Business North Carolina November 2022

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COMBATTING THE HOUSING CRISIS | HOW THE NEW CASINO ROLLED BIGGEST N.C. BREWERS | A SURPRISING WAY TO LEARN GOLF | INNER-CITY LETTUCE

Community collage NOVEMBER 2022 Price: $3.95 businessnc.com

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Our annual Building N.C. feature highlights new structures enlivening the state, including Central Piedmont Community College’s Parr Center.

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+ DEPARTMENTS 4 UP FRONT

NOVEMBER 2022

6 POINT TAKEN

Manufacturer Eaton shifts its N.C. focus to electricification of global energy and power markets.

12 NC TREND

A college football finance primer; Making golf fun, really; Asheville mulls banning plastics; Ranking the state’s biggest brewers; Growing fancy lettuce in downtown Raleigh. What you missed from the N.C. Tribune.

COVER STORY

BUILDING N.C.

80 GREEN SHOOTS

Artist-CEO Arlissa Vaughan’s Aegis Power Systems spurs unexpected growth in Murphy.

+ SPONSORED SECTIONS

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Our annual look at the best new and rehabbed structures that opened in the last year. BY ANNA MASON AND EBONY MORMAN

30 MID-MARKET FAST 40 A diverse array of firms top the rankings of the state’s fastestgrowing mid-sized enterprises.

66 ROUND TABLE: CYBERSECURITY Digital privacy and security gain primacy for businesses facing a more distributed, complex world.

COVER PHOTO BY CENTRAL PIEDMONT PHOTOGRAPHY

73 LAW JOURNAL

GIMME SHELTER

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Tax credits, tiny homes and 3D printing are highlights of the push for affordable housing. BY KATHERINE SNOW SMITH

Legal experts share their insights on business topics.

78 COMMUNITY CLOSE UP: CATAWBA COUNTY

INSIDE STRAIGHT

The Hickory area builds on its reputation as one of the state’s manufacturing powerhouses.

62 November 2022, Vol. 42, No. 11 (ISSN 0279-4276). Business North Carolina is published monthly by Business North Carolina at 1230 West Morehead Street, Suite 308, Charlotte, NC 28208. Phone: 704-523-6987. Fax: 704-523-4211. All contents copyright © by Old North State Magazines LLC. Subscription rate: 1 year, $30. For change of address, send mailing label and allow six to eight weeks. Periodicals postage paid at Charlotte, NC, and additional offices. POSTMASTER: Send address changes to BUSINESS NORTH CAROLINA, 1230 West Morehead Street, Suite 308, Charlotte, NC 28208 or email circulation@businessnc.com.

Key influencers from the Palmetto State paved the way for North Carolina’s new casino. BY EDWARD MARTIN

Start your day with business news from across the state, direct to your inbox.

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UPFRONT

David Mildenberg V O L U M E 4 2 , N O. 1 1 PUBLISHER

Ben Kinney

bkinney@businessnc.com

COME ON DOWN

David Mildenberg

dmildenberg@businessnc.com ASSOCIATE EDITORS

C

ould there be a greater compliment to the strength of North Carolina business than JPMorgan Chase’s desire to build as many as 40 offices in the Charlotte and Raleigh-Durham metro areas? In terms of timing, I beat the largest U.S. bank to town by more than three decades, thanks to an editor at a Charlotte newspaper who bet on a rookie reporter in Iowa. The boss took off for California before long, but I’ve been fortunate to hang around ever since, save for a couple of years in Georgia and Texas. Chase will be around our state for a long time too, because CEO Jamie Dimon makes very few mistakes. He also knows where to show up: In September, he was keynote speaker at the groundbreaking for the $150 million expansion of the KenanFlagler Business School at UNC Chapel Hill. It was an interesting choice given how much Bank of America (ex-NationsBank), Wells Fargo (ex-Wachovia), Truist (exBB&T), PNC (ex-Centura) and other Chase rivals have invested in the school. Dimon got some razzing for admitting that he didn’t know the definition of Tar Heel. And he took a funny shot from David Boliek Jr., the Fayetteville lawyer who chairs the UNC Chapel Hill trustee board. Two of Dimon’s three daughters are Duke University graduates, but Boliek suggested he direct his grandchildren to Chapel Hill where they “can save money and get a better education.” Kidding aside, Chase’s investment sparked reflections of how the state has changed since the early 1980s. I knew nothing about North Carolina or the South at the time, but I’ve tried to be a patient student ever since. My main conclusion: North Carolina didn’t need newcomers like me or the Chase crowd to make it a better place. It was special long before any of us jumped on board. That differs from a popular narrative,

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which I’ve heard almost since I arrived, that lots of newcomers from all over the nation and world have changed a backwards Southern state to a modern powerhouse. Yes, the increased diversity of North Carolina on many levels has had a positive impact. Sure, there are blots on the state’s history, which is also true in the other 49. Of course, I wish some different decisions had been made. But often missing from the narrative is an appreciation of how the underlying strengths of this place, stretching back generations, paved the way for North Carolina’s increasing popularity and prominence. Perhaps one of the few benefits of getting older is gaining that kind of perspective. For me, those strengths include a history of business leaders who built world-class enterprises and politicians of both parties who set the stage for today’s thriving metro areas. That happened in an environment with a sense of shared purpose that appreciates workable solutions and enduring, common-sense values. Our state’s reputation for being “purple” politically is a good thing. So is being a place where it’s still OK to respectfully invite a newcomer to one’s church or synagogue or mosque. While visiting this fall, Dimon praised North Carolina for “trying to attract business,” and predicted the Triangle would grow at a pace similar to Austin and Nashville. "And the loser, unfortunately, is going to be places like New York, Chicago and San Francisco, who have been both anti-business, have their crime problems and high taxes,” he told Axios. I am thankful for this state. I hope we can sustain the momentum.

Ebony Morman

emorman@businessnc.com

Colin Campbell

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Cathy Martin

cmartin@businessnc.com SENIOR CONTRIBUTING EDITOR

Edward Martin

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Katherine Snow Smith CONTRIBUTING WRITERS

Dan Barkin, Brad King, Anna Mason CREATIVE DIRECTOR

Peggy Knaack

pknaack@businessnc.com GRAPHIC DESIGNER

Ty Gentry

MARKETING COORDINATOR

Jennifer Ware

jware@businessnc.com

ADVERTISING SALES ACCOUNT DIRECTOR

Melanie Weaver Lynch, eastern N.C. 919-855-9380 mweaver@businessnc.com

ACCOUNT MANAGER AND AUDIENCE DEVELOPMENT SPECIALIST

Scott Leonard, western N.C. 704-996-6426 sleonard@businessnc.com

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POINTTAKEN

Dan Barkin

POWER PLAYER An industrial giant makes North Carolina pivotal in the gas-to-electric switch.

E

aton Corporation is a company with a long history and a new story. Named for one of its founders, Joseph Eaton, it was formed nearly 150 years ago as Torbensen Gear & Axle Co. The name came from Eaton’s partner, Viggo Torbensen, who had the idea for a new kind of truck axle and had a mother willing to financially back the startup. It was a success, one of many in the then-booming manufacturing center of Cleveland, Ohio. After a few years, one in three U.S. trucks had a Torbensen axle, which sounds impressive, but there were fewer than 100,000 trucks in America then hauling freight on bad roads. The company was born during the transformative rise of the internal combustion engine powering cars and trucks. Its engineering and manufacturing prowess are now deeply embedded in the latest transformation — how electricity is stored and used. The center for much of Eaton’s work in this transformation is in the Raleigh area, a major manufacturing and engineering site for its critical power and digital infrastructure division. About 650 of Eaton’s 3,000 North Carolina employees work — in newly remodeled offices on Six Forks Road and factories nearby — on Spring Forest Road in Raleigh and in Franklin County to the north. 6

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SAGS AND SWELLS To understand the significance of Eaton, you have to learn a little about something called an uninterruptible power supply, or UPS. UPS has gone from being that backup power supply for a few minutes, to being the brains of the new electric grid. Eaton’s Raleigh operations are at the center of innovation, dating back to its 2004 acquisition of Powerware, says James McBryde, engineering director for Critical Power Solutions, and an electrical engineering graduate of N.C. State University. At minimum, the typical UPS is doing what an UPS has been doing for a long time. “You can think of it as a power conditioner and a power backup system,” he says. First, the UPS is taking electricity in from the utility and cleaning it up, basically, eliminating the sags and swells in the voltage that can cause problems with equipment. It’s similar to the massive data centers with hundreds and thousands of servers — the modern cloud computing hubs. Eaton does a lot of UPS business out of Raleigh with the nation’s data centers. The other part of the UPS is the battery. When the UPS senses a disruption in the power coming into the building, it takes over.

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THE SWITCH TO LITHIUM-ION In recent years, technology in the UPS has improved due to research and development. It’s also a reflection of what is happening in the power economy. Solar and wind farms are decentralizing the electric grid. Massive investments in electric vehicle production have revolutionized battery technology. This has changed the role and capabilities of the humble UPS, particularly the battery. Historically, most of Eaton’s UPS products shipped with lead-acid batteries. Recently, the world has moved to lithium-ion batteries and within two years, the market will convert almost entirely, says McBryde. The investment in car battery technology similar to the Toyota factory that will be built near Greensboro “has driven the cost, the densities and the longevity of lithium batteries to the point where in some of these applications — like uninterruptible James McBryde power and energy storage — it pencils out from a cost and performance perspective.” Smaller, better batteries are hugely important for the electric car industry. They are also important for data centers. The new UPS batteries are lasting as long as 10 years and McBryde says 15 years is possible as technology continues to improve. “The ability to deploy these batteries and not having to go in and replace them every three to five years is a huge asset in our markets.” MORE THAN A BACKUP Another key is determining how much longer an UPS can power a building. How does it move from being a backup during an outage to something more strategic?

“Historically, with lead-acid batteries, they’re so big and bulky, you kind of cap out at maybe 15 minutes before it just becomes so big and onerous, that it’s realistically difficult to deploy a large battery,” McBryde says. “With the cost structure and the size and density of lithium batteries as they’ve advanced… deploying a two-hour battery is not out of the question anymore.” Increasingly, large manufacturing facilities and commercial buildings are installing solar panels on land or rooftops. That power can go into the UPS, creating an energy storage system on the premises. Eaton’s software can sit next to the battery and is able to make decisions. The UPS helps a company basically become their own electric utility, able to generate, store, buy and sell electricity. “We’re going from a model where everything was centralized to where everything is distributed,” McBryde says. The existing power system is based on centralized power generation. “The centralized model is now going to a more distributed model, where you will have power generated all over the place . . .,” he says. “The balancing act is really the intelligent piece of it that lays on top of the energy storage, energy generation locally and the energy consumption that’s local already.” THE MICROSOFT PILOT The data center market is growing by around 22% a year, expected to increase by more than $600 billion through 2026, as the world increasingly moves to the cloud, particularly with the rise of remote work turbocharged by the pandemic. “It’s a large portion of our market,” says McBryde. Nearly one in three data centers worldwide is powered by equipment that is designed, manufactured and monitored in the Triangle. That is similar to the market share Eaton had for truck axles a century ago, on a somewhat larger scale. The growth of data centers is one reason why Eaton acquired Richmond, Va.-based Power Distribution in 2020 and Chicagobased Tripp Lite in 2021. It’s why the company’s Electrical Americas segment — including Raleigh-area operations — accounts for nearly 37% of the company’s $19.6 billion in revenue.

EATON’S N.C. OPERATIONS

source: Eaton Corp. N O V E M B E R

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POINTTAKEN

Dan Barkin

It turns out that large cloud operators like the idea of turning the UPS into a strategic asset, and saving on power. Eaton and Microsoft announced a collaboration in June to use Eaton’s technology in its data centers. The collaboration stemmed from a test at Microsoft’s major data center in Boydton, Va., 90 minutes north of Raleigh. “They were essentially verifying that the technology worked and the outcome was ultimately a solution that they could deploy in their data centers,” says McBryde. “In the future, you don’t have a data center or a power plant. It’s something in the middle. A data plant, for example. Where this thing isn’t just a load on the grid, it’s an asset on the grid,” says Sean James, director of energy research at Microsoft. The need to manage power consumption to avoid huge peakdemand charges will be particularly crucial to make electric vehicle charging practical. If charging stations off the interstates are vulnerable to the whims of peak pricing, they will be very expensive to run if everyone pulls up when utility loads are the highest. That is one reason why Eaton is ramping up in the EV charging market, with the charging equipment that sticks into cars and the energy storage hardware and software that will be deployed with it. Some products will be manufactured in the Raleigh area. THE BUILDING Eaton announced in July that it would add more than 170 jobs in the region. It also showed the media its remodeled, 90,000-squarefoot Six Forks office building, which it is named “The Hub@ Raleigh,” a project undertaken with architecture firm Redline Design Group and commercial real estate firm JLL. Instead of individual assigned offices, there’s more collaboration spaces and a hybrid-model. Desk toys are a thing at The Hub — ducks, frogs and monkeys. When people get off the elevators, there are giant wall paintings of the toys. The quiet fourth floor has the zen frog. The less quiet fifth floor has the monkey and the conference rooms are designated King Kong, Curious George and Barrel of Monkeys. Chris Butler recently led the Raleigh operation as president of Critical Power, leaving in August to become president of industrial business at contract assembler Flex, formerly Flextronics. “We were trying to drive a shift in just the mindset of our employees,” Butler says. “We were also trying to attract new talent. [The building] was designed like a Southern law office. When people walked into our building, it didn’t look like a tech company.” Chris Butler

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EATON AT A GLANCE 86,000 employees worldwide Serves customers in 170 countries 2021 revenues: $19.6 billion

$54 billion market value (Oct. 10, 2022) CEO: Craig

Arnold

Business segments: Electrical Americas and Electrical Global, Aerospace, Vehicle and eMobility

22 locations in North Carolina Nearly 3,000 N.C. employees, more than any other state

Asheville facility manufactures electrical distribution equipment

Raleigh-area plants build uninterruptible power supplies Charlotte facilities make commercial and residential distribution solutions

THE ELECTRIC FUTURE One of the great mysteries right now is how to move over the next 10-20 years to a world without gasoline-powered cars and trucks and a grid heavily dependent on solar and wind. We don’t have the infrastructure right now to make the switch. What will be like when everyone in my neighborhood has electric vehicles and they’re trying to charge them at the same time? As Butler explains, “in a subdivision, you only have a certain number of transformers.“ It’s a much more complicated world now than when Joe and Viggo started making truck axles. But it’s a world that holds a lot of opportunities for their successors at Eaton, who will play a key role in figuring it all out. ■ Veteran journalist Dan Barkin went to high school in Newton, Massachusetts, arrived in the South for college in 1971 and moved to North Carolina in 1996. He can be reached at dbarkin53@gmail.com.

