WID Home Page

September-October 2002

CEO's Desk
Feature Article
Membership News
New Members
Worth Beverage
Remembering a hero
SBA 504 News
Renewable Energy
Member Services
Board of Directors

But economic development occurs in other ways, too. Take the stream of corporate headquarters announcements that have come our way recently. In the past 18 months, LEK Pharmaceuticals, Castle Branch and Renewable Energy have all located their North American headquarters here. While immediate workforce headcounts and dollar-investment amounts don’t appear comparable to a major manufacturing win, the trend bodes very well for the long-term economic future of Greater Wilmington.

You needn’t take my word for it. A report released in late August by the Southern Growth Policies Board (SGPB) spelled out the need for economic developers to look beyond their obsession with high-profile manufacturing outposts. "We succeeded in building a branch-plant economy," says Jim Clinton, executive director of the RTP-based think tank, "but we were not as successful in getting headquarters and research-and-development operations." R & D facilities, with their high-dollar scientific and technical positions, will be a particularly sought after plum in 21st Century economic development. And such sites are typically located on or near a corporate headquarters campus. Greater Wilmington has already proven itself as a prime all-around destination for companies – from product development and regulatory approval to production and distribution. The SGPB report confirms that we are on the right track.

Based upon the tremendous turnout at our annual meeting last month, WID is doing a number of things right. Our thanks go out to UNC-Wilmington and its Chancellor Jim Luetze for their hospitality. We also appreciate the strong support we received from BellSouth and Progress Energy for this year’s meeting.

In this issue’s feature article, we turn our attention to the role of the federal government in economic development. The role can be traced to the preamble to the U.S. Constitution and its call “to promote the general welfare.” In practical terms, it means real dollars from Washington to help with infrastructure, training, highway and port upgrades, and more. As Congressman Mike McIntyre explains, Eastern North Carolina can do better at leveraging federal monies. His legislation creating an authority similar to the Appalachian Regional Commission could help us get our fair share. Our thanks go out to him for his leadership!

Sincerely,

R. Scott Satterfield

Proposed “Crescent” Authority Would Help Eastern Carolina

In recent weeks, much attention has been on Raleigh, where lawmakers have been grappling over important matters of economic development in North Carolina such as the budget and its funding for development agencies, and new financial incentive legislation. While state and local governments take the lead in economic development – setting policies, funding infrastructure, help devise marketing strategies and much more –there is also a role for the federal government, a role that is more important than ever given recent fiscal conundrums at the state and local levels.

Since early in the nation’s history, federal authorities have used taxation, trade policies, regulation of interstate commerce and a few other tools to guide development of the economy. Those traditions have endured – for better and worse. But today, economic development programs in Washington also include grants and loans to local and state governments for infrastructure, transportation, workforce, housing and health care improvements.

So important are federal dollars in economic development that the North Carolina Economic Development Board recently asked KPMG to examine how we stack up with competing states when it comes to leveraging cash from Washington. The study found that in 2001, North Carolina received about $8.7 billion in federal funding, with another $568 million from Uncle Sam going to local governments here. Dollars flow in via a number of cabinet departments and independent agencies – and they take the form of specific grants, “formula” grants (i.e., broad based programs that distribute funds through a prescribed calculus), direct payments and loans, and federally-insured loans. In 2001, the state received about $19 million in assistance from the U.S. Department of Agriculture, more than any other state in the KPMG survey except Kentucky.

That amount is slightly more than the help received from the U.S. Department of Commerce -- $18.5 million. South Carolina, in contrast, received $24 million.

The Tarheel State is less aggressive when it comes to securing funds from the U.S. Department of Housing and Urban Development (HUD), from whom we received only $1.1 million. Looked at on a per capita basis, North Carolina came in ninth out of the ten states in KPMG’s analysis when it comes to HUD monies, which include the all-important Community Development Block Grants (CDBG). North Carolina came in dead last in its per capita attainment of federal workforce funds from the U.S. Department of Labor. It was more successful in gathering cash from the U.S. Department of Transportation, which allocated a total of $53.3 million to North Carolina.

