REGIONALREPORT Triad

Bible school gets down to business with MBA

The state’s newest MBA program will teach students how to balance two sets of books — one financial, the other scriptural. Not that the practice would be condoned at Laurel University, a Bible school in High Point that until January went by the name John Wesley College, but its administrators say the $15,000 total cost will be a steal for students, particularly when compared with $100,000 and up for similar degrees at some universities. On the other hand, a degree from a startup program at a little-known school that recently rebranded itself can’t match the cachet of an MBA from Duke, whose graduates started at a median annual salary of about $100,000 in 2009.

Laurel’s online program was patterned after those at larger MBA schools, President Larry McCullough says, and content will be similar, with three concentrations — management, human resources and nonprofit leadership. “We expect some to use the degree in a ministry setting, but the vast majority will probably move into corporate settings in managerial positions.” Sixteen students enrolled in the charter class, and 40 to 50 more will be added by May. The 25-acre campus has more than 150 resident students, which McCullough expects to grow to 200 or more this year.

The MBA program last spring became the first at a Bible college to be licensed by the University of North Carolina Board of Governors, which credentials private colleges — the school website says it’s the first traditional Bible college in the U.S. to offer an approved MBA program — and the first session began in August. It’s one of 27 MBA programs in the state and one of six in the Triad. The college, already accredited by the Orlando, Fla.-based Association for Biblical Higher Education, also obtained state status for its undergraduate business-administration degree to give it broader credibility. The MBA program should benefit from the weak economy: Demand for graduate schools increases in periods when jobs are scarce and hiring down.

Laurel’s addition of the MBA degree comes as the college, which began as Greensboro Bible and Training School in 1903 and has now changed its name six times, is simultaneously absorbing its acquisition of Universidad Facultad Latinoamericana de Estudios Teologicos, a Miami-based online university with about 1,600 students. The bilingual McCullough was president of Universidad FLET before becoming vice president of an accelerated-degree consulting firm in Tennessee. He left there in March to take the Laurel job, promising the school’s trustees to pump up the Bible college’s offerings and appeal to a broader range of students, who are expected to take values learned at the Bible college into “not only foreign villages but also the corporate board room, inner city and everywhere in between.”

REGIONALREPORT Triad

Being inside outlets has been a family trait of the Tangers

Factory-outlet stores are a tradition in Steve Tanger’s family. His grandfather, Moe, opened one of the first in the 1920s. His dad, Stanley, started what would become Tanger Factory Outlet Centers Inc., based in Greensboro, three decades ago and remained CEO until he was 85. Tanger, who joined the com- pany 25 years ago, succeeded him two years ago. His father died in October. A month later, the company opened its 33rd shopping center — with 80 stores — off Interstate 85/40 in Mebane. Three more centers are in the works. The company stayed profitable through the recession, though net income fell 43% in 2010.

You were 60 when you became CEO. Must have been tough to wait so long.
My father and I were best friends; he was my mentor. When I started in 1986, there was my father, myself, a secretary and a bookkeeper. So we built the business together and had a great time doing it.

How did the company manage succession?
I became president and chief operating officer in 1995, so there was a long transition. I spent a lot of time in New York, working with Wall Street and our major tenants, traveling around the country identifying appropriate locations for outlet centers and getting the centers developed and built. Dad spent a lot of time in North Carolina, working with our corporate group here and the accounting group. And we both worked with the marketing group.

Do you feel you work in his shadow?
I’m proud of his legacy, but I don’t feel I have to compete with him. We have different styles. Over time, I hope I’ll be as well-regarded.

How does your management style differ?
I think that my father was more entrepreneurial, building a small business into a larger one. My background is more corporate training.

How is the Mebane center performing?
It is way above average. The initial reception was stunning. We backed up traffic on the Interstate at our grand opening.

What are the economic indicators that tell you it’s a good time to build a center?
The best economic indicator is tenants signing leases. I think the economy is probably stronger than most people had imagined. When we build, we look out two, three or four years, not two or three weeks. And I think over the next two or three years, people will start to rehire. And a lot of folks, having adjusted their individual cash flows, and with secure jobs, are more receptive to buying discretionary items.

Will you still be CEO at 85?
We’ve got good genes. My grandfather retired in 1980, and he was 81. But we’re a public company now, and I serve at the pleasure of my board of directors.

