Regional Business Reports for August
  written by the editorial staff of the North Carolina magazine

Greensboro
After many delays, FedEx sets 2005 for Hub's opening
Despite a process that has slowed to a crawl, FedEx has 2005 circled when it expects the proposed Mid-Atlantic Hub to become a reality. “We’re waiting for the process to play out,” says Pam Roberson, senior communications specialist for FedEx. “We’re still planning on beginning operations in the year 2005.” The company picked Piedmont International Airport in April 1998 as the site of a $500 million regional sorting hub that would primarily be used to move cargo north and south through the eastern United States. In most cases, Roberson says, the time between the announcement and completion of a hub is two to three years.

That hasn’t been the case with this project. Federal officials announced in mid-June that they were delaying the final environmental impact study of the hub until later in the summer — the third delay in three years. And although the economic impact would be significant for the Triad, opposition to the hub continues to mount because of concerns over a myriad of issues, with noise and diminishing property values heading the list.

One significant opponent has been the Environmental Protection Agency, which weighed in last year with a report critical of the noise that would be created by jets landing at night. At the core of the EPA’s objections was that the impact of jet noise had been underestimated by the Federal Aviation Administration.

The FAA had estimated the noise impact based on 24-hour cycles, when, in truth, the jets would land and take off almost exclusively between 1 and 4 a.m. Concerns such as that one aren’t new to Roberson’s ears. “Every situation is different,” Roberson says, “but it’s the same general process. There may be environmental concerns. There may be geographical constraints. There may be some legislative issues. I can’t say that the level of opposition was not unanticipated for this project. FedEx is very concerned and wants to be a good corporate neighbor. We don’t want to be perceived as a company that doesn’t care.”

The next bit of movement could come with the release of a favorable environmental impact statement from the FAA. PTI needs the approval of the FAA to receive federal funding for the proposed third runway and other improvements.In the meantime, more groups are forming to stop the project. Piedmont Quality of Life Coalition was the original protest group put together after the 1998 announcement. Citizens Action Committee, Save the Triad and Alliance for Legal Action have since joined the fray. All are on the record as saying they’ll do “whatever it takes” to stop the project. “Our planning people have put this thing together building in the amount of delays,” Roberson says. “That’s why 2005 is doable.”  — Jim Buice

Garysburg
Lowe's regional center helps build rural economy
Lowe’s Companies Inc., the Wilkesboro-based home improvement chain and the 13th largest retailer in the United States, will hit another home run for North Carolina with a new state-of-the-art regional distribution center in Northampton County. The $90 million, 1.3 million square-foot facility is expected to employ nearly 600 people and supply products to more than 90 stores throughout the mid-Atlantic region. It is being built on a 225-acre site just off of Interstate 95 five miles south of the Virginia border. Construction began this summer and is expected to take approximately 18 months.

“Our ability to move product from manufacturers through our stores and into customers’ hands is critical to the success of our business,” says Lee Herring, Lowe’s senior vice president of distribution. “Northampton County is a perfect location for our ninth strategically located distribution center, with its high local work ethic, county support and excellent highway access.”

A Fortune 200 company, Lowe’s currently operates more than 680 stores in 40 states, with more than 100 of those stores in the Carolinas. With sales of $18.8 billion in 2000, the company is the world’s second largest home improvement retailer, trailing only Home Depot. “North Carolina has been our home for 55 years,” Herring says. “We pride ourselves on being good North Carolina citizens and the addition of this facility will bring our total investment in the state to $1.5 billion.”

When it’s completed, the Northampton County RDC will cover the equivalent of 29 football fields under one roof. The automated center will be equipped with five miles of conveyor belts to transport more than 28,000 different items through the facility annually. Lowe’s currently operates six regional distribution centers around the country, including one in Statesville. A seventh facility is being built in Findlay, Ohio, and an eighth in Cheyenne, Wyo.

“These 600 new jobs will be located where they are most needed,” says Gov. Mike Easley. “This is a prime example of how our North Carolina companies are expanding economic opportunity to all regions of the state.”  — Kevin Brafford

Mebane
Industrial center opens on site Mercedes rejected
Samet Corp. may be headquartered in Greensboro, but the 40-year-old development company headed by Arthur Samet continues to be bold in spanning its horizons. Its latest project is also its biggest— the North Carolina Industrial Center, a 550-acre site recently purchased in eastern Alamance County.

Work already is under way at the site just west of Mebane and less than a mile north of Interstate 40/85. The first step in the three-phase project is to construct a series of streets connecting the property to established thoroughfares. The first phase — spanning 100 to 120 acres — is expected to be completed by the end of the year. The site includes a tract that the state of North Carolina unsuccessfully pitched to Mercedes-Benz in 1993. The German luxury automaker, despite being offered a reported $300 million in incentives, chose to build outside Tuscaloosa, Ala.

