Regional Report Triad August 2010

 In 2010-08

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Team of rivals vies to be data-center hub 

They’ve competed for jobs, attention and even baseball stadiums. But especially for jobs. Greensboro and Guilford County seethed when Winston-Salem and Forsyth County outbid them by about $25 million to land Dell Inc.’s computer plant, then watched as the Round Rock, Texas-based company announced plans to shutter the place. Though Winston and Forsyth got their money back, the episode showed what recruiters don’t like to admit: Intraregional competition in the Triad is alive and well. Both cities bid this year for a Caterpillar Corp. factory, with Winston-Salem still under consideration.

The rivalry between the region’s two largest cities could be entering the digital age, particularly as their economic developers step up recruitment of data centers — behemoth buildings filled with rows of computer servers. Greensboro recently landed a $600 million one from New York-based American Express Co. that will employ about 50 initially but could add about 100 jobs — without offering incentives. But both can point to support from site-selection experts.

The Boyd Co., a consultancy based in Princeton, N.J., published a study that concluded Winston-Salem has the nation’s fourth-lowest cost for operating data centers, while Ronald Bowman Jr., executive vice president of New York-based consultant Tishman Technologies Corp., says North Carolina in general and Greensboro in particular rank second among the world’s best sites for data centers. Boyd and Bowman agree that both places fill the basic requirements: cheap and reliable electricity, little threat of disruption from the weather, distance from likely terrorism targets, a good fiber-optic network and an educated workforce.

Recruiters for both cities say they’re pursuing data centers, but neither says it works against the other. “We even work projects together from time to time,” says Dan Lynch, president of the Greensboro Economic Development Alliance. His counterpart in the Twin City, Bob Leak of Winston-Salem Business Inc., says, “I don’t differentiate Winston-Salem from the rest of the region. I differentiate it against Richmond, Va., Washington, Atlanta and Jacksonville, Fla.” In fact, he admits, his city has roughly the same assets as Greensboro.

They have a point. John Boyd Jr., a principal at The Boyd Co., included Greensboro and High Point in his information about Winston-Salem. The real competition for data centers lies in the Midwest — particularly in states that have no corporate income taxes or sales taxes, he says. But Bowman believes Greensboro is the stronger candidate. “It has better fiber and power distribution.” It also has an intangible, courtesy of his global ranking. “There’s a certain amount of swagger that comes to a city once it gains attention. That gives the user a lot of confidence.”

But it might want to check that swagger at the door. Published reports in July said Microsoft Corp. was considering the region for a data-storage center that would cost at least $120 million — and possibly “billions.” Its location: Mebane, in Alamance County. Could a new rivalry be brewing?

Tobacco money helped build Winston-Salem, but the golden leaf’s stature in the Twin City is steadily withering. Starting in January, city workers must take a test to prove they are tobacco-free or pay an undetermined increase in their health-insurance premiums. Officials say that will cut the city’s health-care expenses, but they aren’t sure how much. In an unrelated move, R.J. Reynolds Tobacco will end cigarette production in the city by the middle of next year. It plans to shift 540 production workers and 40 salaried ones from a 49-year-old factory to a newer one in nearby Tobaccoville. That plant employs 1,100.

STARCaye Upholstery planned to close two factories in North Carolina by the beginning of the month. About 90 workers lost jobs here, while 70 were laid off in Taylorsville. The New Albany, Miss.-based company decided to close the plants after a bank rejected a buyout offer from management.

GREENSBORO — Passenger boardings at Piedmont Triad International Airport fell 36.1% between 1999 and last year. A dearth of discount airlines has prompted some passengers to drive to Charlotte or Raleigh for flights. Nevertheless, the airport’s new master plan calls for expansion over the next 50 years. It says the airport, which has shown increases in freight traffic, should add 50% more space and build a fourth runway.

WINSTON-SALEM — Baltimore-based Wexford Science + Technology will spend $87 million to renovate two former R.J. Reynolds Tobacco buildings at Piedmont Triad Research Park. The development will contain 282,000 square feet of laboratory, office and other space. Wake Forest University Baptist Medical Center plans to occupy 85% of the project.

GREENSBORO — Swiss industrial conglomerate ABB plans to close its local plant by the end of the year and consolidate operations in Pinetops. The plant here employs 48. All but 10 were offered the chance to move to the Edgecombe County factory, which employs about 250.

THOMASVILLEBNC Bancorp raised $35 million in capital, primarily from New York-based private-equity firm Aquiline Capital Partners. The money will allow the bank to move quickly on acquisitions. In April, it bought Myrtle Beach, S.C.-based Beach First National Bank.

REIDSVILLEWhiteRidge Plastics plans to add 55 jobs within three years, giving it about 155 employees here. The company, part of Akron, Ohio-based Myers Industries, makes parts for automobiles, agricultural equipment and other uses.

SUMMERFIELD — Atlanta-based SunTrust Banks dismissed foreclosure proceedings against Greensboro National Golf Club, canceling an auction of the 342-acre course and clubhouse. The bank allowed the owner, Eden-based Golf Venture, to search for a buyer but could reinstate foreclosure proceedings. Golf Venture owes $2.1 million.

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