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MANAGING THROUGH INFLATIONARY TIMES Local PNC leader shares how digital innovations and other strategies are helping businesses manage through inflation. This is the twenty-third in a series of informative monthly articles for North Carolina businesses from PNC in collaboration with BUSINESS NORTH CAROLINA magazine. With inflation recently reaching a 40-year high and interest rates on the rise, business leaders in North Carolina and beyond continue to manage rising prices and confront the headwinds of supply chain challenges and labor shortages. For many c-suite executives, ongoing inflationary pressures are bringing into focus the countermeasure of digital deflation and the return on investment of digital solutions, as well as the business imperatives of other long-term strategies to combat inflation and market volatility. Donna Perkins, who leads PNC Bank’s Commercial Banking business for the Western Carolinas market, has helped local companies navigate the consequential market disruptions of the past two decades, from the burst of the dot-com bubble, to the Great Recession, to the COVID-19 pandemic and inflationary pressures of the present day. Two prime factors distinguish the current climate from previous periods of disruption, she says. First, the labor challenges that continue to persist in multiple industries. Second, the increased adoption of digital solutions, including those automating key finance processes, which can streamline operations for companies of all sizes. To address the unique drivers that define today’s market, Perkins shares the following tips for businesses to consider.

■ LEVERAGE TECHNOLOGY TO OPTIMIZE CASH FLOW.

Accelerating receivables and streamlining payables are two examples of business processes that took on increased urgency during the pandemic as executives worked to improve business continuity and resilience, says Perkins. “During the past two-plus years, we’ve seen a significant uptick in the adoption of digital treasury management solutions among business leaders, including those previously reliant on paper processes and those who may have once dismissed the idea of automation due to company size or setup. “Today, these companies have better control over incoming cash, which allows them to focus on other pressing business needs. For businesses in the beginning stages of their automation journeys, this

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is a moment in time when the benefits of digital innovations are becoming increasingly apparent.”

■ FOCUS ON EMPLOYEES. The Great Resignation and

ongoing labor pressures have underscored the importance of delivering competitive employee benefits packages, with many businesses looking to their financial institutions to assist with the implementation of employee financial wellness solutions – such as bank-at-work programs, Health Savings Accounts, online financial education, retirement plan services and personalized banking solutions. At PNC, for example, Organizational Financial Wellness consultants collaborate closely with companies’ human resources decision-makers and benefits managers to design custom programs that meet employees’ financial wellness needs. Additionally, PNC continues to innovate new payment options that businesses can offer workers, including 1099 contractors and employees wanting access to earned pay prior to payday.

■ BUILD INVENTORY JUDICIOUSLY. With supply chain

challenges dominating headlines and impacting businesses of all sizes, building inventory is understandably top-of-mind for companies in multiple sectors, many of which are stocking up on critical goods to mitigate future fulfillment and delivery disruptions of their own. To help finance these purchases, Perkins notes, many businesses are drawing on their lines of credit. And for companies ordering products from overseas, some purchasers are increasingly conferring with foreign exchange specialists to evaluate the advantages of making payments in U.S. dollars as opposed to the local currency – and potentially securing forward commitments to lock in the cost of funds.

■ REVIEW PROFIT MARGINS AND EXPENSES. Perkins

and her team routinely encourage companies to analyze their balance sheets to assess the cost of capital,

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debt levels, fixed vs. variable rates and potential hedging strategies. One tactic businesses may consider to help manage rising interest rates, particularly when purchasing a piece of equipment that may not arrive for many months, is to lock in the rate upfront – or consider the cost tradeoff of repairing and maintaining existing equipment. Additionally, in this environment, Perkins says, it’s important to evaluate growth goals and special projects.

■ STAY VIGILANT. Payments fraud attempts are becoming increasingly widespread across all industry types, with business email compromise and email account compromise scams representing a particularly serious threat to companies of all sizes. In cases of payments fraud via business email compromise, cybercriminals initiate fraudulent payment requests, or requests to change payment instructions, from email accounts that appear to be from a company executive (such as the CEO or CFO) or from a known external partner, such as a supplier. With email account compromise, the sending

email account has been hacked by cybercriminals, creating an especially dangerous threat for the recipient. According to the 2022 AFP® Payments Fraud and Control Report, 68% of organizations were exposed to business email compromise in 2021. “It’s critically important for companies and their employees to be able to recognize the warning signs of an email compromise and be empowered to take appropriate actions to help protect against the threat,” says Perkins.

■ CONSIDER STRATEGIC OPPORTUNITIES. Because

disruption in the markets can lead to opportunity, business owners who may be evaluating an exit in the coming years should focus on building the valuation of their companies so they are in a position of strength when they ultimately sell – and to help create a path for business continuity. “The events of the past few years have caused many business owners to reevaluate their personal priorities and plans for retirement, so in some cases, we are seeing them accelerate their projected exit timing,” says Perkins.

For more information, please contact your PNC Bank Relationship Manager or visit www.pnc.com. REGIONAL PRESIDENTS: Weston Andress, Western Carolinas: (704) 643-5581 Jim Hansen, Eastern Carolinas: (919) 835-0135

The information and materials were prepared for general information purposes only and are not intended as legal, tax or accounting advice or as recommendations to engage in any specific transaction, including with respect to any securities of PNC, and do not purport to be comprehensive. Under no circumstances should any information contained in these materials be used or considered as an offer or commitment, or a solicitation of an offer or commitment, to participate in any particular transaction or strategy. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any opinions expressed in these materials are subject to change without notice. PNC and PNC Bank are registered marks of The PNC Financial Services Group, Inc. (“PNC”). Bank deposit, treasury management and lending products and services, foreign exchange and derivative products (including commodity derivatives), bond accounting and safekeeping services, escrow services, and investment and wealth management and fiduciary services, are provided by PNC Bank, National Association (“PNC Bank”), a wholly owned subsidiary of PNC and Member FDIC. Lending, leasing and equity products and services, as well as certain other banking products and services, require credit approval. ©2022 The PNC Financial Services Group, Inc. All rights reserved.

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Sports business

Sports business Golf Environment Beer Agriculture Public Affairs Statewide

MONEY BALL College football is big business in North Carolina with the state’s seven Football Bowl Subdivision schools spending more than $350 million on athletics annually. Trying to stay competitive with Alabama, Ohio State and other football powerhouses is a tough issue facing N.C. university leaders. Here’s a look at some football-related financials.

CONFERENCE PAYOUTS

2022

2029 estimate

Universities receive annual payouts from their conferences, mostly from TV contract revenue. North Carolina, N.C. State, Duke and Wake Forest universities are ACC members that received about $31 million each this year. Three other North Carolina universities are in smaller conferences. East Carolina received $7 million, while Appalachian State and UNC Charlotte each got less than $2 million.

source: Navigate | nvgt.com

ATHLETIC SPENDING

FOOTBALL SPENDING

Total operating expenses, including athletic student aid

Football operating expenses, including athletic student aid

2021 North Carolina

Change from 2016

$101.9 million

7%

2021

Change from 2016

$30.2 million

North Carolina

22%

N.C. State University

78.2

-2%

N.C. State University

21.7

-4%

East Carolina

43.7

-2%

East Carolina

11.3

10%

UNC Charlotte

37.7

15%

UNC Charlotte

10.2

-14%

Appalachian State

33.4

6%

9.8

31%

Wake Forest and Duke universities don’t disclose their athletic financials.

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Appalachian State

source: Knight-Newhouse College Athletics Database

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COLLEGE FOOTBALL

STADIUMS IN NORTH CAROLINA (ranked by capacity)

Carter-Finley Stadium, Raleigh ............................. 58,000 Dowdy-Ficklen Stadium, Greenville ................... 51,000 Kenan Memorial Stadium, Chapel Hill ............. 51,000 Wallace Wade Stadium, Durham ......................... 40,000 Truist Field, Winston-Salem ....................................... 31,500 Truist Stadium, Greensboro ...................................... 21,500 Jerry Richardson Stadium, Charlotte ................ 15,314 O’Kelly-Riddick Stadium, Durham ...................... 10,000

NAME, IMAGE & LIKENESS DEALS New NCAA rules permit athletes to get paid for business partnerships, which previously were illegal. Here are four examples.

$20

T-shirts benefiting North Carolina defensive back Tony Grimes

$39.99

Hoodies benefiting North Carolina lineman Myles Murphy

$14.99

Dead Cat Bounce coffee made by Bull and Bear Brew, endorsed by N.C. State wide receiver Thayer Thomas

$47

Barstool Athletes crewneck shirts benefiting Appalachian State quarterback Chase Brice

WHO MADE THE NFL? Number of players who made 2021 early season rosters

Kenan Memorial Stadium

N.C. STATE

18

NORTH CAROLINA DUKE

N.C.

11

13

APPALACHIAN STATE EAST CAROLINA

3

COACHES SALARIES

Salaries exclude endorsements and other supplementary contracts.

6 Source: NCAA | ncaa.com

BOOSTER CLUBS Nonprofit groups that support football programs

Dave Doeren • N.C. State University ....... $5 million Mack Brown • North Carolina ..................... $5 million Dave Clawson • Wake Forest ...................... $4 million Mike Houston • East Carolina ....................$1.5 million Shawn Clark • Appalachian State ...........$1.5 million Will Healy • UNC Charlotte................................ $1 million

Revenue Educational Foundation Rams Club - UNC (2019) N.C. State Student Aid Association (2020)

$43.6 million $132 million 26.2 million

100 million

East Carolina University Education Foundation (2020) 11.4 million

33 million

Athletic Foundation of UNC Charlotte (2020)

33 million

5 million

source: coacheshotseat.com

source: club tax filings N O V E M B E R

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Golf

GOLF CAN BE FUN— REALLY The sport doesn’t have to be a good walk spoiled, an innovative golf pro is proving with Operation 36. By Brad King

yan Dailey has nightmarish memories of his first time on a golf course. “It was so frustrating,” he recalls about his round at Ray Brook Golf Club in upstate New York. “I lost so many golf balls and shot 130 the first time I played. I don’t know why I continued.” He not only continued, he became a PGA Class A Professional and a full-time faculty member at Campbell University, where he was assistant director of the business school’s golf management program. After teaching courses, Dailey gave lessons at Campbell’s home course, Keith Hills Golf Club in Buies Creek. While there, he contemplated ways to increase participation on the golf course by making it fun to learn the game. He concluded that a holistic, trackable method should start with families, particularly junior golfers. In 2011, after trying several strategies, Dailey conducted the first Operation 36 Golf clinic at Keith Hills with about a dozen beginning golfers. The structure now includes weekly clinics and nine-hole leagues and progress monitoring through the Operation 36 app, which allows clubs to compete internationally. Eleven years since its inception, nearly 100,000 new players in 16 countries have taken part in Operation 36 training, which is offered at 53 courses in North Carolina and 22 in South Carolina.

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They run the gamut from high-end private clubs to municipal layouts. Participation from adults and children is roughly equal. The cost averages about $360 for an eight-week program with courses receiving some of the revenue. “We went in thinking that we were going to serve the families at Keith Hills (Country Club) in Harnett County,” Dailey says. It has gradually spread around the world “a lot faster than we had ever imagined.” In February, Golf Genius Software bought Garner-based Operation 36 for an undisclosed amount. The Wayne, Pennsylvaniabased company provides tournament scoring software for nearly a third of the world’s 30,000 golf courses. It also sells software to manage pro shops. Founder and co-CEO Mike Zisman says the two companies “have a shared vision of making golf more fun for more people.” The Operation 36 concept is simple. Instead of starting at the tee box, typically a couple of hundred yards from the hole, new players begin 25 yards from the cup. The challenge is to finish the hole in four strokes or fewer for nine holes, thus shooting a par score of 36. Once the golfer shoots 36 or better, he progress to the second division, starting 50 yards from the green, then to 75 yards. The method lets new golfers learn skills needed from shorter

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distances and advance until they can shoot par 36 from all 10 divisions, which ends at 3,200-plus yards for nine-hole layouts. “You even don’t need a full set of clubs,” only a wedge and putter, says Dailey, 42, who formed Operation 36 with Matt Reagan, 32, one of his Campbell golf management students. “We’re trying to help the industry get more rounds of golf, get people using the facilities more,” Dailey says. “It’s a win-win,” with more practice leading to more activity at courses. “We’re trying to make learning golf exciting, make it fun, make it enjoyable, make it fast,” says Dailey, who was named with Reagan as among the state’s best teachers by Golf Digest in 2018 and 2019. “We’re just trying to speed up the enjoyment process, get them to fall in love with the game.” The 18 full-time Operation 36 staffers remain with Golf Genius, including two software developers who joined a tech team of more than 100. “Now we have access to quite a few more assets to help us expand a little bit faster and try to help more people enjoy the game.” ■

Operation 36 co-founders Ryan Dailey and Matt Reagan met at Campbell University, where Dailey was a faculty member.

We’re trying to make learning golf exciting, make it fun, make it enjoyable, make it fast.” Ryan Dailey

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Environment

SPARRING OVER PLASTIC Efforts to ban takeout containers and other chemical-based packaging divides environmentalists and retailers.

By Edward Martin

he Swannanoa River originates in eastern Buncombe County, meanders through Black Mountain and joins the French Broad River in Asheville, not far from the city’s popular art galleries and beer gardens. The river is a sliver of the beauty and natural resources of western North Carolina that attracts people from all over the world. But the gorgeous rivers and streams across the mountainous region hold distressing secrets that are at the bottom of a heated debate. “Learning they’re polluted by petrochemicals and microplastics is not what people want to hear,” says Anna Alsobrook, watershed coordinator for MountainTrue, a coalition of environmental groups that was formed in 2015. MountainTrue, the Western North Carolina Sierra Club and other groups have formed the Plastic-Free Western North Carolina coalition. They propose to rid this region’s waterways of chemicals such as phthalates, used to make grocery, garbage and other bags and other products flexible, and Styrene, a principal component of the ubiquitous takeout boxes from restaurants. The western N.C. coalition proposes a ban on single-use plastic bags and throw-away containers that contain what environmentalists call forever chemicals. Many are carcinogens and or substances otherwise linked to childhood asthma, and nervousand reproductive-system harm and other ailments. “We have the water samples to prove it,” says Alsobrook. “A pollutant that’s harmful to human health and the environment has been documented here.” She contends the city and county have a legal duty to protect their residents.

