skill that made the magazine the best of its kind anywhere — sweat equity that forever holds title to my respect, admiration and gratitude.
This staff photograph accompanied the first Up Front column in 1987. You're reading the last one under that editor's byline.
Opinion: NC's refusal to expand Medicaid leaves 1.5 million people without coverage
Healthcare reform affected every citizen in the United States in some way, yet little is understood when it comes to the intricate details of the Affordable Care Act, commonly called Obamacare. The law’s intent was to give all Americans access to quality healthcare that’s affordable, while slowing the growth of healthcare costs. While the national conversation has trended toward universal healthcare as the ultimate goal, the local conversation has been very different in North Carolina, where about 1.5 million residents remain uninsured—500,000 of whom would qualify for Medicaid.
Over a year since the effective date of ACA and four years since being signed into law, some of North Carolina’s neediest residents still lack access to health-care coverage. Many are uninsured because our state legislators refuse to expand Medicaid, the nation’s publicly funded health coverage program for low-income Americans and a key component for coverage expansion.
Originally, the ACA required that every state expand their Medicaid program to include everyone earning up to 138% of the federal poverty level. In 2014, that meant an individual with an income of $15,856 or a family of four with an income of $32,499. This would have provided coverage to 19 million of the 48 million uninsured Americans. If states chose not to expand Medicaid, then the law stipulated they would lose all Medicaid funding. As a result, 26 states sued, and the Supreme Court ruled this provision of the law unconstitutional, giving states the option not to expand.
North Carolina remains one of 16 Republican-led states that refuses to expand Medicaid, raising questions as to its partisan agenda to deny coverage. By doing so, it’s created a “coverage gap.” This includes poor residents who don’t earn enough to buy health insurance from the exchange but still make too much to qualify for Medicaid. North Carolina’s decision has been made irrespective of the needs of its citizens and the overall health of our communities and nation.
Medicaid expansion provides federal funds for states to finance expanded eligibility options for its citizens. According to a recent Urban Institute study, for every dollar a state invests in Medicaid expansion, $13.41 in federal aid would flow into the state over a 10-year period (2013-2022). In North Carolina, this totals $39.6 billion in lost federal dollars.
Besides the financial consequences, refusing Medicaid expansion is predicted to adversely affect the health of those affected . Low-income women will forego recommended breast and cervical cancer screening; diabetics will forego medications; and all low-income adults will face a greater likelihood of depression, catastrophic medical expenses and death.
The 1.5 million people left without healthcare in North Carolina present ongoing limitations for access to healthcare and an escalating public health burden to the state. While all of North Carolina will be affected by this decision, our rural communities will be hit the hardest. Twenty % of the people in western North Carolina have no form of health insurance. About 110,000 people in western North Carolina would have qualified for Medicaid through the expansion, according the the Carolina Public Press (2013).
For the remaining states without expansion, the Urban Institute reports 6.7 million residents are projected to remain uninsured in 2016 as a result, and these states are losing $423.6 billion in federal Medicaid funds from 2013 to 2022. North Carolina could see revenue from the broader economic effects of the Medicaid expansion, such as increased jobs, state income and tax revenues within the healthcare sector due to spending. Indeed, states that accepted Medicaid expansion have received billions in federal funding and have reported local job and economic growth. The U.S. Department of Health and Human Services projects that hospitals in states with Medicaid expansion would save $4.2 billion in 2015 in uncompensated care costs.
North Carolina needs to reverse its position. Medicaid expansion is needed to preserve the well-being of our working class, to protect the health of North Carolinians, and to promote the growth of our economy. The North Carolina General Assembly’s decision to forego Medicaid expansion has led to missed opportunities for the state. It has sent the wrong message to the citizens of North Carolina, Republicans and Democrats alike.
-Contributed by Dr. Yele Aluko, MD, MBA
Dr. Aluko is a Fellow of the American College of Cardiology and Senior Vice President at Novant Health in Charlotte
Wilmington's nCino makes Forbes 'Most Promising Companies' list
Wilmington-based nCino Inc. was the only North Carolina business to make Forbes' recent list of America's Most Promising Companies. nCino ranked 93rd on the list, which includes private companies generating less than $300 million annually and considers revenue growth, employee growth, capital raised and management, among other factors.
nCino sells software to banks to help them reduce loan paperwork. The company's CEO, Pierre Naudé, projects $50 million in annual sales by 2018, compared with $6.5 million in 2014 (Statewide, December). Employment has climbed to about 100 from 18 two years ago as banks in 19 states have bought nCino’s products. It spawned out of Wilmington-based Live Oak Bank, founded by Chip Mahan, who saw the potential for selling the software to other banks. Live Oak specializes in U.S. Small Business Administration loans, a niche that has made it the state’s most profitable bank, based on return on assets and equity (“Big Gains for Small Banks,” June).
