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Tobaccos
decline gives way to stunning growth
in the countys industrial base and quality of life
By
Suzanne W. Wood
When
a city relies heavily on one industry for its jobs and tax base, it's
all too apparent what happens and who suffers when that
industry begins to falter. Many American cities have struggled to
remake themselves in the wake of closings and consolidations in the
textile, steel, auto and mining industries over the last 50 years. But
in the case of Durham County and its 220,000 residents, losing its
main breadwinner has spurred nothing less than a renaissance.
Indeed,
Greater Durham has made the transition from the town that tobacco
built into a vibrant, growing community with a diversified industry
base, a technology and R&D sector that is the envy of many cities,
and an undisputedly high quality of life fueled by world-class medical
facilities, top universities and schools, and a dynamic concentration
of arts, cultural and sports amenities, including the famed Durham
Bulls.
Caption for
photo above: A worker at the Freudenburg Nonwoven textile
manufacturing plant prepares sample packets to send to prospective
clients.
That
Durham has found the right formula to create a sustainable future is
evident from the depth and breadth of the accolades it receives:
Durham is the centerpoint of the three-city Triangle
(Raleigh/Durham/Chapel Hill) that Money
magazine recently selected as the "Best City in the South"
and one of only six communities nationwide chosen as one of the
magazine's top picks in its "Best Places to Live 2000" issue
(December 2000). This marks the third time in seven years that Durham
and its neighbors have made Money's
coveted Top 10 list, including 1994's No. 1 ranking;
Durham was ranked the No. 2 city in the country for foreign
investment, behind fellow North Carolina city Charlotte, by Site
Selection magazine (January 2000). The many foreign-owned
companies with a major local presence include Glaxo Wellcome, Nortel
Networks, Rhone Poulenc, Sumitomo, Freudenberg and AW North Carolina;
Durham County companies received nearly half of all venture capital
dollars invested in North Carolina companies, according to
Pricewaterhouse Coopers (1998);
The
area, including the other Triangle cities, has earned numerous
entrepreneurial honors, including being chosen as the No. 1 city for
small business by Entrepreneur
magazine and the No.1 area for economic growth in the past 25 years
("Where the Money Is: America's Strongest Local Economies, 2nd
edition);
And in a nod to its quality of life, Durham in recent years has been
named the No. 2 Healthiest City for Women (American
Health magazine), one of the Top 10 cities for working mothers (Redbook
magazine), the No. 3 ranking for Most Enlightened Place to Live (Utne
Reader magazine), one of the Top Five places to raise kids (Child
magazine), and one of the Top 10 urban hiking areas (American
Hiking).
Durham
leaders' commitment to jobs for all people recently was recognized by
Gov. Jim Hunt, who last month honored the Greater Durham Chamber of
Commerce's Work First program and its chief job developer, Linzie
Atkins, for helping more people get off welfare than other communities
averaged.
Durham
is home to the country's eighth-ranked university (Duke), which just
happens to have a medical center that is the nation's sixth-ranked
overall hospital.
As
local leaders tell it, the community has taken less than 50 years to
transform itself from the City of Cigarettes to what they like to call
the City of MERIT medicine, education, research, industry and
technology. Two major catalysts have been the growth of Duke
University and the creation and expansion of Research Triangle Park
most of which sits in Durham County into the premier research
and development corporate park in the country with a more balanced
portfolio than technology corridors in the San Jose or Boston areas.
Durham's evolution also has been a behind-the-scenes effort
involving not only the major players, but also an inclusive array of
local governments, economic development agencies and citizens
groups as well, notes Bert Collins, chairman of the Greater Durham
Chamber of Commerce and president of the 103-year-old North Carolina
Mutual Life Insurance Co.
"We
collaborate with and support activities of other civic groups that
have growth and development as their primary focus, such as Downtown
Durham Inc., the Greater Durham Convention & Visitors Bureau, and
area economic and business councils," says Collins. "Some of
the key factors behind the county's success are community leaders
including city and county governments along with a concerned citizenry
that is progressive in their vision and willing to move forward with
alternative plans that offer the growth and survival opportunities
needed to prosper."
