Economic development: Local leaders share perspectives on progress, rumors, relationships

As one local leader would say, the opportunity for economic development is "hot" for the state of North Carolina, Davidson County and municipalities seeking to recruit jobs well above the living wage of the region.

Davidson County is located at the center of NC's manufacturing Region. But there are debates on the steps local leaders have taken, perceived relationship challenges to strengthen Lexington's position as the county seat and the structure of the county’s new Economic Development Commission. Meanwhile local voters ask, "Are these debates holding us back or moving us forward?"

The Commissioners Shift

On May 22, Davidson County Commissioners unanimously voted to leave the existing Economic Development Commission structure. At the cost of $240,000 annually, Davidson County was the highest payee for the industrial recruiting services followed by the city of Lexington at $40,000. 

The EDC established a public-private consortium including Davidson County, Lexington, Thomasville, Midway, Denton, Wallburg, Davidson-Davie Community College, private developers and utility providers. Like models similar to most in the state, the previous EDC was led by an economic development director.  

Before the vote, several commissioners expressed that they were being asked to provide incentives without receiving enough information. According to county manager Casey Smith, this had been an ongoing concern for years. The county decided it would create its own structure and abandon the old model, even if it had to do it alone. Rather than hire a new director, the county opted to assign the responsibility of leading the EDC to Smith. The newly formed commission later offered the municipalities an opportunity to participate in the new structure, at no cost. 

Smith noted that recruiting companies is just one role of economic development and recruitment is just one focus of the newly formed EDC. "It ain't just about recruiting, we have kids graduating and we need three categories - gainfully employed, go to college, go to the military. That is of utmost importance. Acquiring talent for businesses is getting tougher. There are opportunities with some of these companies for kids to make much more money without going to college." Smith said he hoped partnerships with local municipalities, high schools and Davidson- Davie Community College will help bridge the gap.

Commissioner Todd Yates, who served under the previous structure for more than eight years, said he was a major proponent of the county creating its own structure. He opined the need for more accountability during the negotiating process was the biggest driver for the shift. "If we are giving incentives, it's just as important for us to know about the economic development partners [companies], as much as they need to know about us. Before we were given a pseudonym for a company and told to write a check, we didn't even know anything about them. We didn't even know who they were or if they were a good fit for the county." 

Yates said the new effort being led by Smith has made the process more transparent for municipalities who joined the county's new Economic Development Commission. "Now, if there is interest, the municipality that serves on the EDC board and one county official will have the initial meeting with the company. Meet with them firsthand," Yates said. "In the last 30 days, I've met with three international companies and one domestic company. That never happened in my 12 years of being a county commissioner."

Smith recognizes it was a leap for municipalities to join a new model. He admitted the "leap" is already proving its worth. "We have a good relationship with the folks in Raleigh; they have been here for several site visits. Take this for example, the amount of requests for information has been coming from the state." 

Smith estimated about 30 Requests for Information from July to November. “Before I got involved, in 18 months we would have a total of 60 RFIs." Smith said the volume of requests coming through the state was an adjustment for his staff. "Volume wise, we are on pace to do as much as we have ever done." Smith explained by asking the EDC partners to pay nothing means they can keep those dollars in their communities while benefiting from the county’s administrative support. "We would have to do that work anyway." 

Public Perception

Not everyone agrees the new model will work to bring jobs to Davidson County. Burr Sullivan is a former board member of EDC representing Lexington as a business person. Sullivan, candidate for the city of Lexington mayor, served two terms with the North Carolina Economic Investment Committee that evaluates potential Job Development Investment Grants and makes decisions on business recruitment incentive funding. 

"I have a lot of concern about what is going on here in Lexington and Davidson County and I do have the background to comment on all of this," Sullivan said. "Everyone is entitled to their own opinion. It's a model I don't think will work. It's different from how the EDC worked when I was on it. There were always business people with a high-level understanding of what it takes in economic development."  

The current structure allows for elected officials from each municipality. City managers and alternates are additionally invited to attend.

Sullivan said, "You can't just play this economic development game without a budget, without a professional. We just do not have relationships; those professional relationships are professionals. Neither does the county. The city of Lexington does not have an economic development budget. That needs to change immediately." 

Rift or No Rift?

Sullivan expressed concern about the city of Lexington's relationship with Davidson County. Sullivan isn't alone in questioning a long-standing perception of a "strain." That public perception was heightened when the city of Lexington filed a lawsuit on Monday with the Davidson County Superior Court against Davidson County and the Robert E. Lee Chapter of the Daughters of the Confederacy No. 324 to authorize the removal of the Confederate statue in uptown Lexington.

The lawsuit led to the removal of the statue of an unknown soldier in 1905. 

Sullivan said, "Things are apparently so bad the city did not invite the county manager and the county commissioners to a moment of great celebration," referring to the August 23 groundbreaking for Siemens Mobility's $200 million facility in Lexington. Sullivan was a shovel holder at the groundbreaking on behalf of his role as a trustee at Davidson County Community College. 

County commissioners were not invited to the ground breaking ceremony. Mayor Jason Hayes and County Manager Smith both called it an "oversight" on the company planning the event. "It was a mistake, [and] people are making too big of a deal of this. We provided incentives so of course we would have been there if we had known. It's not because we're mad at the city, our relationship with the city of Lexington has never been better and don't think it was their fault." 

Sullivan disagrees. "How did the city let that happen? I just don't see how it is remotely possible that it's an inadvertent error. This is an event that is held in Lexington. The city needs to be part of planning that event. It's unacceptable! We had the top recruiter from the state of North Carolina, Chris Chung, head of Economic Development Partnership of North Carolina, here. The city should have been coordinating. I have been going to these kinds of events all over the state. I have never seen anything like this happen. You just don't take a casual approach. This was a big deal. The city embarrassed itself. I was standing there with a shovel. I was very embarrassed."

Moving Forward?

Have the city of Lexington and Davidson County reached a turning point? "I've heard the rumors but I don't know where this is coming from," said Yates. "As far as I am concerned, we are getting along better with the city than we ever have. We have a good relationship with the mayor of Lexington...and the new city manager seems very eager to work with us. We have a good relationship with Thomasville, the mayor and we just inked a $35 million sewer deal. We don't agree on everything but we can still work together."

Smith offered, "The relationships with the municipalities have never been better. We have a good working relationship with the municipalities. We had some issues with sewer and were at an impasse. Recently, we were able to work that out and build a foundation of trust to work from."

Hayes referred to the same impasse speaking in depth about the sewer negotiations that led to what he calls "an extremely collaborative process." "Coming in, I had heard there was some strain. But just like in the private sector, government is all about relationships. We were able to make a deal where the city got paid $5 million and the county got what they needed." Hayes added this has led to other progress including a sewer line on 763 acres for Sammet. The company had plans for a 200,000-spec building, voluntary annexation but Hayes said the project was at a standstill without sewer. The county granted sewer access for the project and currently the facility is underway. 

Hayes recognizes that shifting the public perception of the county relationships will take time and hard conversations. "When you are able to work with these folks to sit down and negotiate...You walk out of those conversations and we don't always agree but at least we understand each other. We were able to get to a place, a deal. Then you know you probably can do it again. You build trust. We can have those good conversations with Lexington and Thomasville. If there is something contentious, we can have talks...at the end of the day, we all want what's best for economic growth in Davidson County."