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The mountain movement comes five years after the North Carolina legislature repealed a ban on single-use plastic bags, Styrofoam containers and similar products on the Outer Banks. Environmentalists backing the coastal plan focused on health concerns. This time, the proposal frames the bags and containers as a solid-waste issue, which supporters argue local governments have the power to regulate directly. The 25,000-member N.C. Retail Merchants Association is pushing back by lobbying local officials, with aid from representatives of the Fox Rothschild law firm. The association, whose members sell 75% of the state’s groceries, sundries and other goods, believes a wave of local initiatives such as the Asheville proposal would hurt consumers and businesses, says Andy Ellen, the group’s president. “The Supreme Court of North Carolina has said, it’s not a good thing to regulate commerce on a local level,” he says. “It creates a balkanization of our state, where you have different rules depending on which locality you’re in to operate business and commerce.” The ban on plastic bags in the delicate Outer Banks barrier island was favored by the late Marc Basnight, a Manteo Democrat who was Senate President Pro Tem from 1993 to 2010. Basnight and supporters argued plastic trash was jeopardizing tourism at the islands, and harming its wildlife, such as leatherback sea turtles. That ban produced strange bedfellows. Supporters included the Outer Banks Chamber of Commerce, which argued that the plan would protect the island’s beauty and create jobs. Polls indicated

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most merchants supported the ban. MountainTrue supporters say their proposed ban is receiving similar reaction from merchants and residents. “This really is the wave of the future and the people of Asheville want to be part of it,” Alsobrook says. Microplastic and other forever chemicals leach into water from landfills, roadside litter and other sources, says Susannah Knox, a senior attorney with the Charlottesville, Va.-based Southern Environmental Law Center. Ellen says the eastern and western N.C. environmentalists took different approaches. “The ban that was in place [in the Outer Banks] from 2009 until 2017 was creative and tried to get around exactly what Asheville is trying to do.” While not naming specific islands and towns, it stipulated covered areas had to contain a wildlife refuge, have 200 or more residents, and be bounded on the east by the Atlantic and west by a coastal sound. That meant only stores in portions of Dare, Hyde and Currituck counties, including from Nags Head to Duck, were covered. ”They couldn’t say that, because it would have been unconstitutional localizing,” says Ellen. In 2017, the Republican-controlled General Assembly ditched the ban, several years after the GOP took control from Democrats. “About 300 governments in eight states have passed these laws, and the business communities have gotten on board,” Alsobrook says. Ellen and other proponents say they’re barking up the wrong tree. “They point to Virginia, South Carolina, New York or whatever that are home-rule states where localities have tremendous power,”

he says. “North Carolina is what’s called a Dillon Rule state, where all authority comes from the legislature. It has the power to give and take away.” Under Asheville’s proposed ban, he adds, the hundreds of localities in the state could also outlaw virtually anything deemed solid waste and undesirable from a health or other standpoint. That might mean wood, household shingles or other goods. With House Speaker Tim Moore and Senate Pro Tem Phil Berger leading the legislature now as in 2017, it’s unlikely that state lawmakers’ views on ceding authority has changed significantly. The laissez-faire American Legislative Exchange Council, which has a reputation for helping mold conservative policies, opposes such plastic bans nationwide, arguing they infringe on free commerce. Ellen argues bans ultimately hit merchants – and their customers – in their pockets. “Merchants already recycle tons of plastics and cardboard, and they’d rather you as a consumer come in with your reusable bag,” he says. “But right now, when all-time inflation is at its highest, this is not the time to put this on the merchant’s back.’ While the MountainTrue effort has found some support among some Asheville politicians, action appears unlikely anytime soon. The progressive-leaning city council in mid-October directed city staff to schedule meetings with stakeholders, study the issue and issue a recommendation by October 2023. Alsobrook calls the situation a “quagmire of bureaucracy.” But she says proponents of cleaner streams won’t stop pressing the issue.” ■

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Beer

BARRELING AHEAD

North Carolina’s beer business continues its surge. By Ebony Morman

orth Carolina has more than 400 craft breweries in small towns and major cities, including a couple of dozen that have opened in the past year alone, according to statistics recently released by the Colorado-based Brewers Association. The state ranks in the top 10 nationally for craft beer production with the industry reporting an economic impact of $2.8 billion per year and 18,000 jobs, including suppliers, distributors and other vendors. Craft beer businesses are known for their creativity, providing distinctive brews and serving as community gathering spots. Beer gets particular attention in October and November as breweries introduce flavors and offer marketplaces for holiday gift buying. The N.C. State Fair last month featured the industry at its NC Public House in a partnership with the N.C. Craft Brewers Guild and N.C. Wine and Grape Council. The brewers’ group holds an annual competition to honor the best beers in the state. This year’s winner will be announced in November. The Brewers Association defines craft brewers as producing less than 6 million barrels annually, while being at least 75% owned by an individual or group not controlled by a large beverage company. In 2021, North Carolina had 364 craft breweries that produced more than 950,000 barrels of craft beer, according to the trade association.

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CRAFT BREWERIES BY STATE 2021

SWIFT RISE Number of manufacturing licenses issued in North Carolina by federal Alcohol and Tobacco Tax and Trade Bureau, including beer, wine and liquor.

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NORTH CAROLINA 364

WASHINGTON 437

CALIFORNIA 931

MICHIGAN 408 TEXAS 406

COLORADO 428

OHIO 365

NEW YORK 485

2021» 544 2011» 71 2001» 38

PENNSYLVANIA 486

FLORIDA 374

NORTH CAROLINA’S 10 LARGEST CRAFT BREWERS Based on self-reported 2021 production

source: Brewers Association, companies

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Agriculture

SALAD DAYS

High-tech, efficient farming blossoms in downtown Raleigh. By Dan Barkin

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n one of the state’s fastest-developing commercial areas, leafy greens bound for restaurants are growing in shipping containers because of an innovative agriculture technology company and a resourceful Raleigh entrepreneur. Boston-based Freight Farms sells the boxes, which are designed to efficiently grow food in almost any location with available power and water access. Trevor Spear, who bought two 320-square-foot containers three years ago, operates them on a lot sandwiched between Raleigh’s red-hot Boylan Heights and Warehouse District neighborhoods, about three blocks east of the Raleigh Convention Center. One container’s output is the equivalent of a 2.5-acre farm. The climate-controlled 40-foot container, which costs about $149,000, is an insulated hydroponic farm, filled with racks of gourmet lettuce. Near the front, there’s a nursery where young plants grow. At three weeks, they’re transplanted to 88 vertical panels with five channels, with as many as 50 plants per channel. Salanova, romaine, butterhead and other varieties continue to grow for several more weeks. “Everything is automated, so there are sensors throughout that are monitoring our climate, our temperature, our humidity and our CO2,” says David Ridill, a Freight Farms account executive. A container requires about 5 gallons of water daily, which is about 99% less water than traditional farming, he adds. Jon Friedman and Brad McNamara founded Freight Farms in 2010 with a focus on rooftop greenhouses. They later shifted to shipping containers, which can be outfitted in the same way and placed in a variety of places. The company was incorporated in 2013 and has raised more than $24 million from investors. “It’s the largest connected farm system in the world,” says Rick Trenchard, the company’s director of business development. “Leafy greens are optimal but we want to get into vine crops like tomatoes.”

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Freight Farms, with about 60 employees, has a network of more than 500 farms in 48 U.S. states and 38 countries. There are 600-plus trained farmers, who share billions of data points with the company’s Boston office, One of those farmers is Trevor Spear and his Nanue’s Farm operation in downtown Raleigh. The New Bern native, who had been a building contractor, read a magazine article about Freight Farms, toured its facilities and received containers in December 2019. Then, COVID-19 happened. “It was a train wreck,” Spear says. “We started a home-delivery business, taking four heads, five heads [of lettuce] to someone’s home. Just paid the power bill and [kept] the lights going.” In the past six months, business has picked up, with restaurants

Trevor Spear bought two Freight Farms containers three years ago and operates them on a lot in downtown Raleigh.

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buying locally sourced produce. With the support of his son Brayton Spear, who helps with operations, the business is selling about 400 heads of lettuce a week. Spear predicts business will double in the next six months. Nanue’s Farm, which is named after his grandmother’s nickname, is starting to be profitable, Spear says. “We can grow 1,000 heads a week. Those two containers can grow 500 heads each.” “The lettuce is really high-end. It’s a little pricey,” says Spear. “But we grow obscure varieties you can’t get anywhere else, by design.” And it is freshly harvested. “It literally is farm to table in hours.”

David Ridill, an account executive at Frieght Farms, gives a tour of a container farm. An example of how lettuce grows inside a container (below).

INCREASE IN URBAN FARMING Hydroponic farming — growing produce indoors in nutrients without soil — is taking off. Companies such as Charleston, South Carolina-based Vertical Roots and New York-based BrightFarms are selling to major grocery chains. BrightFarms opened a 280,000-squarefoot indoor salad farm in Hendersonville last year. The farm and food processing sector is among North Carolina’s biggest industries, contributing more than $90 billion annually. “Basically, what we’re seeing is this continued evolution of controlled-atmosphere production,” says Ron Fish, assistant director for agribusiness development for the N.C. Department of Agriculture and Consumer Services. Some enterprises are essentially large-scale, hightech greenhouse operations. Another direction is the smaller footprint containerized model, which began emerging more than a decade ago.

The container model can work, says Fish. “If you’re first in the area, you can lock up enough high-end restaurants within five or six blocks of where you are. Then, it becomes a very good model.” ■

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Public affairs Our paid daily newsletter provides detailed interviews with key lawmakers, Q&As of other political leaders, and stories on 2022 election news and campaign finance. Plus lots of stories tracking daily happenings at the state legislature. Here’s some of what you missed. Sign up today at nctribune.com.

Child care industry calls for help

Ad Watch: Bankers back Budd

A legislative oversight committee recently heard details of a “fiscal cliff ” that could affect child care centers next year. That’s because the centers — which were dealing with staff shortages well before the pandemic — are currently receiving millions in temporary federal dollars that have allowed them to offer more generous wages without big tuition increases for parents. That funding ends next year, leading industry advocates to warn of a looming shortfall. “The number one barrier to expanding quality licensed child care is a child care workforce crisis,” said Sherry Melton, advocacy director for the N.C. Licensed Child Care Association. She said the problem will require financial and regulatory help from both the state and federal governments, or parents could soon find that quality child care is unavailable or prohibitively expensive. Subsidy rates that the government pays for low-income families to attend will be too low. Melton and other child care providers are also asking the state legislature to extend a pause on center assessments that determine the “star ratings.” Those are already on hold until early next year, but Melton and others worry that those ratings are based too heavily on the educational credentials of staff.

Here’s a player in the U.S. Senate race I wouldn’t necessarily expect: the American Bankers Association. Technically, the group isn’t weighing with a formal endorsement for Republican U.S. Rep. Ted Budd’s campaign, but its TV ad is clearly intended to boost Budd’s reputation. The ad focuses on Budd’s support for farming, not banking issues. Because it’s technically not a campaign ad, the narrator tells viewers at the end of the ad to call the congressman’s office and “tell him to continue helping keep North Carolina farms viable.” “We're happy to join ABA in applauding Congressman Budd’s dedicated efforts on behalf of North Carolina’s family farmers,” N.C. Bankers Association President and CEO Peter Gwaltney said in a news release promoting the ad.

Board OKs $100 million for Raleigh-area toll road The State Board of Transportation gave the green light last month to speed the final section of the Interstate 540 loop around Raleigh. Meeting in Topsail Beach, the board approved a request from the N.C. Turnpike Authority to provide as much as $100 million in advance funding for the project. Chief Financial Officer David Roy said a similar financing approach was used for the Holly Springs-toGarner section that’s under construction. The move will allow the Turnpike Authority to begin buying land, with money that will be paid back to the state’s Highway Trust Fund by April 2024. Roy said the approach will make the project cheaper overall, since the cost of construction could increase if the state waits longer to get started. The 540 section under construction is scheduled to open in 2024, while the contract for the final Garner-to-Knightdale segment is expected in 2025, according to the project webpage. 22

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Mark Robinson creates new energy committee One of the lieutenant governor’s lesser-known duties is chairing the Energy Policy Council, a part of the N.C. Department of Environmental Quality that advises lawmakers on energy issues. Lt. Gov. Mark Robinson is making his mark on the council by creating an Energy Innovation Committee. It will “work to inform the Energy Policy Council about new, and emerging energy technology,” according to a news release. The committee will be chaired by John Hardin, who serves as Commerce Secretary Machelle Sanders’ representative on the Energy Policy Council. He is the executive director of North Carolina Board of Science, Technology & Innovation. Other members include Robinson’s chief of staff, Brian LiVecchi, and Jenny Kelvington, a former DEQ leader during Gov. Pat McCrory’s administration.

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Statewide

COOLEST PRODUCTS he NC Chamber’s annual competition for the “Coolest Thing Made in NC” wound up with a loader made by a giant international corporation and a beach umbrella developed by a Greensboro small business. The Caterpillar Cat® XE Compact Track Loader, which is made in Sanford, won the medium-to-large business category. Bill Schermerhorn’s beachBub® All-In-One Umbrella System took the small business category. The Chamber started the competition in 2020 to honor manufacturing and encourage more people to work in production

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jobs. The state’s 10,250 manufacturers employ more than 450,000 people. Caterpillar, which is moving its headquarters from Illinois to the Dallas area this year, had revenue of $51 billion in 2021. It employs more than 2,000 people in North Carolina, mainly in Cary, Clayton and Sanford. Schermerhorn started selling his umbrella in 2015, aiming to create a safe product after seeing a conventional umbrella hurt a young girl at the beach on a windy day. The company has a 16,000-square-foot plant in Greensboro.

PINK ENERGY COLLAPSE olar energy installer Pink Energy filed for bankruptcy liquidation after hundreds of customers complained about the company’s ineffective products and customer service. The Mooresville-based company said it employed more than 1,650 employees and had annual sales of nearly $600 million in 2021, making it among North Carolina’s largest privately held businesses. Its filing listed debts topping $138 million. CEO Jayson Waller started the business in 2014 and aggressively expanded in several states through heavy media advertising. It was

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called PowerHome Solar until a branding change earlier this year. The company also sold Generac power generations, but developed a testy relationship with the publicly traded company over unproven claims of defective products. N.C. Attorney General Josh Stein and peers in other states are investigating Pink Energy’s actions. Its collapse also damaged Charlotte-based Sunlight Financial, which provided financing for solar customers. Sunlight estimates it could report a charge of more than $30 million related to its Pink Energy dealings.

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CHARLOTTE CHARLOTTE RXO, a spinoff from Connecticut-based XPO Logistics is the state’s newest public company. It has 1,100 N.C. employees and the CEO is Drew Wilkerson. The 2022 Presidents Cup golf tournament at Quail Hollow Club had an estimated economic impact of more than $175 million.

