COVER STORY, AUGUST 2011

RIGHT ON TARGET
Economic development councils aim for business.
Savannah Duncan

Economic development initiatives in the Southeast, such as those in Charlotte, North Carolina, Baltimore and Gwinnett County, Georgia, are creating new jobs and raising capital investments. While some programs target specific industries, others focus more on retention and improvement of businesses that are already in place.

Gwinnett County has five targeted industries: information technology, healthcare and life sciences, distribution and trade, advanced communications, and corporate headquarters says Nick Masino, vice president of Economic Development and Partnership Gwinnett.

“If a business meets qualifications, including job requirements, salary requirements and infrastructure improvement requirements, we would offer property tax incentives and we have the standard ability to waive fees,” he says. “However, incentives never make a bad deal good, they make a good deal great.”

Since opening in July of 2007, the initiative has seen consecutive growth and created more than 11,000 jobs.

In Charlotte, some similar sectors are targeted, like corporate headquarters and healthcare and life sciences. However, it also looks for different industries, such as energy production, financial services, motor sports, defense and aerospace. 

Jeffrey Edge, senior vice president of economic development for the Charlotte Chamber of Commerce says its program requires a minimum of 20 full time jobs and a minimum capital investment of $3 million. He adds that even if a company meets the requirements, it still must go through an approval process before receiving incentives.

“We have a local business investment grant program that rebates a portion of the property taxes a company will pay when creating a new project,” he says.

So far this year, traffic has been steady in Charlotte, Edge says. “We’ll handle about 350 leads this year and land between 75 and 80,” he says. “So far this year, we have landed about 38 projects, so we’re on track to hit our goal, which includes 4,260 new jobs and $376 million in capital investments.”

One initiative that is more focused on retention rather than adding new businesses is the Baltimore Development Corporation. Its core mission is keeping current businesses and helping them expand, says Jay Brody, president of the Baltimore Development Corporation.

“We reach out to between 200 and 300 businesses a year and go visit them,” Brody says. “These visits often produce a series of small needs, like help with building permits or a zoning change, which sometimes produces a need for financial incentives.”

The Baltimore Development Corporation provides low-interest loans, grants and in some circumstances, payment in lieu of taxes. In 2009, the initiative provided a $1.5 million loan to for the Morgan Stanley & Company’s expansion to 140,000 square feet at Harbor Point in Baltimore. To date, the company has created close to 600 new jobs with hopes to reach 900 new jobs during the next several years.

In order to recruit businesses within targeted industries, economic development initiatives rely on a variety of resources, including networking and connections with regional partners.

When attracting corporate headquarters, the Charlotte Chamber of Commerce tries to match up executives from local companies with CEOs or board members of targeted companies to make a more personal connection within the initial outreach.

“We do a lot of networking through existing companies in our market that are in those sectors to make introductions for us and suggestions on who to contact,” says Edge.

Networking can play an integral part in securing deals, and both Masino and Edge say they attend trade shows and conferences of industries of interest to make connections and to gain knowledge.

Another way economic development groups find businesses is through other organizations. Both the Baltimore Development Corporation and Economic Development and Partnership Gwinnett work with other state wide and regional partners to find leads.

“We get a tremendous amount of leads from the Georgia Department of Economic Development,” says Masino.

Sometimes keeping an eye on local news can also provide good outreach opportunities. When Masino heard Suniva, a spinoff of the University Center of Excellence in Photovoltaics department at Georgia Tech, was looking to relocate, a $4.5 million incentive package was created to attract the company to Gwinnett County. Ultimately, Suniva did choose to move there.

Not just American industries are of interest to economic development initiatives. A variety of means from overseas trips to foreign ambassadors and offices abroad are used to attract international businesses.

Edge says travel is a must to Europe and Asia at least once a year to meet with companies that have displayed interest in locating an office in the United States, while Gwinnett County hosts a Korean liaison officer to build relationships between small businesses in Korea and Gwinnett County.

A rendering of the 281,000-square-foot Time Warner Data Center under construction in Charlotte, North Carolina.

This year, all three intiatives report an increase in activity compared to last year, In fact, 2011 brought one of Charlotte’s biggest successes so far. Time Warner Cable has plans to build a 281,000-square-foot, two building data center and back office, which includes a $180 million capital investment and will create 325 jobs.

Edge says that in spite of some uncertainty in the marketplace, there are deals that are getting done.

“Maybe it’s premature to say the recession is over, but we’re certainly seeing more prospects,” says Brody. “It’s promising in terms of what the future brings.”

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