Family Dollar shareholders approve sale to Dollar Tree
Family Dollar Stores Inc. shareholders voted Thursday to approve the sale of the Matthews-based discount retailer to Chesapeake, Va.-based Dollar Tree Inc. The company's early vote count showed 74% of total shares were in favor of the deal, and 89% of total shares voted.
The vote came after being delayed in December as some shareholders wanted the company to consider a $9.1 billion offer from rival Dollar General Corp., based in Goodlettsville, Tenn. The Dollar Tree deal was valued at $8.5 billion, or $74.50 per share. Family Dollar shareholders are slated to receive $59.60 per share in cash and the remainder in Dollar Tree shares. Dollar General had offered $80 per share.
Family Dollar CEO Howard Levine favored Dollar Tree's lower bid, which he said would protect some of the1,300 jobs at Family Dollar's corporate headquarters and was more likely to receive Federal Trade Commission approval. Levine is expected to stay on under Dollar Tree's ownership. A combination with Dollar General would have led to more store closings, Levine said.
Leon Levine started the discount chain in Charlotte in 1959 and took the company public in 1970. His son, Howard, became CEO in 2003.
Impetus for the sale followed last June's disclosure that New York investor Carl Icahn owned 9.4% of Family Dollar's shares. He demanded that Family Dollar be put up for sale, prompting the takeover fight between the two other dominant dollar-store chains.
The merger still needs approval from the Federal Trade Commission, and the sale could close as soon as March.
State eyeing $2.5 billion debt expansion
North Carolina may be asking lawmakers and voters to approve as much as $2.5 billion in debt, State Budget Director Lee Roberts told UNC System leaders last week. His comment to the UNC Board of Governors in Chapel Hill was overshadowed by the forced resignation of UNC System President Tom Ross, expected in January 2016.
Roberts said the McCrory Administration will ask the General Assembly for approval to issue up to $2.5 billion in debt for various needs, including transportation and education.
Any general-obligation bond issue must be approved by the legislature and voters, said Melanie Matthews, a spokeswoman for Roberts. The state has authority to issue as much as $2.5 billion, she said. Roberts and McCrory have not discussed the amount publicly because "we are just starting the conversation," she said.
North Carolina had $8.8 billion of outstanding debt as of June 30, 2013, according to a February 2014 report by State Treasurer Janet Cowell. That includes $7.4 billion in debt backed by highway, general-fund and other taxes. Higher education makes up 47% of the total tax-supported debt, with transportation accounting for 16%.
BankNotes: Remaining community
Banking is an industry that, by nature, experiences a volume of ebbs and flows. Mergers. Acquisitions. Consolidations. Liquidations. As I discussed in an earlier post, the Great Recession that began in December 2007 had an enormous negative impact on banks of all sizes, greatly changing the landscape of community banks in North Carolina – a crushing ebb. Today, we are experiencing steady economic growth, particularly due to the stock market's recovery. Investors have been bullish. The housing market has rebounded. This time is what we consider a welcomed flow.
By all accounts, this economic health is a positive change. For example, according to the U.S. Department of Labor, North Carolina's unemployment rate for November 2014 was 5.8%, down from 10.4% in November 2009. Improvements like this naturally spark spending and expansions, causing an institutional shift within the banking industry. Among the countless opportunities this provides – for both banks and their customers – a significant challenge presents itself. As the growth of the economy fuels the growth of banks, one tough question arises: "How do you remain a community bank as you develop into a larger financial institution?"
As I've learned firsthand, the answer actually lies in the question: community. A bank must always, at its core, be community focused. This can be tougher than it sounds as you factor in the surge of operating branches, employees, and accounts. Additional corporate structure is inevitably required for a bank to function as a smoothly run business. However, taking an active role in the communities in which a bank serves must continue to be the crux of the franchise. And I mean every community it serves. A bank is merely a whole of its parts, with every branch just as important as the next.
So, how does a bank do this? I've previously shared some characteristics of a successful community bank. For one, even with added structure and directive, it must still allow for some decisions to be made at a local level. This empowers bankers, who personally know the communities they live in, to make the best choices for their customers.
Second, a bank must not overlook the influence of customer service. There is no denying we live in a digital world with incredible technology advances that make our daily lives easier. Online and mobile banking certainly provide added convenience and immediacy, but should be used as an extension of services – not a replacement. Face-to-face, personalized service is still arguably the most important factor when choosing a bank. Bankers and staff should be encouraged to treat customers like neighbors because, in many cases, they are.