EAST GREENVILLE After receiving a $2 million donation to the Pirates Unite Campaign for Comprehensive Excellence, ECU plans to change Dowdy-Ficklen Stadium student section’s name to Clark Family Boneyard. FAYETTEVILLE The Fayetteville-Cumberland Regional Entrepreneur and Business Hub opened at Fayetteville State University. The 6,500-square-foot office supports small businesses in the region.M INGTON People who live here, in Greenville and Raeford will try Metronet’s ultra-highspeed multi-gigabit internet first, which promises to improve video conferencing, gaming and online learning for customers.

KANNAPOLIS

LAURINBURG So-Pak-Co, a Mullins, S.C.-based food processor, will invest $85 million in a processing center and add 440 new jobs here. It’s Scotland County’s largest job announcement for county in two decades.

WILMINGTON Wilmington ranked 10th in Conde Nast Traveler magazine’s annual reader’s choice awards for the best U.S. cities. The magazine described Wilmington as a “lower-key Savannah.”L Live Oak Bank is expected to start construction on its fourth building in the fourth quarter. Earlier this year the online-only bank received a $1.5 million Job Development Investment Grant and agreed to add more than 200 employees with average salaries of $102,000.

Charlotte developer Insite Properties purchased ample land from Castle and Cooke, owners of much of downtown Kannapolis. Insite expects to oversee at least $500 million in investment in projects near the N.C. Research Campus. KINSTON Kinston-based flyExclusive, which offers private jet service, wants to go public in a combination with New York special-purpose acquisition company EG Acquisition. Sponsored by EnTrust Global and GMF Capital, it will combine with flyExclusive to create a publicly traded company led by founder and CEO Jim Segrave. The transaction values flyExclusive at $600 million and is expected to provide up to $310 million in proceeds. Segrave and other flyExclusive owners will retain 60% ownership. As part of the announcement, unnamed sovereign wealth and institutional investors provided $85 million to flyExclusive by acquiring convertible notes. FlyExclusive estimates revenue of $360 million and pre-tax operating earnings of $32 million in 2022. The company says it employs about 800 people and operates 90 jets. N O V E M B E R

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Statewide

TRIAD

Virginia-based Clachan Properties acquired the former Pilot Life Insurance headquarters buildings. The property will be transformed into luxury apartments. WINSTON-SALEM

GREENSBORO Toyota will give $1 million to support science, math and technology education. Funds will be split between Communities in Schools of Randolph County and N.C. Agricultural and Technical State University.

Garner Foods opened a 160,000-squarefoot warehouse here. It’s a $20 million project for the Texas Pete hot sauce maker.

L. Ebony Boulware was named dean of Wake Forest University’s medical school. and vice chief academic officer and chief science officer of Atrium Health. She succeeds Julie Freischlag, who remains chief academic officer. After serving as Inmar Intelligence’s interim CEO, Spencer Baird succeeded retired David Mounts as the new CEO.

TRIANGLE

Gilbarco Veeder-Root Retail Solutions named Karthik Ganapathi president. The ex-Honeywell executive will steer the company, which makes fueling-system products.

APEX

A $450 million tower is under construction here at Atrium Health’s Wake Forest Baptist campus. The contractors are Brasfield & Gorrie and Frank L. Blum. Expected completion is 2026.

A crochet business based here was featured on CNBC’s Shark Tank show last month. Justine Tiu and Adrian Zhang led The Wobbles to more than $5 million in revenue since starting in 2020.CARY New-York-based JPMorgan Chase plans to expand with additional branches in the Triangle and Charlotte area. The company has about 700 employees statewide. DURHAM Drug developer Chimerix sold the rights to produce an oral antiviral that treats smallpox for $236 million in a contract with Maryland-based Emergent BioSolutions. The agreement could be worth as much as $680 million if targets are reached. Arbiom raised $10.5 million to continue its research into converting wood into protein for use by animals and humans. The French-American company raised $10.8 million in 2020.

MEBANE Manufacturer Thermo Fisher paid $41 million for property here to be used for a factory. The seller of the Orange County property is the Buckhorn Industrial Park. Last November Thermo Fisher said it would add 150 to 200 jobs in Mebane, citing a multimillion-dollar contract with the U.S. government.

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PHOTO CREDITS: GILBARCO.COM; GARNERFOODS.COM; HTTP://BUCKHORNINDUSTRIALPARK.COLLIERS.COM

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CBRE Investment Management purchased the 95-acre Park Point lifescience campus in RTP for $288 million. It previously sold for $37 million before major investments to renovate the buildings. A judge ruled N.C. Mutual Insurance insolvent because liabilities exceed assets by $78 million. The historic Black-owned insurance company will liquidate. It has been under court-ordered rehabilitation since 2018. Oncology startup Tavros Therapeutics signed a five-year agreement with San Diego-based Vividion Therapeutics that could bring as much as $430.5 million to the local firm over the next five years. Tavros raised $7.5 million last month.

RALEIGH SEPI Engineering & Construction was acquired by Kansas City-based TranSystems. SEPI’s 330 employees will merge with TranSystem’s staff of 1,100. Sepi Saidi started SEPI two decades ago and has chaired the Greater Raleigh Chamber of Commerce and NC Chamber.

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RALEIGH Bankruptcy law firm Stubbs Perdue closed as founder and senior partner Trawick H. “Buzzy” Stubbs Jr. retired. The firm was in business for five decades. Former partner Laurie Biggs founded her own law firm. Amazon will hire 1,000 workers in the area as part of a holiday season initiative to add 150,000 employees throughout the nation. Pay will start at $19 an hour.

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AppalCart, which provides transportation for the Appalachian State University campus, bought its first electric bus, a 35-foot ZX5 Proterra. It cost about $850,000 and can carry 27 seated commuters.

UNC Asheville Chancellor Nancy Cable is leaving at year’s end to lead the William R. Kenan Jr. Charitable Trust. She has led the school since 2018. It has enrollment of about 2,900, down from 3,760 in 2018. Kimberly van Noort, the UNC System’s top academic officer, is now interim chancellor. A national chancellor’s search is planned. FLAT ROC

Ground was broken on the $80 million Blue Ridge Commerce Center. Plans call for construction of more than 650,000 square feet of industrial and warehouse space across 65 acres. Expected completion is summer 2023.

Western Carolina University total enrollment declined from a year earlier despite a 12.5% increase in freshman enrollment and 3% gain in out-of-state enrollment.

as required by 39 U.S.C. 3685 for Business North Carolina, published monthly at 1230 West Morehead St., Suite 308, Charlotte, NC 28208. Number of issues published annually: 12. Annual subscription price: $30. The general business office of the publisher is 1230 West Morehead St., Suite 308, Charlotte, NC 28208. Owner is Old North State Magazines LLC, a North Carolina limited liability company, 145 W. Pennsylvania Ave., Southern Pines, NC 28387. Members owning 1% or more of total amount of shares are: The Estate of Frank Daniels Jr., David Woronoff, Frank Daniels III, Jack Andrews, Lee Dirks (all c/o Old North State Magazines LLC, 145 W. Pennsylvania Ave., Southern Pines, NC 28387). Avg. no. copies each issue during previous 12 months

A. Total no. of copies printed 29,580 B. Paid/requested circulation 1. Mail subscription 15,285 2. Sales through dealers/requested 2,626 C. Total paid/requested 17,911 D. Free/nonrequested distribution 1. Mail 11,295 E. Total nonrequested distribution 11,295 F. Total distribution 29,206 G. Copies not distributed 374 H. Total 29,580 I. Percent paid/requested circulation 61.33%

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Scottish company Emtelle plans to expand here with its first U.S. location in a 300,000- square-foot facility. The company makes fiber cable and may add 200 jobs.

CULLOWHEE

U.S. Postal Service Statement of Ownership Management and Circulation

Extent and nature of circulation

FLETCHER

No. copies of issue published nearest to filing date 29,568 15,254 2,615 17,869 11,339 11,339 29,208 360 29,568 61.18%

MARS HILL Spark Robotic celebrated its move to the 110,000-square-foot former Honeywell building here. Owner Frank Johnson purchased the building last fall.

PHOTO CREDITS: UNCA.EDU; PROTERRA.COM; GOHENDERSONCOUNTYNC.ORG; SPARKROBOTIC.COM

ASHEVILLE

James B. Kinney, publisher

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FEATURES

COMPANY PROFILES

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Round table: Showcasing thriving mid-sized businesses

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2022 North Carolina Mid-Market Fast 40 List

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2022 Awards event

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First Carolina Bank

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DMA industries

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Macro Integration Services

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Atlantic Forklift Services

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SHOWCASING THRIVING MID-SIZED BUSINESSES Business leaders from across the state shared thoughts on the Fast 40, their own businesses and the state’s economic outlook in a recent roundtable discussion. The panel touched on the diversity of winners, the continuing labor shortage, the state’s excellent community college system, rising interest rates and the demise of water-cooler bonding in the workplace.

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The following round table discussion was moderated by Ben Kinney, publisher, Business North Carolina. It was edited for brevity and clarity.

WHAT DID YOU THINK OF THE COMPANIES IN THIS YEAR’S FAST 40?

PANELISTS

GONELLA: The spread of successful companies across the state was really good. It wasn’t one particular part of the state that has done well over the past year. We had good representation really across the board. Bill Elkin

chief operating officer Network Wireless Solutions

John Gonella

tax partner Cherry Bekaert LLP

Lee Hodge

attorney Ward & Smith P.A.

Lauren Jarman

vice president Atlantic Forklift Services

John Martin

co-founder and partner Fourth Elm Construction

Thad Walton

North Carolina commerical banking executive Regions Bank

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WALTON: Last year, we first saw pockets of (businesses) outside of the major metropolitan markets. This year, it was even more so. And the field was not as concentrated in tech or healthcare with furniture and construction, among other industries, represented. All are approaching conducting business in new and innovative ways. HODGE: I just thought it was a very reflective economy. We’ve got a broad diverse economy. HOW IS YOUR COMPANY PERFORMING THIS YEAR?

JARMAN: Record breaking. We’re 9 years old, and we’ve seen year over year growth, last year up 40%, and we’re up 60% this year, and just riding the wave of our customers. They need service because they’ve been unable to purchase new equipment due to industry challenges and supply chain issues. MARTIN: Last year was hard for us, even though we did grow, because of the supply chain. We’re commercial construction. So we had materials that were backlogged. Because of COVID, we had labor shortages that we had to deal with. It was actually pretty challenging. With that said, there was an enormous overall demand. And so that kind pushed this bottleneck. I called myself a professional bottleneck unclogger for a little bit there. I think we’re kind of through that. Of course, now we’ve got this interest rate issue. We still had good volume, but some of the general flow of business was just very disrupted in the commercial structure. ELKIN: I would echo what John (Martin) said. It was hard. We had tremendous growth, we could

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irst Carolina Bank is a premier regional financial services institution that prides itself on doing the day-to-day things in banking extremely well. One of the safest and most efficient banks in the US as measured by credit quality, liquidity, and overall operating practices, First Carolina offers a full suite of deposit and loan products as well as treasury and wealth management services for both individual and commercial clients. Our people, personal service, and products make us unique. In terms of commercial banking, we provide lines of credit for

seasonal and growth working capital, construction and term facilities for owneroccupied real estate as well as equipment and agriculture business financing. For investment real estate, we focus on construction and permanent loans in the office, industrial, retail, multifamily, and storage categories. Our personal checking and savings products are designed to fit your lifestyle, financial goals, and banking needs. We also provide a variety of consumer and portfolio residential mortgage loans – holding them

on-balance-sheet for a better customer experience throughout the life of the loan. Additionally, we have an in-house investment management team of experts ready to support clients with tax, financial, retirement, business, estate, and fiduciary planning guidance. We operate with a service-first focus, as our local teams are readily available to assist rather than a 1-800 help line. Stop by or call your local branch today to find out how First Carolina Bank can meet and exceed your personal and business banking needs!

WE DO THE DAY-TO-DAY THINGS IN BANKING EXTREMELY WELL

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have grown probably 25% more if we could have had materials to sell. We had tons of supply chain issues and still do now. We sell the equipment that goes up and down a cellphone tower, except for the tower itself, and nearly everything’s got to be replaced for 5G. A lot of materials come from China. And you know, they’re still shut down partially for COVID. We started sourcing out of Central America as well. With the infrastructure bill, now who knows how that’s gonna play out with the economy but you know, we’re leaving a lot on the table because (of supply issues).

ELKIN: So, you’ve got Apple coming to (RTP and hiring 3,000 people over 10 years) and you’ve got the new (Wolfspeed) chip plant coming to Chatham County. So one of the conversations we’re having right now is do we continue to expand in Greensboro and Durham, or do we go somewhere else like potentially out of state? It’s great for the economy that these companies are coming. But when you already can’t sign a worker, and (the labor shortage) drives wages up, that’s a problem. So it does impact our decision of whether to invest more in North Carolina or go out of state.

WHAT ARE YOU HEARING FROM COMPANY LEADERS IN THE FAST 40?

HOW HAS THE WORKPACE CHANGED COMING PUT OF THE PANDEMIC?

GONELLA: A year ago when we sat down, supply chain and people, talent (employees), were two of the big concerns that people had. A year later, we’re still hearing things, particularly if you’re relying on China and Eastern Europe for supplies. And then from a people standpoint, it’s across the board. It’s not a particular industry, everybody you talk to is having trouble finding qualified people to work. The demand (for products and services) is there. It’s having the capacity to be able to fulfill it.

MARTIN: Construction works a little differently. You can’t really do remote work, but you also have folks working in the office. If you’re asking people in the field to come in and work even during the depth of COVID it’s tricky not to do the same with people in the office. There’s this push to bring everyone back. The companies are in this sort of limbo.

WALTON: That they’re experiencing a wage war to some degree. You’re seeing the ability of some employees to secure a 20% raise, but that’s not internal; it requires jumping companies. Another theme I heard involved playing defense just as much as playing offense in every industry right now. We also talked about the importance of (company) culture, especially now with a more remote or hybrid workforce. All of this is coming to a head. It’s an interesting time, for sure. HODGE: Internally, we’re doing a bunch of work trying to manage the hybrid workplace because we’re not saying everybody’s got to be back. It seems to be sort of generational, with the younger generation wanting to be more remote. The older generation wants to be in the office five days a week. The middle of the pack wants three or two days. So trying to manage through that is difficult. 34

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WALTON: We are looking at the square footage we have and exploring how we use it most effectively. The office was built five years ago, and. we have sufficient space even to grow tremendously. But it’s a new dynamic of how people interact in the workforce. Not everyone’s at the watercooler every single day. So we need to offer reasons for people to connect at the watercooler more often. JARMAN: The forklift industry isn’t exactly known as bleeding edge when it comes to technology and remote working. You can’t repair a forklift from home. During COVID we were dealing with customer protocols of entering warehouses and different spaces while we also had employees who were able to work remotely. It’s a balance and you’re never going to please everyone. So we had to focus on how you can build and maintain the team camaraderie… and keep our customers up and running.

