Regional Business Reports

CABARRUS COUNTY
Corning's Growth Redefines an 'Old Economy' County
At least a portion of North Carolina's textile beltway is giving way to a more rapidly growing industry — fiber optics. The latest expansion by New York-based Corning Inc. will create the world's largest fiber plant south of Concord on U.S. 601. Last month, Corning announced its second planned expansion at the plant in a year. The latest announcement is a $450 million capital investment that will create 475 new jobs by 2004. Last February, Corning announced a $550 million addition in Concord. The plant manufactures fiber optic cable, the material used to transmit data in high-speed communications networks.

Corning's significant investment of more than $2.5 billion in North Carolina — including a plant in Wilmington and operations in Hickory and Winston-Salem — boosts North Carolina's tech economy and catapults Corning into a top-10 manufacturer with its 6,500 employees statewide. But nowhere is the impact felt more strongly than in Cabarrus County, where officials have wrung their hands over the waning fortunes of the textile industry, including the recent bankruptcy filing by Pillowtex, the owner of Fieldcrest Cannon. “It's so enormous,” says Maurice Ewing, president of Cabarrus Economic Development.

When completed, it's estimated that the Corning plant will account for about $1 billion in county tax value. And while Corning will benefit from millions in state and local tax credits, the company's investment will help the county deal with the growth that's come from being one of Charlotte's closest neighbors by creating a larger tax base from which to draw revenue for new schools. And locating the world's largest fiber plant in the county boosts Cabarrus's reputation as a high-tech workplace. “I don't think anybody looks at Cabarrus County and thinks it's Silicon Valley. We are what we are,” Ewing says. “But it will continue to impact the reality of what Cabarrus County is all about, and that's more important.”

Corning officials say the expansion is needed to create more manufacturing space to keep up with worldwide demand for fiber. “The increased fiber capacity made possible through the expansion of Concord and the addition of a new facility enables us to keep pace with the tremendous worldwide demand for Corning's optical fiber,” says Alan Eusden, senior vice president and general manager of Optical Fiber for Corning. The Concord plant originally broke ground in 1997. Construction on the new expansion will begin immediately with its capacity coming on line in 2003 and 2004. — Laura Williams-Tracy

CHARLOTTE
School System Whipsawed by Conflicting Court Rulings
A series of court rulings has left the state's largest school system tossing back and forth over whether it can continue to use race as a factor in determining pupil assignment. In November, a three-judge panel of the 4th U.S. Circuit Court of Appeals in Richmond, Va., overturned a 1999 U.S. District Court ruling that Charlotte-Mecklenburg Schools was no longer required to use a race-based student assignment plan. That decision in effect ended 30 years of busing in Mecklenburg County for racial balance.

The case originally came before Judge Robert Potter after a group of seven white parents sued, alleging that CMS was racially integrated and that the system's race-based student assignment system was not needed. They called on the system to end its 30-year busing system and race-conscious magnet school lottery. The parents won and CMS appealed, but in the meantime began developing a new student assignment plan based less on race and more on parental choice. When Potter's ruling was overturned, CMS threw out the new student assignment plan it had been designing for almost a year. The ruling came a day before the system was to hold a student assignment fair to unveil the plan to parents and explain how they would have more choice in where their child goes to school.

Now, all 10 judges of the same circuit court are considering hearing the district's desegregation case. Attorneys for school officials have said having to switch gears once again would throw the system into turmoil. Jerri Haigler, director of public information for the school system, says it should be known soon if the case will be heard again. If the court agrees to hear the case, the three-judge panel's ruling is dismissed, and the school choice plan may have to be put back in play. It's also possible that the case could jump directly to the U.S. Supreme Court.