REGIONALREPORT Eastern

Legislator: TransPark can’t climb above debt 

The North Carolina Global TransPark’s $39.7 million IOU to the state Escheat Fund underscores Benjamin Franklin’s axiom that those who go borrowing end up sorrowing. GTP’s latest audit warns that the debt, which has been growing since 1993, threatens the 2,500-acre industrial park’s future, and this time the hand-wringing that traditionally follows the annual release of its financial figures is likely to force lawmakers and TransPark executives to come to grips with congenital flaws in the project.

“The debt, quite frankly, is something they can never pay back,” says Rep. Stephen LaRoque, a Republican from Kinston, GTP’s home. “I wish everybody had sat back at first and said, ‘Let’s look at how this thing is being financed and how we’re going to pay for it.’”

The brainchild of UNC Chapel Hill professor John Kasarda, GTP was intended to attract just-in-time manufacturers who would use its two-mile runway to fly products worldwide. It attracted no major tenant until 2008, when Wichita, Kan.-based Spirit AeroSystems Inc. announced it would make airplane parts there. Lured by incentives that cut its rent to $100 a year, it agreed to hire 1,031.

The report from the state auditor’s office shows GTP grossed about $1.4 million during the fiscal year that ended in June but spent $5.4 million. Executive Director Darlene Waddell says revenue came mainly from tenant leases and fees charged for aviation fuel pumped there. Kasarda’s plan called for companies to support the park by paying big money to lease space, but with few tenants and its biggest one paying nominal rent, that revenue stream has been disappointing. Meanwhile, interest continued to mount on the original $25 million loan from the Escheat Fund, pushing its balance by January to $39,719,902.

The fund, which has more than $400 million, was established to hold unclaimed property such as abandoned bank accounts. But the General Assembly, desperate in 1993 for ways to finance the project, tapped it for a $25 million loan. “The Escheat Fund should never have been used to finance the TransPark in the first place,” LaRoque says. “It should have come from a general appropriation.” He and other legislators have worked behind the scenes on a plan for dealing with the debt. But the options are few: GTP can go bankrupt, at least technically; ask the General Assembly to pay off the loan from general tax revenue; or hand over the deed to the state.

The project has been criticized since birth as a boondoggle, and legislators say using the general fund to pay its debt would trigger a firestorm. LaRoque is coy about lawmakers’ plans but doesn’t rule out steps to make GTP self-sustaining. “You’re going to have to build more buildings that you can rent out at market rates. That would have to be done through an appropriation, not a loan, because it’s not generating enough revenue to pay off the debt.”

REGIONALREPORT Eastern

Tourism will win this time 

In January, 146 years after the fall of Fort Fisher — the earth-and-sand citadel the Confederacy had hoped would keep open its last, vital seaport at Wilmington — reenactors manned their cannon. Unlike the real battle, in which nearly 2,000 Confederate and Union troops were killed or wounded, there were no casualties, but at the end of the day, more than 5,500 visitors were tallied. “This was in the middle of winter,” says Jim Steele, manager of the state historic site. “It set a record for a single-day event here.”

The South lost the war, but in the four years starting in April, Tar Heel tourism boosters hope to win big by marking its 150th anniversary. “The Civil War is good business,” says Keith Hardison, director of state historic sites in Raleigh. Very good.

A reenactment last spring at Bentonville, where Union troops under William Tecumseh Sherman battled Joseph Johnston’s Confederate forces for three days in March 1865, attracted 54,000. “We were blown away by that number,” says Jeffrey Crow, deputy secretary of the state Office of Archives & History. “We were expecting 30,000.” Hardison says the visitors spent $6 million on lodging, food and other necessities.

Beneath the high hopes for Civil War 150, as the state calls its upcoming commemoration, and the impact it holds for Eastern North Carolina — scene of most of the military action that took place in the state throughout the war — lie economic assumptions based on the ability of heritage tourism to open wallets. Maryanne Friend, an assistant secretary in the state’s Department of Cultural Resources, says cultural and heritage travelers average five trips a year, compared with four for others, and spend more per trip — $994, compared with $611.

Connie Nelson, communications director of the Wilmington/Cape Fear Coast Convention and Visitors Bureau, adds that heritage tourism has boomed since the terrorist attacks of 2001, as Americans apparently feel a need to get closer to their roots. North Carolina, however, is not relying on just the basic attraction of heritage tourism. State officials say Civil War 150 will quietly focus marketing on a broad mix of ethnicities and incomes, including overseas visitors. “There are Civil War 150 tours already arranged in London, Liverpool and Glasgow, Scotland,” Hardison says. “There’s worldwide fascination with this.”

