Statewide: Great ain’t good enough

 In 2014-09

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STATEWIDE

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Great ain’t good enough

Tourism is thriving, so why is the state changing the way it goes after guests?
 
by Lee Weisbecker

Ted Jagucki seems happy with the current state of affairs. Giant Slice Pizza, sandwiched in the TimBuck II Shopping Village on the upper end of the Outer Banks, relies on tourist trade — “Nine of every 10 people who come into my shop are vacationers,” the Ohio transplant says — and business has been brisk the last two years. Sales at the Corolla restaurant are about 10% higher this summer than last.

From 2011 to 2013, the number of annual visitors to state attractions increased more than 40%, to 52.5 million. Only five states host more. Tar Heel tourists spent in excess of $20 billion last fiscal year, leading to the employment of more than 190,000, despite the N.C. Department of Commerce spending only $10 million to $11 million a year to attract them — about half as much as South Carolina, Tennessee or Virginia and less than 24 other states. North Carolina gets away with such scrimping because destinations and local visitor bureaus shell out about $90 million a year to promote their attractions.

Though it’s not broken, lawmakers think the system could be better. In June, the General Assembly approved the Economic Development Partnership of North Carolina Inc., a private nonprofit that will take over sales and marketing from the Commerce Department on a contract basis. Though its major responsibility will be corporate recruitment, promoters also want to revamp tourism, film and sports marketing, says Rep. Tom Murry, the Wake County Republican who sponsored the bill. “The partnership will give the private sector more of a say in how we reach our targets,” which, the pharmacist says, should include increased online advertising. “We need to have a digital component in everything we do.”

""Richard Lindenmuth, the partnership’s interim CEO, will reveal the reorganization plan — one of Gov. Pat McCrory’s legislative goals even before he took office — later this year. Tourism officials and executives will get more specifics at an industry conference this month in Wilmington, says Wit Tuttell, the partnership’s vice president of tourism and marketing. That’s created a lot of uncertainty. “We didn’t want to get ahead of ourselves, and we didn’t want to make a lot of promises we couldn’t keep.” So far, about a quarter of the 25 state tourism positions allocated in the 2013-14 budget have been cut due to attrition or dismissal. Local tourism groups are worried their relationships with the state won’t survive the switch, says Diane Nordstrom, who retired in July after 10 years as head of Currituck County Department of Travel and Tourism. (Her departure was unrelated to state-level activity.) “Commerce has lost a lot of good people over the last few months who didn’t want to make the change. It’s been a good partnership, and the question is whether it’s going to continue.”

“Our state has done remarkably well in both recruiting industry and tourism,” says Rep. Paul Luebke, a Durham Democrat who voted against the partnership. “So why shift over to the new public-private partnership? It seems to me totally unnecessary.” That’s a legitimate question, Tuttell says. “But under the partnership, we believe we will be able to expand our efforts and have more flexibility.” State personnel rules won’t affect partnership employees, and though Tuttell expects tourism spending to decline, he says that money will be replaced by private-sector sources. A state agency can’t solicit tourist attractions, but the partnership can shake the fundraising tree.

Such public-private arrangements have drawn criticism from both conservatives and liberals. “This new partnership seems to cut back even further on the transparency of the Department of Commerce, which never has been very open about why concessions are made and grants given out,” says Donald Bryson, deputy state director of Americans for Prosperity, the Arlington, Va.-based conservative-advocacy group founded by the Koch brothers. “It’s something taxpayers should be concerned about, no matter what party is in charge.” Though the partnership will report to Commerce Secretary Sharon Decker, a 17-member board appointed by the governor and legislative leaders will guide it. At least two members will represent tourism interests. In five other states “these experiments in privatization have, by and large, become costly failures,” according to an October 2013 study by Good Jobs First, a Washington, D.C., nonprofit that opposes incentives for corporate recruiting. “They have created ‘pay-to-play’ appearances of insider dealing and conflicts of interest” and resist basic oversight, the report says.

The partnership, Tuttell insists, will stay close to local officials and cooperate with them on joint advertising campaigns, including some that will give poorer counties more exposure than they could afford on their own. “There may be a bump or two because transitions are never perfectly smooth. But we serve 100 different partners, and we plan to continue to serve them.” At Giant Slice Pizza, which he has owned since 2004, Jagucki is sticking to his pies and calzones. “When summer comes around, I just lower my head and sell pizza. I leave politics to others.”

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