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DMA INDUSTRIES CONTINUES TO GROW EXPONENTIALLY DESPITE CHALLENGES Despite numerous hurdles presented by the pandemic, including rising raw material prices and lengthy supply chain shortages and delays, DMA Industries has achieved yet another year of impressive double-digit growth. For the sixth consecutive year, DMA has ranked amongst the top 40 fastest growing private mid-cap companies in NC, ranked 9th in this year’s results. Founded in 2008 by John Treece, President and CEO, and business partner Steve Bertling, CFO, DMA is a leading product development, engineering, manufacturer, and trusted supplier to the Automotive, Heavy Duty, Recreational Vehicle, and industrial markets. With over 1.5M square feet of distribution

space across its 6 locations in NC and SC, DMA has continued to invest and build the necessary infrastructure required to meet its future planned growth. With no signs of slowing down any time soon, Mr. Treece credits their success to the company’s culture as one Built on Passion. “We have always Visioned Big, even from the very beginning as a small startup company. We continue to foster and build our company’s culture based on the entrepreneurial spirit from which we were founded. Meaning, we are a performance driven company that has held on to its flexibility and sense of urgency in recognizing what it takes to exceed our customers’ expectations. It’s about providing an environment where everyone

is committed to achieving excellence,” said Mr. Treece. In dealing with the specific challenges over the last three years, the company has focused on four key approaches: Adapt, Innovate, Execute and Recalibrate. “DMA has built a company culture that embraces and actually thrives on change year over year. In times of uncertainty and unpredictability, we rely on our people’s ability to quickly recalibrate based on the day-to-day developments,” said Mr. Treece. DMA is also a committed contributor to its industry and the communities in which it operates. Over the years, DMA has consistently given back to numerous events and charities.

233 N US HIGHWAY 701 BYPASS, TABOR CITY, NC 28463 | 910-653-7101 | DMA-INDUSTRIES.COM S P O N S O R E D

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INTEREST RATES ARE SPIKING AND A RECESSION APPEARS LIKELY. WHAT ARE YOU SEEING IN THE MARKETPLACE?

MARTIN: I’ve had a couple of projects that have been put on hold indefinitely or canceled because they say the cost of materials is too high. JARMAN: Our customers have still not been able to get new equipment. And so we’re in this sort of unique situation where our manufacturer, Doosan, had shorter lead times than a lot of our competitors and so we sort of rode that wave. So for us, as a service business, if (customers) can’t buy something new, they’ve got to spend money, a lot of money, to keep old equipment up and running. So … we have a lot of uncertainty. You better be buying now and planning ahead. And we have an enormous backlog just because, you know, folks are thinking it’s not going to get any better. HODGE: We’re still sort of in the M&A world that’s associated with relatively solid deal flow, but definitely the valuations have come down a little bit. They’re not weighed down or anything, but then that’s a factor of just the cost of capital. In doing transactions our client base is pretty broad and diverse from technology, construction, manufacturing and agribusiness. And we still have some clients with a number of clients with tons of demand. They’re having some situations like John was mentioning where the demand was there, the order was there. And now, the financing is an issue. There’s still plenty available. It’s just you’re paying a higher rate than you were 12 to 18 months ago. WALTON: For some clients and business professionals, this is almost a ‘generational’ experience in that their entire careers up until this point have been during an ultra-low or near-zero rate environment. But talk to those who’ve been around for a while, and they have seen this before. We are still much lower in terms of today’s rates than we were many years ago. That said,

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there is still uncertainty about how much higher they will go during the current cycle. At the end of the day, borrowing costs six weeks from now will have more than doubled in seven months. And so it represents a new time in the banking industry for a lot of folks who have joined the workforce in the last 15 years and on the operating-a-company side as well. This is when having deep relationships with clients really helps – listening to their needs and positioning them not only for today but also the future. I think the buzzword I’ve heard is “just in case inventory” instead of “just in time.” So a lot of people, maybe they prepared for a trade war with China. And so they ordered inventory as a result of that and ended up needing it for COVID reasons. We need to look at the next few years the same way. Have you put your head in the sand and kind of ignored what you think could happen? If so, that could be problematic. But the same folks who are agile – maybe interest rates are encouraging them to be more liquid. ELKIN: The rates are impacting us as well, but we’re going to build a new building somewhere. Now we’re probably gonna lean toward leasing it because of interest rates, right? But we don’t have to go out and borrow the money. WALTON: It took three years for the Fed to increase rates by 200 basis points. So just think about the last 18 weeks. And think about six weeks from now. But you know it’s achieving the objective. ELKIN: You know, there are all sorts of small, rapidly growing middle market companies, right. And so, they are probably not as disciplined as big fortune 500 companies, right? I think what we’re getting ready to go through is going cause all of us to sharpen our pencils a little bit and be a little less loosey goosey. We’re gonna start looking a little more inwardly about how we’re spending money, how we’re allocating capital.

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acro Integration Services, Inc (Macro) is a value-added reseller serving multi-located, customer facing businesses. Our primary focus segments are Grocery Stores, Quick Service Restaurants, ABC Stores, Convenience Stores, General Retail, and Hospitality Establishments. Macro operates with a family of professionals who value and serve our customers, like they are part of our family for life. Macro was founded 21 years ago by Wayne Williams, Bart Collins, and the late Tommy Gardner. Our commitment to doing whatever it takes to serve our customers has created wonderful and long-lasting relationships. We believe in making our customers’ professionals internal heroes, so it is common when one of those professionals leaves one company to go to another, they invite Macro

to serve the new company. All of this happens because we take great care of our own professionals who take pride and care in serving the ultimate customer. Macro is a value-added reseller and service provider for such leading brands as HP, Toshiba, NCR, Diebold Nixdorf, Zebra, Elo, Verifone, and Ingenico. We not only sell hardware and software, but our distinguishing expertise is in performing services for our customers. We cable; install technology, including POS and networks; provide maintenance services, including depot and on-site; perform technology assessments and recommendations; deinstall equipment; perform adds, moves, and changes projects; manage and wipe sensitive data; economically dispose of unwanted technology; warehouse and maintain inventory; and provide

integration/staging services. Additionally, we have distinguished ourselves with our Integration services and engineering unique solutions directed at our customers’ most challenging needs. We are well plugged into the segments we serve thereby bringing leading ideas and solutions to the table. Our customers love the fact that we can develop creative solutions and then deliver them to drive results. Our founders and leaders are experienced and highly ethical professionals. We are based in Greensboro, NC near PTI airport and a Fedex hub, but we have staff located in many locations across the US. Macro provides services coast to coast in the United States along with Hawaii and Alaska using a mix of Macro project managers and our network of trusted partners and can-do professionals.

420 N. CHIMNEY ROCK ROAD | GREENSBORO, NC 27410 | 336-931-0674 | MACROINTEGRATIONS.COM S P O N S O R E D

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NORTH CAROLINA HAS RECORDED A SERIES OF BIG ECONOMIC DEVELOPMENT WINS AND CNBC NAMED IT THE NO. 1 STATE FOR BUSINESS. WHAT ARE THE KEY SUCCESS FACTORS?

GONELLA: And as much as we’ve grown, there’s still room for growth. There’s a lot of opportunity with the low tax rate, comparatively to other fast growing states.

ELKIN: The capital markets are plentiful with Charlotte. Your geography is great. You’ve got the mountains, you’ve got the coast, you still have, kind of, four seasons. All in one week, sometimes. It’s a really good place to live. Great colleges and universities. A lot of people are coming for that.

MARTIN: I think it’ll be stable. I do believe that it will, they’re enough tailwinds for the demand to stay stable.

WALTON: Ironically, I think COVID illustrates your point. People have more freedom to live where they want to live. And I think Charlotte has been one of the beneficiaries of that probably longer term. People have left the congested northeast, the congested west coast. You also see some of the southeastern or southwestern states benefiting from that as well. And we’re in the states that are expanding. HODGE: You put together the strong business climate and relatively low tax environment, we’ve got in the state, plenty of access to financing and liquidity for whatever you need to do. A great quality of life. If you’re in Raleigh in three hours, you can be at the beach: in three hours, you can be in the mountains. There aren’t many places in the United States where you can say that. So it’s just a good place to be. MARTIN: I think the one other thing that hasn’t been mentioned yet is infrastructure, power. These mammoth projects in the Carolina core, … they’re enormous power users. There’s been a lot of preparation. Maybe we take it for granted, maybe not. But, it’s pretty unique. Duke Power is pretty aggressive I think in the economic development world.

WHAT DO YOU ALL SEE MOVING INTO 2023?

GONELLA: We got a good track record in this state even when there are downturns from a nationwide perspective. ELKIN: It is leveling down a little bit. Like you said, I think we feel like it’s going to be kind of level for 2023, maybe some growth. We’re more concerned about earnings because we’re gonna have higher capital costs, we’re gonna have higher labor costs for sure. And as soon as we can mitigate that, or control that it will be alright, I think. JARMAN: We’re not planning on going backwards. For us, (the main challenge) is going to be the labor shortage. We had a talent shortage before the last two years, from a mechanic and technical standpoint. We’re spending time with our community colleges and other folks really trying to build up the technical schools and resources that we need, not for 2023, but well beyond. WALTON: We’ll likely see margin compression and I think valuation multiples are already coming down a little bit. That will keep happening to some degree. But I don’t think we’re falling off a cliff, I think we’re reaching a plateau. The Fed is doing what it’s doing because it feels necessary and what is probably an appropriate reaction. We talked about the pockets, and the geographic breadth of the award winners this year. We have the benefit of having two very large cities, and then a lot of midsize cities around them. That diversifies us and offers us a competitive geographic advantage. ■

ELKIN: If you’re coming from the northeast, or California, which is where we’re getting a lot of people, the cost of living is a bargain. So you get all that (others have listed) for half the price. Most of my new neighbors are from either California or the Northeast. 38

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SUCCESS THROUGH SERVICE

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tlantic Forklift Services, LLC has found success in a crowded material handling market by providing ‘noticeably best’ customer service. Headquartered in Charlotte, North Carolina with branches in Greenville and Columbia, South Carolina, Atlantic Forklift Services has positioned itself as an industry leader, alongside manufacturing partner Doosan, that has seen double digit revenue and profitability growth since opening its doors in 2013. Atlantic Forklift Services has grown its equipment, service, parts and rental business

by branding itself as a ‘full warehouse solution partner’. Their experienced sales and service teams work together to diagnose, repair and maintain forklifts, scissor lifts, conveyors, sweepers, scrubbers, dock doors, racking and mezzanines, and other warehouse items used by customers. The goal is to increase efficiency and productivity to maximize uptime for customers, thus deepening the partnership in a market that has many other well-known service and equipment providers. Despite the challenges of a global pandemic in 2020, and ongoing supply

chain issues even today, Atlantic Forklift Services not only kept its doors open, but experienced 30% growth in 2019, and 42% growth in 2020. They have also doubled their work force and continue to hire additional sales and service team members, while also adding full-time administrative resources to support the growing dealership. Atlantic Forklift Services has been recognized as one of Doosan’s top dealers in equipment sales, service and parts for the last 6 years and is a proud two-time winner of the Mid-Market Fast 40.

5509 DAVID COX ROAD | CHARLOTTE, NC 28269 | 704-816-8960 | ATLANTICFORKLIFTSERVICES.COM S P O N S O R E D

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BUY | SELL | BUILD | INVEST

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he Jim Allen Group is the general brokerage team market leader in the Triangle area, affiliated with Coldwell Banker Howard Perry and Walston. The Jim Allen Group was established in 1983 and has consistently proven to be the market leader in sales and marketing since its inception. Our passion, insight, and expertise mean we are a devoted team that can execute on an ever-changing landscape and also deliver stellar results. The Jim Allen team is a collective powerhouse of top-performing industry professionals, with over 80 agents with over 1,000 years of experience and knowledge in the Triangle area real estate market and over 25 full-time staff members. Our group is continually motivated by a desire for excellence, success, and generosity. The award-winning Jim Allen Group has listed and closed more than 8,000 homes and offers over 45 new home neighborhoods in the Triangle area.

5000 FALLS OF NEUSE ROAD | SUITE 100 | RALEIGH, NC 27609 | 919-845-9909 | JIMALLEN.COM S P O N S O R E D

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Mid-Market Fast 40 August 24, 2022 The companies that were ranked among the fastest growing mid-market companies in N.C. enjoyed a golf/spa outing and awards reception at Grandover Resort & Spa in Greensboro. Photos by Tim Sayer

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By Anna Mason and Ebony Morman

Years of economic strength have combined to create a robust construction market, which is evident in the ninth Building North Carolina awards for commercial real-estate projects. The eight category winners and nine honorable mentions span a wide spectrum of industries and include offices, apartments, performing arts, athletics, health care and lodging. Our editorial team selected the buildings with input from representatives of the state’s construction and architecture industries. Projects that were completed between July 1, 2021 and June 30, 2022 were selected based on design, innovation and community impact.

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OVERALL DESIGN

NIDO AND MARIANA QUBEIN ARENA, CONFERENCE CENTER AND HOTEL HIGH POINT

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ince 2005, High Point University has undergone a complete transformation with 90 new buildings and more than $1 billion of development. The growth has rallied its hometown city, whose legacy as the world’s furniture capital was hit hard as many U.S. manufacturers moved production overseas. In October 2021, the university added another landmark to its campus with a unique facility that serves as a venue for basketball games, concerts, conferences and community events. It was named after the university president and his wife who have led High Point’s expansion since 2005 with no letup in sight — about $400 million of projects are planned or under construction. The 4,500-seat arena includes luxury suites, athletic training space and other amenities. Without leaving the building, visitors can walk to a conference center that hosts meetings with as many as

Developer: High Point University Contractor: Christman Co. and Samet Corp. Architect: CJMW in conjunction with Perkins + Will Cost: $170 million Size: 350,000 square feet

2,500 people, an intimate hotel with 40 rooms and various dining and meeting rooms. Nido Qubein guided the design of the property based on what he learned by giving 7,500 motivational speeches at conference centers and meeting spaces across the world since the 1970s. High Point enrolled a record 6,000 students this fall, including 1,600 new students. New schools for law, dentistry and nursing are in various stages of development, while an $80 million, 150,000-square foot library is expected to open in 2024. The university hopes the new arena can attract recruits to help improve its men’s basketball program, which has had losing records in five of the last six years. G.G. Smith, son of High Point alum and former University of Kentucky coach Tubby Smith, succeeded his father as the team’s coach near the end of the 2021-22 season. N O V E M B E R

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COMMERCIAL PROJECT

301 HILLSBOROUGH AT RALEIGH CROSSING RALEIGH

Developer: Fallon Company Contractor: Clancy & Theys Construction Co. Architect: Duda/Paine Architects Cost: $160 million Size: 299,752 square feet

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oston-based Fallon Company made its first mixed-use development in Raleigh a notable one with the April opening of 301 Hillsborough, a 19-story tower with about 287,000 square feet of office space and 12,100 square feet for retailers. It’s one of Raleigh’s tallest buildings with key tenants including Raleigh software firm Pendo, which leased the top five floors, and the Nelson Mullins law firm. The building has an open terrace on the ninth floor, a fitness studio and other amenities. Fallon has said it plans an adjacent tower that may be for offices or apartments at its Raleigh Crossing development.