Lastly, a bank should never underestimate the importance of giving back. Philanthropy is essential for the reputation of any institution. As I recently witnessed during Yadkin Bank's East Meets West campaign, goodwill at the local level is key for a community bank. It's commendable to have worldwide, nationwide, and even statewide causes, however benefiting local foundations and nonprofits ensures that charitable efforts are making a difference in the lives of people within the community a bank serves.
As a bank grows, the additional services and resources now available to customers are of great value. However, the benefits of a larger financial institution must never overshadow the philosophies from which a community bank is built.
Scott Custer is president and chief executive officer of Yadkin Financial Corp.
Biotech Center CEO moves to lobbying job
E. Norris Tolson, a veteran Raleigh state official who was the CEO of the North Carolina Biotechnology Center for seven years before resigning last year, joined the Williams Mullen law firm's economic-development group in Raleigh.
Before working for the biotech center Tolson served as secretary of three different state agencies, including revenue, transportation and commerce. He also worked for DuPont for more than 25 years and served as a member of the N.C. General Assembly.
Williams Mullen has 220 lawyers at offices in North Carolina, Virginia and Washington, D.C.
Greensboro gaining large spec industrial building
McConnell Center Two LLC, a joint venture between Greensboro developer Pete Goria and Richardson Properties LLC, plans to build a 300,000-square-foot speculative industrial building in McConnell Center Industrial Park on Interstate 40 in east Greensboro. It will be the third building in the park and is expected to open in July. The existing buildings are occupied by O’Reilly Auto Parts, Dry Storage Corp. and Vistar, a division of Performance Foods Group.
Windsor Commercial LLC is the contractor, while Triad Commercial Properties LLC will lease the project.
Charlotte-based Falfurrias sells Dorsey Wright for $225M
Falfurrias Capital Partners, a Charlotte-based private-equity firm led by Hugh McColl Jr. and Marc Oken, sold its stake in investment company Dorsey, Wright & Associates to New York trading company Nasdaq OMXGroup Inc.
New York-based Nasdaq is paying $225 million for Richmond, Va.-based Dorsey Wright, which manages $6 billion in addition to providing investment research to financial advisers and investors. Falfurrias bought controlling interest in Dorsey Wright in 2011, though its precise stake was not disclosed.
McColl, former CEO of Bank of America Corp., and Oken, a former CFO of the bank, started Falfurrias in 2006. It is named after a small town in south Texas near some favorite hunting grounds of McColl and Oken.
Dorsey Wright has an exchange-traded fund, the PowerShares DWA Momentum Portfolio, that has attracted $1.6 billion in assets since its inception in 2007. A separate ETF, the First Trust Dorsey Wright Focus 5, gathered $1.2 billion in assets in 2014.
Family Dollar delays Dollar Tree acquisition vote
Family Dollar Stores Inc. on Tuesday delayed its stockholders' vote on the proposed acquistion by Chesapeake, Va.-based Dollar Tree Inc. after there were insufficient votes at the time of the meeting. The meeting was adjourned until Jan. 22.
The Matthews-based company agreed to an $8.5 billion deal in July with Dollar Tree, which will pay $74.50 per share. Family Dollar has declined an offer from Goodlettsville, Tenn.-based Dollar General Corp. for $9.1 billion, citing potential antitrust issues. Dollar General extended its offer on Tuesday to expire Jan. 30.
Tuesday's delay came a day after a Delaware court denied a request to block the shareholders' vote.
N.C. Medicaid expansion has big benefits, study says
North Carolina could add 43,000 jobs and boost the economy by more than $10 billion by 2020 if the state expands Medicaid eligibility to as many as 480,000 people over the next two years, according to a report by researchers at George Washington University. The report was funded by Greensboro-based Cone Health Foundation and the Winston-Salem-based Kate B. Reynolds Charitable Trust.
The Republican-dominated North Carolina General Assembly, along with peers in many other states, have thwarted plans to make Medicaid available to people with income of 133% of the federal poverty level because of concerns over the long-term costs once federal support for the program wanes.
Hospital groups have pushed for expansion, contending that enrolling more low-income people in the federal plan saves money by promoting more healthy living and averting emergency room visits.
Cone Health Foundation, affiliated with the nonprofit Cone Health network of hospitals and medical practices, has more than $100 million in assets, according to its website. The Winston-Salem-based Reynolds trust, formed by the wife of a former R.J. Reynolds Tobacco Co. chairman with a mission of assisting financially needy North Carolinians, has assets of more than $550 million.
“We have some of the most restrictive Medicaid eligibility requirements in the country, so hundreds of thousands of low-income North Carolinians will benefit if the program expands,” Susan Shumaker, president of Cone Health Foundation, said in a statement. “The decision not to expand the program impacts all of us, not just those who are struggling to access the care they need to stay healthy. It has already also cost jobs and billions of dollars, and will continue to do so.”