The state plans about 150 events, many keyed to important dates in the Civil War, between now and April 2015. It will also boost publicity about its Civil War Trail sites, some 250 locations that are part of what amounts to a self-guided tour in the Southeast. Though state officials are reluctant to make revenue projections, most expect the impact to substantially exceed that of the Revolutionary War-related bicentennial of the Declaration of Independence in 1976.

They don’t pinpoint any blockbuster events, but expect Bentonville — the biggest and bloodiest battle in North Carolina — to attract 50,000 to 100,000 in March 2015, its 150th anniversary. Another major draw may be the scene of what happened in its aftermath. Johnston, against the orders of Confederate President Jefferson Davis, surrendered about 90,000 troops at Bennett Place in Durham, the largest capitulation of the war. That was on April 26, 1865 — 17 days after Lee’s surrender to Grant at Appomattox Court House, Va. “The war didn’t end at Appomattox,” Hardison says. “What happened at Bennett Place insured that what happened at Appomattox would stick.”

REGIONALREPORT Eastern

GOP landslide could roll out the (pork) barrel from region 

As the magnitude of the Republicans’ victory became apparent Nov. 2, Marc Basnight looked neither surprised nor angry. He had been watching the election-night returns in his Legislative Building office. For 18 years, the man with the Outer Banks brogue had reigned as president pro tempore of the state Senate, one of the most powerful politicians in North Carolina. Now, the reign was over, his Democratic majority gone. Republicans would control 31 of the 50 seats in the Senate. Basnight spoke calmly about going out of office as a rank-and-file legislator. “It’s the way I started. It’s not a bad way to end.”

If Democrats’ Election Night losses were bad for Basnight, they may have been worse for Eastern North Carolina. To understand his mark on the East, all you have to do is travel down that nice, wide stretch of U.S. 64, from Raleigh to his home county, Dare. Like legislative leaders before him, Basnight brought home the pork. Unlike the others, he had 18 years to do so in a sprawling Senate district that includes most of the northeastern part of the state and much of the coastal barrier islands.

Pork, as applied to politics, may be a dirty word in the minds of many, but it usually means infrastructure — including roads, school buildings, natural-gas lines and industrial parks. That infrastructure helps drive economic development. Other examples of Basnight bringing home the bacon include a $200 million natural-gas pipeline through 22 previously unserved eastern counties and a $25 million state-owned pier and aquarium set to open later this year in Nags Head. “Infrastructure, that’s the best example of what clout means,” says Ran Coble, executive director of the North Carolina Center for Public Policy Research. “I think the East loses a lot of people who have been in powerful positions and able to help it.”

Even before the Democrats lost control of the state House and Senate, the No. 2 power in the Senate, Fayetteville resident Tony Rand, had given up his seat. Most of the new powers in the legislature will come from the western half of the state. Republican lawyer Phil Berger of Rockingham County likely will be elected to Basnight’s old post, while sidekick Tom Apodaca of Hendersonville is the chairman-elect of the powerful Senate Rules Committee. Republicans are backing Thom Tillis, a former IBM executive from the Charlotte suburb of Cornelius, as the next House speaker.

Eastern North Carolinians aren’t totally bereft of friends in high places. Gov. Beverly Perdue, a Democrat, still calls New Bern home. Republicans Harry Brown of Jacksonville and Jean Preston of Carteret County also are expected to emerge as powerful figures in the new Republican Senate. But it’s unlikely to get as much pork as in Basnight’s day. Then again, given North Carolina’s current financial state, there will be less to go around — for at least a few years.

REGIONALREPORT Eastern

New owner will reinforce Xe 

For more than two years, Moyock-based Xe Services Inc. has been rattling government officials and economic developers in northeastern North Carolina. In late 2008, it sacked 52 workers and closed a newly built plant after it failed to land a key government contract. In March, it sold its 225-employee aviation division, and, in December, the new owner announced that the division would move to Florida. A week later, a New York-based holding company bought Xe, formerly Blackwater USA.

But contrary to speculation that the company was heading down the drain, it appears Xe’s new owners might beef up operations not only in its home county, Currituck, but also in neighboring Camden. USTC Holdings LLC “plans to invest further in the company primarily on the training side,” says a spokeswoman who asked not to be named — Xe is no less secretive than Blackwater (Cover story, June 2007). Such a shift could distance Xe from the volatile private-security business that plunged it into hot water in Iraq and elsewhere. A federal judge in 2009 dismissed manslaughter charges against six employees in connection with the deaths of 17 Iraqi civilians in 2007, but a wrongful-death lawsuit is still pending.

