Inside Charlotte USA’s Regional Challenge

In wake of the city’s failed Amazon bid, there are new questions about the Charlotte Regional Partnership’s ability to recruit companies


Published:

BOB SCOTT

RONNIE BRYANT and his staff at the Charlotte Regional Partnership can gaze out the windows of their offices on the seventh floor of the NASCAR Plaza building in uptown and see, every day, the heart of the organization’s pitch to companies considering the 16-county Charlotte region—what the partnership has branded “Charlotte USA.” See all the construction, the ever-expanding transit options, the crowds clogging the streets for events? Why wouldn’t you want to join the party?

The regional partnership, true to its name, doesn’t sell only Charlotte or its city center to corporate prospects. The Charlotte Chamber and Charlotte Center City Partners carry that load. The partnership’s intent is to connect companies and their job opportunities to the workforces in places such as Shelby, Albemarle, and Chester, South Carolina, towns with their own distinct economies but still within the gravitational pull of the Carolinas’ largest city.

The proposition often works as intended, going back to 1991, when North Carolina’s three main urban areas—Charlotte, the Research Triangle, and the Triad—formed public-private organizations to market themselves regionally to companies seeking to locate, relocate, or expand their operations. Bryant and his staff of 12 represent 11 North Carolina and four South Carolina counties, competing with other regions for manufacturing, technology, and other businesses by pursuing leads, fielding inquiries, and emphasizing the Charlotte area’s position in the eastern United States—“halfway between Miami and New York,” Bryant likes to say—climate, airport, and workforce. The partnership says it successfully recruited 12 economic development projects in 2017, resulting in 1,297 jobs and $181 million in capital investment, and through the first quarter of 2018 has recruited a Turkish composites manufacturer’s 200-employee, $12.6 million factory to Gaston County and a United States Defense Department contractor’s 367-employee, $28.9 million headquarters to Iredell County, among other projects.

“This year, we’ve not seen much of a slowdown at all,” says Bryant, the partnership’s president and CEO since 2005. “We’re one of the most dynamic regions in the country, and we’re just seeing so much interest in companies wanting to look at us for that next location or that expansion or consolidation.”

Yet some local economic development officials wonder if the partnership is as effective as it could be, especially in light of a high-level failure in January. The organization led Charlotte’s effort to land Amazon’s East Coast headquarters, or HQ2, launching a massive marketing campaign in the fall (#CLTIsPrime!) and commissioning a promotional video in which spoken-word artists freestyled awkward rhymes on the Charlotte region’s growth, climate, and proximity to other eastern markets. The partnership declined to say how much the effort cost. Then, in January, Amazon announced that Charlotte didn’t make the 20-city short-list—and that Raleigh, its capital city neighbor and rival, did. Charlotte corporate and civic leaders acted as if they’d been slapped in the face. They were accustomed to seeing Charlotte as a slam-dunk for large economic development projects; it was one thing not to win the bid, but to not even make the short-list?

Amazon has not, and probably will not, reveal exactly why it rejected Charlotte. After the announcement, Bryant said he spoke via telephone with an Amazon project leader, who told him Charlotte’s relative lack of tech workers—fewer than 50,000, compared to an average of 105,000 for the 20 cities that made the cut—was a factor, perhaps the biggest, in the rejection. But Bryant refers to a study last year by the real estate and investment firm CBRE that placed Charlotte at the top of a list of 50 markets in tech talent rate of growth—77 percent from 2011 to 2016. He takes it as proof that Charlotte and his organization just need to stay the course.

“We were told that our number wasn’t that competitive, although there were four cities on that list with less,” he says in late March. “But that’s OK. We’re the number one market in the country for tech worker growth. So if that’s the case, we’re doing what we need to do. Just keep doing it.”

That attitude, and the partnership’s performance over the last decade or so, makes some economic development and regional elected officials nervous. I reached out to a number of them this spring to try to assess how the Charlotte region stacked up against its so-called “peer cities” such as Nashville, Denver, and Austin after the Amazon decision. Most declined to speak on the record; some didn’t want to talk at all. But those who did expressed some degree of worry about whether Charlotte’s economic development organizations—the regional partnership in particular—are keeping up with rival urban areas whose leaders increasingly think and work together on large-scale regional problems such as job recruitment, transportation, and economic opportunity.

It’s a concept called “regionalism,” and while it’s not new, it’s taken on a heightened importance among economic developers in recent years. Public officials, academics, and researchers have pointed out often, especially since the election of Donald Trump as president, that American cities have to take the lead in generating new technologies, ideas, and jobs for a deindustrialized workforce.

“But it is a mistake to believe that city leaders can accomplish their aspirations on their own,” Amy Liu, a Brookings Institution vice president and director of the institution’s Metropolitan Policy Program, wrote with a colleague in the Boston Review in February. “Most challenges, after all, span multiple jurisdictions. Carbon emissions don’t stop at city borders. Workers look for housing and jobs, consumers buy groceries and other goods, and parents seek out schools for their children across city, county, and even state lines. Cities and suburbs are deeply interconnected and thus need each other to tackle the major issues of our time. … Regional collaborations do already exist, but today’s economic and political realities demand more of them if cities and metro areas are to remain epicenters of national progress.”