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PUBLIC PROJECT

CENTRAL PIEDMONT COMMUNITY COLLEGE PARR CENTER PHOTO CREDIT: CENTRAL PIEDMONT PHOTOGRAPHY

CHARLOTTE

Developer: CPCC Contractor: Rodgers Builders and R.J. Leeper Construction Architect: Morris Berg Architects and Moody Nolan Cost: $113 million Size: 183,000 square feet

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entral Piedmont Community College added the largest building in its 59-year history with this project that includes a library, student center and a 450-seat theater. It’s aimed at providing students a hub for collaboration as CPCC attracts more 21-and-under students to complement adult learners. The Dove Art Gallery and Catalyst Coffee Bar provide space for students to rest and refuel. The center is named after longtime benefactors Wilton Parr, a former Piedmont Natural Gas executive in Charlotte, and his wife, Mary.

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RENOVATION PROJECT

DURHAM PUBLIC LIBRARY DURHAM

Developer: Durham County Contractor: Skanska and Holt Brothers Construction Architect: Vines Architecture Cost: $47.1 million Size: 85,000 square feet

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he county’s downtown library building, which opened more than two decades ago, underwent a significant renovation with an almost total rebuild. Adding an additional 20,000 square feet of space, the project’s goal was to usher in efficiency and innovation. The use of energy-efficient building components such as vast expanses of glass as a source of natural light contributed to its LEED® Gold certification. Updates also include a large outdoor program space and new parking areas that make a more seamless connection between downtown and adjacent residential areas.

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ARTS & ENTERTAINMENT PROJECT

STEVEN TANGER CENTER FOR THE PERFORMING ARTS GREENSBORO

Developer: City of Greensboro Contractor: Barnhill Contracting Architect: Rosser International and H3 Hardy Collaboration Architecture Cost: $93 million Size: 100,000 square feet

PHOTO CREDIT: GREG LOFLIN

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he 3,000-seat multipurpose performance venue, which opened in September 2021, is located in downtown Greensboro near the the city’s historical museum and cultural center. Its prominent features include an 8,000-square-foot grand lobby and a founder’s room for intimate gatherings. The venue hosts Broadway productions, concerts, comedy shows and other family entertainment. The facility has already entertained more than 430,000 patrons, with performances from Josh Groban, Patti LaBelle and Sting. In its first year, the center hosted 89 sold-out shows.

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HEALTH CARE PROJECT

ATRIUM HEALTH UNION WEST

Developer: Atrium Health Contractor: Brasfield & Gorrie Architect: Perkins+Will

STALLINGS

Cost: $150 million Size: 150,000 square feet

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he state’s biggest health care system opened the 40-bed hospital to serve fast-growing western Union County. It includes a 10-bay emergency department next to a helicopter landing pad. There is a 4-bed intensive care unit, 30 medical and surgical beds and six labor and delivery rooms. Floor-to-ceiling windows provide natural light and artwork hangs throughout the health center. The Charlotte-based system also operates Atrium Health Union hospital near downtown Monroe.

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HOSPITALITY PROJECT

JW MARRIOTT CHARLOTTE CHARLOTTE

Developer: White Lodging and Crescent Communities Contractor: Brasfield & Gorrie and DPR Construction Architect: HKS Architects and KTGY + Simeone Deary Design Group Cost: N/A

PHOTO CREDIT: MICHAEL KLEINBERG PHOTOGRAPHY

Size: 345,000 square feet

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he first JW Marriott in the Carolinas is across the street from the Charlotte Convention Center. The 23-story hotel is part of the Ally Charlotte Center, covering an entire city block developed by Charlotte-based Crescent Communities. Merrillville, Ind.-based White Lodging owns the 381-room hotel that has floor-to-ceiling windows and 34 VIP suites. A spa features six private treatment suites. There’s 22,000 square feet of event space and three restaurants, Dean’s Italian Steakhouse, Caroline’s Oyster Bar and Aura Rooftop.

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RESIDENTIAL PROJECT

THE EASTERN RESIDENCES AT NORTH HILLS RALEIGH

Developer: Kane Realty Contractor: Balfour Beatty Construction Architect: Smallwood Cost: N/A Size: 376 units

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PHOTO CREDIT: JIM SINK PHOTOGRAPHY

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he Eastern is a 35-story apartment tower in Raleigh’s North Hills neighborhood with 376 residences that opened in April. It features floor-to-ceiling windows, quartz countertops and floating bathroom vanities. Monthly rents are mostly in the $2,000 to $4,000 range, though some of the larger units top $10,000 per month. About 25,000 square feet of indoor and outdoor amenities include a pool, wellness center and rooftop courtyard that provides expansive views of the Triangle.

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TOWER TWO AT BLOC [83] RALEIGH Developer: Heritage Properties Contractor: Whiting-Turner Architect: Gensler Cost: $108 million Size: 271,500 square feet

Baltimore-based Heritage added the 10-story building after developing the adjacent One Glenwood project in the Glenwood South area. The site includes 30,000 square feet of street-level retail and a 665-space parking garage. Tenants include First Horizon Bank, the McAdams engineering and design firm, and Envestnet, a fintech company.

HONORABLE MENTIONS

UNC PEMBROKE WEST HALL RENOVATION PEMBROKE Developer: UNC Pembroke Contractor: Metcon Architect: Jenkins Peer Cost: $14 million Size: 40,659 square feet

This former dorm built in 1965 was converted into a technology hub with exposed beams and high ceilings. The adaptive reuse project preserved the exterior brick characteristic of the school’s campus into a home for the university’s IT services group. It also has classrooms and meeting spaces. A new roof pop-up lets in abundant natural light. Renovations included a new elevator and HVAC system.

WEST HALL RENOVATION PHOTO CREDIT: SEAN BUSHER IMAGERY

MURPHY’S FARM APARTMENTS MORGANTON Developer: Homes Urban Development and Centerlane Capital Contractor: Summit Contracting Group (apartments) and Stewart McKee (barns) Architect: Group 4 Design (apartments) and Nverse (barns) Cost: $39.5 million Size: 224,640 square feet

Murphy’s Farm consists of 240 luxury apartments in eight three-story buildings. The design preserves local history with the reuse of a silo barn that houses community amenities including fitness rooms and small offices. Other amenities include a pilates and yoga studio, fire pit, saltwater pool and electric car charging stations.

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RALEIGH Developer: N.C. State University Contractor: DPR Construction Architect: Flad Architects Cost: $160.2 million Size: 185,000 square feet

The research and innovation building provides a place for collaboration among scientists and staff across multiple disciplines. Located in the center of the university’s Centennial Campus, it houses research labs, greenhouses, office space, collaborative hearth space and shared conference space.

PHOTO CREDIT: MARK HERBOTH PHOTOGRAPHY LLC

N.C. STATE UNIVERSITY PLANT SCIENCES BUILDING

HONORABLE MENTIONS

LAUREL CREEK HALL AT APPALACHIAN STATE UNIVERSITY BOONE Developer: RISE: A Real Estate Company in partnership with Appalachian State Contractor: Choate Construction Architect: Niles Bolton Associates Cost: $49.3 million Size: 152,000 square feet

The five-story residence hall provides 640 beds for university housing. It has a 14,400-square-foot green space for students that includes an area for hammocks. The project has a focus on sustainability with LED lighting, energy- and water-efficient appliances and other features.

ALOFT HOTEL / COASTLINE CONVENTION CENTER WILMINGTON Developer: Wilmington Hospitality Associates Architect: Isom-Ham Design Group Cost: $30 million Size: 112,229 square feet

Located near the Cape Fear River and next to the downtown convention center, the 7-story hotel offers 125 guest rooms, including 12 suites and 11 corner rooms with balconies. With about 32,000 square feet of renovated space, its lobby and meeting spaces sit in what used to be the Atlantic Coastline Railroad headquarters until the 1960s. The hotel has space for events for as many as 400 guests.

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PHOTO CREDIT: WILL PAGE PHOTOGRAPHY

Contractor: Clancy & Theys

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FRIENDS HOMES PHOTO CREDIT: MARK HERBOTH PHOTOGRAPHY LLC

GREENSBORO Developer: Friends Homes Contractor: Landmark Builders Architect: Stewart & Conners Architects Cost: $11.7 million Size: 112,229 square feet

The independent living campus for senior citizens underwent recent renovations including an upgraded wellness center that features an indoor track, a bistro with outdoor seating and more exercise and multifunctional spaces.

PINE SPRINGS PREPARATORY ACADEMY HOLLY SPRINGS Developer: Pine Springs Prep Contractor: Landmark Builders Architect: Insight Architects Cost: $14.5 million Size: 65,520 square feet

The K-8 public charter school’s expansion includes a new middle school addition at the existing campus. The two-story building features multiple classrooms, administrative offices, a large gymnasium, assembly area and collaborative spaces. The academy enrolls 1,250 students.

SEVEN SOUNDS BREWING ELIZABETH CITY

Developer: Paul Robinson, Matt Wood and Dean Schaan PHOTO CREDIT: WILL PAGE PHOTOGRAPHY

Contractor: JD Lewis Construction Management Architect: Walter Parks Architects Cost: $3.3 million Size: 13,300 square feet

Operating in a former warehouse built 100 years ago, Seven Sounds is an independent craft brewery on the banks of the Pasquotank River. The downtown revitalization project led to the area’s second local brewery. The second floor has about 6,000 square feet of event space with a seated capacity of 300 guests, while there’s a 4,000-square-foot rooftop space.

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Gimme

shelter How North Carolina is combating the affordable housing shortage By Katherine Snow Smith

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he longstanding shortage of homes for essential workers continues to worsen. Throughout North Carolina, teachers, firefighters, hospitality staffers and other rankand-file workers are struggling to find affordable housing near their jobs. “This is one of the biggest issues for employers across the state,” says Mark Brooks, president of Brooks Engineering Associates, an Asheville-based civil engineering firm. “I’ve run this company for 20 years and when I make a job offer out of town or out of state, I’ve rarely been turned down. Now I can’t get anyone from anywhere to come because they say it’s too expensive to find a place to live.” 58

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In North Carolina, 27% of residents are considered costburdened because they spend more than 30% of their income on housing, according to the N.C. Housing Coalition, a nonprofit advocating for affordable solutions. The squeeze is even tighter in counties including Buncombe, Durham, Guilford, New Hanover and Watauga. “Developers are not going to build affordable, price-restricted units all on their own. There’s a math problem,” says Tyler Mulligan, professor of public law and government at UNC Chapel Hill’s School of Government. “At lower rents, there is just not enough revenue for those developers to make a profit. So we aren’t getting affordable housing at the level that is needed.”

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North Carolina communities are using everything from tax credits to a new kind of construction popular on TikTok to address the problem. This story looks at several examples: The Low Income Housing Tax Credit programs, which Greensboro developer Chester Brown III calls “the best vehicle for workforce housing right now.” Chapel Hill, Davidson and Manteo have mandatory zoning ordinances that call for developers to designate 10% or more of their for-sale units as affordable. Or, they can pay a set fee into a city-run housing fund. Asheville, Durham, Wilmington, Winston-Salem and other cities have amended residential zoning to allow for smaller, secondary homes, which are called accessory dwelling units. Charlotte and Raleigh instituted new zoning rules that broaden where townhouses, duplexes, triplexes and quadruplexes can be built. The theory is that denser housing will boost affordability and diversify neighborhoods. Mills River, which is between Asheville and Hendersonville, has a thriving 80-unit community of “tiny homes” that are 400 square feet or smaller. It’s a low-cost alternative in the increasingly pricy mountain region. Dare County has about 500 housing rental units in the works after partnering with UNC consultants to combat its housing shortage. These measures may just be a splinter in a two-byfour. Five hundred affordable homes in Dare County barely touch the 5,000 households that are considered cost-burdened. Eighty tiny homes in Mills River compare with 45,000 households in Henderson and Buncombe counties that are paying nearly a third or more of their income for housing. But you have to start somewhere.

Here’s a look at efforts that optimists say might make a dent in the state’s housing crisis.

Tax credits work

Greensboro nonprofit Affordable Housing Management has been involved in eight projects for essential-worker housing, each typically 70 to 90 units. Board President Chester Brown III credits the Low Income Housing Tax Credit program, which appeals to advocates of different political stripes. “Conservatives tend to favor it because it supports privately constructed and managed housing and is also a tax credit to reduce the tax burden of those who take advantage of it,” UNC’s Tyler Mulligan says. “Those on the liberal spectrum like it because it ensures housing is available to those with lower to moderate incomes.” The federal program allows private developers to sell tax credits to investors to fund projects and reduce borrowing. Investors are typically institutions that use the annual credit and take depreciation to offset their tax liability for 10 years. The apartments or townhomes are leased to residents who earn an average of 60% of an area’s median income. The federal government requires the housing to be priced below market rates for at least 15 years. State housing finance agencies, which allocate the credits, often mandate longer terms. An example is Affordable Housing’s Redhill Pointe Apartments in Greensboro. It opened this fall with monthly rents ranging from $283 to $785 a month, well below the city’s market rates. About 900 people signed up for a waiting list at the 84-unit project, Triad TV station Fox 8 reported in October. Brown complains that a limited amount of credits are allocated to each state annually, although the federal government is offering more than $1 billion in various programs this year. Many developers who meet the rigorous qualifications aren’t awarded credits. As a result, many projects don’t progress he says. In 2021, 35 developments in 29 N.C. counties came to fruition after receiving tax credits. About 129 developers pitched projects. “It’s a very competitive process,” Brown says. “If the developer (who is awarded the credits) doesn’t do a good job on the project, they won’t be eligible for future developments.