Rick Davenport, Samet Corp.’s director of business development, told The Business Journal that the first North Carolina Industrial Center lots could be as small as three acres, but that most are expected to be considerably larger. Versatility is one of the park’s advantages — companies that need anywhere between 20,000 square feet to one million square feet are expected to find their way to Mebane. Samet says that his company will serve as the park’s sole developer and contractor and will also handle the bulk of the marketing. He likes that the site sits virtually equidistant from the two major regional airports — Piedmont Triad International and Raleigh-Durham International.

Samet Corp. was founded in High Point in 1961. In recent years, the company has developed several notable projects in Forsyth County, including buildings in the Union Cross Business Park and the Piedmont Triad Research Park.   — Kevin Brafford


Charlotte
J.A. Jones to construct World War II memorial
The long-awaited memorial to the nation’s World War II veterans will be built by Charlotte-based construction firm J.A. Jones. Groundbreaking was held in July for the $163 million monument with completion expected in early 2004.

“The sense I’ve gotten from most people is that this monument should have been done in 1948. It’s simply high time we do this,” says John Bond, president of J.A. Jones Construction, who attended the groundbreaking with his father, a World War II veteran.

J.A. Jones counts among its list of completed projects numerous high-profile buildings that are part of the country’s national historical treasures, including the National Mall Reflecting Pool, the West Wing of the White House, the East Wing of the National Gallery of Art, the East and West Fronts of the Capitol, the Smithsonian Air and Space Museum and the National Museum of History addition and renovation. J.A. Jones also has constructed numerous military bases and facilities across the country, including the current reconstruction of the two U.S. embassies in Africa destroyed by terrorist bombings. Still, Bond says the World War II memorial is “the most exciting project our firm has had in my lifetime.”

The memorial will occupy 7.4 acres on the Capitol Mall at the eastern end of the Reflecting Pool between the Washington Monument and Lincoln Memorial. Its design is composed of 56 granite pillars, each 17 feet tall, which represent each state, territory and the District of Columbia during that war period. Arched pavilions 43 feet high on the north and south ends of the plaza will be dedicated to the Atlantic and Pacific theaters of the war. Twenty-four bronze low reliefs will depict different aspects of the war, both military and civilian.

The project has sparked some controversy from people who fear that its location on the National Mall will spoil the view between the Washington Monument and Lincoln Memorial. That debate had delayed progress on the memorial, which has been planned for eight years. J.A. Jones Inc., the parent company of J.A. Jones Construction Co., has $3 billion in annual revenue. It is the 11th largest construction company in the nation with more than 10,000 employees.  — Laura Williams-Tracy


Asheville
Two major developments bolster region's growth
The odds may have been high, but Asheville and Buncombe County managed to pull off a nifty exacta within a seven-day span this summer that stands to be an economic winner for the region for years to come. First came the news that eWorker Technologies, which had leased space in Biltmore Park, chose Asheville over Atlanta and Charlotte as the relocation for its corporate headquarters. One week later, the outlook turned even brighter when BorgWarner Turbo Systems announced that the city will be the site of its North American headquarters and technology center.

BorgWarner, a leading designer and manufacturer of turbochargers for the passenger car and commercial vehicle markets, will construct a new 23,000 square-foot, state-of-the-art facility on its current campus in south Asheville, along with office additions and renovations to the existing 250,000 square-foot manufacturing complex. BorgWarner Turbo Systems, part of Chicago-based BorgWarner Inc., will invest nearly $50 million over five years in the facility and equipment to support the needs of the North American turbocharger market. The new facility will encompass turbocharger test facilities as well as engine and engine systems testing facilities.

 “By creating a center of knowledge and excellence in Asheville we are bringing the engineering, manufacturing, and support groups of BorgWarner Turbo Systems North America together in one facility,” says Lee Wilson, president of BorgWarner Turbo Systems. “The Asheville facility will maximize operational efficiency and shorten time to market.”

The new facility will create about 100 new jobs. BorgWarner already employs 400 people at the Asheville Turbo Systems Plant and nearly 500 at the BorgWarner Cooling Systems Facility in Fletcher. Rick Purcell, president and CEO of eWorker Technologies, says his company expects to hire up to six new workers to complement its current 15 employees in Asheville. The company provides content and Internet infrastructure for more than 35 clients.  — Kevin Brafford


Charlotte
HOV lanes ready to arrive on Independence Boulevard
Traffic snarls on Charlotte’s busiest highways will get a high-octane boost with the state’s first high occupancy vehicle lanes intended to reward carpoolers. Known as HOV lanes or car pool lanes, these high-speed travel lanes reserved for cars, vans or buses with two or more passengers are mainstays of traffic management in Seattle and Washington, D.C. Charlotte is completing its first HOV project along Independence Boulevard and is considering another for Interstate 77 north of the city.

The state is wrapping up its study of how to design the $68 million expansion of I-77, which is scheduled to be widened starting next spring. James Dunlop, congestion management engineer with the N.C. Department of Transportation, says the state hopes to possibly include HOV lanes in the design. Interstate 77 will be widened from two lanes in each direction to four lanes for a 6.2-mile stretch from I-85 to the new I-485 loop. But Dunlop warns commuters that even if the HOV lanes are built along with the expansion, they may not be opened up until more of the highway is widened. Planners fear such a short segment of HOV lanes could create a bottleneck of traffic before it enters downtown.

