Monday, May 27, 2024

N.C. economic development: Top job-creating projects

Power players stake a claim in North Carolina’s economic development pie.

Pandemic aside, North Carolina had a remarkably successful year in economic development. Asheville and Charlotte recorded unprecedented corporate expansions by Pratt & Whitney and Centene, respectively, while Apple’s $1 billion plan for Wake and Catawba counties grabbed international attention.

Officials from arriving and expanding firms routinely cited the state’s talent, market access and supportive leadership when asked what led them here.

California companies accounted for 10 of the state’s major projects last year, led mainly by life-sciences projects heading for the Raleigh-Durham area. Businesses from New York and New England also launched and expanded big operations. Foreign investment is coming to the state from major companies based in Canada, Japan, Spain and the United Kingdom. One key caveat: Projections for new jobs often fall short because of changing economic conditions and revised corporate strategies.

Ranked by job creation, here are the top 26 economic-development projects announced in North Carolina from June 2020 through the end of May 2021. (See separate story on Amazon on Page 54.)

Health insurer Centene’s plans for a 3,200-person workforce on a potential $1 billion campus marked the largest job-generating project in the 18-year history of the state’s Jobs Development and Investment Grant program. It was the first company to qualify for provisions adopted by the N.C. General Assembly in 2017 that allow for “transformative” JDIG awards that extend for 39 years. Charlotte and Mecklenburg County are offering an additional $58 million in incentives.

Centene specializes in offering health insurance for low-income Americans enrolled in the federal Medicaid program. CEO Michael Neidorff has led the company since 1996, building it into the 42nd-largest U.S. public company with 23 million customers. It paid $10 million for an 81-acre property near UNC Charlotte.

St. Louis-based Rafco Properties is managing the development, Charlotte-based LandDesign is the site planner, and Charleston, S.C.-based LS3P is the architect.

Many had assumed Apple’s selection of Austin, Texas, for a $1 billion campus in December 2018 meant the tech titan had ruled out a major campus in North Carolina. State officials steadfastly refused to concede they had closed the file on “Project Bear.” In April, Apple said it will invest $550 million in a Wake County campus plus about $450 million to expand its Catawba County data center, which opened in 2009. The Wake site near Cary and Morrisville is expected to eventually employ 3,000 in research, operations and engineering jobs with an average annual salary of about $187,000, according to the company. Apple already employs 1,100 in the state, including 200 at the Catawba center in Maiden.

Apple has said little about its Wake County site development plans. Acute Investments, a company with links to Apple, acquired 281 acres near the intersection of Interstate 540 and Davis Drive in 2018 for $50 million.

As part of a $7 billion nationwide expansion this year, Google officials announced a 1,000-job cloud-engineering hub in Durham, including as many as 500 by the end of 2023. It will be one of five Google Cloud engineering centers across the country as the search-engine giant competes with Amazon and Microsoft in cloud computing. Google didn’t seek incentives for the project and hadn’t disclosed its site location as of mid-June. In the meantime, it is leasing downtown Durham space. The search-engine giant has operated a data center in Caldwell County since 2007.

Contract-research organization BioAgilytix, which opened in Durham in 2008, specializes in large molecule bioanalysis and provides a wide portfolio of services supporting the development and testing of biologic drugs, which are produced by or contain living organisms. Salaries are expected to average nearly $96,500. BioAgilytix also operates labs in Boston and Hamburg, Germany, but the company said the Triangle’s abundant supply of experienced biotech workers and livability made it a logical expansion choice. BioAgilytix is owned by Cobepa, a Belgium-based private-equity group.

The pandemic wreaked havoc on commercial aviation and aerospace manufacturing, prompting massive federal responses to prop up the industry. But Pratt & Whitney’s plans for a $650 million aircraft engine-manufacturing site in Asheville proved the state’s economic resilience. The plant, near Interstate 26 and the Blue Ridge Parkway, is on land owned by the Cecil family’s Biltmore Farms, marking the biggest project in Buncombe County history. Detroit-based Walbridge Southeast is the general contractor for the 1.3 million-square-foot complex, and Highlands Ranch, Colo.-based Arcadis is the architect. Raytheon Technologies bought Pratt & Whitney owner United Technologies for $30 billion in 2020.

