For more than a year, the Economic Development Partnership of North Carolina has been the main recruiter of new jobs to the state, taking over from the Commerce Department.
I sat down for an hour recently with Christopher Chung, the partnership’s chief executive officer, who has led the organization since shortly after its creation in the fall of 2014.
Here are some main takeaways from that discussion:
First, the uncertainty over the state’s package of economic development incentives during last year’s long legislative session led some companies to go elsewhere.
By the time the General Assembly approved new incentives programs and allocated more money to existing ones in late September, the damage had been done. Chung said roughly a dozen companies had offers on the table with asterisks next to them to indicate that the deals were contingent upon the legislature approving incentives funding.
“Some of those companies eventually got to a point where they had no choice but to pursue another location where they could maximize what that incentives package was,” he said. “I have to imagine that was a big factor because they just didn't have that degree of certainty that they had in those other states."
Chung said North Carolina lost “sizable deals” in the industrial arena, as well as office regional headquarters.
From an incentives standpoint, he also said North Carolina is on stronger footing now than it was a year ago.
In the final days of last year’s session, the General Assembly passed the North Carolina Competes Act, which included a range of new or expanded incentives. They included a new program to attract “high-yield projects” (such as car manufacturers) that invest at least $500 million or create at least 1,750 jobs. That measure also extended the popular Job Development Investments Grants program through 2018 and added more money to that pot, among other changes.
Chung said the state is better off from a recruitment standpoint because of those changes.
“Are we the most aggressive in the game? I still think there are other states that probably put a lot more in upfront money to attract deals, but they may feel like they have to do that, whereas perhaps North Carolina feels like they don't have to put that part of the incentives package on the table,” he said.
The partnership is focusing more resources on attracting companies from overseas, Chung made clear.
Last May, the partnership opened an office in Seoul, South Korea, adding to several other foreign offices historically staffed by the N.C. Department of Commerce. Chung also hopes to open an office in India some time in 2017.
Those two countries are two of the fastest-growing sources of investment in the United States, and Chung sees benefits in having boots on the ground to work with companies interested in American investment and also to promote North Carolina broadly to develop a pipeline of potential projects.
The Seoul office costs the partnership about $110,000 a year, Chung said. That money is coming from private donations, not taxpayer funding. Without additional money from the state, the partnership would have to rely on private funding for an India office as well.
This should be a good year economically, but a challenge is to ensure prosperity extends to exurban and rural areas as well.
Global trends show a shift in population and economic activity toward urban areas. Chung said more investment in infrastructure – such as water and sewer and roads – in rural areas could help attract large manufacturers and industries to those areas that sorely need an economic boost.
“It shortens the time cycle by which a company can depend on that site being ready for their project," he said.