About 18% of North Carolina citizens lack health insurance. If the state doesn’t expand Medicaid, it will be turning down more than $21 billion in federal funds between 2016 and 2020, according to Leighton Ku, a public health expert at George Washington and the lead author of the report. As part of the program North Carolina would need to spend $1.7 billion to cover the newly insured.
Making more people eligible for Medicaid would boost spending on construction, food service and other sectors by tens of billions of dollars, offsetting higher medical costs, Ku said.
The report, which includes the impact on each of North Carolina’s 100 counties, is available at www.NCMedicaidExpansion.com.
Brunswick Co. builder named chair of ports board
Gov. Pat McCrory has named building contractor Tom Adams of Brunswick County chairman of the North Carolina State Ports Authority board of directors. He succeeds Mike Lee, a Wilmington lawyer who left the board this summer after being appointed to the N.C. Senate, replacing Thom Goolsby, who resigned. Lee was elected in November to a four-year term.
Adams is president and CEO of Adams Building and Consulting Company LLC. Former House Speaker Thom Tillis appointed him to the ports authority in January.
Board membership includes N.C. Secretary of Transportation Tony Tata, six members appointed by the governor and four appointed by the General Assembly. The governor selects the chairman and the vice chairman.
Pantry gains as oil slides
Lower gas prices are great news for drivers and investors in convenience-store operator The Pantry, which gained 4.4% Wednesday a day after reporting soaring profits. The gain came on the same day the Standard & Poor's 500 Index slid 1.6%, its worst daily showing in seven weeks.
Convenience stores benefit when customers spend less on gas, leaving more money to spend on food, beverages, cigarettes and other staples.
Cary-based Pantry reported earnings on Tuesday of $15.4 million for the fourth quarter ended Sept. 25, or 66 cents per share, beating average analyst estimates by 20 cents. (The earnings excluded three cents per share of impairment charges.) A year earlier the company earned $1.4 million, or 6 cents per share.
Revenue declined 3% from a year earlier to $1.96 billion, about $20 million less than estimates.
Pantry shares have doubled in the past year, trading as high as $29.19 this week. They closed Wednesday at $28.47.
Pantry operates about 1,500 stores in 13 states, mostly under the Kangaroo Express brand.
The S&P 500 has declined 2.4% over the past three trading days, but has gained 9.6% so far this year.
North Carolina metro-area unemployment tumbles
The North Carolina job market has recovered dramatically over the past year, according to new statistics. Twelve of North Carolina’s 14 larger metropolitan areas had unemployment rates of 6% or less in October, compared with only three a year ago, according to the North Carolina Department of Commerce. The rates were not seasonally adjusted.
The biggest changes over the past year, with the unemployment rate declining by at least two percentage points, occurred in Fayetteville, Hickory-Lenoir-Morganton and Rocky Mount. Regions with the lowest rates are Asheville, 4.1%, Durham-Chapel Hill, 4.5% and Raleigh-Cary, 4.5%. The highest rates are in Rocky Mount, 8.1%, and Fayetteville, 6.5% – the only metro areas above 6% — according to the department’s labor and economic analysis division.
The October rate in Charlotte-Gastonia is 5.6%, compared with 7.3% a year earlier. Greensboro-High Point came in at 5.7%, while Winston-Salem was 5.1%.
Several smaller cities and rural areas have higher unemployment rates, including Laurinburg, 10.2%; Henderson, 8.2%; and Roanoke Rapids, 8.2%.
About 4.42 million workers were employed in the state in October, a gain of about 76,500 from the previous year. The number of unemployed declined by about 82,500.
The statewide rate, which is seasonally adjusted to reflect hiring patterns, was 6.3% in October, compared with a national rate of 5.8%. The November number will be reported on Dec. 19.
Ryan Homes owner Schar donates $12 million to Elon
Elon University received a record $12 million pledge from Dwight and Martha Schar of Palm Beach, Fla. Dwight Schar is founder and chairman of Reston, Va.-based NVR Inc., which operates Ryan Homes and NV Homes. The couple have a son who is in Elon's class of 2016 and another son who plans to enroll at the Alamance County university next year.
The Schars' donation will be used to build a two-story, 45,000-square-foot building for the School of Communications. Money will also be used for construction of a convocation center.
Schar is a co-owner of the Washington Redskins football team. At his alma mater, Ashland University in Ashland, Ohio, the athletic complex, education school and nursing school are named in his honor, reflecting his philanthropy.
Schar founded NV Homes in 1979 and took the company public in 1986. After acquiring Ryan Homes in 1986, the heavily indebted company filed for bankruptcy reorganization in 1992, according to Forbes magazine.
