Charlotte bubbles ahead
Landing 1,260 jobs and the headquarters of Sealed Air Corp. may rank among the best days in the history of Charlotte’s business community, on par with NationsBank Corp.’s purchase of Bank of America Corp. in 1998 or Royal Insurance’s U.S. headquarters relocation from New York City in 1986. The latter included 1,200 jobs, about half of them filled by existing Royal workers.
As the 345th largest U.S. public company, Sealed Air, which makes bubble wrap and other packaging, is the type of headquarters move that Atlanta or Dallas envy, much less Greenville S.C., which is losing more than 600 white-collar jobs as the company consolidates into a larger corporate campus, according to the Wall Street Journal. It’s a big victory for North Carolina over South Carolina, which a month ago was crowing after attracting potentially thousands of jobs from Charlotte through recruitment of Lash Group, a division of AmerisourceBergen, and LPL Financial Corp., both of which are seeking to reduce costs by moving across the state line.
Charlotte’s gain is also a loss for New Jersey, which has higher overall taxation and declining revenue from Atlantic City casinos. Sealed Air is now based in Elmwood Park, N.J., an affluent suburb 15 miles west of Manhattan. Losing headquarters is never good news for governors, especially when they are considering a presidential bid, such as New Jersey’s Chris Christie.
Charlotte benefited from the background of Sealed Air Chief Financial Officer Carol Lowe, a UNC Charlotte graduate who joined the company in 2012 after working for more than 10 years at for Carlisle Cos., another local Fortune 500 company. She joined the company just months before Jerome Peribere, who was initially president and then named CEO in March 2013. He had spent the previous 35 years at Dow Chemical Co., and brought new vision to the company.
Incentives of about $36 million helped make Peribere’s decision as he picked North Carolina over four states. It disproves the notion that the Tar Heel state won’t be competitive in doling out money to massive international companies. In April, Texas promised $40 million to Toyota Motor North America Inc., which is moving its headquarters and about 6,400 jobs to a Dallas suburb from California.
Sealed Air’s promised wages surely enticed North Carolina’s politicians. The average annual wage is about $120,000, though simple math suggests the reality may be closer to $100,000 for about 1,200 workers after excluding the top 50 executives, whose wages skew the average. In any case, it was a huge victory for Charlotte and North Carolina.
Raleigh tops 'Best Places for Business' list
Eat your heart out, Des Moines. Raleigh returned to the top of Forbes’ Best Places for Business and Careers in 2014, unseating the Iowa state capital. Our seat of state government was third last year, previously ranking No. 1 in 2011 and from 2007 to 2009.
“Fueling Raleigh’s consistent results are business costs that are 18% below the national average, and an adult population where 42% have a college degree, the 12th best rate in the U.S. (30% is the national average). Raleigh is home to North Carolina State University and nearby schools include Duke University and the University of North Carolina at Chapel Hill. The area’s appeal has led to a strong inflow of new residents to the city, which boasts the sixth fastest net migration rate over the past five years.” Also contributing were Research Triangle Park, which has spawned 1,800 startups since 1970, business recruitment efforts, such as those that landed Cisco System’s expansion last month, and low regulatory hurdles. Charlotte ranked 12th. “Charlotte’s economy continues to be one of America’s best performers with the metro’s gross metro product up 3.7% last year.”
The list wasn’t all sunshine and rainbows for the Tar Heel State. North Carolina also boasts Hickory, the 10th-worst city for business. Though it has the lowest business costs in the U.S., its job losses are third highest over the past five years — and this is simply the latest slight for the metro.
BankNotes: Life after The Great Recession
It’s hard to believe that it has been nearly six years since The Great Recession ripped through the U.S. Nevertheless, the sweeping reforms, shrunken budgets and countless bankruptcies it engendered continue to make headlines. Community banks have not been immune. A headcount in this state is proof enough: Five years ago, there were approximately 80 banks. Today, there are 60.
With our industry under greater scrutiny than ever, regulatory and compliance costs have increased, forcing community banks to reassess their strategic options. Because these costs escalated so considerably and so quickly, it has become significantly harder for smaller banks to generate the same level of earnings they did just a few years ago. In turn, reduced earnings have caused investors to shy away, making it all the more difficult to raise capital. If a community bank is able to raise new capital, it often comes at the expense of current shareholders — whose shares become diluted — stifling the bank’s ability to grow.