“Right now we want to make sure we don’t do anything with the design that prevents us from doing this in the future, such as putting bridge abutments where we can’t expand the road,” Dunlop says.

Meanwhile, the Independence Boulevard HOV project is expected to be completed in mid-2003, giving east-side commuters a rapid path to downtown and back home again. “HOV lanes are meant to move more people in the same amount of space,” Dunlop says. “They will not reduce congestion, but they encourage more than one person per vehicle.”   — Laura Williams-Tracy


Hickory

Smart growth ideas anchor new complex
An office, retail and residential complex planned for 92 acres in Hickory will bring to the city of 36,000 the type of development seen in larger North Carolina cities and could help it recruit new business, say the complex’s planners. “Hickory is starting to get regional and national attention from commercial users, and retailers are evaluating Hickory as they would major cities,” says Cole Richardson of Commercial First of Hickory, the broker for the project. “So, this type of development will give Hickory more exposure on a national level. And, the next time a company like Corning or CommScope comes around that we want to recruit, we obviously want to have space for them.”

When it is complete, the NewPointe development, located off Interstate 40 at Lenoir Rhyne Boulevard, is expected to generate close to $1 million in tax revenues for the city and $900,000 for Catawba County, according to Richardson. It will be one of the first developments designed in keeping with the city’s new land use and transportation plan, Hickory by Choice. The plan, which was hailed statewide for the enormous amount of citizen input that went into it, calls for developing neighborhood commercial areas that include residential, retail and business areas.  

Preliminary plans call for the largest part of the development, 44 acres, to house high-end corporate office and medical office space. Another nine acres would be earmarked for flex space, part office and part warehouse space. Upscale residential apartments will sit on 18 acres and another 10 acres is for retail and commercial development. “This will bring a type of development that the Charlotte or Raleigh area, the larger community markets, are used to because of its size and design,” says Tim Leadbetter of the Compass Group, the Winston-Salem developer which has the property under contract. The Compass Group is expected to close on the land with the seven property owners by the end of August.

The Hickory by Choice plan makes transportation an integral part of the zoning and land use process. When the Hickory City Council approved rezoning of the property last month, it gave approval contingent upon the developer making certain road improvements. It will take about a year to complete grading and road improvements, according to Leadbetter.

“The plans are very closely tied to Hickory by Choice,” says City Economic Development Commissioner J.R. Steigerwald. “This rezoning integrally intertwines land use planning with transportation.”

The complex will be the first in the area to group office, residential and retail in one development. Richardson says plans call for a high-end restaurant and hotel on the site. Other retailers will be recruited who can provide services to the people working in the offices and living in the apartments, such as a dry cleaners and a daycare facility, according to Richardson. Hickory by Choice also puts a lot of emphasis on landscaping and green spaces. Plans call for NewPointe to include a park with walking trails, picnic tables and other amenities.   — Charlene H. Nelson



Greensboro
Business center expands, becomes largest in state
The Greensboro Business Center will soon become the biggest small-business incubator in the state, thanks to a 10,000-square-foot addition during the first phase of a $500,000 expansion. The center is already the largest in the state in terms of tenants with 43. The additional space, which will increase the physical size to 55,000 square feet, will enable the center to surpass a 50,000-square-foot center in Charlotte. Tom May, director of the Greensboro center, says it’s simply a matter of needing more room for a facility that has been running close to 100 percent occupancy all year.

“We saw the opportunity to grow it, and everything has fallen into place,” says May.  “We’ve actually been running at 97 percent capacity the last three years. Things have really turned around since the late ’80s and early ’90s. It wasn’t so good then.” What’s been the key to operating at peak efficiency in difficult economic times? “I think we run it as a business,” May says, “just as the associates do that go through the center.”

Construction on the project got under way in early June and is scheduled to be completed in September. Fifteen offices will be added, and May says he already had commitments for half of them by July 1. In the future, a second phase will add 14,000 square feet and 28 offices at a projected cost of $350,000. May says the Greensboro center, which was founded in 1987, is one of three in the state that doesn’t depend on grant money or gifts for survival. “We became cash positive in 1995 and have been so ever since,” he says.

The center provides reasonably priced offices and light-manufacturing space along with shared support services such as a receptionist, business counseling and basic equipment needs to its tenants. The center leases space for $100 to $2,500 a month, depending on square footage. The current list of tenants includes professions such as accounting, architecture, construction, engineering, marketing, e-commerce, warehouse distribution, non-profits and real estate.

May says that incubators sometimes thrive when times are tough. “Think about yourself,” he says. “You work, say, for a Fortune 500 company, and they downsize. You have three choices if that happens. One, you can retire. Two, you can look for another job. And three, you can take your severance pay and start your own business. Sometimes in a down economy, incubators do better. You might not have been willing to take the risk when things are going well.”     — Jim Buice