KPMG also looked at funds received from the Appalachian Regional Commission (ARC), a federally-funded partnership covering the 13 Appalachian states from northeastern Mississippi through southwestern New York. About $3.3 million in ARC support found its way to the 29 Western North Carolina counties that are part of the organization, which was founded in 1965 as part of the Great Society initiative.

By all accounts, ARC funds have made a difference for western counties, which through the years have received over $400 million from ARC. Those dollars have been leveraged against other government funds to complete nearly $1 billion worth of economic development projects. Since the mid-1960s, the number of Appalachian counties with poverty rates of 20 percent or more has been cut in half.

“Everywhere I’ve gone I’ve asked people to look back at the progress that’s been made in the Appalachian region,” says Congressman Mike McIntyre (D-7th), who introduced legislation earlier this year to create a similar authority to help counties in Eastern North Carolina and coastal communities in six other southeastern

states. Known as the South-East Crescent Authority (SECA), much of the idea has been germinated by the Regional Development Institute at East Carolina University. The program’s advocates are calling for an annual appropriation ranging from $59 to $80 million. Both New Hanover and Pender Counties would be eligible for SECA funds, which could be used across a myriad of economic and community development needs.

“It’s not a situation where the federal government is a panacea,” Congressman McIntyre continues. “All that does is expand bureaucracy.” Instead, he explains, SECA represents more of a “battle plan” to combat unemployment, poverty and deficiencies in health care and education. “I’m very excited we’ve had tri-partisan support for this,” he says, noting that the bill’s co-sponsors include legislators from as far away as California.

Congressman McIntyre would like to see North Carolina receive more federal support for economic development. “We’ve had to fight for every penny,” he says, “from both Democratic and Republican administrations. He is pleased that the state has recently secured federal transportation funds for improvements at the Port of Wilmington and new resources from the USDA’s Rural Development program. “We’ve turned the corner significantly, though we really haven’t arrived yet.” That should change with passage of his new legislation. “SECA would help carry us forward even more.”

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Remembering an Economic Development Hero

Worth Beverage
(1942-2002)

There’s a special place in heaven for people who quietly perform good deeds while shunning any limelight. We can be sure that Worth Beverage has found that sparsely populated spot. WID was saddened by the news of Worth’s death on July 16th after a valiant struggle with a terminal disease.

In Worth, Burgaw and Pender County had one of its most effective leaders. He was completely devoted to making his community a better place. While most knew him through his post at Bank of America and its predecessors, few were aware of his key role in the county’s economic transformation from an isolated agrarian outpost to a sought-after destination for national manufacturing names.

“Not a single new industry which located in Pender County in the last 25 years did so without Worth playing a significant role in the recruiting,” recalls Rick Biberstein, WID’s past chairman and a close friend. “For years, he was the primary contact person in Pender County for industrial recruiters.”

Worth led Pender Progress, a non-profit foundation set up to foster economic development in the county, since its founding in the late-1970s. It was largely through his leadership that Pender County joined WID, which he later served as board member and treasurer.

“Worth operated behind the scenes,” says Scott Satterfield, WID’s C.E.O. “After making the projects happen, he’d make a point of not taking credit.” While most economic development leaders enjoy basking in the spotlight when there’s good news, Worth rarely even attended announcement ceremonies that his own tireless efforts had made possible, Mr. Satterfield recalls.

Last year, the Town of Burgaw honored Worth and his many contributions to local development by adopting a resolution commending him for his service in bringing industry to Burgaw and surrounding Pender County.

“Worth was a good friend to a great many people, but he was also a great friend to Burgaw and Pender County in many, many ways,” Mr. Biberstein says.

Though he’s sure to be greatly missed, Worth Beverage made his mark on his community and on WID. Both are better off because of him – and we’re better off having been inspired by such a rare brand of citizenship.

Scott C. Sullivan, Chairman
Russell M. Carter, Vice Chairman
Bill King, Treasurer
R. Scott Satterfield, Secretary

R.V. Biberstein, Jr., Esq.
Carl A. Byrd, Sr.
Meg Davenport
Rob Gerlach
Robert G. Greer
Paul S. Grimsley
Frank H. Hamilton, III
James D. Hundley, MD
Mayor Harper Peterson
Phil Marion
Louise F. McColl
Eric McKeithan, Ed.D.
J. Eugene McMurry, MD
Gene F. Renzaglia
James L. Smith
Dwight Strickland
Robert A. Stuart, III
Gayle Van Velsor

Are you considering a project, but are not sure that it will meet the job creation requirements of SBA’s 504 loan program? This may not be a problem after all. The SBA does like to see one (1) job created for every $35,000 of funds they lend. However, there are other things to be considered if your “actual” job count is falling a little short.

