Sunday, July 14, 2024

Point taken: New industrial park sparks optimism in southeastern N.C.

Robeson County is where Interstate 95 enters North Carolina from the south, and that is relevant, because in economic development as in real estate, location matters.   

Another interstate, east-west I-74, intersects with I-95 on the southwest side of Lumberton – the county seat – and that has set up an interesting story about a new 215-acre industrial park that will be able to send trucks to much of the nation’s population in less than a day. The first building, a distribution center, is going up right now. 

What you know about Robeson County may be out of date. It is a county that has struggled economically, but there are good things happening. You have to go see them. 

That’s what I did last April, when I was working on a story about a Robeson County company called the Emerging Technology Institute, which turned an old, empty textile plant in Red Springs into a test facility for defense contractors. That led me to talk to more folks in Robeson, and that led me to the industrial park and Channing Jones, the county’s economic development director.

And, so, recently I was walking around the park with him, where Elkay Manufacturing’s new southeastern distribution center is being built, a 388,000-square-foot facility. Elkay, a century-old business, is the leading manufacturer of sinks, water fountains and bottle-filling stations in the country. It has been manufacturing in Lumberton for more than 40 years. In the early 1980s, Elkay Southern had 50 employees. Now it has hundreds in buildings a few miles from the industrial park, folks who make more than 1 million sinks a year. 

The new distribution center will employ around 40 people when it opens in the first quarter of next year. 

I asked Ken Blazer, Elkay’s director of global distribution and logistics, what made the site so good, because it would also give a window into what other companies might think about Robeson in general. Here’s is what he emailed me: 

“The transportation ecosystem starts with a strategic location midway between New York and Florida along I-95, and the I-74 corridor forms an ideal east-west crossroads. This unique location is served by excellent trucking and rail lines, nearby major airports, and easy access to deep-water ocean ports, so critical to our international supply chain.”

Its construction also frees up space at the manufacturing plants that had been used for distribution, which could mean more jobs. More important, perhaps, is that the distribution center made the park possible, and the park helps create a new narrative. Earlier this year, Site Selection Magazine ranked Lumberton one of the nation’s top 10 micropolitan areas – small urban areas – because of its economic development activity.

Channing Jones leads Robeson’s economic development effort.

Team sport

The industrial park exists because Lumberton and Robeson officials worked together to make it happen, along with a big assist from the state’s Department of Commerce.  You will hear that economic development is a team sport; the park is an example.  When economic development wins are announced, there is a paragraph at the end of the press release listing the government agencies, public utilities and non-profits that helped. It looks like boilerplate, but it is meaningful. 

The location makes it a logical place for a park. “So, this is one of the few parks to have access to an east-west [highway] that goes all the way across the state and to the ports,” says Jones. “And, of course, you can go from Maine to Miami on 95.  The park is completely surrounded by interstates. You don’t have to worry about the zoning.”

But it takes millions of dollars for land, roads and utilities.  Lumberton and Robeson needed help from the state, but to get folks in Raleigh interested, they needed a live prospect to anchor the project.

Deep roots

In 2018, Jones was hired as county economic development director.  A 1999 graduate of UNC Pembroke, Jones had been a senior executive of a plastics company, so he understood manufacturing.  He was recruited back to the county in 2011 to become a vice president at Robeson Community College in charge of workforce development, so he knew that part.  Jones is on the Pembroke town council. His grandfather, the late English E. Jones, was the first member of the Lumbee tribe to be president of what was then called Pembroke State College.

Not long after becoming economic development director, Jones started working with Elkay, which was looking to build a new southeast distribution center.  This was serious stuff, not just because of the potential for a big project, but also the competition.  Elkay wasn’t just looking around Robeson.  It was looking in other places, like South Carolina. And that was a problem. If Elkay built somewhere else, it might also move some existing Robeson County jobs out of state. So it wasn’t just about a single building, but also about retaining jobs a few miles away.

“We showed them a host of sites,” Jones says, but not what would become the industrial park. “We got it to three and whittled it down to one.”  But Elkay’s project engineer had concerns about water pressure for fire protection – concerns that proved ultimately to be unwarranted, but it looked like a potential dealbreaker.

“And he called me and said, ‘Well, Channing, what’s Plan B if this doesn’t work out the way we hope it will?’ I said, ‘Well, you’ve seen the other sites. We’ve done due diligence. You know everything that’s out there.  Except for one thing. Historically, there’s been this conceptual idea of developing a new park. And the problem is, we have to get funding because we’re a very rural area. We can’t spend all the millions that it takes to develop a park on a whim.’”

“And so, very, very fortunately, he said, ‘We’re willing to look at it if you are.’”