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Forcing affordable housing In Chapel Hill last year, fewer than 200 homes were sold at a price affordable to a four-person household making 80% or less than the average median income (AMI) of about $75,000, according to Nate Broman-Fulks, assistant director of affordable housing. He estimates the city has a gap of about 1,500 units, considering the number of households earning 80% or less of AMI and the existing base of homes and apartments. The Community Home Trust nonprofit works to fill that hole. More than 270 homeowners with an income of 80% of AMI or lower have bought a home in Chapel Hill or Carrboro through the nonprofit since 2011. Typical buyers are nurses, teachers, public safety officers and UNC Chapel Hill employees, according to spokesperson Daniele Berman. “A lot of people who work in Chapel Hill commute from Burlington or Mebane or further,” she notes. Many would prefer to live in Chapel Hill and Carrboro so their children could attend the highly-rated local schools. Community Home Trust sells homes to qualified buyers with traditional mortgages, but maintains ownership of the land, which is leased to homeowners. It also caps price appreciation at

Density triumphs This year, Charlotte and Raleigh city councils passed zoning changes that allow more density in single-family neighborhoods, overcoming significant opposition. About 60 residents from Raleigh’s Hayes Barton neighborhood protested outside a city council meeting to oppose the city’s new “Missing Middle 2.0” plan. The city’s zoning modification cleared the way for a developer to buy a large Hayes Barton home, which would be replaced with 17 townhomes priced at $2 million each. "These changes are an assault on single-family homes and the people who built this city,” Hayes Barton resident Terry Henderson told the council. “You have introduced a Trojan horse and presented it as if it were a gift to affordable housing.” 60

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no more than 1% per year of ownership. When the homes sell, the price hasn’t escalated with the market, paving the way for a new moderate-income buyer. If residents make home improvements, the investment is preapproved and factored into the asking price at the time of a sale. Community Home Trust receives money through grants and private donors, but mostly from town funds that result from an ordinance passed in 2010. It mandates developers building more than five for-sale housing units must designate 15% to be sold at prices affordable to low-to-moderate-income households. (The percentage is 10% in the town center.) “If they don’t want to make those units affordable, they can make a payment in lieu,” Berman says. In 2019 Epcon Communities sued Chapel Hill to recover $800,000 paid in lieu of setting aside 15% of its units to be sold at below market rate. The lawsuit came after the sale of all 63 homes in Epcon’s Courtyards at Homestead development. The Dublin, Ohio-based builder argued the town didn’t have the authority to enact its “inclusionary zoning” ordinance. The case was later dismissed because of statute of limitations. Mandatory inclusionary zoning in North Carolina is a legal gray area. State law doesn’t prohibit the plans, but there isn’t specific enabling legislation, either. A 2009 Court of Appeals ruling said a zoning ordinance may restrict various components of a development such as height, size, density, and use of buildings. While price was not listed as a characteristic, some lawyers argue that “use” could be interpreted as relating to price-sensitive affordable housing. “The town does not believe that our inclusionary housing program is in imminent jeopardy at this time,” says Broman-Fulks. Still, Lennar Homes is challenging Davidson County’s similar inclusionary zoning plan after the Miami-based builder paid $700,000 to the county’s Affordable Housing Fund. Lennar had not dedicated 12.5% of its units as affordable as required by the county.

A city of Raleigh website states the more flexible zoning code is “designed to allow for smaller homes on smaller lots and denser development near high-frequency transit [that will] promote alternative and missing middle housing types so that Raleigh can better accommodate existing and future residents.” Similarly, Charlotte now allows developers in many areas to replace a single home with three or four smaller units to help meet the city’s big shortage of affordable housing. Changing the zoning rules passed by a 6-4 council vote. Critics say the measures could harm a neighborhood’s character without improving affordability. Former Charlotte city councilman Matt Newton predicts that lower-income neighborhoods with less expensive land will attract many developers planning new, higher-priced homes.

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Coastal response Dare County faces a major challenge because of a land shortage and increased housing demand. The mainland is dominated by tens of thousands of acres that are part of Alligator River National Wildlife Refuge and Dare County Range, which the Navy and Air Force use for bombing practice exercises. “We only have the land on the barrier islands where we all live and very little on the mainland. It makes it very difficult to develop here,” County Manager Bobby Outten says. “It’s not profitable for (developers) to build apartments that can cater to the essential workforce. So we have teachers, police officers, and people working in offices and restaurants driving from as far as Currituck, Plymouth, Columbia and Elizabeth City.” Two years ago, the county made workforce housing a top priority and partnered with the Development Finance Initiative at UNC’s School of Government. About 500 workforce housing units are in the works after officials amended regulations allowing

residents to construct guest houses, garage apartments and so-called accessory dwelling units on their properties. Coastal Affordable Housing, a business led by Aaron Thomas of Pembroke-based Metcon Construction and Raleigh architect Robbie Ferris, plans to build 400 subsidized apartments by the end of 2023. In the public-private partnership, Dare County is providing a $35 million forgivable loan, using money from the state budget. Coastal will also borrow $65 million separately. Dare County is also investing $9 million in a 100-unit affordable housing project by Columbus, Ohio-based developer Woda Cooper Co. on county-owned land. Neighbors in single-family homes may not be pleased, Outten notes. “No matter where you put anything, somebody is not going to like the fact that there is county-owned land. It’s new and it’s not what they are used to,” he says. “We don’t expect everybody to like it but in the long run it’s really what we need to do. These 500 units are going to be important for our community.”

Tiny homes, big potential? Acony Bell Tiny Home Community in Mills River was almost completely leased before developers broke ground on its infrastructure in 2017. Now, the waiting list to lease one of the last 19 lots is capped at 100 names. The 60-acre development charges $550 a month for people that provide their own tiny homes, which typically cost from $30,000 to $60,000. All utility hookups are provided. It will eventually total 94 homes, the vast majority housing full-time residents. “We are providing a nice community and affordable place to stay that’s an alternative to apartments,” says managing partner Mark Brooks, also president of Brooks Engineering. He knows residents who pay $550 and have a mortgage of a similar amount. “You can't get an apartment in Asheville for $1,100 a month,” he says. The majority of Alcony Bell residents are single, middle-aged women. A few couples and families with children are also residents. Brooks recalls a married couple with a baby who lived in a 120-square-foot home for about two and a half years. “We had neighbors who were upset when we broke ground. There was a knee-jerk reaction. Now they love us,” he says. Each home has a different style. Amenities include vegetable gardens, a chicken coop, campfire ring and an early-1900s stone cottage that serves as a clubhouse. “There is a real close sense of community here,” Brooks says. “They have potluck dinners, poker nights. People take care of each other.”

Shazam! 3D-printed homes In January, Raleigh-based TNT Development and partner Austin, Texas-based ICON plan to assemble an $800,000 3D printer that dispenses concrete for a home frame, based on a digital file’s blueprint. The project is occurring in Littleton, a Halifax County town 70 miles northeast of Raleigh, with backing from private investors including the Ed Fitts Charitable Foundation. Fitts is a retired packaging CEO who is revitalizing his hometown with a vocational school, retail stores and a restaurant. He also plans an affordable housing community with 20 3D printed homes and about 150 tiny homes. The 3D printing system’s technology comes from Denmark’s COBOD, which has affordable housing projects in Germany, Kenya and other nations. The process will enable construction of homes within 10 days and save as much as 40% compared with a stick-built home, says TNT President Tone Terrell, who has worked to combat homelessness in the Triangle. “There is a lot of interest and hope for 3D-printed homes,” says Mulligan. ■

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Inside Straight As slot machines rattle 24/7, details emerge on key influencers who cleared the way for North Carolina’s new casino. By Edward Martin ost who come to the granite boulders of Crowders Mountain’s Pinnacle Peak in Gaston County risk nothing greater than blisters hiking its rocky trails. Others gamble more, rappelling or free-climbing its precipitous cliffs. Within sight of the cliffs, just beyond Interstate 85 on the outskirts of Kings Mountain, Jason Brewer is playing for lower stakes. Inside the windowless, warehouse-like building, 1,000 slot machines entice casino visitors. He concentrates and spins. Mega Spin stops on what players call an upgrade. “That’s $1,000,” Brewer says, sliding to the edge of his seat. He spins again and takes a deep breath. “Another!” he exclaims as symbols on the screen align. Then another. “A jackpot!” With as little drama as a grocery-store checkout, the machine spits out a paper ticket. Brewer hands it to a cashier and heads home to Winston-Salem with $2,037 in pocket. And an IRS Form 1099-MISC. “For taxes,” he laughs. “I paid ‘em.” Officially opened in July 2021, Catawba Two Kings Casino

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has slated $273 milion for a two-story permanent casino, 29-floor hotel, restaurants and other trimmings. Last winter, it doubled the playing floor to about 30,000 square feet. In September, it added sportsbook betting with 30 kiosks. For gamblers like Brewer, who returns with his family monthly, it’s an unbridled success. “I do wish they’d get a little more upbeat music,” he says. The 3,700-member Catawba tribe is staking much of its future on this casino, which expects to eventually have 5,000 slot machines. “We can improve health care, housing, education, scholarships, workforce opportunities,” says Elizabeth Harris, the tribal administrator. But 15 months after the casino’s debut, it’s clear that Lady Luck had little to do with its development. Rather, its path was paved by the support of prominent Carolinas and U.S. politicians, various business figures and the persistence of Wallace Cheves, the main outside developer. Now, because many of those affiliated parties do not have Native American genes, construction of a permanent

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casino has stalled, pending a probe by the National Indian Gaming Commission. “The truth is now coming out,” says Richard Sneed, perhaps the casino’s biggest critic. The former U.S. Marine is the elected chief of the 14,000-member Eastern Band of Cherokee Indians, which operates two casinos in western North Carolina. The Cherokees tried for years through lawsuits, Congressional testimony and political contributions to block a Catawba casino in South Carolina, where gambling is barred. Instead, the tribe went across the state line, where it didn’t hold reservation property. “This is all about political dealings and backroom deals. It’s all out there now,” Sneed says. Cheves bristles at such descriptions. The Catawbas “stood little or no chance of realizing their dream” of a casino without the expertise of his Greenville, South Carolina-based company, Sky Boat Gaming, he says. The Wofford College graduate started working in gaming in 1996 and has owned his own companies, including day-cruise casino boats, for more than 20 years. He started working on the Two Kings project in 2008. “It’s well known that those who have opposed this project from day one have spent millions of dollars trying to influence Congress and trying to smear me and others with blatantly false and unsubstantiated accusations,” he says. In their pursuit of the casino, the Catawbas and Cheves developed ties with South Carolina political royalty: U.S. Sen. Lindsay Graham and kinfolk of U.S. Rep. James Clyburn and former Governor Nikki Haley. Graham has been an outspoken advocate for the Catawba casino. Cheves has donated tens of thousands of dollars to Graham’s campaigns and served on his finance committee during his unsuccessful run for president in 2016.

Clyburn’s brother, John, and Haley’s husband, Michael, received shares in Kings Mountain Equipment Supply, which gets 20 cents of each $1 in profit generated by the N.C. casino’s slot machines, the Wall Street Journal reported in July. John Clyburn consulted on the project for nearly a decade, while Michael Haley started advising on cybersecurity issues in 2018, the paper said. Nikki Haley opposed gambling as governor and says she didn’t promote the Catawba casino. James Clyburn says he never discussed the project with his brother. Clyburn and Graham promoted legislation that made Two Kings possible after the Trump administration reversed its initial opposition to the project. Other legislative supporters that received campaign donations from the Catawbas and non-tribal members affiliated with the casino include Senate Majority Leader Chuck Schumer of New York, North Carolina senators Richard Burr and Thom Tillis, and political action funds connected to former President Donald Trump. Federal Election Commission and Senate disclosure documents show the tribe paid more than $200,000 in the past two years to lobbying firms such as Washington-based Hobbs, Straus, Dean & Walker. Graham believes the Catawbas have historically been treated badly, a spokesperson says. Representatives of Tillis and Burr say their support of the casino isn’t tied to campaign contributions. Clyburn’s press secretary, Hope Derrick, declined to comment.

Siphoning business

The Cherokees didn’t want to lose their monopoly on Native American casinos in North Carolina. Since federal and state officials approved gambling in the mid-1990s, EBCI Holdings, the Cherokees’ business arm, has pumped close to $2 billion into

Catawba Two Kings Casino opened in July 2021 and includes 1,000 slot machines and sports betting.

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Catawba Indian Nation executive committee member Dwayne Rogers, left, Secretary/Treasurer Rod Beck, Chief Bill Harris, Assistant Chief Jason Harris, and executive committee member Sam Beck at the July 2021 .opening of Two Kings Casino.

Harrah’s casino complexes in Cherokee and Murphy. The Cherokee casinos are among the most successful of the nation’s 532 Indian casinos. Native American establishments comprise nearly half of all U.S. casinos, and pack a $32 billion annual wallop for one of the nation’s poorest demographics. EBCI is partnering with Harrah’s owner Caesars Entertainment on a $600 million casino and hotel complex in Danville, Virginia, 45 miles north of Greensboro. It’s expected to open in 2024. Sneed insists that the Kings Mountain site is on ancestral Cherokee land, violates treaties with North Carolina dating to the 1700s, and skirts national Indian gaming regulations. He also estimates that Two Kings is siphoning $100 million a year from the Cherokee casinos. The new rival is adjacent to Interstate 85 and 35 minutes southwest of Charlotte. “Cherokee was three hours and meant an overnight trip,” says Brewer, who typically visited a few times a year. “[Two Kings] is an hour and a half down I-85. We stay a couple of hours and go. Sometimes we leave a little money, sometimes we bring a little home.” No proof of crimes in connection with Two Kings have surfaced. However, Justin Platt, spokesman for the National Indian Gaming Commission, which regulates Native American casinos, confirms the agency is probing financial transactions tied to Twin Kings. “Our investigation is limited to requirements of the Indian Gaming Regulatory Act, including ensuring that the tribe maintains sole proprietary interest in its gaming operation,” he says. The rules mainly limit percentages of revenue outside

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companies such as Kings Mountain Equipment can earn from casino contracts. Allegations that outsiders have muscled in on the casino “are not within the scope of the agency’s jurisdiction,” he adds. The National Indian Gaming Act in 1988 formed the gaming commission as a watchdog to ensure non-tribal parties don’t take advantage of Native Americans. Under North Carolina’s agreement that permitted the Cherokee casinos in 1994, the state’s Indian Gaming Revenue Fund gets 6% of live table revenue from blackjack and other games. That share will rise to 8% in 2032. The Cherokee, under a plan approved by the federal commission, divides up gambling proceeds between the tribe and its 14,000 members. The tribe’s share goes to education, including cultural programs aimed at preserving and teaching the Cherokee language. The Eastern Band opened an $82 million hospital in 2015. Members get annual payments that last year came to about $6,600 per person. Harrah’s management fee is less than 10% of total revenue, having declined steadily since 1994, Sneed says. It was originally capped at 30% of revenue. The Catawbas are permitted only for electronic gaming, which doesn’t provide revenue for the state. The site is managed by Delaware North, a Buffalo, N.Y.-based company that operates more than a dozen casinos.