Privately held Fidelity’s 2006 arrival at Research Triangle Park helped launch Raleigh and Durham as contenders for big financial-services campuses. The company has continued to grow to a local staff of more than 3,000 with two new waves of hiring announced this year. It is hiring 750 mobile app development, customer service and financial advisory positions in North Carolina, mainly at the Durham site.

Activity on the company’s mobile and web-based platforms spiked by about 60% during the pandemic, helping Fidelity add 8.6 million customer accounts in the last 18 months.

The biotech company formed by Dutch and Japanese owners announced the state’s first $2 billion plant in mid-March. Fujifilm Diosynth had said it would locate in either College Station, Texas, or Wake County, where it employs 600 in Morrisville. With support from the N.C. Biotechnology Center and others, the company picked fast-growing Holly Springs for the site that will produce cell cultures. The southern Wake town is also home to a 500,000-square-foot biomanufacturing plant opened by Swiss multinational Novartis in 2009. (It’s now called Seqirus.)

Credit Karma in May said it would expand its Charlotte operation over the next five years with salaries expected to average nearly $157,000 annually. Intuit, which owns TurboTax and QuickBooks, bought the consumer-finance and marketing company for $8.1 billion last year. Credit Karma has operated an office in the Ballantyne area since 2017. It plans to create a high-tech engineering center that will employ analysts, software engineers and managers.

With shipping demand soaring in the pandemic, UPS announced major growth at its sorting facility in Greensboro and plans for a new distribution center in Alamance County. For the latter project, the transportation giant worked with Greensboro-based construction company Samet in acquiring 185 acres at the N.C. Commerce Park in Mebane, where its $262 million facility will employ 451 workers. Its Greensboro site will undergo technology upgrades and add 141 jobs. Annual salaries at the UPS sites will average more than $65,000.

Charlotte’s hefty pool of financial-services talent was cited as a top factor for Intercontinental’s expansion in the Queen City. The privately held mortgage lender also considered Richmond, Va., and Indianapolis. The new jobs will average $87,500 annually. Prior to the expansion, ICG employed 179 in Charlotte.

Thermo Fisher Scientific is adding a 130,000-square-foot building in Greenville for the company’s sterile drug product development and commercial manufacturing lines. The diversified company already employs 1,500 workers in Pitt County. Thermo Fisher is working with Pitt Community College, East Carolina University and other entities to help train workers for skills needed at the business.

Recreational boating took off during the pandemic, with sales reaching a 13-year high last year, according to the National Marine Manufacturers Association. North Carolina’s strong boat-building industry is a key beneficiary. As part of its acquisition of 60-year-old Hatteras Yachts, White River is building a center for R&D and manufacturing as part of a plan to make New Bern the “new world capital for offshore angling and boating.” Hatteras had been controlled since 2013 by Versa Capital Management, a Philadelphia-based private-equity company. White Marine is owned by Springfield, Mo.-based Great American Outdoors Group, which operates about 200 outdoor recreational-equipment stores under the Bass Pro Shops and Cabela’s brands.

British electric-vehicle maker Arrival picked Charlotte for its North American headquarters in December, then followed up in March with plans for a 250-employee factory in west Charlotte. The company, founded in 2015, has a contract to make zero-emission vehicles for UPS, with initial deliveries expected in late 2022. Arrival previously said it plans a factory in nearby Rock Hill, S.C., to make electric buses. The company’s overall area employment is expected to reach 650. Russian billionaire Denis Sverdlov controls Arrival, which went public in March.