Schar controls about $88 million of NVR shares, according to Yahoo Finance. The company's shares have advanced 22% this year and NVR has a market capitalization of $5.1 billion.
Elon was founded in 1889 and has about 6,500 students, including 5,800 undergraduates. About 59% of the students are female, according tot he college's website.
Eshelman donates $100 million to UNC
Fred Eshelman, founder and former CEO of Wilmington-based Pharmaceutical Product Development LLC, pledged a $100 million donation to the Eshelman School of Pharmacy at UNC Chapel Hill, his alma mater. It was the largest individual donation the university has ever received and the largest ever made to a pharmacy school in the United States.
The donation will create the Eshelman Institute for Innovation, which will promote research and encourage entrepreneurship, UNC Chancellor Carol Folt said at a Wednesday announcement. Folt has been leading an effort to increase private funding at UNC.
Eshelman founded PPD in 1985 as a one-man startup. It was sold in 2011 for $3.9 billion to two private equity companies, Washington, D.C.-based The Carlyle Group and San Francisco-based Hellman & Friedman. In 2010, PPD spun off Morrisville-based Furiex Pharmaceuticals Inc., which was sold in July to Forest Laboratories Inc., a subsidiary of Dublin-based Actavis, in a deal valued at about $1.1 billion.
The pharmacy school was named for Eshelman in 2008. He has donated $38 million to the school since 2003.
The school enrolls approximately 650 students in its professional degree program, more than 100 students in its graduate program and has more than 100 full-time faculty members.
“In the past 10 years, the school has generated more than 130 patents and created 15 spin-off companies,” said Eshelman, who has been a member of the school’s Board of Visitors for more than a decade and has lectured at the school as an adjunct faculty member. “Their success demonstrates the power and the future of drug discovery in academia, and it’s a future that I am eager and proud to support.”
The UNC pharmacy school is second among the nation’s pharmacy schools in total federal research funding and specifically in National Institutes of Health funding, according to a news release about the donation.
Eshelman earlier this year urged North Carolina's political leaders to invest more money in the state's university system. He is president and a key contributor to Wilmington-based RightChange.com, a political group that supports Republican Party candidates.
Raleigh incubator expanding to Greensboro
Raleigh-based business incubator HQ Raleigh, which hosts more than 90 companies at its downtown Raleigh offices, is expanding to Greensboro in a partnership with Gate City developer Andy Zimmerman.
The new HQ Greensboro is scheduled to open in May at a 10,000-square-foot building at 111 W. Lewis St. in downtown Greensboro. The aim will be to promote more ties between the Triangle and Triad regions and spur entrepreneurship. The building, built in 1898 for a wagon company, will include more than 20 offices and three or four conference rooms.
"This partnership will create an ideal environment to foster increased collaboration and idea collision, as well as cross-state opportunities for economic growth," says Christopher Gergen, co-founder of HQ Raleigh.
Co-founders of HQ Greensboro are Zimmerman, Ryan Barry, Ken Causey and April Harris.
The two entities have agreed to allow HQ Raleigh companies to gain access to collaborative space at HQ Greensboro and vice versa.
HQ Raleigh was founded in October 2012 by Gergen, Jason Widen, Brooks Bell and Jesse Lipson.
Decker resigns commerce post
Sharon Decker, secretary of the N.C. Department of Commerce, will step down effective Dec. 31, Gov. Pat McCrory announced Tuesday. John Skvarla, secretary of the Department of Environment and Natural Resources, was appointed to the post.
Decker became commerce secretary when McCrory took office in January 2013. Since then, North Carolina has gained more than 150,000 jobs, according to a news release from the governor’s office. She also helped create the Economic Development Partnership of North Carolina, a nonprofit focused on recruiting businesses and helping existing companies expand.
The (Raleigh) News & Observer reports that Decker said in June that her services had been requested elsewhere but that she planned to stick with her current post through the transition to the public-private partnership. On Monday the partnership announced its new CEO hire, Christopher Chung, who has run a similar economic-development agency in Missouri.
Skvarla worked as an attorney in Raleigh before joining the McCrory administration in 2013. He has led his department as it oversaw regulations related to Duke Energy Corp.'s coal ash troubles as well as the state's permitting of hydraulic fracturing for oil and gas production. In both instances he’s drawn fire from environmental groups for being too lenient on businesses. The governor’s news release praised Skvarla for leading the effort to create the toughest coal ash law in the nation.
The governor’s office praised Decker in its news release, which didn't include comments from her. Decker, who is also a Presbyterian lay minister, will return to the private sector. Decker worked for Duke Energy for 17 years earlier in her career.