The officials I spoke with pointed to places such as Denver, Seattle, and even (heaven forbid) Atlanta as examples of productive regional cooperation, the necessity of which was sometimes learned the hard way. Atlanta’s metropolitan area, which has suffered for years from a lack of cooperation among its 29 counties and 135 cities and towns, has deliberately beefed up its regional commission to encompass not just economic development, but also planning, transit, and quality of life issues in a smaller, 10-county region.

“Right, wrong, or indifferent, Atlanta learned the hard way that being parochial was a sure bet toward congestion, deteriorating air and water quality, and quality of life,” says Brian Leary, the president of Crescent Communities’ commercial and mixed-use business unit, who moved to Charlotte from Atlanta in 2014. In Atlanta, Leary held management and executive positions at a series of real estate development firms and served as president and CEO of the massive Atlanta BeltLine urban redevelopment project. Governments and agencies in the metro area, he said, “have figured out a way to come together and row in the same direction.” Leary, also a member of the Charlotte Chamber’s board of directors, adds that he doesn’t see the same level of regionalism in Charlotte—perhaps because it’s still trying to adjust to its relatively new status as a “major city” that serves as an economic hub for a far broader area.

“We are on the verge of becoming a true Southeastern metropolis, which is a distinct difference from being a strong Southeastern city,” Leary says. “As the world really competes region versus region, as we grow up and shed our kind of awkward teenage years, what we do now ... will establish whether or not we’re successful in the decades ahead.”

When I brought it up to him, Bryant passionately disputed the notion that Charlotte or the regional partnership was lagging behind in anything. “I don’t spend a lot of time talking about the competition. I don’t have to position Charlotte against anybody,” he says. “Anybody who would criticize us on those grounds simply does not know what we do.”

Yet the agency has run into a series of problems in recent years, not all of them exclusive to the agency or its fault. The partnership received more than $500,000 in state funding as recently as 2011. But a General Assembly-led shakeup of regional economic development agencies in 2013 resulted in a cut to its state funding every year until it dried up completely in 2015, forcing the partnership to seek additional private dollars. Corporate shunning of North Carolina during the House Bill 2 controversy of 2016-17 hurt Charlotte as much as anywhere in the state. And last year, the partnership lost its chief financial officer, Melissa Hendrick, after an audit found what Bryant called “sloppy accounting.” The agency did not fill her position, farming her duties out to the remaining staff and an auditing firm, Bryant says.

The hardest blow came in February, less than three weeks after Amazon rejected Charlotte’s bid: Union County, one of the fastest-growing counties in the Charlotte region and state, suspended its membership in the Charlotte Regional Partnership. The decision, recommended by the Monroe-Union County Economic Development board in early January and ratified by county commissioners on February 5, came after officials decided Union County wasn’t getting enough return on its annual investment of $66,822—the second-largest county contribution to the regional partnership, behind only Mecklenburg’s.

“Right now, the amount of money we’re contributing represents roughly 21 percent of my operating budget,” Chris Platé, the executive director of Union County’s economic development agency, tells me. “That’s a significant amount of money, and when you look at it as being the second highest-paying county in the region, I don’t believe the model is equitable.” The Union County agency is “evaluating opportunities,” Platé adds, and hasn’t ruled out rejoining the partnership if it can’t find a better deal. “But it is a process,” he says. “While being part of a regional organization is very important, at the end of the day, it’s still a service-providing entity. It’s not something that you’re obligated to be a part of.”

Bryant says he didn’t expect Union County to suspend its membership. “I knew there were some concerns,” he says, “but I didn’t see that particular action being taken.” He and regional partnership staff members have met with Platé and Union County officials since February to urge them to rejoin. Bryant doesn’t agree with Union’s assessment that it’s not getting, in common economic development shorthand, bang for its buck. “I take issue with that, and we’ve given them some information to hopefully show that the ROI (return on investment) is up to par,” Bryant says. “That’s all I’m willing to speak about at this time.”

But the larger issue goes beyond the partnership’s member counties or even Amazon’s rejection of the Charlotte area for HQ2. In her regionalism argument, Brookings’ Liu cites other institution research that identifies 30 American urban areas, including Charlotte, that grew economically in the first five years of this decade. But of those areas, only four—Austin; Denver; Charleston, South Carolina; and Albany, New York—“achieved growth, prosperity, and inclusion that benefited a majority of workers of all races and ethnicities.” Those four urban areas prioritized job creation in all sectors of the economy—from low-skilled, low-paying service industry jobs to high-skilled manufacturing and professional services jobs—and generally worked across city and county lines to spread economic opportunity throughout their metro areas.

Bryant argues that he and the Charlotte Regional Partnership are doing their part to advance that goal. “Anyone looking at an East Coast location,” he says, “you’ve got to come see us.” 

Then again, it’s a crowded and competitive field, and the ground is constantly shifting. “If we don’t keep an eye on this, competing regionally, it’ll be very easy to think parochially and inward and say, ‘Well, I don’t necessarily need anyone else in this region to be successful,’” says Crescent’s Brian Leary. “The sooner we start doing this, day in and day out, the better off we’ll be.”

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