Founded in 2013, Robinhood pioneered mobile-based investment services with a stated goal of “democratizing finance.” The company’s trading platform caused a sensation earlier this year when users coordinated a “short squeeze” on GameStop shares, sparking massive losses for some hedge funds. About 150 local jobs are likely to be filled by the end of 2021, the company said. Charlotte competed with Denver; Fort Mill, S.C.; and Tempe, Ariz., for the project.

Founded in 2015, cancer-detection biotech company Grail counts Jeff Bezos, Bill Gates and Johnson & Johnson among its investors. The company is developing a platform for early detection of more than 50 cancers using a single blood draw. Grail is leasing 200,000 square feet in Research Triangle Park. In 2016, the firm was spun out of San Diego-based Illumina, which last year said it wanted to buy the company back for $8 billion. The Federal Trade Commission is blocking the deal over antitrust concerns. General contractor Brasfield & Gorrie and architect Perkins+Will are working on the project.

The repurposing of a shuttered 250,000-square-foot retail property near Raleigh-Durham International Airport caught the eye of genetic-testing company Invitae. Formerly home to the once-bustling Prime Outlets Mall, the leased facility will span 245,159 square feet of office, research and lab space. Invitae went public in 2015 and had revenue of $280 million last year. New York City-based OCS Capital and Equator Capital Management bought the property in 2019 for $15.5 million.

Abzena, which is working on an antibody-based treatment for COVID-19, collaborates with pharmaceutical companies and academic institutions around the world. A 117,000-square-foot building at Central Carolina Enterprise Park will house Abzena’s work on antibody discovery and immunology assessment, marking the latest life-sciences expansions in Lee County. Audentes Therapeutics is occupying a nearby building in a $100 million initiative announced in February 2020. In 2019, Pfizer unveiled plans for a 300-worker expansion at its Sanford campus.

Grifols, already Johnston County’s largest private employer with 1,600 staffers, is adding more positions at its manufacturing campus in Clayton. Salaries for the new jobs are expected to average $69,000. The closely held maker of plasma-based therapeutics opened the site near Clayton in 2011. It has plenty of room to accommodate more growth. In early 2019, the company bought 467 acres southeast of Clayton, several miles from the existing campus, Triangle Business Journal reported. Grifols had revenue of $5.3 billion in 2020.

With brands like Purina One, Pro Plan and Tidy Cats, Purina has been a popular brand for generations. A 1,300-acre site that once housed a MillerCoors brewery is being redeveloped into a 1.3 million-square-foot pet-food manufacturing facility expected to be fully staffed by 2024. MillerCoors closed the plant in September 2016, eliminating 520 jobs. Greensboro-based D.H. Griffin bought the 39-year-old property in January 2019 for $2.76 million and sold it last year to Switzerland-based Nestlé, which has owned Purina since 2001.

Mortgage lender PennyMac explored locations in Phoenix; Tampa, Fla.; and Plano, Texas, before selecting Cary for a 300-worker center that will include sales and technology functions, production, business technology and an IT support center. The region’s diversity and talent attracted PennyMac, President Doug Jones said. PennyMac, founded in 2008, went public in 2013 and had revenue of $4 billion last year.

An estimated $92 billion leaves the U.S. retirement system annually as job-changing workers prematurely cash out 401(k) savings accounts, according to the Employee Benefit Research Institute. Former Charlotte Bobcats owner Robert Johnson’s RLJ Cos. owns the business, which helps workers shift accounts from one employer to the next without incurring major penalties. About 6 million Americans have used the company’s solutions to consolidate their retirement savings. Formed in 2001 as Rollover Systems, it rebranded in 2013.

Gilead Sciences operates in 35 countries, developing medications for life-threatening illnesses, focusing on virology, inflammation and oncology. The company’s COVID-19 treatment Remdesivir was developed by researchers at UNC Chapel Hill. Its latest venture in North Carolina is a business-services center that will provide financial, human resources and IT services to its 36,000 employees. The hub is expected to operate from offices in Raleigh’s North Hills area and be fully staffed by 2023. The new jobs have an annual salary averaging $142,000, the company said.