If this weren’t enough, advances in technology have altered community banking at the branch level. In an effort to keep up with the cutting-edge conveniences larger institutions offer, many community banks have commoditized the banking experience in a niche that was previously best known for customized solutions. By giving customers the online- and mobile-banking options they demand, community banks have essentially increased the distance between themselves and their customers, diminishing the close relationships and personal interactions that have historically set community bankers apart.
However, the forecast is encouraging. While analysts continue to debate the degree to which the U.S. economy has recovered, the signs of recovery are unmistakable. Now it’s up to every industry to learn to grow, thrive and innovate in spite of perceived hardships. If the best ideas are born during the most difficult of times, imagine the possibilities that lie ahead. With fewer banks in North Carolina, there is greater opportunity — and greater responsibility — for those still standing. I’ll explore both in subsequent posts.
Custer has been director and chief executive officer of Yadkin Bank since 2011 and director and CEO of Piedmont Community Bank Holdings since 2010. Before joining Piedmont, he served as chairman and CEO of RBC Bank (USA).
New jobs for Charlotte, Oxford
Spectra Group Inc., a Princeton, New Jersey-based software consulting company, plans to add as many as 250 jobs in Charlotte over several years after receiving a $2.9 million grant approved today by the N.C. Department of Commerce, agency spokesman Daniel Spuller said. The grant is spread over 12 years and hinges on the company meeting job targets. The jobs will pay an average annual wage of about $85,000.
Spectra’s clients include Royal Bank of Canada's RBC Capital Markets division and Boston-based State Street Corp., according to the company’s website. President Aditya Narra said Spectra considered Austin and Tampa before selecting Charlotte because of its proximity to the Northeast and quality of life issues. Its office opens Aug. 1 in a 12,864-square-foot space in BB&T Center in downtown Charlotte.
Separately, New York-based Ideal Fasteners Corp. is adding 155 jobs over five years in Oxford, a Granville County city 40 miles north of Raleigh, according to a release from Gov. Pat McCrory’s office. The company, which now employs 226 people in Oxford, is receiving as much as $1.3 million over 12 years. The new jobs will pay an average of $35,200. Ideal Fasteners bills itself as the world’s second-biggest zipper manufacturer in the world.
Why Laura Bowles chose Movement Mortgage
Laura Bowles had worked in senior consumer lending jobs at three big U.S. banks before joining Movement Mortgage LLC, a fast-growing Charlotte-based lender, as chief financial officer earlier this year. Her father-in-law, Charlotte investment banker Erskine Bowles, urged Movement co-founder Casey Crawford to consider her for the job. At the time Laura Bowles was head of consumer and small-business lending products for New York-based Citigroup Inc.'s Citibank unit.
Lisa Davis, a contributing writer for Business NC, interviewed Laura Bowles for her article, “Catching a break” in the July issue. The following excerpts have been edited for brevity and clarity.
We met, and it gave me a chance to learn more about Movement Mortgage and what they did and what was unique about the company. And I talked a little about my experience with larger banks and some of the challenges that they face in the evolving regulatory environment and through some of the legacy issues from the financial crisis. We met periodically, talking about some of those things and got to know each other.
Toward the end of last year, beginning of this year, Casey was starting to feel that he needed to bring in someone with the expertise and somebody he was comfortable with to help drive the company to the next level and be able to realize the high level of growth the company has seen to date.
I lived in Charlotte and spent a lot of time in New York, that was really where all the people who worked for me were, it was where the bulk of what I needed to do was, so I spent a lot of time back and forth. I have a husband and small children, so the commute starts to wear on you.
The company has tremendous growth potential and prospects. I think the business model is unique relative to other independent mortgage companies given the very strong realtor relationships and the heavy purchase focus, and the high level of service that the company offers to its clients to its employees. It’s consistent in the culture throughout the company, so I think the business model is in an industry where I think companies struggle a little bit to differentiate themselves. That was very intriguing for me - that the prospects are tremendous because there is so much change in the industry. To have a differentiated model, to have realized such strong growth, is a tremendous opportunity.
A smaller company is able to be more nimble and that is something that I think is great. The larger companies have many more established processes, which can be a benefit at times and can also be a hindrance. I think given where we are in terms of the mortgage industry, to be able to be nimble is a huge advantage.
A lot of the things that are a challenge for more entrepreneurial organizations as they mature and become more established is being able to preserve the great culture that attracts a lot of people to it, while also developing a little bit more structure in process so that they can grow in a way that is efficient, particularly this highly regulated industry. So my goal is both to be able to continue the high level of growth while also developing more of the processes and efficiencies that you have with more established companies.
