Rural counties fret over change to NC's business-recruitment efforts

Posted August 25, 2014

— The change in economic development strategy in North Carolina is raising new tensions between the state's urban and rural areas.

The McCrory administration is steering away from regional development groups to a privately led recruitment model, but some leaders in rural areas worry that could create a greater economic divide between the haves and the have-nots.

North Carolina's northeastern counties represent small town – hard-working but also prone to hard times.

"We have a unique region, but it's a poor region that needs some resources," said Van Rogerson, president and chief executive of the North Carolina Northeast Alliance, which has handled economic development for 16 counties in the northeast corner of the state.

The combined population in those 16 counties is 366,000 – less than the city of Raleigh – and the poverty rate is higher.

The state's shift away from government-backed regional economic development groups like the Northeast Alliance to a private nonprofit model leaves rural areas nervous.

"We cannot raise enough money to maintain a viable recruiting operation," Rogerson said.

Edenton Mayor Roland Vaughan said he worries that a strategy to reel in big economic development fish could drown out already disadvantaged areas.

"To think that you're going to impose a one-size-fits-all approach to (business recruitment) just is not going to work," Vaughan said.

More than half of the counties in northeast North Carolina have a median income that's in the bottom 25 percent of the state, which he said doesn't help attract big companies and skilled jobs.

"We're not getting a lot of feedback from our efforts to tell our story, so we're not really sure what the future holds for us," he said.

Commerce Secretary Sharon Decker argues that the old model may be on the way out, but the new way will help, not hurt, rural areas.

"You can't keep doing things the same way and expect suddenly we'll get a different result. We've had to rethink all of that, and that change sometimes is painful," Decker said. "We are making progress. It is difficult. Change is hard, but I feel we are moving in the right direction."

The commitment by the state to rural counties is different but still there, she said, noting that the state handed out $33 million in rural grants over the past year.

The Northeast Alliance has money to operate for two years. After that, the future is unclear.

"My greatest fear is that we are left to do it on our own," Vaughan said. "We can do it, but we do need some help."


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  • Alex25 Aug 26, 2014

    Because, you're right: businesses know what they want -- and the main thing they want is low operating costs. So they will move and expand in states that provide incentives. In fact, thanks to the glorious markets, they have a fiduciary duty to do exactly that.


    A state the 'provides' incentives......where do you think those incentives come from -- ?? THE TAXPAYERS. You're not saving any incremental're simply taking from the private sector in hopes of luring businesses. How many times have we done this ....and how many times has it failed. And each time, it COSTS THE TAXPAYERS and real capital wealth creation.


  • beef Aug 26, 2014

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    You forgot their one big advantage - no annoying and hateful elitists.

  • John McCray Aug 26, 2014
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    I disagree with that statement. I think people in "third world" countries (an outdated term), such as Haiti, or Sudan, Chad, Nigeria, Congo, Botswana, et al. would be happy to trade places with people in the northeastern part of our state, and find the indoor plumbing, electricity, cable tv, local doctors and health care facilities, paved roads, as huge upgrades to their current conditions.

  • Anita Woody Aug 26, 2014

    No modern business is going to move this part of North Carolina. First of all, there is no real infrastructure. The infrastructure of many third world nations is more significant and modern than what you can find in NC. Secondly, the quality of life also ranks with third world nations. The vast majority of the population is highly uneducated. Many of these people are barely qualified to pluck chickens for a living.

  • Eq Videri Aug 26, 2014
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    And that view will make sense in the real world just as soon Congress outlaws state incentives. So complain to your Congress member.

    Until then, NC is in a war with other states, and we would be foolish to disarm unilaterally.

    Because, you're right: businesses know what they want -- and the main thing they want is low operating costs. So they will move and expand in states that provide incentives. In fact, thanks to the glorious markets, they have a fiduciary duty to do exactly that.

    That is the real world we live in, as opposed to the utopia we might wish for.

  • Eq Videri Aug 26, 2014
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    The McCrory Administration's motto: "If it ain't broke -- we'll break it!"

  • Alex25 Aug 26, 2014

    Govt led cronyism efforts to bring / recruit businesses does NOT work. Never has.

    Businesses and markets know what they want ....... keep my tax dollars out of it.

  • miseem Aug 26, 2014

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    Right. Why would we want to encourage growth in Hyde, Gates, Swain or any of those other rural counties when we can spend the money in Raleigh or Charlotte? What's in it for me, other than maybe cutting poverty and unemployment in rural areas, making the entire state a little more livable, and cutting some of the excessive growth in the metropolitan areas that keeps eating up money for roads, schools and other infrastructure due to higher costs. By sidetracking incentives to rural areas, we can keep more of the people in these areas on the dole, which gives the right wing more to complain about. Sounds like a win - win to me.

  • iopsyc Aug 26, 2014

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    Private equity firms produce returns for stakeholders by acquiring undervalued companies, and working to increase their value prior to re-selling/re-listing the company. Increasing the value of the acquisition may, or may not, spur further economic development. That's my main point, involvement of private equity firms and local economic development are two independent items that may or may not occur together.

    Private equity firms aim to keep their acquisitions for 3-5 years (on average they are exiting right at 5 years). So, I wouldn't really call that long term investment (although Wall Street would likely disagree with me).

    I'm not arguing for or against private equity firms, but I am saying you and MEP should remove the rose colored glasses when discussing these kinds of firms.

  • miseem Aug 26, 2014

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    So you think that politicians are going to drive all the people out of the already sparsely populated rural areas and destroy what industry is there now so they can bring in their own development? So who is going to invest in an area with no work force, no existing industrial base, and therefore no tax base to support your development? I'm not a big fan of many things the NCGA has done recently, and some of their actions do have hidden agendas, but this is a little far afield. That being said, government can create policies that encourage corporate investment, and simply cutting taxes is only one tool for encouraging development, and that is only necessary when most of the other tools are absent - qualified workforce, infrastructure, general quality of life in the area. The Triangle area has placed high on lists for favorable business climate for decades, despite all the recent claims of excessive tax burden.