Preserving
the Past, Preparing for the Future
Some of those alternative plans embrace a vision that pays
homage to the industry that put Durham on the map while creating
another economic opportunity. In a city that already has recycled
several former tobacco warehouses into successful retail, office and
residential developments including Brightleaf Square in downtown
Durham (photo at left) another major revitalization project is in the works. The
American Tobacco Historic District project would renovate about 1
million square feet of old tobacco warehouses and related buildings
into a mixed-use center-city development with office space, retail
facilities such as restaurants and boutiques, a hotel, day-care center
and fitness club, a theatre and eventually residential units. Some say
it could be to Durham what popular Faneuil Hall is to Boston both
a tourist attraction and a heavily used local center of commerce.
Capitol
Broadcasting Co. in Raleigh owns an option on the property and will
exercise it as soon as it has enough lease commitments, says Peter
Anlyan, general manager of the project. So far, Duke University is the
only tenant who has made a commitment, but it's a big one 120,000
square feet of office space, with a specific department or unit yet to
be announced. The first building on the American Tobacco Co. campus
opened in 1874, and today the entire property is on the National
Register of Historic Places. Visitors and prospective tenants are
treated to the unmistakable aroma of tobacco that still fills the air.
Project
supporters say the development will be a tremendous boost to the city
revitalization efforts that soldier on despite record prosperity,
especially in the suburbs and the surrounding business parks that
include RTP.
"What
downtown Durham really needs is feet on the street more people
working downtown, more people after hours," says Anylan, who sees
the American Tobacco project as a magnet for growth as well as a way
of preserving tradition.
Of
course, projects like the American Tobacco revitalization wouldn't be
necessary if two trends hadn't intersected in the 1960s and 1970s: the
decline in smoking in the United States and the shifting of
tobacco-products production jobs overseas. From the early days of
mechanized-cigarette production in the 1860s to the heyday of
cigarette making near the turn of the 20th century, a dozen
tobacco companies operated in Durham, including American Tobacco Co.
the brainchild of pioneering tobacco farmer and scion Washington
Duke which was capitalized at more than $25 million in 1890.
Tobacco brought railroads, manufacturers of tobacco-supporting
products including textile mills that made tobacco sacks, as well as
other infrastructure necessary for growth. And it was Duke family
money, particularly James B. Duke's $40 million investment, that
remade Trinity College into a wealthy, progressive and prestigious
university that has itself been the catalyst for much of Durham's past
and present growth.
During World War II, Durham produced one-quarter of all the
cigarettes made in the U.S. Twenty-five years later, only four tobacco
plants remained standing. Last fall, Liggett shut down what had been
the last tobacco factory in town. But thanks to economic magnets such
as Duke University, Duke University Medical Center and Research
Triangle Park, unemployment rates are not catastrophic but enviably
low, currently below 3 percent.
Location,
Location, Location
The
list of companies that have put down roots in Greater Durham during
its transition is both long and impressive for the number of
international and Fortune 500 companies with major sites here. That
list includes RTP residents IBM, which at 14,000 employees is the
largest manufacturing employer in the county; Nortel Networks, which
employs 8,000; and Glaxo Wellcome, which and currently has 4,900
Durham County employees and will become the No. 2 drugmaker in the
world after its pending merger with SmithKline Beechum.
It
also includes newcomer AW North Carolina (photo at left), a Japanese-owned company
that is helping to broaden the area's industry mix with its auto-parts
manufacturing plant in the Treyburn community. Attracted in part by
the county's location its close proximity to Interstates 85 and
40, Raleigh-Durham International Airport, and job-training
opportunities provided by Durham Technical Community College the
company chose Durham out of 276 sites it considered worldwide, says
Will Collins, the plant's human resources manager. "Durham's
reputation in Japan is very favorable due to the number of Japanese
companies already located here," says Collins. When it begins
full production in April, the plant will supply 30,000 Toyota Camry
automatic transmission sets a month to an auto component plant in
Buffalo, W.Va., and employ about 250 people. "We have made a $100
million investment in Durham County," he notes. "Everyone's
been very comfortable with our decision."