Though controversial on the international scene, Xe is a valued corporate citizen in the job-hungry northeast. “They’ve been our largest taxpayer and employer for years,” says Camden County Manager Randell Woodruff, who also serves as economic-development director. “We’re a rural county, and mainly a farming area. We work closely with them.”

Local officials are scrambling to cement relations with the new owners, two Manhattan private-equity firms that joined forces for the sole purpose of buying Xe. “We want to let them know we’ll do everything we can to keep them strong,” says Peter Bishop, economic-development director in Currituck County. A company spokeswoman declined to say how many Xe employs. “I think it was up to about 1,200 at one time,” Bishop says. Now the number is about 600, he says, after the loss of the aviation division.

Currituck and Camden have other interests in Xe’s health. Its 70,000-square-foot industrial building where armored vehicles were to be assembled remains vacant. And the departure of Xe’s aviation arm could leave the company’s 5,200-foot runway and new hangar lightly used. Camden doesn’t have a local airport, important for economic recruiting, though striking a deal with Xe could be touchy. “What makes their compound so attractive to them is that it is so private,” Bishop says. ”But we want to let them know we will work with them. We’re coming in with open arms.”

REGIONALREPORT Eastern

Cities: Switch off our debt for power plants 

It’s tough to recruit and retain businesses when your electricity costs are a third higher than the state average, so it’s no wonder that some leaders of 32 Eastern North Carolina municipalities are willing to try what amounts to a Hail Mary pass to reduce them. But many, even within their own camp, say they don’t have a prayer of getting Duke Energy Corp. and Progress Energy Inc. to swallow $2.4 billion in debt their cities and towns incurred 30 years ago, when they bought shares of power plants in an effort to obtain cheap electricity.

The initial reaction from Charlotte-based Duke, which is seeking regulatory approval for its acquisition of Raleigh-based Progress, wasn’t favorable. “When we purchased Progress, it was a $26 billion transaction that included assuming about $12 billion of Progress debt,” spokesman Tom Williams says. “It did not include acquiring debt that Duke or Progress didn’t incur from the municipalities.”

Their problem goes back to 1981, when the 32 cities and towns, acting as the North Carolina Eastern Municipal Power Agency, bought shares in three nuclear and two coal-burning plants from Progress’ forerunner. But the deal backfired when their share of the plants’ costs soared in the decade following the 1979 accident at the Three Mile Island nuclear plant in Pennsylvania. The bonds won’t be paid off till 2026. “I’ve seen citizens paying as high as $750 a month,” says Roger McLean, mayor of Elizabeth City, which owes about $93 million. “It affects our ability to grow as a town and to maintain jobs.”

He’s one of about 20 mayors lobbying Duke and Progress to take on the debt as part of the merger. But they face an uphill fight. “The Municipal Power Agency serves 500,000 people, and the merged Duke and Progress will serve 7 million,” says a city manager who asked not to be named because his mayor is involved in the lobbying effort. “You’re not going to tell me the legislature or the State Utilities Commission is going to say, ‘You 7 million people have got to bail out the 500,000 others.’”

Plus, he adds, Duke and Progress can’t just forgive the debt, because they don’t hold it. Institutional bond agencies do. He also says that some of the municipalities dug their debt holes deeper by shunting proceeds from electricity sales to their general funds. That was a politically popular means of holding down property taxes, but it has slowed payback of the bonds.

If the mayors fail to persuade Duke Energy and lawmakers to bail out their towns, what’s next? Some municipal administrators say they want to get out of the power business by getting Duke to buy their infrastructure. Otherwise, they’ll be paying off bonds for 15 more year

REGIONALREPORT Charlotte

Execs eschew core’s value

Business in North Carolina doesn’t get any bigger than in downtown Charlotte. It has the tallest buildings and the largest company: Bank of America Corp. But downtown isn’t where all the action is. Of the 13 Fortune 1000 companies based in the Charlotte region, just three — BofA, Duke Energy Corp. and Ruddick Corp. — have their corporate offices downtown. Two are near the airport, two are in tony South Park, and two more are in Ballantyne, a massive mixed-use development on the far south side. Ballantyne is home to two recent additions — Carlisle Cos., which moved to the Queen City from Syracuse, N.Y., in 2001 and SPX Corp., which relocated from Muskegon, Mich., in 2002 and is growing. In November, it announced plans to add 180 jobs, starting in 2012, that will pay an average of $83,000 a year and boost the headquarters head count to 430. The manufacturing conglomerate could receive more than $9 million in state and local incentives if it meets and maintains job targets.