A Landmark Deal With Big Spinoffs

As of Monday, March 18, 2013

It’s being described as the kind of deal that “comes around once in a lifetime.” And Southern Pines Mayor David McNeill made it happen , though he had a lot of help.

We’re talking — in fact, everybody in these parts is talking — about the decision by Troy-based First Bancorp to move its corporate headquarters to Southern Pines. The bank will pay $2.65 million to occupy the splendid building constructed just a few years ago to house Hobbs Upchurch & Associates, which is downsizing and moving.

This landmark decision would not have been made without a little greasing of the skids in terms of incentives agreed to by Moore County ($15,000 per year over 10 years) and the town of Southern Pines ($12,000 annually over the same period).

Though there has been a bit of grumbling and second-guessing in the days since this bombshell announcement, and though incentives aren’t always popular in principle, this package seems a no-brainer. And it was McNeill’s low-key, optimistic manner that brought the pieces together.

Massive Benefits

First Bank’s contracts with the county and town pledge that the moving of the corporate headquarters here will produce either (a) a minimum of 30 jobs, each paying at least $100,000 per year; or (b) a combined annual payroll of $5 million.

Either way, it seems all but certain that people looking back from the vantage point of the year 2023 will view the $270,000 paid over the previous 10 years as a relative pittance compared with what First Bank’s presence will have meant to the county. There will be direct and indirect benefits that people here haven’t even fathomed at this point.

Booming First Bank is the fourth-largest in North Carolina, with $3.5 billion in assets and plans to double in the next five years. It has clearly outgrown its modest Montgomery County roots, though some operations will remain there.

Normally when one thinks of bank headquarters, places like Charlotte and Winston-Salem come to mind. But in this case, the company decided to take a step up in visibility and increase its ability to recruit executives without abandoning its small-town roots. And we are the fortunate beneficiaries.

Ripple Effect

This is shaping up as the biggest deal locally in the past two or three decades. Already people are comparing it to ClubCorp’s purchase of Pinehurst Resort in 1984, the USGA’s bringing of the 1999 U.S. Open to Pinehurst, or the Dedman family’s subsequent decision to retain ownership of the resort after selling off the rest of ClubCorp.

For Southern Pines, this will bolster an already vibrant downtown district, with a big infusion of revenue. With so many highly paid employees, just their lunch tabs alone seem likely to exceed the $1,000 per month that the town has agreed to pay. The inflow of human and economic resources seem likely to create an awesome ripple effect.

In addition, First Bank seems likely to become one of our largest corporate benefactors. Everyone from the United Way to FirstHealth of the Carolinas to Sandhills Community College will benefit from the company’s philanthropic largesse.

This deal happened so quickly because the business parties involved negotiated a price quickly, and because county and town worked together — a praiseworthy instance of governmental bodies cooperating for the benefit of all, mostly putting parochialism and politics aside. (Are you listening, Washington?)

More like this story

alladat1 2 months ago

I'm not going into the details of the article - yet. I would like to focus on the Pilot's editorial and Mr. Natt 's "Dynamic" story in particular. I can understand why the original reporting of "The Great Move" was just that - a reporting of the facts. When it comes to the followup articles and editorials - they are always spinning the "Pro" position and never mention the "Cons". The usual suspects ( the top 5%) are always interviewed so they can take credit and put a positive spin on things.

Let me correct myself when I say they never mention the "Cons" - the entire story and editorial consisted of positive opinions with the exception of the following:

"Though there has been a lot of grumbling and second-guessing in the days since the bombshell announcement, and though incentives aren't always popular in principle, this package seems a no-brainer."

Any details as to why some readers are grumbling are always omitted.

Where is the opinion of the man in the street? Where is the opinion of the people who were just terminated from Gullistan?

Closing thoughts:

I guess the bottom line is that they have to put a positive spin on it because it's a "done deal" - a very quickly put together - done deal.

"A combined payroll of $5 million" - this could be just the salary of the CEO.

Oh well, maybe they will hire some gardeners, maids and chauffeurs.

TF121 2 months ago

Just have a look at the "Partners in Progress" Board of Directors: http://www.moorebusiness.org/about-us/board-of-directors/

Note that Mr. Fred Hobbs just recently resigned form this esteemed board.

Note that Mr. Woronoff, publisher of "The Pilot," is also there; so much for objective "reporting" from our "local" community newspaper.

That is all . . .

njc17 2 months ago

If, [ a big IF] the working climate is so wonderful in Southern Pines, WHY do you have to pay big bucks of other peoples money to"lure" a business here? It's wonderful that First Bank is relocating here, but at what expense?

JD 2 months ago

so much for objective "reporting" from our "local" community newspaper.

But this isn't the Sandhills Tribune website? This is the Pilot, the local enquirer.

Middleman522 2 months ago

Many sucessful NC banks got their start or grew in places like Greensboro, Winston Salem, and Charlotte. Small towns like Rocky Mount, North Wilksboro and others, had to offer something that these large population areas don't have. Our great community is what we have, but the big cities offer tax breaks as well. We must do that too. We can't fillup all of these empty developements by letting companies move somewhere else, now can we? I know how furious some folks get at the mention of "tax cuts", and you know who you are and who you voted for, but this one is done. So wipe the tears and open a checking account at First Bank, or don't, your choice!

alladat1 2 months ago

Middleman -" So wipe the tears and open a checking account at First Bank, or don't, your choice!" Sure it's my choice where to bank - it shouldn't be Moore County's choice to choose which bank to subsidize.

TF121 2 months ago

"There will be direct and indirect benefits that people here haven’t even fathomed at this point." OK. Sl perhaps the braintrust behind the deal can make an effort to enlighten us with specifics. What local tax contribution will be made by this corporation? What is the expect impact in terms of new revenues generated by this move? Between the Town, the Chamber, the county, the economic development group, and the bank, surely they could put together some real data and share it. Otherwise the whole initiative is sure to be met with skepticism. So how about it, dear editor? How about some real reporting on this? Spare us the press release approach.

PBinNC 2 months ago

I feel sorry for the people in Troy and for Montgomery County, but I am sure the headquarters would have moved somewhere because the bank has grown so big. It sort of reminds me of how the people in Baltimore felt when their football team left town for Indianapolis, but they soon forgot when they stole Cleveland's team. It's all about the money. When I went past the building that is to be their new headquarters, I noticed that there weren't all that many parking places. Maybe enough for the thirty empkloyees but no visitors?

alladat1 2 months ago

PBinNC - " I noticed that there weren't all that many parking places. Maybe enough for the thirty employees but no visitors?" Now you've gone and done it - maybe the town council will build a parking deck nearby (just like Pinehurst). I'm sure the lobbyists over at Partners in Progress are looking into this as we speak.

Middleman522 2 months ago

alladat, you make investments don't you. Some have a good chance of paying off, and some don't. This one seems like it will. We have Little River (950 lots) Dormie ( 1,100 acres) Legacy Lakes, and others than will not ever finish being developed, if we don't invest in some growth. NC banks just don't fail, and this one is growing. Stop whining! It's not a chemical plant!