Biggest industry challenge
Since having been at the banks, I’ve really gotten to see how changing regulation has impacted the industry in such a big way. One thing that has been a benefit to Movement Mortgage is that the company was founded in the post-crisis environment where we’ve been fortunate to be able to build the business at the time the regulation was being formed, as opposed to having to retrofit the business to changing regulation, which for a large organization is very, very hard. It’s hard to move that fast, so I do think the continuously evolving nature of the regulation will be a challenge because it requires a lot of oversight and a lot of attention on the part of the leadership.
Five NC hospitals recognized among nation's best
Five North Carolina hospitals achieved national rankings in at least one specialty on U.S. News & World Report's 2014-15 list of top medical centers. The news outlet evaluated nearly 5,000 hospitals in 16 specialties.
Duke University Hospital was ranked No. 14 overall and was the top-ranked hospital in North Carolina. The 957-bed hospital achieved national rankings in 13 adult specialties. It ranked No. 4 in Cardiology & Heart Surgery and No. 5 in Pulmonology in the United States.
Here are the rankings of the Best Hospitals in North Carolina:
1. Duke University Hospital, Durham (nationally ranked in 13 specialties: Cancer, Cardiology & Heart Surgery, Diabetes & Endocrinology, Gastroenterology & GI Surgery, Geriatrics, Gynecology, Nephrology, Neurology & Neurosurgery, Ophthalmology, Orthopedics, Pulmonology, Rheumatology, Urology)
2. Wake Forest Baptist Medical Center, Winston-Salem (nationally ranked in 4 specialties: Cancer; Ear, Nose & Throat; Nephrology, Pulmonology)
3. University of North Carolina Hospitals, Chapel Hill (nationally ranked in 2 specialties: Cancer; Ear, Nose & Throat)
4. Carolinas Medical Center, Charlotte (nationally ranked in one specialty: Urology)
5. Mission Hospital, Asheville (nationally ranked in one specialty: Pulmonology)
To see how other North Carolina hospitals fared, click here.
Read how BNC ranked the state's top hospitals in our March 2014 issue:
Raleigh a top 10 place for STEM graduates
The Raleigh-Cary metro area ranked No. 8 on NerdWallet.com's list of best places for graduates in science, technology, engineering and math fields.
Using data from the Bureau of Labor Statistics, the financial website analyzed criteria including annual pay for STEM jobs, median rent and availability of jobs in STEM industries.
The study cited N.C. State University's STEM education program, which helps teachers learn to prepare local students for work in the area's STEM-related companies upon graduation.
Best Places for STEM Graduate
view the report here
1. San Jose-Sunnyvale-Santa Clara, Calif.
2. Seattle-Bellevue-Everett, Wash.
3. Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.
4. Houston-Sugar Land-Baytown, Texas
5. San Francisco-San Mateo-Redwood City, Calif.
6. Austin-Round Rock-San Marcos, Texas
7. Boston-Cambridge-Quincy, Mass.-N.H.
8. Raleigh-Cary, N.C.
9. Denver-Aurora-Broomfield, Colo.
10. Dayton, Ohio
Wake Forest gets $280M settlement
It’s Christmas in July for Winston-Salem’s largest employer. Wake Forest Baptist Medical Center settled a patent lawsuit with Kinetic Concepts Inc., a San Antonio-based company, which has agreed to pay $280 million in royalties through 2017.
The medical center will use income from the settlement to fund “major initiatives of strategic importance,” according to a statement issued today.
Wake Forest licensed technology for closing wounds, developed by faculty members Louis Argenta and Michael Morykwas, to KCI in 1993. The device led to about $500 million in royalties for Wake Forest, according to a 2012 Fortune story written by BNC contributing editor Ken Otterbourg.
Those royalty payments ended in 2010 after KCI said it was freed from the licensing agreements due to a federal court ruling invalidating the product’s patents. That prompted a lawsuit in which Wake Forest and KCI have accused each other of acting in bad faith.
Today’s statement notes that KCI will pay $80 million in 2014, $85 million in 2015, $85 million in 2016 and $30 million in 2017.
“The agreement negates the need for further litigation and fully releases all claims and counter-claims that were previously scheduled to go to trial in San Antonio, Texas, next month,” according to the statement.
KCI, founded in 1976 by Jim Leininger, is a private company owned by a group of pension funds and private-equity firms.