Wednesday, May 29, 2024

Rivalries and rows that have shaped North Carolina

Illustrations by Brian Call

Under one of Charlotte’s huge old oaks, a dozen men and women lie facing each other. It’s a sultry August evening and nothing stirs, yet the mystic leading the group implores them to “feel the vibrations.” The earth below, he says, imparts psychic messages.

One of the seekers is Henry Belk Jr., a large man with a thin, knowing smile. Later, in a workshop, Henry lectures participants on psychography, or automatic writing, in which the cosmos reveals its secrets to the specially endowed without touching pen or keyboard. This very book, he says, holding one up, contains such messages from “the other side.”

Henry’s father was a Monroe merchant more focused on profit and other earthly endeavors. He struck the mother lode when he founded what would become the country’s largest family-owned department store chain. Henry Belk Sr. died in 1952 at age 89, passing his wealth and business to his six children.

Among Tar Heel empire builders, Charlotte’s Belk family ranks near the top. But their success was marred by sibling strife and disagreements. It’s one of dozens of feuds and rivalries — from bitterly personal to politics and sports, good-natured to nasty — that have shaped the state.

As Henry traveled the world in search of enlightenment, the retailing company was led mainly by two brothers: John, the baritone-voiced, constantly wise-cracking Davidson College graduate, and Tom, a stern UNC Chapel Hill graduate who avoided the limelight while overseeing Belk’s transformation into more upscale retailing. John eventually ousted Henry, while another brother who fell into disfavor found his office emptied, its contents piled in his driveway the next morning. “Man is a working animal,” John huffed. “He’s not supposed to loaf.”

Paradoxically, the winners and losers of such conflicts help define the state as much as ever, say historians, archivists, economists and others. Today’s 160-mile Urban Crescent — which arcs across central North Carolina from Mecklenburg County to Wake — has seven of the state’s 10 largest cities. Topography played a role, says John Hood, chairman of the Raleigh-based John Locke Foundation and author of more than a half-dozen books. “Indian trading paths and buffalo trails already existed,” he says. But so did 150 years of regional rivalry, often between silk-stockinged easterners once called tuckahoes and, in their view, couth-deficient cohees to the west.

The N.C. Railroad, the crescent’s backbone, was plotted in the middle 1800s. A century later, steel wheels turned to rubber, and Interstates 40 and 85 paralleled it. Competing Raleigh, Durham, Greensboro and Charlotte leveraged stops and flourished. Those that didn’t, didn’t, but still try.

Now, state and federal governments are spending $500 million on high-speed passenger rail to cut Raleigh-to-Charlotte trips to less than three hours. Locomotives that top 110 mph are available, but competition between towns for stops make the three-hour quest as much a matter of urban competition as engines and engineers. The rivalries continue.

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Racin’ rivals

[media-credit name=”Brian Call” align=”alignleft” width=”350″]Bruton Smith[/media-credit]

NASCAR has always brimmed with on-track rivalries involving superstars Earnhardt, Petty, Allison and others. But the off-track competition between Charlottean Bruton Smith and the sport’s ruling family, the Frances of Daytona Beach, Fla., is equally compelling.

“He’s a bulldog,” says Tom Cotter, who for four years in the 1980s was Smith’s public-relations director at Charlotte Motor Speedway, one of eight tracks owned by Speedway Motorsports Inc. Smith, now 91, in 1959 leveled a shotgun at a balky paving contractor who threatened to delay his inaugural NASCAR race. Picking fights judiciously has never been his forte.

His chief battle, lasting decades, was with NASCAR founder Bill France Sr. and his successors. After forming the sanctioning body in 1948, “Big Bill” banned Smith’s speedway partner, driver Curtis Turner, from competition when he tried to unionize drivers, and the feud was on. “Stock-car racing had no organization, and Bruton was trying to form his own, but Bill France beat him to the punch,” says Cotter, author of more than a dozen books on cars and racing.

