Tough climb

Stanley Furniture Co. bet on pregnant women when it installed $9 million in new equipment in its Robbinsville plant in the Smoky Mountains in 2010. The plan was for parents to order cribs and custom furniture with shipment times trimmed to as little as a day. It didn’t fly.

Last year, Stanley closed the plant, throwing 400 workers out of jobs and spiking unemployment to almost 15%. It has since dipped to 12%, still dwarfing the state average of 5.7%. “Our biggest employers now are several of these companies that mow roadsides for the states,” says Keith Eller, chairman of the Graham County Board of Commissioners.

Now, Fletcher-based AdvantageWest Economic Development Group, which has promoted Graham and 22 other counties for more than two decades, is shutting down by December, stripped of state funding by the General Assembly. It received about $1.1 million in 2013, $337,000 in 2014 and zero this year. It also averaged about $1 million a year in additional state grants. Five employees will lose jobs.

AdvantageWest has been one of the state’s seven regional partnerships, which lost their funding as of June 2014. The cuts coincide with a plan by Gov. Pat McCrory to centralize industry recruiting in the public-private Economic Development Partnership of North Carolina.

Surviving partnerships are relying on private donations and local-government support.  But the loss of AdvantageWest may create the greatest economic-development vacuum, and fuel the debate over whether the strategy is leaving rural counties in the cold, while stoking the fire for urban areas.

“In the conversations I’ve had with the current leadership, there’s no meat on the bone to overcome that,” says AdvantageWest Chairman Tom Alexander, who lives in Yancey County. “I understand the new model for recruiting business, but I and a lot of others out here think it’s focused on the Piedmont Crescent, starting down in Charlotte and going on up to Raleigh-Durham. You can have the most success in the quickest time there, but we still need to have concern for these rural counties.”

Unlike eastern North Carolina, whose poverty is well-known, “we’re the state’s stepchild,” because of poor infrastructure and distance from Raleigh, Alexander says. State-appointed economic-development agencies and regulatory boards often have few representatives from west of Charlotte.

Christopher Chung, CEO of the new statewide group, says such concerns are off base. The new partnership promotes exports, tourism and other economic contributors, with industry recruitment only part of its task. “Our job is to drive economic development in all 100 counties,” he says. “When I spoke to AdvantageWest, I told them nobody can guarantee we’re going to put a deal in each of those counties. Some communities expect a deal tied up with a bow and delivered to them. It doesn’t work that way.”

AdvantageWest was instrumental in recruiting industries to western North Carolina, such as Google Inc.’s $600 million Caldwell County data center in 2007, Sierra Nevada Brewing Co.’s $110 million Mills River brewery in 2012 and General Electric Co.’s $125 million aviation plant in Asheville in 2013. The group’s scope expanded beyond manufacturing when it took over the Western North Carolina Film Commission in the mid-1990s from the Asheville Area Chamber of Commerce. It helped attract some major productions, including The Hunger Games, filmed near Asheville in 2011.

Other AdvantageWest programs helped Buncombe and other counties attract tech startups, outdoor-equipment makers, brewers and other small businesses. The agency in 2005 created Blue Ridge Food Ventures LLC, an incubator that aids farmers in growing and selling local products. About 250 clients have participated, producing more than $10 million in goods. Since 2007, the partnership has run a revolving-loan fund for entrepreneurs, providing up to $1.4 million in early funding.
It is now run by a nonprofit, Mountain BizWorks. Its WNC AgriVentures, started in 2012, has provided about $1.6 million to sustainable agriculture projects.

Within the region, some areas are excelling while others lag. The west has seven Tier 1 counties, the state’s neediest, while Buncombe’s unemployment rate was 4.5% in May. The Asheville chamber’s development plan has landed about 6,400 jobs and $1 billion in investments since 2010, according to a June report.

Supporters of McCrory’s public-private recruiting approach cite such success as justification for change. “AdvantageWest was very important in the beginning, but less now,” says N.C. Rep. Chuck McGrady, a Hendersonville Republican. “Then, we didn’t have anything focused on economic development in the mountains. Now, 20 years later, we do.”

The partnership is free to morph, Chung says. He cites the newly created NCEast Alliance, which merged two previously state-funded partnerships and covers 26 counties. It has backing from local governments and industry.

Efforts to attract private support, especially in the westernmost counties, have proven ineffective, says Kathi Petersen, AdvantageWest’s interim director of operations. “We discovered a prevailing attitude or philosophy that economic development is a function of government and should not have to be funded privately.”

When Stanley Furniture shut down, Arcadia, Wis.-based Ashley Furniture Industries Inc. visited Robbinsville two or three times before opting for a Davie County site. “The biggest problem was there’s no good road in and out of here,”  Eller says. In November, China’s Oak Valley Hardwoods Inc. bought the former Stanley plant, promising to invest $10 million and employ about 100. About a dozen work there now.

Many relocating companies require demographics, transportation or urban amenities not available in western North Carolina, Chung says. “Our job is to listen to what the customer wants. We can do the sales and marketing and try to create opportunities, but then the burden falls on local communities. If they have nothing to offer — no site, no buildings, no workforce — some of the responsibility falls on them.”