Caption
for photo above: Bradley Tuck and Ruby Arnette inspect a piston from the
drum assembly line at the new AW North Carolina plant.
Another
international company with an established presence in Durham County is
also banking on Durham's reputation as well as the company it keeps.
Freudenberg Nonwovens Group, which has three plants in Durham that
make automotive carpet backing, apparel underlinings, and hygienic
coverstock, is in the midst of a 52,000-square-foot expansion of its
spunbound polyester nonwoven capacity, which represents a $35 million
investment. Located in Eno Industrial Park, Freudenberg is a division
of Carl Freudenberg & Co. of Weinheim, Germany, and has had a
presence in Durham since 1984, when it was called Lutravil Co.
Freudenberg also has plants in Lowell, Mass., and Hopkinsville, Ky.
"The
general economic climate and availability of all factors of production
and distribution have made Durham the preferred site in North
America," says Lee J. Sullivan, general manager of the company's
tuft division. "Of all our locations, Durham offers the best
balance of culture, travel support, skilled workers, and other
available factors of production."
Like
Freudenberg, Durham employer EMC is investing for growth. As a result
of its acquisition of Data General in 1999, the data-storage company
currently employs 680 people in the Triangle, including 230 at a
software R&D facility in RTP. But those numbers could double in
the next two years, in large measure due to EMC's recent announcement
that it will open a training facility in RTP for employees and
customers that will serve more than 5,000 people a year, many of whom
will stay in the area's hotels, use the local airport and shop in the
community's stores. The EMC Southeast Training Center will encompass
28,000 square feet, including 10 classrooms and a 6,000-square-foot
lab. It should open early this year.
Location,
convenience and an attractive talent pool have influenced the
company's decision to not only locate its new training center here,
but to groom its local operations for growth.
"RTP is just a two-hour or less flight from anywhere on
the East Coast, and EMC is just a 10-minute cab ride from the airport.
When our clients or employees are here, the amenities are top-notch,
including among some of the world's best golf courses," says Joel
Schwartz, senior vice president and general manager of EMC's Midrange
Storage Division. "And without a doubt, being close to so many
world-class academic institutions has and continues to play a critical
role in EMC's recruiting efforts."
Education:
Training Hands, Testing Minds
Those
academic institutions, when the offerings in Raleigh and Chapel are
added to the mix, represent an embarrassment of riches; even when
Greater Durham's schools stand on their own, their programs,
achievements and contributions are impressive by any measure. Its
three institutions of higher education Duke University, N.C.
Central University, and Durham Technical Community College support
the economy through their payrolls, student populations and visitors.
They also provide thousands of degreed and skilled young people each
year as raw talent for neighboring companies. And Durham Tech is also
an important part of the community's corporate recruitment and
retention efforts because of its esteemed worker training programs.
There's
no mistaking Duke's influence on Greater Durham's economy, quality of
life and reputation. The university and medical center together employ
nearly 18,000 people, making Duke the largest employer in the county.
That's nearly 10 percent of the county's population. Most of them, no
doubt, stick their chests out a little more at this time of year. The
Blue Devils mens basketball team has taken its usual place among
the nations elite, and now has been joined by the womens team,
which reached the Final Four two years ago and again is among the best
in the country.
Theres
more. Through the universitys cultural offerings, such as theater
productions and documentary festivals, and outreach efforts, such as
community enrichment and educational partnership programs, the
community's livability is heightened. Its professors and students
create a community of scholarship that brings a certain cachet to the
area. And now it is about to go on what one local newspaper recently
described as a "spending spree," thanks to the success of
its current capital campaign.