NASCAR remains the only major sport run by a single family that both sets the rules and owns many facilities. But Smith, who grew up in tiny Oakboro in Stanly County, established himself as an integral player, expanding his publicly traded company’s empire to venues in Atlanta, Fort Worth, Texas, Sonoma County in California and other locales. “Like all good partnerships, they might have hated each other, but they needed each other,” Cotter says. Both the Smiths and Frances show up on various lists of billionaire families.

But the rivalry was about more than just money. “Between Bruton and I, we conked Billy France’s head a whole bunch of times,” says Humpy Wheeler, longtime speedway president, referring to Bill France Sr.’s son who led NASCAR from 1972 to 2000.

Smith’s feistiness was on display when Concord threatened to block a $60 million dragstrip next to his flagship property in 2007. Smith threatened to move the speedway. Concord caved. Today, Smith’s Speedway Motorsports owns eight tracks, while the France family-controlled International Speedway Corp. has 13. Smith also controls Sonic Automotive Inc., one of the nation’s biggest vehicle sellers with nearly $10 billion in sales last year from more than 100 dealerships.

Auto racing contributed $6.2 billion to the N.C. economy in 2018, according to the North Carolina Motorsports Association in Concord. With 20,000 area employees, Charlotte is the nation’s motorsports hub. Much of the credit goes to Smith, says David Miller, the association’s director.

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Tobacco titans

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Agents of nicotine, James Buchanan Duke and his American Tobacco Co., founded in 1890, dominated Durham, while Richard Joshua Reynolds, who founded his eponymous competitor in 1875, did likewise in Winston-Salem. R.J. Reynolds Tobacco Co. was eventually absorbed into Duke’s company until an antitrust judge ordered the breakup of American Tobacco in 1911.

In 1913, Reynolds, which initially sold chewing tobacco, began selling Camel cigarettes in packs, upstaging American’s roll-your-own fixings. Meanwhile, Duke refocused on hydropower in western North Carolina, says Catawba College historian Gary Freeze, damming rivers and spawning the state’s once dominant textile and furniture industries, along with today’s Duke Energy Corp.

The dueling cigarette giants set the stage for what would become a competition between their hometowns in attracting economic prosperity.

“Their rivalry even affects the location of some of our universities,” John Hood adds.

Duke bought and relocated Brown’s Schoolhouse, later called Trinity College, from Guilford County to Durham, where it became the forerunner of Duke University. In Winston-Salem, Reynolds funded an industrial school that’s now Winston-Salem State University. He died in 1918, but his wealth in 1956 lured Wake Forest College (now University) from the Wake County town by that name to Winston-Salem.

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Locking horns

[media-credit name=”Brian Call” align=”alignleft” width=”375″]Rameses UNC Chapel Hill mascot[/media-credit]

UNC Chapel Hill beat Buck Duke’s little college 36-25 in their first basketball game in 1920, launching a sports rivalry that ESPN once ranked as the third-hottest in the nation. A 2007 book by Tar Heel superfan Will Blythe summed it up: To Hate Like This Is to Be Happy Forever.

Behind the stats — UNC leads the basketball marathon roughly 140 to 110, depending on who’s counting — the rivalry between the 10-mile-apart schools still shapes the state after 99 years.

The low point was 1996, when Rameses, the UNC football ram mascot whose horns were sometimes surreptitiously painted Blue Devil blue before games by pranksters, was found with his throat slashed. “He was murdered,” declared the Orange County sheriff, though the suspect claimed he was drunk at the time and didn’t realize the ram was the beloved mascot.

Innumerable high points? Beyond sports, a modern-day history of cooperation and mutual benefit. With N.C. State University, the schools form the three legs of the Research Triangle, North Carolina’s Silicon Valley.

Duke claims an annual overall economic impact on North Carolina of $5.8 billion. UNC says its vaunted research and technology-transfer program alone was worth $2.6 billion in 2015, the latest year calculated. Its Office of Commercialization and Economic Development says more than 370 companies started by faculty members and students have created 8,900 jobs and generate $10.5 billion in annual sales.

