Tuesday, May 17, 2022
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Will NC Commerce wrest some control from state economic-development group?

[/media-credit] Chris Chung

Based on frequent expansion announcements and magazine ratings, economic development seems to clicking in North Carolina. Still, an undercurrent of dissatisfaction with the process of attracting new investment is sparking some intrigue.

In 2014, the state formed a public-private Economic Development Partnership of North Carolina to take charge of business recruitment and tourism marketing. Gov. Pat McCrory’s administration hired Chris Chung, who had a similar post in Missouri, to lead the effort. The purpose was to boost development, reduce costs and avoid partisan politics as much as possible.

Meanwhile, a slimmed-down N.C. Department of Commerce retained the work of negotiating incentives contracts with companies that pledge a certain number of new jobs and investment. Those deals hinge on companies making targets for hiring and spending. Commerce Secretary Tony Copeland, a Raleigh lawyer and business executive, is an appointee of Gov. Roy Cooper.

Since coming to North Carolina, Chung has won widespread applause among business and economic-development leaders for his professionalism and understated style. Meanwhile, the number of state-supported project announcements have topped 19,500 jobs in 2017 and 2018, the best results in a decade.

But not everyone is happy. At a recent talk to the Charlotte Regional Business Alliance, Copeland “sounded skeptical of the EDPNC,” the Charlotte Business Journal reported. EDPNC is “like 95% public money and 5% from the private sector,” Copeland said. “They do not answer to me. I have no actual authority over them whatsoever.”

Strong words, so we asked Copeland last week to elaborate. A spokeswoman said he wasn’t available for comment.

Concern that Copeland wants additional authority is prompting various N.C. economic development officials to urge Gov. Roy Cooper to support EDPNC. The partnership’s contract with the state is up for renewal in October.

“I’m getting lots of calls from county economic developers, regional partnership directors, etc., who are asking folks to make calls to the governor, [senior aide] Ken Eudy, anybody, to encourage the governor to renew the arrangement,” according to a person familiar with the matter, who asked to remain anonymous.

Tony Copeland
[/media-credit] Tony Copeland

Copeland’s comments follow a legislative report in January that concluded the Commerce department and the partnership “lack effective coordination.” The report also criticized the partnership for not raising more private funds. It has received about $5 million over the last five years, making up about 10% of its total budget. The legislative report recommends doubling that to about $2 million annually. The partnership said more fundraising could take money away from local and regional development groups.

The report also noted that the partnership has been as effective as Commerce had been previously. About 13 states have similar nonprofits that take on the traditional role of state agencies.

In an email, Chung said, “We’re honored to be part of the statewide economic development team led by Gov. Roy Cooper and Commerce Secretary Copeland and that includes the General Assembly and regional, local, and private-sector economic development partners. … We look forward to continuing to work with this team every day to achieve even more positive results for our great state.”

Former N.C. Commerce Secretary John Skvarla, who worked in the McCrory administration, is a big supporter of the group. As a nonprofit, the partnership can retain key staffers more easily than in a politically directed organization and is better able to reward good performance and address poor results, he says.

“The Governor needs to sign a long-term extension of this agreement and let the world know that North Carolina’s economic development is running like a well-supported, well-oiled machine,” says Skvarla, who now practices law at Nexsen Pruet in Raleigh. “Chris Chung is the best of the best and we need to keep him and the EDPNC.”

 

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David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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