In a Business North Carolina story about Decker in June 2013, she said, “I serve in a governor’s administration that would not ask me to compromise what I believe to be true. Will that mean I will agree with every decision? No. But if I reach a point I can’t wake up and look in the mirror in the morning, I won’t do it anymore.”
Skvarla has shown a willingness to work with businesses. In February 2013, Skvarla told the Associated Press that some state regulators had been too zealous in defense of the environment and to the detriment of business.
"We are a service agency. We are not to be an obstacle of bureaucratic resistance,” Skvarla told AP. "Our job is to take (a business) by the hand and determine how quickly we can get to the outcome within the confines of the rules and regulations."
Decker and Skvarla will remain at their current positions through the end of the year. A search has begun to fill Skvarla’s position.
State adds new industry hunter
The new Economic Development Partnership of North Carolina hired a senior Missouri industry recruiter as its leader.
Christopher Chung, 38, comes from the Missouri Partnership, a public-private entity formed in 2007 that is credited with recruiting 78 companies and more than 10,000 jobs since 2010. Projects include expansions by Armonk, N.Y.-based IBM Corp. and roofing manufacturer GAF, based in Wayne, N.J.
“He is widely respected in the industry and experienced using the public-private approach, and he has proven he can create jobs and opportunities,” Gov. Pat McCrory said in a statement. Development Counsellors International, a New York-based economic-development consulting firm, named Chung one of the recruiting industry’s “Top 40 Under 40” in 2013.
Chung will succeed interim CEO Richard Lindenmuth, who will remain as a consultant for special projects, according to the governor's statement.
North Carolina lawmakers created the new partnership, a nonprofit corporation, to take on many of the recruiting and marketing tasks formerly handled by the N.C. Department of Commerce.
In Missouri, Chung worked for the administration of Gov. Jay Nixon, a Democrat. McCrory and North Carolina’s top legislative leaders are Republicans.
Missouri ranked 31st on Forbes magazine’s latest list of best states for business, receiving low marks for its overall economic climate and growth prospects. North Carolina ranked third.
Chung has degrees in economics and Japanese from Ohio State University.
N.C. Railroad Co. investing $13 million
The North Carolina Railroad Co.’s board approved more than $13 million in improvements to its system as part of a six-year plan to spend $60 million. The moves follow a strategic plan adopted in 2013 to increase the company’s economic development efforts.
Since 2000 the railroad has invested more than $80 million in capital projects. (On down the line, February 2014 cover story.)
The largest project among those approved by the board is $5.4 million for improving tracks and sidings in Cabarrus and Mecklenburg counties.
The company is a privately owned corporation with its stock owned by the state of North Carolina. Created in 1849, it manages 317 miles of track from Charlotte to Morehead City. The company is governed by a 13-member, all-male board of directors.
Unemployment rate declines to 6.3% in October
North Carolina's unemployment rate fell to 6.3% in October, 0.4 percentage points below September's rate of 6.7%, and average earnings declined slightly, according to a report from the N.C. Department of Commerce. The rate has declined 1.2 points over the past year, though it remains above the national rate of 5.8%.
The state had 4.18 million employed in nonfarm, seasonally adjusted jobs, exceeding the pre-recession high of 4.17 million in February 2008, according to a release from Gov. Pat McCrory. The state's employment declined for 24 consecutive months, bottoming at 3.84 million in February 2010.
Over the past year total state employment has increased 28,447, the Commerce Department said. About 294,000 people are unemployed, or about 55,000 fewer than a year ago.
Education and health services added 6,100 jobs, while leisure-hospitality services and government each added 3,500. Financial activities reported a decline of 2,000 jobs.
Preliminary numbers show average hourly earnings fell 8 cents to $16.59, while average weekly hours dropped 18 minutes. Average weekly earnings fell $8.49 to $723.32.
Zapata expansion to add 35 jobs
Charlotte-based Zapata Inc. announced an expansion that is expected to create 35 jobs over two years. The architecture, engineering and construction management firm will grow its service areas, including additional locations in North Carolina.
The company will partner with LJB Inc., an engineering design firm based in Dayton, Ohio, to expand its public transportation engineering design services, according to a news release.
“Charlotte and other areas of North Carolina are in a pattern of tremendous growth,” Marty Ray, Zapata vice president of strategy and planning, said in a statement. “Our ability to support our communities and the state planners and engineers will be critical to North Carolina’s success for growing and attracting future investment.”
Zapata, which was founded in 1991 by former Duke Energy Corp. engineer Manuel Zapata, has mostly focused on federal work. This expansion represents a refocus on local and regional needs, according to the company.
Rockingham County draws $58 million in investments
Rockingham County commissioners and Eden City Council members agreed this week to provide incentives for two companies – SGRTEX LLC and Gildan Activewear Inc. – that plan investments that total more than $58 million and will add 100 jobs.