However, if Duke trails in sports — UNC football leads 58-36 with four ties — it might have the academic edge. U.S. News & World Report currently ranks it eighth nationwide and UNC 30th. Duke alums had median starting salaries of $66,200 last year, compared with UNC’s $49,600, according to U.S. News. Of course, Duke’s tuition now tops $55,000, more than quadruple the in-state rate in Chapel Hill — but who’s counting?

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Green envy

[media-credit name=”Brian Call” align=”alignright” width=”400″]Brody School of Medicine[/media-credit]

In 1974, eastern North Carolina landed the state’s second medical school affiliated with the University of North Carolina System. The decision followed a spirited battle with several other N.C. cities, especially Charlotte, which badly wanted the school. Criticism of the decision still exists in the Queen City. “Putting a medical school in Greenville made about as much sense as putting ice cubes in the Amazon River,” says Dan Morrill, a history professor emeritus at UNC Charlotte.

But only Greenville had Leo Jenkins, who led East Carolina University from 1960-78. The sharp-tongued Marine veteran fought to make ECU part of the UNC System in 1972, then leveraged the east region’s political clout to land the medical school two years later. Rallying support for the Pitt County location from lawmakers across North Carolina proved effective partly because of a general aversion to the “Great State of Mecklenburg.” That’s the enduring view that Charlotte’s interests aren’t connected to the rest of the state because of its proximity to South Carolina — capital Columbia is 70 miles closer than Raleigh — and the Queen City’s relative wealth.

In retrospect, picking Greenville proved to be a masterful decision for the economic health of a vast region that has lagged the rest of the state over the last 50 years. Few leaders in the early ’70s foresaw the decline of the tobacco industry, which then was the dominant force in the east, if not the entire state. Brody School of Medicine — named after financial backers who ran a now-defunct department-store chain — and ECU formed a partnership with Pitt County Memorial Hospital. That hospital has morphed into Vidant Health, which now covers 29 counties with eight medical centers, 12,000 employees and annual revenue of more than $1.7 billion.

Brody students train at Vidant, while more than 300 physicians work at an affiliated university-owned clinic. The medical school also raised the ambitions and profile of ECU, the UNC System’s fourth-largest campus with enrollment of about 29,000.

Charlotte, meanwhile, remains the largest city in the U.S. without a medical school, though dozens of resident physicians train annually at locally based Atrium Health and Novant Health.

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Edifice complex

[media-credit name=”Brian Call” align=”alignleft” width=”350″]Hugh McColl[/media-credit]

Charlotte’s skyline is known for towering office buildings that housed key executives of some of the nation’s biggest banks for decades. Wachovia Corporate Center and NCNB Plaza both opened in 1974. Bank of America Corporate Center, built in 1992, is 60 stories high. Four blocks away, One First Union Center, later renamed after successor bank Wells Fargo, has 42 floors and opened in 1998. Nearby is the 48-story Duke Energy Center, which was conceived by former Wachovia Corp. leaders just before the institution collapsed amid the 2007-09 recession. It opened in 2010 with naming rights sold to the Charlotte-based utility.

“Skyscrapers are the totem poles of capitalism,” UNC Charlotte’s Morrill says. “They’re symbols of power.” And no one ever disputed the importance of power to two young banking rivals who created competitive cultures that transformed Charlotte into a top financial center.

Bennettsville, S.C., native Hugh McColl Jr. rose in Tar Heel banking to become president of North Carolina National Bank in 1974 at age 39 and CEO nine years later. The Marine veteran kept a crystal hand grenade on his desk to send a signal to visitors. He oversaw dozens of acquisitions as a regional institution turned into a national powerhouse. McColl’s work culminated in the 1998 takeover that created Bank of America Corp.

Just down the street, Ed Crutchfield — “Fast Eddie” to some — showed similar ambition. The Albemarle native became president of First Union in 1973 at age 32 — the youngest president of a major U.S. bank — and CEO in 1984. Scores of acquisitions as far north as Connecticut made First Union into a $250 billion institution that was competitive with McColl’s crosstown bank. While a national publication branded the McColl-Crutchfield rivalry a “cartoonish arms race,” the pair remained heroes in their hometown. Both stepped out of the way before their institutions suffered embarrassing declines later in the decade.