While CMS will do what's required under the ruling, Haigler says it would be almost impossible to implement the school choice plan for the 2001-2002 school year. “Even with all of this going on, students and teachers have not missed a beat at all in the classroom,” Haigler says. “Our schools remain focused on academics.” — Laura Williams-Tracy


TRIANGLE
ESA Partners Finally Settle Their Naming-Rights Fight
In a relationship that has left each side seeing red, the partners in the Entertainment and Sports Arena in Raleigh finally have settled on how naming-rights revenue will be split. And in the process, the three parties — the Carolina Hurricanes of the National Hockey League, N.C. State University, and the Centennial Authority that operates the arena — tied up numerous loose ends that had caused repeated money disputes since fans first waded through the turnstiles on Oct. 29, 1999. “With this agreement,” says Steve Stroud, the authority's chairman, “we've cleaned up all of those issues. I just don't anticipate any major problems from here on.”

The agreement opens the door for Gale Force Holdings, the hockey club's parent company, to sell naming rights to the $167 million arena. The ESA is the only primary-sports venue to open in the past five years that does not already have a corporate sponsor. The agreement also sets aside approximately $22 million in naming-rights revenues for a capital improvement designed to extend the facility's life expectancy, thus ridding taxpayers of future expense. Finding a company willing to pony up the money to put its name on the arena won't be easy. Jim Cain, the president of Gale Force, says he will go to companies seeking about $80 million for a deal that would span 15 to 20 years.

The vote, completed on Dec. 19, beat by six hours a deadline imposed by the city of Raleigh for a naming-rights agreement. It also followed a year of disharmony between the Hurricanes, N.C. State and the Centennial Authority, which have argued over everything ranging from the color of the arena's seats to suite-revenue disbursement. “I think N.C. State and the Hurricanes are going to work together now to make this building the greatest entertainment success in the country,” Stroud says. — Kevin Brafford

FAYETTEVILLE
New Coliseum Scores Big with New Basketball League
Hoops fans will be able to follow the bouncing ball to Fayetteville come November, thanks to the NBA's decision to grant the city the first franchise in the infant National Basketball Development League. The new league, designed for players 20 and older, will consist of eight teams based in Southeastern cities. The inaugural 56-game regular season — to be followed by playoffs — will be highlighted by a 24-game television package on ESPN and ESPN2. Play will begin in mid-November and continue through March.

“Fayetteville is the perfect place to launch this phase of the NBDL,” says Rob Levine, an NBA senior vice president. “It's a city that has all of the elements needed to succeed, including a first-class arena. We are confident that the excitement of professional basketball will appeal to its diverse community, including its strong military population.”

In addition to serving as a source of on-court talent for the NBA's 29 teams, the NBDL will serve as a human resource pool for the NBA and its teams by training employees in management, operations, public relations and marketing. On the court, teams will not have any affiliation with specific NBA teams. Cumberland County's share of the revenue mostly will come from concession sales, ticket and box office surcharges and a corporate renaming of the 10,300-seat Crown Coliseum, which opened in 1997. The county expects to net at least $123,000 in the first year.

The NBA is teaming with New York-based SFX Entertainment to form a partnership known as Arena Ventures. Together, they will bring more games, concerts and other events to the coliseum. A five-year licensing contract guarantees 26 home basketball games and at least 22 SFX-sponsored events a year. A clause allows the team to leave after three years if it does not average 4,500 fans for home games. “We plan to make them proud they came our way,” says George W. Breece, the chairman of the Crown Coliseum Complex. Fayetteville Chamber of Commerce officials believe the announcement will improve the area's image and better its chances to attract businesses. “This will give us national exposure,” says Franklin Clark, the chairman of the chamber's board of directors. — Kevin Brafford

TRIANGLE
RDU Hopes Its $1-Billion Expansion Will Fly
The Raleigh-Durham Airport Authority has unveiled a nearly $1 billion, seven-year expansion plan that could begin as early as 2003 — that is, if the authority can successfully get the plan off the ground. The construction project calls for replacing Terminal A, which has 18 gates, with a dramatically larger, 40-gate terminal. It put on the backburner the airport's original $500 million plan to overhaul and expand the 19-year-old terminal. “The numbers are pretty breathtaking,” says Bob Winston, the airport authority's chairman, referring to the estimated near-$1 billion cost. “You never get used to numbers that big.”