Gildan Activewear, an apparel company based in Montreal, Canada, plans to expand its Eden distribution center by adding $12.7 million in machinery and equipment and $10.4 million in building improvements, as well as 16 full-time jobs, according to a news release. The center has 310 full-time employees.
SGRTEX, an India-based textile company, announced plans in May to open a yarn-manufacturing plant in Eden, investing nearly $35.4 million over two phases and creating 84 full-time jobs, according to the release. It will be the company's first U.S. plant.
SGRTEX will receive payments of $635,261 from the county and $555,853 from the city. The company will be paid the incentives over a period of four years. The county agreed to pay Gildan $448,719, and the city will pay $392,629, also over four years. The deals require the companies to meet investment and job-creation targets before incentives are paid.
Rockingham County is in north-central North Carolina, bordering Virginia. Its county seat is Wentworth and largest cities are Eden and Reidsville. The county's population is about 94,000.
BNC Bancorp expands into Virginia
BNC Bancorp., the High Point-based banking company backed by Aquiline Capital Partners, is making its biggest expansion by buying Roanoke, Va.-based Valley Financial Corp. for about $101.3 million in stock.
The move expands BNC into Virginia, where Valley operates nine branches in Roanoke and Salem. Including the Virginia bank’s $857 million in assets, Bank of North Carolina will have assets of $4.9 billion. Pending approval from regulators and stockholders expected by the second quarter of 2015, BNC will be the fourth largest North Carolina-based banking company, behind Charlotte-based Bank of America Corp., Winston-Salem-based BB&T Corp. and Raleigh-based First Citizens BancShares Inc.
BNC is paying about 1.7 times Valley’s book value and about 16 times its earnings per share, according to a statement from the company. The valuation is in the mid-range of similar-sized bank acquisitions over the past year, according to SNL Financial LLC data.
BNC has made a dozen acquisitions since 2010 in North Carolina and South Carolina, and its stock has more than doubled in the past two years. Because of its success in managing those acquisitions, industry analysts have said BNC has the best growth prospects of North Carolina’s larger independent banks. ("Fresh crop," June 2014).
Valley Financial was started in 1995 and ranks fourth in deposit market share in Roanoke, trailing large rivals Wells Fargo & Co., SunTrust Banks Inc. and BB&T. Roanoke investor George Logan is Valley’s largest shareholder, with a stake of more than 10%, according to Yahoo Finance.
Aquiline owned 1.5 million voting shares, or 7%, according to BNC's 2014 proxy. The New York-based investment company also owns 4.8 million nonvoting shares, which are convertible into an equal number of voting shares, the proxy says.
Demand on the rise for NC tech jobs
North Carolina employers showed more demand for technology jobs in October, with 6.2% more job openings compared with September, according to a report from Raleigh-based The Select Group, a staffing and recruitment company.
After seeing a low point of about 3,000 average daily postings at the beginning of 2014, openings have exceeded 3,500 since June and increased to 3,780 last month.
The most demanded job categories in October were: systems engineer/support (1,020 average daily postings), IT management (750) and software development (710). Most demanded skills included Java (830), SQL (760) and Windows operating system (610).
Labor demand from most sectors increased in October, according to the report, but financial services and banking had fewer job openings. The national average increased 0.5% in October.
Source: The Select Group
Wilmington attracts 1,300 jobs
Vertex Rail Technologies LLC plans to make rail cars for transporting crude oil at a Wilmington plant that will employ as many as 1,300 people.
Vertex plans to invest $55 million to renovate the plant, which previously housed a crane-manufacturing business operated by Westport, Conn.-based Terex Corp., according to a statement from Gov. Pat McCrory’s office.
Vertex said it well be hiring assemblers and fitters, welders, painters and others for jobs that will pay an average of about $40,000 annually.
Vertex Rail CEO Donald Croteau is managing director of Middleborough, Mass.-based Vertex FD LLC, a fabricating company that employed 30 and had annual revenues of $67 million in its 2013 fiscal year, according to a September 2013 story in the Taunton Daily Gazette in Taunton, Mass.
Vertex said the plant is needed because of increased demand for rail cars by crude-oil exploration companies in Texas, North Dakota and other states.
Economic development board members named
The Economic Development Partnership of North Carolina announced its 17-member board of directors, including nine people appointed by the governor and four each named by House Speaker Thom Tillis and Senate President Pro Tempore Phil Berger.
John Lassiter, president of Charlotte-based Carolina Legal Staffing, is chairman of the board and the sole representative from Mecklenburg County. Four members are from Wake County, including Jim Whitehurst, CEO of Raleigh-based Red Hat Inc. The group holds its first meeting Friday, Nov. 21.