After Crutchfield retired in 2000, successor Ken Thompson continued the dealmaking with the $14 billion conquest of Winston-Salem-based Wachovia in 2001. It looked like a dream combination until the housing recession of the mid-2000s led to massive amounts of uncollectible debt. Thompson had paid $25 billion for home lender Golden West Financial Corp. in 2006, just as the real-estate and stock markets were cresting. With Wachovia pressured to sell, Wells Fargo purchased the company for about $13 billion in 2008.

Similarly, McColl’s successor Ken Lewis may be best known for Bank of America’s $2.5 billion buy of subprime lender Countrywide Financial Corp. in 2008, now rated one of history’s worst corporate acquisitions. Lewis receives less credit for the purchase of foundering Merrill Lynch in 2009, which diversified BofA’s business and helped it stay afloat until the economy accelerated after the recession.

Tar Heel banking law encouraged branch banking more rapidly than other states, egging on the two rivals. “North Carolina was bred for competition,” says the John Locke Foundation’s Hood. “If you add to that the personalities, the rivalries, you can see how it would snowball.”

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Air grievances

[media-credit name=”Brian Ca” align=”alignright” width=”500″]Piedmont Airlines[/media-credit]

The world’s seventh-busiest airport, Charlotte Douglas International, along with Wake County’s Raleigh-Durham International and Greensboro’s Piedmont Triad International, help generate $52 billion a year “creating jobs, supporting business growth and connecting people and companies around the globe,” says Bobby Walston, director of the state Department of Transportation’s aviation division. But they’re products of sometimes painful competition.

“Our whole world changed,” says Gayle Anderson, retired president of the Winston-Salem Chamber of Commerce, when, among other things, Piedmont Airlines moved its headquarters from Winston-Salem to Charlotte in 1981. Started as Camel City Flying Service and renamed Piedmont Aviation in 1940, it had become arguably the state’s most revered corporate icon and the anchor of Winston-Salem’s Smith Reynolds Airport. But access to plenty of land and well-heeled business travelers lured Piedmont to the Queen City.

Even before Piedmont’s corporate move to Charlotte, Greensboro’s PTI was eating away at Smith Reynolds, where passengers plummeted from 33,000 in 1980 to 2,700 four years later. It soon halted commercial flights.

Piedmont Airlines became a mainstay at nearby PTI, but that airport too would feel the competitive knife when Charlotte offered a new terminal and massive maintenance hangar in 1982. Its gain was Winston-Salem’s loss of about 5,100 well-paying blue- and white-collar jobs, and airport jockeying wasn’t over.

By the early 2000s, PTI had rebranded itself as a low-fare alternative to Charlotte-Douglas and RDU and was poaching one in 10 passengers from Mecklenburg County, according to market surveys. That rivalry lingers.

Piedmont Airlines succumbed to corporate raiding in 1989 when it was acquired by USAirways Group for $1.6 billion. US Airways in turn would be swallowed by American in 2013 — Charlotte Douglas is American’s second-largest hub.

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An idea before its time

Kinston’s Global TransPark may represent one of North Carolina’s most polarizing issues since 1788, when lawmakers decreed the state capital would forever be within 10 miles of Raleigh’s Hunter’s Tavern, their bar of choice.

The 1980s TransPark concept was a just-in-time manufacturing hub ringed by plants assembling items, then winging them worldwide aboard huge air freighters, recalls N.C. State University economist Mike Walden. The park was largely conceived by UNC Chapel Hill business professor John Kasarda, who gained support from Republican Gov. Jim Martin in 1990.

Eastern politicians such as Wilson’s Jim Hunt, the state’s longest-serving governor and a Democrat, leaped aboard, swayed by estimates that it would generate nearly 50,000 direct jobs by 2010 in an area suffering population losses. While requiring public subsidies of as much as $300 million, advocates said the ensuing economic development and job creation made it worth the expense, especially given the region’s tobacco-industry decline.