The proposed terminal would span 1 million square feet — four times the size of the present one — in a plan that was designed by Leigh Fisher Associates of San Mateo, Calif. In addition to financing, at issue would be the ability of travelers to navigate through the continuous maze of construction The authority originally envisioned constructing a new south concourse, overhauling the main section of Terminal A and then realigning and double-decking the access roadway. The project would have been completed with the expansion of the Terminal A extension. But that plan was ditched when consultants said it would take longer and cost more than anticipated, plus more greatly inconvenience travelers.

Under the new proposal, travelers would continue to use Terminal A during the initial phase of construction, from 2003 to 2005. But the access road would be moved west to make room for the new south concourse, and the roadway in front of the terminal would be double-decked to separate arriving and departing passengers. Terminal C already has a double-decked roadway. During this phase, workers would construct the interim terminal, which would connect with the current Terminal A extension for 23 gates. The existing infrastructure, including a fueling station and electrical vault, would be moved.

In the second phase, from 2005 to 2008, all passenger traffic would shift to the interim terminal and Terminal A extension. No gates would be lost in the move, Winston says, and a new skyway would connect the new parking deck to the terminal. During this phase, workers would demolish Terminal A and construct the new, four-level terminal, which would open in 2008.

In the third phase, which would last to 2009 or 2010, the interim terminal would be torn down, and the current Terminal A extension would be rebuilt. A final, six-month phase would tie up loose ends. In the meantime, other construction would continue, such as parking decks between the terminals and a third runway west of Terminal C, which is scheduled to be completed by 2010.

The proposed 2003 start date would depend on financing. Airport officials voted last October to seek permission to charge a $3 to $4.50 boarding fee to help pay for the terminal expansion. A $3 fee, however, would raise about $16.9 million a year and fall far short of the nearly $1 billion that's expected to be needed. Another possibility for raising money is by issuing bonds, and the authority plans to pursue a new bond rating this year. — Kevin Brafford

TRIANGLE
Convenience Store Chain Snaps Up 198 More Outlets
Convenience USA Inc. announced recently that it will purchase 198 MAPCO Express stores from Williams Express of Tulsa, Okla., boosting the Durham convenience-store chain to 484 stores. The bulk of the stores are in Memphis and Nashville, Tenn. The sale price is expected to exceed $100 million and should close in the first quarter of this year.

The transaction is C-USA's first major acquisition since it received $7.5 million from New York-based venture firm Soros Private Equity Partners, and allows the chain to further broaden a market saturation that blankets the Southeast. C-USA already owns and operates 251 stores under the names Holiday Market, Kwik Shop, Nugget Store, McCracken Express, Tee Pee, Winoco, Gant and Sun Mart in Alabama, Florida, Georgia and North Carolina.

MAPCO Express convenience stores employ about 1,500 people, who are expected to be offered employment with C-USA, which already has 1,700 workers. As a result of the deal, C-USA will expand its accounting department, adding 15 to 20 employees to the 60 at its Durham headquarters.

Since it was founded in 1998, C-USA has made 14 acquisitions. Its goal, according to chairman and CEO Don Draughon Jr., is to own 1,000 stores by 2003. — Kevin Brafford

CABARRUS COUNTY
The Towns that Cannon Built Shudder at Pillotex Bankruptcy
The Dallas-based company that owns Fieldcrest Cannon mills, the largest employer in Kannapolis, has filed for bankruptcy protection, leaving many in this textile-centered town doubting the mills' future here.

Pillowtex Corp., with mills in Cabarrus and Rowan counties as well as Tarboro, Rocky Mount and Eden, filed for Chapter 11 bankruptcy in November seeking protection after defaulting on $650 million in loans. The company says the filing is a necessary component of its strategy to improve operations and profitability. The move came less than three weeks after Pillowtex Chairman and CEO Chuck Hansen resigned after months of disappointing financial losses.