The nonprofit, public-private partnership develops new business prospects and works with the N.C. Department of Commerce, which retains responsibility for job-creation incentives and state funding decisions.
The members are:
- Marie Flow Arcuri, dealer principal, Flow Lexus in Winston-Salem and Greensboro. (Forsyth)
- Charles Creighton, founder and CEO, Colony Tire Corp. (Chowan)
- Bill Graham, lawyer and partner, Wallace & Graham. (Rowan)
- Michael Hawkins, president, Pisgah Enterprises. (Transylvania)
- John Kane, founder and CEO, Kane Realty Corp. (Wake)
- Vimal Kolappa, entrepreneur and founder, East Coast Hospitality. (Beaufort)
- John Lassiter, president, Carolina Legal Staffing. Board Chairman. (Mecklenburg)
- Thomas Looney, vice president and general manager, Lenovo North America. (Wake)
- Pleas McMichael, retired textile executive and exporter. (Rockingham)
- Melanie McNamara, founder and CEO, Absolute Style Furniture. (Guilford)
- Caleb Miles, president and CEO, Convention & Visitors Bureau, Pinehurst/Southern Pines/Aberdeen. (Moore)
- R. Doyle Parrish, CEO, Summit Hospitality Group. (Wake)
- Sheila Pierce, executive director, Jacksonville Onslow Economic Development. (Onslow)
- Robert Singer, lawyer and partner, Brooks Pierce McLendon Humphrey & Leonard. (Guilford)
- Julie Spiro, executive director, Jackson County Chamber of Commerce. (Jackson)
- Jeffery Turner, executive vice president and COO, Murphy Family Ventures. (Lenoir)
- Jim Whitehurst, president and CEO, Red Hat. (Wake)
Forbes ranks NC third best state for business
North Carolina moved up a spot to No. 3 in Forbes’ annual study of the best states for business for 2014.
Utah was No. 1 in the ranking, followed by North Dakota. Virginia, last year's top-ranked state, fell to fourth.
Forbes’ ranking looks at business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life. Business costs, which include labor, energy and taxes, are weighted the most heavily. North Carolina’s labor costs are 16% below the national average, Forbes reported.
The state’s unemployment rate has declined from a peak of 11.3% in early 2010 to 6.7% in September, according to the U.S. Bureau of Labor Statistics.
Read more about the national rankings at http://onforb.es/1pR98r7.
LabCorp makes $6.1 billion acquisition
Laboratory Corp. of America Holdings, the Burlington-based drug testing company with a stock market value of about $9 billion, is buying medical research firm Covance Inc. for $6.1 billion in cash and stock, the companies said today.
LabCorp. will pay $105.12 for each share of Princeton, N.J.-based Covance, 32% more than the company’s closing price on Oct. 31.
LabCorp. said the combined company will make research more efficient and deliver results from clinical drug tests more quickly. The headquarters will remain in Burlington, while the Covance division will be based in Princeton, headed by Covance Chairman Joseph Herring.
LabCorp. Is North Carolina’s 11th largest public company with a stock market valuation of more than $9 billion. Shares increased 20% this year through Oct. 31.
Jim Powell started LabCorp predecessor Biomedical Laboratories in 1969 after graduating from Duke University's medical school. Biomedical was acquired by Switzerland-based Hoffmann-LaRoche AG in 1982 and the company, later named Roche Biomedical Laboratories, became the nation’s largest provider of lab tests for hospitals and physicians’ practices ("False positive," September 1997). LabCorp was formed in 1995 after the sale of Roche Biomedical to National Health Laboratories Holdings of La Jolla, Calif.
Corning Inc. spun off Covance in 1996. The company had revenues of more than $2.6 billion last year.
Linamar plans $115 million expansion near Asheville
Linamar Corp. plans to invest $115 million in its Arden plant near Asheville with plans to add 150 positions, according to a statement from the Economic Development Coalition of Asheville-Buncombe County. The expansion stems from a new product line for the plant, which Guelph, Ontario-based Linamar bought from Volvo Construction three years ago. A building renovation will start this year with hiring expected to begin in early 2015, according to the release. The expansion follows a 2012 announcement of plans to invest $75 million and add 250 jobs at the plant.
Linamar plans to make transmission gears for the automotive industry at the plant, which now employs about 200 people who make engine blocks for customers including Peoria, Ill.-based Caterpillar Inc.
“Linamar’s success elevates Asheville’s growing reputation as a national leader in advanced manufacturing," Paul Szurek, chairman of the Asheville-Buncombe coalition, said in the statement. "There are only a few plants in the world that can produce products with such refined tolerances. We are extremely pleased Asheville has been selected for this project."