State job recruitment shakeup sets stage for possible battle over corporate donations
11/22/2013 12:51 PM
11/22/2013 1:25 PM
At a time when the state is creating a new group to lead job recruitment efforts, what’s the future role of the group handling that mission for Mecklenburg and its surrounding counties, the Charlotte Regional Partnership?
That question has been asked a lot this year, as the state shifts the weight of economic development responsibility from seven regional partnerships to a statewide public-private partnership still under construction in Raleigh.
When state lawmakers slashed their appropriations for the seven regional groups this summer, it marked a death knell for the four rural ones and a serious setback for the urban ones serving Charlotte, Greensboro and Raleigh.
The urban groups say they will press on, but it remains unclear to many just how the new state partnership will work with them to recruit industry – especially given that the state group will be asking for financial support from the same major corporations that underwrite the regional partnerships.
In a recent interview with the Observer, N.C. Commerce Secretary Sharon Decker gave, perhaps, her clearest explanation to date of how the state views the regional groups’ future. They will survive, she said, if the corporations see enough value to keep writing checks.
So, do they see enough value?
Or, more accurately, will they see enough value when the state’s new group makes the corporate rounds next year, palms out?
I asked three of the regional group’s biggest backers in Charlotte. Duke Energy said it will donate to both the new state group and the Charlotte Regional Partnership, noting that the latter “has a strong record of performance for our region.”
Wells Fargo said it’s too early to say what it will do for specific groups.
Bank of America answered with a statement from Charles Bowman, its North Carolina and Charlotte market president: “We realize the importance of economic development to the vibrancy of our community and will continue to support organizations that foster that commitment.”
I wondered what John Lassiter might be hearing. Lassiter, a former Charlotte City Council member who is chairman of the N.C. Economic Development Board, raised eyebrows in October by saying that only 4 percent of the state’s job recruitment leads in recent years arrived via the regional partnerships.
He said people seem unsure whether they should give to the state group, the regional group, or both.
“What I’m hearing is people are wondering, ‘What do I do?’” he said. “The (state’s) goal is not to create competition, the goal is to create cooperation. If something is working, it needs to continue working to grow the economy.”
But how, exactly, will the state group and the regional groups avoid duplication if they’re pursuing the same corporate underwriters, perhaps even the same corporate relocation prospects?
Such questions have spurred talk in Charlotte’s business circles that it’s time to consider folding the Charlotte Regional Partnership into the Charlotte Chamber – the group from which it was birthed decades ago, and which also has its own job recruitment efforts.
Ronnie Bryant, CEO of the Charlotte Regional Partnership, said such talk has cropped up before, but doesn’t make sense because the partnership markets the region, while the chamber markets Mecklenburg.
The surrounding counties prefer it that way, he said. He explained that the partnership was born in 1989 at a time when business leaders realized the area’s economic development efforts needed to be regional, but Charlotte officials perceived that the surrounding counties didn’t want to be considered part of the Charlotte Chamber.
“To talk about a merger would not be fair to the other counties around Mecklenburg,” Bryant said. “They would not look favorably to being within the Charlotte Chamber.”
Bob Morgan, CEO of the Charlotte Chamber, declined comment through a spokeswoman.
Gaston County commissionersChairman Mickey Price said his board recently talked about whether it should contribute to the new state partnership or stay with the regional partnership. The commissioners decided to wait and see what the state puts forward, he said.
His fellow commissioner, Joe Carpenter, is the Gaston board’s representative to the regional partnership. Carpenter said he was around when the partnership was created and is “very satisfied” with its work. He credited the partnership’s marketing efforts with helping Gaston County land Italian dye manufacturing firm REPI LLC and German vehicle service lift maker Nussbaum Automotive Solutions.
He doesn’t think the regional partnership will be duplicating the state’s group and doesn’t want it folded into the Charlotte Chamber.
“If it’s a separate entity like the Charlotte Regional Partnership,” he said, “it gives everybody a little equity in the process.”
I asked Lassiter if he’s heard the merger idea.
“I think that’s a possibility. The partnership grew out of the chamber to begin with,” he said. “It was created out of the chamber to create a sense of regionalism. Over time it became more independent, but there’s still significant economic development activity within the chamber. That’s all privately supported, and I totally expect that to continue.”
Bryant thinks the partnership has been unfairly painted as on its deathbed, even as it has been raising larger amounts of private money each year to make up for falling state support. He said state money dropped from $1.2 million when he arrived at the partnership eight years ago to $132,000 this budget year.
“This is not something that caught us by surprise,” he said of the most recent state budget cut. “When I got here we had 43 private investors. We have 175 now.”
He has said previously that, after the state legislature cut its support level this summer from $500,000 to $132,000, he asked corporate supporters to increase their contributions and they did so.
Has any company offered definitive assurances that their regional support will continue once the state starts asking for money?
“No one has alluded to dropping us because they don’t know what’s coming” from the state, Bryant said. “They’re still committed to us, and a determination will be made once that ‘ask’ gets made from the new organization.”
It comes down to proving to those corporate supporters that they’re getting enough bang for their buck. Statements like Lassiter’s about the 4 percent of job leads coming from partnerships can’t be helping.
“That’s not a fair statement,” Bryant said when I asked him about it. “You have to distinguish between a lead and an announcement (of new jobs). I don’t turn project leads over to the state. We work our own leads.”
A better gauge, he said, would be to see how many projects announced by governors in recent years were handled by the Charlotte Regional Partnership. He added that his organization is in the process of determining that.
An example of the regional partnership’s work, he said, is MetLife’s announcement this spring that it will bring its U.S. retail hub and more than 1,300 jobs to Ballantyne.
“MetLife started with the Charlotte Regional Partnership,” he said. “I personally received the call from the consultant that brought MetLife to Charlotte.”
He identified the consultant as Tim Nitti, a principal with KLG Advisors, a site selection firm in New York City. Nitti confirmed that account, noting that he has known Bryant since around 2000, when Bryant worked in economic development in Pittsburgh.
“Anytime we have a project that Charlotte is relevant to,” Nitti said, “that’s the first phone call I make.”
So, I guess we’ll have to wait and see what fruit the state’s efforts bear. Nitti offered a word of caution.
“The challenge North Carolina faces is do you risk fixing something that’s not broken,” he said. “You’ve got a number of regional partnerships I would call best in class, and to try to replicate those on the state level … is what I would consider a risky proposition.”
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