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Loss of industry takes jobs, leaves behind financial struggles

Posted March 27, 2020 5:00 a.m. EDT

This article was written for our sponsor, the North Carolina League of Municipalities.

To support a textile mill, you need a lot of water. You need a large wastewater system. You need a robust infrastructure framework.

North Carolina cities and towns made these costly investments throughout the 20th century, and the economy benefited greatly from it.

Over the past few decades, however, those mills and the textile jobs have moved away, reshaping North Carolina's economy. The exodus took the industry and left an unworkable situation in its wake – a massive infrastructure framework without a massive industrial customer.

This is what happened to the town of Williamston after the exodus of Parkdale Mills, a world-leading yarn manufacturing company.

Williamston's story is like many others around the state. Parkdale Mills shut down its Williamston location in June 2017, and its closure created what Martin County Manager David Bone described as "ripple effects throughout the community."

The town and county did all they could to keep the company.

"Williamston and the county put an aggressive retention incentive on the table for Parkdale, which would have netted the company significant savings in terms of water expenditures and future taxes," said Jason Semple, president and CEO of Martin County Economic Development Corporation, in a press release. "However, there are many factors that large corporations consider when consolidating operational footprints and maximizing profits. Often, many of these factors ... are beyond the control of the local community."

The prized asset of Williamston's infrastructure is the Martin County Water and Sewer Authority, which was built to address state regulations that required the county to diversify its water resources and reduce its reliance on groundwater from a cretaceous aquifer. Additionally, saltwater was creeping into the aquifer and posed a threat to its cleanliness.

Wiliamston and Martin County looked at several alternatives together and chose the Roanoke River water treatment plant – keeping in mind that it had Parkdale Mills to support.

The $27 million investment it put toward MCRWASA's expansion proved excessive once Parkdale Mills announced the shutdown of its local operations. Parkdale Mills was Williamston's largest water customer, using up to 35.6 million gallons of water in a year. And without that industrial customer, the costs would soon be unmanageable.

The loss of Parkdale has the town, the county and residents still bearing the brunt of a financial burden that stakeholders and citizens don't really know what to do with.

"Martin County is a Tier One county and it is the 13th most economically distressed county in the state," said Al Chesson, mayor pro tem of Williamston. "The poverty rate is at 29 percent and we're losing 1 percent of the population each year, which is not unusual for rural communities in northeastern North Carolina."

Williamston and the county have limited options when it comes to offsetting the costs of running the MCRWASA, and, as a result, resident's water bills are high. Chesson said the town and the county are doing everything they can to come up with more solutions to such a hefty financial problem, but that it's been "really tough."

"One of our biggest issues is when you have so many people on fixed incomes, it's really hard for people on fixed incomes to pay a $125-a-month bill," said Chesson.

The size of the water system only exacerbates the problem. Designed to meet the needs of a large industrial customer, the water system is an immense resource, and, as Chesson admits, Williamston is hard-pressed to find a company that needs as much water as the plant produces.

The county's debt has also cut into its ability to market the plant or allocate funds to other economic development initiatives. Without a long-term solution, they're simply enduring the situation for now to keep costs to customers as low as possible.

Williamston's story is only different in that its loss and its investment were relatively recent. Many North Carolina towns faced similar situations in the 1990s and early 2000s when textile and furniture mills were shuttering left and right.

Dozens of towns saw their largest property tax payer and utility rate payer – sometimes making up a quarter of those revenue streams – gone overnight. As a result, many of those towns today have substantial deferred maintenance needs. Two years ago, the N.C. Division of Water Infrastructure estimated North Carolina's water and sewer infrastructure needs over the next 20 year range from $17 billion to $26 billion.

Kerry Spivey, public works director for Williamston, wonders what would have happened if stakeholders had not invested in the MCRWASA, though he acknowledges the difficulty of the town's situation.

It boils down to an impossible choice: Do you neglect the infrastructure needs and, while avoiding excessive debt, all but guarantee the departure of your top job creator? Or do you make the upgrades and, by doing so, accept a great deal of financial risk?

Williamston, as with many other rural communities across the North Carolina, opted for the latter.

"The town and the county felt like they had to take action pretty quickly and some decisions had to be made," Spivey said. "Everybody did the best they could."

Williamston and Martin County leaders hope to secure a large company or industry partner that requires a high volume of water to help remedy its situation, and hope that residents will be understanding of its current predicament.

At the least, with a quick glance around the state, they can know they're not alone.

This article was written for our sponsor, the North Carolina League of Municipalities.

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