The Charlotte-based door and window maker selected Statesville for a new facility that will produce VPI Quality Windows, which are customized for commercial and multiunit residential markets. Jeld-Wen’s new site will employ 235 in addition to the more than 500 employees the publicly held company has at a Wilkes County plant and its Charlotte headquarters. Jeld-Wen reported $4.2 billion in net revenue for 2020.

Contract beverage manufacturer Prime Beverage Group will operate from a 300,000-square-foot facility in Kannapolis. The startup company’s operations will be capable of filling 1,500 cans per minute. Workers will earn an average annual salary of $66,000, the company said. Atlanta-based Choate Construction was the general contractor for the building, which is owned by a company associated with NASCAR team owner Gene Haas.

Beam, which develops precision genetic medicines through DNA editing, is working with Pasadena, Calif.-based Alexandria Real Estate Equities on a build-to-suit facility in Research Triangle Park. Plans call for 140,000 square feet of offices, labs and storage space. Beam, which went public in February 2020 and has reported little revenue so far, also considered locations in Maryland, Massachusetts and Pennsylvania.

Prepac, one of the largest North American makers of ready-to-assemble furniture, is occupying a 260,000-square-foot facility at Rock Creek Center in Whitsett. Pandemic-related demand for home-office furnishings is helping drive the company’s recent growth. Its business model relies on “just in time” inventory management that cuts shipping time to two business days, making the Greensboro region well-positioned to serve eastern U.S. markets. Prepac, founded in 1979, was acquired by Canadian private-equity firm TorQuest Partners in 2019. isn’t listed in our list of top job-creating projects for a basic reason: The Seattle-based retail giant operates on a different frequency than the rest of corporate America.

Since 2010, Amazon has created more than 27,000 full- and part-time jobs in North Carolina while investing $2.1 billion in plants and equipment. The company doubled its global staff over the past two years to reach 1.3 million workers. Its total revenue is expected to top $490 billion this year then hit $1 trillion by 2027.

In May alone, Amazon said it would add a $100 million processing center in Smithfield in Johnston County with more than 500 jobs by 2024 and a smaller Fayetteville site that would total a couple of hundred jobs. The 620,000-square-foot Smithfield warehouse is expected to open next year, joining more than 25 other fulfillment sites, sorting centers, delivery stations and Whole Foods Market grocery stores in North Carolina. It also owns a wind farm in the state.

Amazon facility

By last December, Amazon had opened more than 6 million square feet of distribution facilities in the state, ranking 16th nationally, according to Marc Wulfraat, a Montreal-based logistics expert who tracks the company. Its largest centers, each topping 1 million square feet, have opened since 2018 in Charlotte, Concord, Kernersville and Pineville. Its 640,000-square-foot center in Garner that opened last year employs 3,000.

“Amazon’s selection of Johnston County for this important new facility will bring accessible job opportunities, local tax base and economic diversification to Smithfield and beyond, and it marks a major win for our community,” Chad Stewart, chairman of the Johnston County Board of Commissioners, said when the Amazon expansion was announced. “We welcome the arrival of this game-changing company and are deeply grateful for the positive impact it will make here.”

Unlike many companies pledging new jobs in North Carolina, Amazon hasn’t sought state incentives to build its massive supply chain network. That’s a big contrast from its much-publicized “second headquarters” competition in 2017 that pitted Charlotte, Raleigh and dozens of U.S. cities against each other for as many as 50,000 high-paying jobs and a $5 billion campus. North Carolina officials indicated at least preliminary interest in offering tax breaks to Amazon that would have exceeded $2 billion over 15 years, but the company eventually chose Arlington, Va.

Earlier in its life cycle, Amazon relied on UPS, FedEx and the Postal Service, but it gradually built up its own sorting centers to speed the delivery to customers. Huge delays during the holiday season of 2013, which marked a surge in Amazon ordering, and ice storms in the Dallas area that winter that slowed transportation accelerated the company’s expansion plans.

Since then, the company has never looked back. ■

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