Skeptics argued that expecting private enterprise to put public good above profit was a flawed concept. Why would a manufacturer gamble on a rural area with limited access and little infrastructure, when other regions already had interstate highways and thriving airports? Among the most outspoken critics was Jerry Orr, who was president of Charlotte Douglas, the state’s largest airport, for 24 years.

Nearly three decades after it opened, fewer than 2,000 people are employed at private and public-sector jobs. The TransPark’s star is Spirit AeroSystems Inc., which employs more than 800 and has invested about $200 million, mostly making components for Europe’s Airbus. Wichita, Kan.-based Spirit’s growth has lagged its 2008 projections of more than 1,000 jobs, which sparked a pledge for as much as $250 million in state incentives if targets were hit.

The biggest blow to the TransPark’s dreams may have come in 1999 when FedEx Corp. said it would invest $350 million in a hub somewhere in North Carolina, creating 500 or more jobs. In Kinston, 500 cheering supporters rallied in support of the park’s bid for the delivery giant’s expansion. But FedEx turned a deaf ear, choosing a site at PTI, which has established itself as the champion of the state’s aerospace-manufacturing industry.

About 200 mostly high-tech aviation companies such as Honda Aircraft Co. now employ 20,000 employees, many of them in close vicinity to the Greensboro airport. It looks much like the early renderings of the Kinston site.

The original TransPark concept? “A flop,” Walden says.

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Road rage

East of Raleigh, a wide, horizon-straight highway links crossroads like Parmele and Robersonville. U.S. 64 feels like but isn’t an interstate, and sometimes, absence of traffic gives it a deserted, Twilight Zone feeling. To cynics, this is the “Marc Basnight highway,” linking Raleigh to the Manteo home of the Democratic senator from 1984 until 2011. His stature as one of the state’s most influential power brokers in history was recognized in the recent naming of the $252 million Bonner Bridge replacement to Hatteras Island as the Marc Basnight Bridge.

Tar Heel highways have been pocked with political potholes since 1700s stagecoaches rumbled over corduroy roads, state archivists and historians say.

“Counties that were traditionally Republican claim roads would stop at the county line,” the John Locke Foundation’s Hood says. “That was sometimes true, sometimes legend, but certainly feuds between regions have been around a long time.” The record? Look at interstate miles.

“Urban areas — Raleigh, the Triad and Charlotte — are the big three,” says N.C. Department of Transportation spokesman Steve Abbott. But answers are more complex. N.C. DOT measures lane miles, not just totals, and the common suspicion — particularly in Winston-Salem, Fayetteville, Charlotte and elsewhere — that Raleigh gets the gravy is not always true.

Populous Mecklenburg County, with 121 miles of interstate highway and 746 lane miles is tops, followed by Guilford with numbers of 82 total miles and 517 lane miles. Wake ranks third, with 73 total and 456 lane miles.

The great divide, though, is between rural and urban areas, which once explained why when power swung to kingpins like Basnight, the road less traveled got funded. “Back in the old days, the system was more political,” Abbott says.

Not so now, and those who drive the state’s 65,000 miles of secondary roads — it has 80,000 miles total — have to scrap for their share of the annual $5 billion highway budget. Led by then-Gov. Pat McCrory, a plan adopted by the state in 2013 scores projects on standardized criteria. “They’re picked on the basis of qualifications,” Abbott says, “not on geographic area or the power of your local representative.”

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Power play

[media-credit name=”Brian Call” align=”alignleft” width=”350″]Buck Duke[/media-credit]

Duke Energy Corp. has consolidated much of North Carolina’s electric and gas utility industries into a single organization over the last five years. But for many decades, the Charlotte-based company had an important cross-state rival called Carolina Power & Light Co. that packed a similar economic and political punch. Duke Power Co., a legacy of J.B. Duke, electrified the industry-rich Piedmont and most of western North Carolina and upstate South Carolina. CP&L, as it was often called, was officially formed in 1908 to serve Raleigh, then a city of fewer than 20,000. It gradually expanded across rural eastern North Carolina, including the 1952 purchase of Wilmington’s Tide Water Power Co. By quirk, CP&L also served Asheville.