The company has received a commitment of $150 million in financing from a group of lenders led by Bank of America. If approved by the courts, the funds will be used to pay for ongoing business operations. Almost 750 employees in Cabarrus and Rowan counties were temporarily put out of work as the company shed excess inventory. But officials say the layoffs were not related to the bankruptcy filing and those employees were back at work on Jan. 2.

“We don't intend to go out of business,” says Don Mallow, company vice president of human resources. “(The bankruptcy filing) in essence is a timeout, giving us relief from our creditors.”

Pillowtex employs more than 7,000 people in North Carolina, with almost 4,500 in Cabarrus and Rowan counties. The company is the economic center of Kannapolis where generations of families have worked. The company has struggled for more than a year because of management decisions, a troubled computer conversion, weak sales from overseas competition, and the debt from acquiring Fieldcrest Cannon in 1997.

Fieldcrest Cannon began operating more than a century ago as a towel and sheet maker. Founder James W. Cannon built his mills and the city of Kannapolis. His son, Charles A. Cannon, built the company into a global textile giant with clients such as Sears. Today, Pillowtex is one of the nation's top-three home-furnishings makers. — Laura Williams-Tracy


TRIAD
Entrepreneurs' Dream Depends on a City's Hunger for the Arts
Most people look at the four-story Montgomery Ward building in downtown Greensboro and see an obsolete retail building that hasn't been occupied for 40 years. Richard Whittington, however, sees a 300-seat theater — named Triad Stage — that will bring professional actors and directors to the city to debut original plays.

Whittington, along with partner Preston Lane and numerous investors, announced their plans in early December. The building's renovation is expected to be completed by fall, and eight plays are planned for the inaugural season, each carrying 21 performances. Anticipating hungry arts patrons, several restaurants are set to open in the area.

Lane, a Boone native, met Whittington when both were taking graduate classes at Yale. They collaborated to save a small local theater in the university town of New Haven, Conn., then they researched other areas they thought were “under- represented on the national theater scene,” and Greensboro popped up. Adding fuel to the findings was that Lane had attended the N.C. School of the Arts in Winston-Salem and knew the area.

“What we saw about Greensboro, we liked,” says Whittington. “The population trend was upward. There are five colleges alone in Greensboro and higher-education involvement is an indicator of theater support. We found that there is something like 1,600 households in the city with a household income of $150,000. Greensboro also has a very large middle class.”

Triad Stage set a $4.5 million fund-raising goal and had already raised nearly $3 million by the first of the year. Whittington says Triad Stage will not try to compete with the traveling road shows of big Broadway musicals that typically play to large audiences in large venues. Instead, it wants to host original plays that authors might want to stage in smaller cities before trying for Broadway. — Clint Johnson

SALISBURY
Reconstruction Begins on Deadly Stretch of I-85
The already difficult commute along Interstate 85 from Lexington to Charlotte and points in between is about to become more treacherous. One of the most significant pieces of I-85 construction will get under way this spring on a 3 1/2-mile stretch through Rowan County as the interstate is widened from four to eight lanes. The well-traveled Innes Street Bridge in Salisbury will be torn down and replaced with a new interchange. It will take three and a half years to make $75 million worth of improvements to the segment of I-85 from Bringle Ferry Road near East Spencer south to U.S. 601.

Replacing the bridge will challenge DOT workers, Ivey says. The bridge handles 72,000 motorists on any given day, and it's Salisbury's main connector to the interstate. The project will include demolishing the existing bridge and creating a new bridge that's 12 feet taller and uses a new urban freeway design that brings all vehicles to one traffic signal.

It's estimated that the new bridge construction will displace as many as 30 established nearby businesses.Ivey says road crews will keep a minimum of two lanes open each way for the duration of the project, with traffic sometimes narrowing to one lane at night when traffic counts are lower. — Laura Williams-Tracy

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