Jones got some drawings made up of what a park surrounded by the two interstates would look like – “again, it’s still agricultural and [we] didn’t own it” – and discussions started heating up in October 2020, with a deadline. Elkay wanted to make a decision by December.  “So, from October to December, the county and the city, in joint partnership, said that we will make this a reality.  If you decide to come here, we’ll figure it out.”

And they did, with help. A key player was Mark Poole, a financial analyst at Commerce at the time, and now director of the department’s finance center.  “Mark worked with us super-closely to guide the conversation about how to get this park developed,” says Jones.  

In December, the state announced it was awarding a $3.7 million grant to put water, sewer and roads in the 215 acre site.  The money was coming from what is known as the state’s Industrial Development Fund – Utility Account, which is what Poole worked on. This is a program that is significant in the politics of economic development in this state. It is a way that rural counties benefit when wealthy urban counties like Wake land a big project like Apple. When the state promises these companies big incentives, like the JDIG grants, a portion of the grant is diverted into the rural Industrial Development Fund. 

When Apple announced last year it was going to Research Triangle Park, for example, it was noted that some of its incentive money would be reserved for grants to rural counties, as much as $112 million over the life of Apple’s potentially $845 million JDIG tax reimbursement. Every time a big economic development project is announced in a wealthy county, the press release always mentions the cut this rural account is getting, because the political challenge of sustaining support for tax incentives is trying to make the case that the benefits are statewide.  But that only works if there are rural projects to fund, and folks like Jones and Lumberton City Manager Wayne Horne to bring them along.

“We have a really strong relationship with our county government,” says Horne. “We meet right regular with Channing or the county manager, Kellie Blue.” 

“It’s just a matter of putting the resources together and having a vision,” says Horne.  “And our vision was this location, with two major interstates, 95 and the new Interstate 74.  And if you look at the location, we’re only about 75 miles from the Port of Wilmington, straight down 74.  Then, we’re only 30 miles from the inland port in Dillon, which is right across the South Carolina line. The inland port serves about a 120-mile radius around the location.”

“So, we feel like companies coming here, that we’re working, that the inland port will be a great benefit to them. And then on the backside of the park is our regional airport,” adds Horne.  “We just built a new terminal out there. That’s an attractive draw for companies that would be coming in.”

Elkay’s building sits on 48 acres, so that leaves about 80% of it left to market. Jones is in discussion with two other companies. When all the land and infrastructure costs are figured in, Jones figures there will be $12 to $14 million invested.

“The rate of return that the taxpayers of North Carolina and Robeson County are going to get is an absolute no-brainer,” he says.  “And the number of jobs that will be created by the time this is fully built out, is a whole ‘nother level of economic activity.” He estimates 1,000 jobs.  That may be conservative.  When Horne and the city first submitted a grant proposal to Commerce four years ago, the forecast was that total investment in the park by tenants – land, buildings and equipment – could reach $300 million and employment 2,300 jobs.

Meanwhile, Robeson Community College, nearby up I-95, is training an advanced manufacturing workforce.  In part because of lobbying by College President Melissa Singler, the state budget last year committed $19 million for a new workforce development building.

Elkay workers will earn about $49,000 a year, topping the local average.

The college can provide customized training while companies are in construction in the park, says Jones. “The community college can say, ‘OK, we have a 50,000 square foot facility over here, why don’t you start bringing some of your machines in here, setting them up and let us start doing training, and when you get ready, ship them over there and be done.’ So, they start ramping up their workforce before a single brick is laid or electrical line run,” says Jones.

That is the imperative today in the world in which Robeson competes. It is important to be shovel-ready, which is why the park is being built. Companies want to open fast and seize market opportunities.  But workforce-readiness is critical; every conversation with a prospect starts with the workforce. 

Lessons of the past

Robeson has been diversifying its economy. The companies that have been recruited to the county or expanded in the past decade are varied – food manufacturing, poultry, building components, and packaging. The county once was heavily dependent on textiles and apparel, as were many other rural areas in North Carolina. In the early 1990s, the jobs started leaving for Asia and other low-wage countries, around 9,000 by some estimates.

The wave of plant closings lasted a decade, 100, 200, 300 jobs at a time, and larger, like the Converse shutdown. Converse, the iconic sneaker brand, had nearly 2,000 employees.  Some of this would have happened with automation; manufacturing is never going to be as labor-intensive as it used to be. But free trade was costly for Robeson County.

At the same time, the tobacco industry was shrinking, closing the warehouses that had brought farmers to towns like Fairmont.  By the time the textile plant and tobacco warehouse closings were done, the Great Recession piled on. It was a rough couple of decades in the county, the 1990s and 2000s.  That’s now in the rear-view mirror, I hope. 

The park is a symbol of a better future. As Horne, the Lumberton city manager says, “It makes a statement out on 95.”


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