For decades, investors and government regulators closely tracked the two companies’ financial, stock-market and operating performance. Duke generally received higher ratings from credit agencies and financial analysts, benefiting from the Piedmont’s robust manufacturing sector and respected managers including Bill Lee, who was president from 1978-94. The grandson of a Duke Power co-founder, Lee helped the utility become a global leader in nuclear power with its plants deemed some of the most efficient in the world.

CP&L was also an early entrant into nuclear power but never gained Duke’s reputation as a premier operator. In particular, cost overruns and other problems at its Shearon Harris Nuclear Power Plant hurt the company’s performance. The Wake County site was slated to house four nuclear units, but only one was completed.

Like their banker brethren, both companies made interstate expansions with a “Keeping up with the Joneses” motif: CP&L acquired Florida’s Progress Energy Corp. in 2000, while Duke expanded into natural gas with its 1997 purchase of Houston-based PanEnergy Corp. Duke moved into Indiana, Kentucky and Ohio in 2006 by buying Cinergy Corp.

The rivalry would end after Duke’s $32 billion acquisition of its cross-state peer in 2012 — but only after an expensive boardroom imbroglio. During negotiations, the two companies’ boards agreed that the Charlotte utility’s leader, Jim Rogers, would be chairman and Progress CEO Bill Johnson, an active Raleigh civic leader, would have the same title at the merged enterprise. But only hours after the deal closed, the new board booted Johnson and restored Rogers’ CEO title. Details about the boardroom skirmish remain sketchy, though some Duke directors criticized Johnson’s handling of a troubled Florida nuclear plant and his people skills.

Johnson was soothed with a $44 million severance package and later became CEO of the federally chartered Tennessee Valley Authority, which had revenue of $11 billion in 2018.

The trauma was worth it for Charlotte, though, as Rogers constantly promoted the region as it became a hot spot for energy companies. “He said energy was poised to grow across the globe and we have the opportunity to become the nation’s emerging energy sector,” says former Chamber of Commerce President Bob Morgan.

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[media-credit name=”Brian Call” align=”alignright” width=”350″]William Henry Belk[/media-credit]

In 2015, a private-equity firm paid $3 billion for Belk Inc., and a year later, Tim Belk, 61, who’d succeeded his uncle John when he retired in 2004, stepped down, ending more than 130 years of family involvement. It was a stormy history, with brothers John and Tom dominating in the latter quarter of the 20th century. They’d oust Henry, who’d launch troubled businesses of his own and eventually declare bankruptcy. Another brother, Ike, achieved great success as an investor outside the retail industry.

Sometimes the brotherly conflicts turned physical, as when John was charged with assault for roughing up Henry III at a board meeting. Henry Jr. would die in 2001, John in 2007.

Despite the drama, Belk would become the nation’s largest privately owned department-store chain, with more than 300 stores in 16 states, 25,000 employees and selling $4 billion a year in goods. Much of the growth stemmed from an innovative structure in which the Belks would share ownership with local families such as the Hudsons in Raleigh and Matthews in Gastonia. The move proved savvy as other famous Tar Heel family-owned retail chains, such as Iveys in Charlotte, sold to larger companies. By the early 2000s, the Belk family had taken back most of the ownership.

John would serve four terms as Charlotte mayor and is credited with easing the city’s racial desegregation process and helping the city’s airport become one of the nation’s busiest. Tom kept a much lower profile, but his sons Tim and Johnny led the business for about a decade before the December 2015 sale to Sycamore Partners.

Their tenure was marked by limited drama, compared with the feuds of their parents’ generation. But it’s likely their business shrewdness would have impressed their grandfather: The value of publicly traded U.S. department-store groups such as Macy’s and J.C. Penney has tanked during three-plus years since the sale.

Meanwhile, the Reynoldses and Dukes would leave behind the nation’s largest utility and two of the nation’s most-respected universities.

Political rivalries buried, the Research Triangle Park would pull the state out of its agrarian past into a high-technology future, underscoring a central point.

Out of conflict, say state historians, North Carolina forged strength. ■

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