The
university initially set a fundraising goal of $1.5 billion, and had
raised nearly 90 percent of that by early December with three
years of the campaign remaining. So it raised its goal to $2 billion,
joining only three other schools Harvard, Columbia and the
University of Southern California who have set such lofty
expectations. Duke plans to spend $500 million of that money on
faculty and laboratories to upgrade its science, engineering and
business programs, which while well-regarded, have historically lagged
behind its liberal-arts programs in funding and prestige. This largess
comes on the heels of a bull market that has boosted the university's
endowment to $2.7 billion. (For comparison's sake, Harvard's endowment
is $19.2 billion; the University of North Carolina at Chapel Hill's is
$1.1 billion).
As
Duke gets stronger and more heavily invested in science, engineering,
technology and business, the benefits to local companies should be
plentiful. Passage of the state bond issue to fund improvements to
community colleges and public universities will greatly benefit Durham
due to the presence of two recipients of those public millions, N.C.
Central and Durham Tech. N.C. Central, or NCCU, is the oldest publicly
supported, historically black university in the country. It currently
employs more than 1,100 and has an enrollment of 5,476, but has big
plans for growth. To help absorb much of the increase in UNC-system
enrollment projected over the next 10 years, NCCU is set to expand its
enrollment by 50 percent by 2008, and in the process become more
racially diverse. Already, enrollment in the school's evening
programs, which are some of the most comprehensive in the area, has
increased dramatically, from 798 in 1999 to 2,060 in 2000. And it
plans to use some of its $121 million share of the bond money to build
a new science complex. Outgoing Chancellor Julius L. Chambers feels
the university should focus on the sciences, now that it has a new
Biomedical-Biotechnology Research Institute and plans are under way to
create a new program in genomics and bioinformatics.
Durham
Tech's share of the community-college bond money will be apportioned
among most of its units, including its corporate education department,
which is closely tied to economic development in Greater Durham.
"Over the last three years, we have provided skills training for
5,000 students a year," says Gordon Copeland, associate dean for
corporate education. Durham Tech's on-the-job, customized training
programs for both new and existing employers are so well-regarded
as are all the community college system's campuses that they
figure prominently in a company's decision to locate or expand in the
area, notes Copeland. Last year, Durham Tech worked with 500 companies
some were mom-and-pop joints that wanted computer training, and
others were large multinational companies opening a new division and
in need of trained machine operators.
Although
two-thirds of the college's training occurs on the corporate client's
site, Copeland hopes to be able to upgrade his campus facilities.
"We would like to be a little more accessible and match our
technology to our clients' needs," he says. "We want to make
sure we continue to meet the worker-training needs of the
region."
Durham County's Largest Employers
1.
Duke University & Medical Center . . . . . . . . . . . . . . . . .
.19,500
2. International Business Machines (IBM) . . . . . . . . . . . . . . 13,000
3. Nortel . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .8,500
4. Glaxo Wellcome, Inc. . . . . . . . . . . . . . . . . . . . . .
. . . . . . 4,500
5. Durham Public Schools . . . . . . . . . . . . . . . . . . . . . . .
. . . 4,000
6. Blue Cross and Blue Shield of N. C. . . . . . . . . . . . . . . . .
. .2,500
7. Durham County Hospital Corp. . . . . . . . . . . . . . . . . . . .
. . .2,050
8. Durham City Government . . . . . . . . . . . . . . . . . . .
. . . . . . 1,816
9. Veterans Administration Medical Center . . . . . . . . . . . . . .
. 1,600
10. Durham County Government . . . . . . . . . . . . . . . . . . . . .
. .1,600
11. Triangle Institute . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 1,450
12.
U.S. Environmental Protection Agency . . . . . . . . . . . . . . . 1,400
13.
GTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . 1,200
14. North
Carolina Central
University . . . . . . . . . . . . . . . . . . 1,138
15.
National Institute of Environmental Health Science . . . . . . . 1,000
Through
September 2000
COPYRIGHTED MATERIAL. This article first appeared in the January
2001 issue of the North Carolina Magazine.
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