SBA has what it calls Public Policy Goals which can be used to offset the need for job creation. Some of the Public Policy Goals are: business district revitalization, expansion of exports, minority business development, women-owned business, and rural development. We have also spoken with SBA’s Charlotte District Office regarding the Development Zone which WID implemented in New Hanover County. The majority of New Hanover County is in the Development Zone.

Remember that some of SBA’s public policy goals can also qualify a borrower for SBA’s increased maximum loan participation in a project. Normally, SBA’s participation is 40% or $1,000,000-whichever is greater. When meeting a public policy goal, the maximum participation can increase to $1,300,000.

When you are looking to finance a real estate project, please call to inquire about how SBA’s 504 Loan Program can assist with your financing. The SBA 504 Loan Program can be used for almost every type of business. Existing businesses are eligible for a lower equity injection of 10%. SBA 504 loans have fixed interest rates with terms of 20 years for real estate and 10 years for machinery and equipment.

Please call Susie Parker at 910-763-8414 to obtain more information on how the SBA’s 504 Loan Program can assist with your project.

Are you Eligible?

5.31%*

SBA’s 504 Loan Program has

20 year

Fixed Rate Financing.

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Renewable Energy

Renewable Energy, a New Zealand based company has announced its intention to move their US corporate headquarters from Charlotte to downtown Wilmington.

Renewable Energy specializes in waste to energy conversion. They use a process know as gasification to convert industry byproducts such as wood chips and animal waste into clean energy. The energy produced can then be used to power the entire facility.

When asked why they chose Wilmington, Paul Williams, CEO replied, “Wilmington has all the things we were looking for, charm, great business atmosphere and a wonderful quality of life. We are looking forward to calling Wilmington our home.”

Renewable Energy will be bringing their corporate staff to the First Union Building in mid October.

Port City Capital Bank
Mr. Keith Betts
1508 Military Cutoff Rd., Suite 100
Wilmington, NC 28403
Phone: 910-344-2265
Fax: 910-344-2266
www.portcitycapitalbank.com

Thank you to everyone who attended the WID annual business meeting on Thursday, August 15, 2002 at the Warwick Center Ballroom. A special thank you to Bill Cavanaugh, President, CEO and Chairman of Progress Energy for being our featured speaker. We would also like to express our appreciation to Todd Dawson with Ice Occasions of NC for donating the ice sculpture for the meeting.

For information about Todd’s ice sculpture business visit him on the web at:

www.iceoccasionsofnc.com

This years meeting was a great success and we hope you will join us again next year.

Cape Fear Commercial Moves Into New Office

Cape Fear Commercial, specializing in commercial real estate, have recently changed locations.
Their new address is:
3517 Wrightsville Ave., Suite B
Wilmington, NC 28403

Local Businesses Honored

LL Building and New Hanover Health Network were honored by the Employment Security Commission (ESC). Both received an award for exceptional contribution to the North Carolina economy through new business, business expansion and partnership with ESC.

Cape Fear Academy

Cape Fear Academy has started the school year with the highest enrollment it has ever had since they opened their doors in 1967.This year there was a 2.5% increase in overall enrollment with a 7% increase in high school enrollment.

Town Hall Meeting

The US Department of Labor would like to hear your concerns regarding workplace issues, guidelines, and initiatives. This open forum will allow you to meet presenters from Job Service, Legal Aid Society, Human Relations Commission and OFCCP who can help connect you with the right workplace information.

The forum will be held September 26, 2002 from 6PM-8PM at the Historic New Hanover County Courthouse, 24 N. 3rd Street, in the Commissioners Chambers. To reserve your space please contact: Yvonnica Williams or Mary Akinkuotu at 919-856-4058 or you can call Carl Byrd, NH Human Relations Commission at 910-341-7174.

There is no cost to attend.

SBA 504 Loan
Industrial Revenue Bond Inducement Assistance
Community Development Block Grants