Local connections

South Carolina attorney James “Wally” Fayssoux is the manager of Kings Mountain Equipment, which has supplied more than half the casino’s 1,000 slot machines. He and

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Cheves say their dealings with Two Kings are rigorously scrutinized by federal officials. Adds Harris, the tribe’s chief executive, “We’ve confirmed with the NIGC that there’s no investigation regarding alleged political favors.” Kings Mountain Equipment “purchased millions of dollars in state-of-the-art gaming equipment” for lease to Two Kings, and all the contracts meet N.C. Gaming Commission regulations, Fayssoux says. Citing confidentiality agreements, Cheves, Fayssoux and Harris declined to share contract details. Three other non-Catawba owners of Kings Mountain Equipment stock have been identified in newspaper reports. Columbia lawyer Butch Bowers worked for the Catawbas in their negotiations with North Carolina, while former Cleveland

Land transfers Some conservative members of the Catawba and Cherokee tribes may cringe at their involvement now, but archeologists and cultural historians say Native Americans have gambled for millennia. In fields near the Cherokee headquarters in Swain County and river bottoms southwest of Charlotte along the Catawba River, it’s not unusual for archeologists to find gaming stones, polished rocks sometimes with holes, used by Native Americans in games resembling shuffleboard or horseshoes. Betting was common, say anthropologists, with stakes sometimes including bettors’ wives and children. Links between the two tribes may have flowed along the Catawba River, which originates in western North Carolina. That ancient history is pertinent to today’s casino controversy, says Richard Sneed, the Cherokees’ elected chief. Under unrelenting pressure from white settlers, both tribes resorted to treaties that were repeatedly broken.

County commissioner Eddie Holbrook and former County Manager David Dear are local long-time powerbrokers. Fayssoux calls accusations of misdealing “most probably the result of a false narrative and being promoted by those who oppose the success of the Catawba and their casino.” Despite the current delay, Two Kings is likely to join the ranks of major tribal casinos with estimated annual revenue topping $300 million. It will make Kings Mountain a top N.C. tourist destination, local officials say. “Sky Boat and its principals prefer to deal in facts, not accusations,” Cheves adds. “The Cherokees are a good example of how tribes benefit, and it would be our hope that others would want to see other nations benefit as well.” ■

“The parcel of land the Catawba casino is on was actually Cherokee aboriginal land that we deeded to the state of North Carolina in 1777,” he says. A treaty that the Cherokee signed with North Carolina in May 1777 failed to protect the Cherokees for long. In the Trail of Tears between 1830 and 1850, Cherokees were forced to Midwest reservation land at gunpoint. Thousands died. A few hid in the nooks and valleys of the Smoky Mountains, becoming the ancestors of today’s Eastern Band. Meanwhile, by the 1970s the Catawbas numbered about 2,000, mostly low-income workers in textile mills in the South Carolina counties south of Charlotte. They gave up federal recognition as a tribe, and, along with it, millions in federal aid. Remnants filed a lawsuit, alleging that much of the 144,000 acres making up Rock Hill was on their land. They dropped the lawsuit when granted federal recognition again in 1993, but are now subject to South Carolina law that forbids gambling. “They were a terminated tribe,” Sneed says. “That was voluntary on their part.” After negotiations with the state and an appeal to the South Carolina Supreme Court failed, they switched their sights to North Carolina. “This whole dynamic of reservation-shopping is unprecedented.” The U.S. Department of the Interior, which oversees Native American gaming, initially rejected the project in 2018. After Senator Lindsay Graham began lobbying, the U.S. Interior Department reversed itself, and approved the purchase of 16.7 acres in North Carolina to be held in trust for the Catawbas. The Cherokees sued, but Congress took the matter out of the courts by passing the Catawba Indian Lands Act, which codified the Interior Department’s decision. President Joe Biden signed the bill. The Two Kings slots haven’t stopped ringing ever since. ■ N O V E M B E R

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ROUND TABLE

DIGITAL PRIVACY & SECURITY

CYBERSECURITY: THE NEW BABY Today’s global economy relies on data shared and stored through cyberspace. North Carolina businesses — large and small — have long known the importance of maintaining the physical property they own and protecting against intruders, potential theft and other acts that could cause issues within the company. Emerging from the age of COVID19, employees working from home pose even more challenges. Add to that, the effects of recent cyber-attacks on businesses and organizations across the country make cybersecurity an even more important topic for all N.C. businesses.

PANELISTS

The discussion was moderated by NC Tech Association’s Brooks Raiford. It was edited for brevity and clarity.

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Chuck Kesler

Brooks Raiford (moderator)

chief information security officer, Pendo

president and CEO, North Carolina Technology Association

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MORE COMPANIES AND GOVERNMENT AGENCIES ARE VICTIMIZED BY RANSOMWARE. WHAT ARE THE RAMIFICATIONS FOR N.C. BUSINESSES AND ORGANIZATIONS?

they needed to be. So that tells you something. You need to be prepared. It’s coming. Just get ready for it.

RODGERS: One thing that we need to start with is the state has issued an edict that no state agency may pay a ransom at all. (North Carolina is the first state to do this.) All of these schools and agencies are really going to have to get with it when it comes to incident response, and, most importantly, the backups in making sure they can restore their systems so they aren’t down for very long. I think that really is the key. They say that there are two groups of people, those who have been hacked and those that don’t know they have been hacked. You have to assume that you have been and you have to act accordingly, and that means good preparation

and making sure you have a good incident plan in place. The last thing you need is for everyone to act in a n uncoordinated way. When you have press come along they typically interview the person who doesn’t know anything and the person typically says something they shouldn’t. Everyone in your organization needs to understand how to respond and who is supposed to talk and who isn’t. Typically with ransomware you are going to have to get the FBI involved. And at that point you are going to need an attorney. So you are going to spend a lot of money. I just read an article about a school in Connecticut that was the victim of ransomware. The outcome was it cost them about $500,000, and about $350,000 of that was unnecessary. Had they done everything upfront that they ended up having to do in a very short period of time, it would have cost them about $150,000 over the course of the year to get where

Susan Randall

Laura Rodgers

Jon Sternstein

information technology instructor and department chair of Computer Information Technology and Broadcasting, Cleveland Community College

director of cybersecurity practice, Secure Computing Institute, NC State University

founder and CEO, Stern Security

RANDALL: I know of one incident in the last year or year and a half with one of our other community colleges. It was hit with ransomware. It took their entire system down. It didn’t just cost them their emails, it cost them their curriculum. Because when it shut their system down it took down their learning management systems, it took down access to all their courses. You didn’t know where your students stood in regards to their courses, who had submitted what and what grades they had when the system went down. They were pretty much stuck until they could get to some backups and be able to start rebuilding. All their instructors had to start rebuilding their courses. STERNSTEIN: There is a lot of pressure for organizations to pay and the criminals know this. We’ve

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ROUND TABLE

DIGITAL PRIVACY & SECURITY

talked about companies paying to get their lives back. More and more recently criminals are trying to tell companies that if they don’t pay they are just going to release all their data, too. That adds additional pressure on companies to want to pay in order to get their files back. Paying doesn’t mean that everything is going to go back to normal. We had a company that reached out to us a year or so after a ransomware attack. They paid the ransom and a day later they got hacked again. The criminals claimed this was a completely different criminal group that did this. Just because you pay doesn’t mean you are going to get all your files back and not get hacked again if you don’t do the correct incident response and figure out how this happened in the first place. KESLER: Building on what Jon said, when you’re making a decision to pay a ransom, you are dealing with criminals. You can’t assume a criminal is going to give you your data back. It’s quite possible they can’t even give you your data back. And going back to what Laura said, preparation is really key. Doing things like simulated exercise, tabletop exercises and walking through the scenarios 68

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and understanding how your organization might be impacted if you lost those systems. And, by the way, that can bring benefits beyond just ransomware attacks. You can have a natural disaster that can render those systems unavailable. As an organization, you need to be spending the time to understand how you depend on those systems, what you do if you do lose those systems, and how you can recover that data. Do you have backups and have you tested your recovery procedures? We all know paying a ransom should be a last resort and that we shouldn’t negotiate with terrorists. WHAT HAS BEEN THE IMPACT OF THE SHIFT TO WORKFROM-ANYWHERE ON SECURITY FOR EMPLOYEES’ DEVICES CONNECTING TO A CORPORATE NETWORK? KESLER: Prior to the pandemic, many companies, especially cloudnative startups, were beginning to adopt the “heading toward a model toward the “zero trust” network architecture model, and I think the move to work-from-anywhere has accelerated that model. Traditional network security models tend to be heavily based on the idea that access originating from corporate networks C A R O L I N A

could be trusted, and for companies using that approach, remote work tends to create higher risks. Zero trust turns that on its head by assuming that no network can be trusted, and instead focuses on using strong authentication methods to verify user identities and that access is originating from devices that meet an organization’s security requirements. So it becomes less important as to what network users are coming from and it gives you more flexibility whether you are sitting at home or sitting in a hotel or sitting in an office. For companies that were already using zero trust, the shift to workfrom-anywhere was a non-event, and I think many who weren’t have struggled to adapt. RODGERS: For organizations where employees primarily work on site, they all of the sudden had to develop policies and procedures to handle everyone working off site. I saw many companies struggling with “I don’t even know how to start telling people what networks they can use and they can’t use.” I saw a lot of things come out a year after we were all working from home. It took them that long to get a handle on: “What we can and cannot do. If it’s an employee’s device how can I

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tell them what they can and cannot do for work? ” One of the things we really got a handle on with COVID is we really got to think about all the risks out there and how we need to have something in place for every one of them whether for a natural disaster, or another pandemic, a ransomware attack. This is the time you have to sit down and really brainstorm all the things that can go wrong and have a good plan for each one of them. Right now everything is fair game. If you’re not ready you are going to be left behind and you’re going to have some big problems moving forward.

HOW HAVE SECURITY ISSUES CHANGED YOUR CURRICULUM AND TEACHING STRATEGIES? RANDALL: I’m the department chair for IT and we have changed our program of study from security. We now strictly focus the program on cyber. Our networking technicians and web developers are both using cyber courses as well so our students are well rounded and they are looking for all that can go on. When the pandemic hit, my department was ok because my students were already primarily online. My students were okay, they are the gamers that stay up all night. We had a lot of traditional instructors, they didn’t know what

to do. The business office, they’ve always worked from the office. Different VPNs (virtual private network) had to be set up so they could work remotely securely. In my department we really make sure they know security is a big thing. We have two factor authentication on campus. The different third party software we use to teach with, they all have a focus on encrypting your data as well. We’re trying to make sure we get the word out. We are trying to put information out locally on C-19 the our TV station we have here at the college we do a “cyber moment.” We are trying to educate the public on how important this topic is. We’ve got to keep everybody’s data safe.

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DIGITAL PRIVACY & SECURITY

PLANNING FOR THE INEVITABLE As cyber attacks become the norm instead of an occasional headline, having plans and policies in place is crucial. Attorney Will Quick, a partner at Brooks Pierce in Raleigh, helps companies of all sizes in all industries that are experiencing cybersecurity incidents with the investigation, response and notification process. This often means coordinating efforts across multiple states. The board certified specialist in privacy and Information security law has expertise in assessing regulatory obligations and developing privacy compliance programs as well.

WHAT HAS BEEN THE EFFECT OF RECENT RANSOMWARE ATTACKS ON VARIOUS BUSINESSES AND ORGANIZATIONS?

knows your business keep up with changes in data privacy laws so that you aren’t caught by surprise when the law changes somewhere you do business.

Ransomware attacks have exponentially driven up the cost of incident response, including the cost of cyber insurance. Typical ransom attacks now include both system encryption and data exfiltration. When you are hit with one of these you have to get back up and running, figure out how the bad guys have gotten in and close that gap. You also must determine what data might have been exposed and what your obligations are related to that data. Those are costly processes. I try to get clients to understand that investing in cybersecurity measures, data mapping and redundant backups on the front end is going to save a lot of headaches and money when a ransom event happens. As an added bonus, these efforts up front can also help to bring down the cost of cyber insurance.

WHAT AND WHO SHOULD BE INVOLVED?

HOW OFTEN SHOULD COMPANIES REVIEW THEIR PRIVACY PRACTICES AND RELATED POLICIES? This varies from industry to industry and company to company, but I think an annual review is a good starting place. Just as important is having someone in the company or a trusted outside advisor who

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It’s important to have a multi-disciplined team involved in creating and updating privacy policies. Certainly legal and IT, but marketing , HR, accounting and management all have roles to play. Really any department that holds personal information about consumers, employees, or business partners or other sensitive company data needs to be involved. WHY IS IT IMPORTANT FOR COMPANIES TO PERIODICALLY REVIEW AND UPDATE THEIR PRIVACY PRACTICES AND RELATED POLICIES? The data privacy landscape is constantly changing. In the past year, Connecticut and Utah have passed comprehensive consumer privacy laws. In 2021 it was Colorado and Virginia. These all come after California’s CCPA in 2018, which was expanded by the CPRA in 2020. More will follow. While implementing solid privacy principles can go a long way towards satisfying multiple laws, there are slight variations that require tweaking on the margins. ■

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WHAT ARE SOME OF THE NEW RULES OR BEST PRACTICES FOR COLLECTING, STORING AND USING PERSONAL INFORMATION? KESLER: I think the EU’s General Data Protection Regulation, or GDPR, which went into effect in May 2018, has set the bar for data privacy. Even though the GDPR is focused on protecting the data of EU residents, many subsequent national and statelevel privacy regulations, such as the California Consumer Protection Act (CCPA) follow many of the same principles. It A lot of the states have similar legislations geared around protecting the privacy of individuals. It boils down to a few main concepts. One is making sure organizations have the legal right to collect and store that private information they are getting. Another is making sure you are following industry practices around protecting data. You also need to be able to address the basic requirements of removing personal data upon request, providing an accounting of who accessed personal data, correcting errors in that data, and not selling or sharing that data without the user’s express consent. It is certainly getting more complicated with more states and more countries creating their own privacy regulations, but from my perspective, the work that we have done to be compliant with GDPR puts us in a pretty good place for meeting any new requirements from other jurisdictions. RODGERS: One of the best practices now is to not get any information from a consumer or

anyone else that you don’t need. For the longest time it was: “Get all the info you can get because you might not know if you would ever need it.” We collected a lot of info that didn’t really need to be collected. Now it’s shifting more to getting only information for that purpose and nothing more. If you don’t have a legal need for that data you shouldn’t be collecting it. KESLER: Laura has made a great point here. Culturally speaking, companies are often thinking: “We might need that data so let’s get it just in case.” With an increased focus on privacy, having that extra data dramatically increases your risks. STERNSTEIN: You have to know all the data you have collected and know where it is stored. And minimizing the data is something that’s highly crucial these days. We see companies all the time collecting way too much information that they do not need. HOW OFTEN SHOULD POLICIES AND PROCEDURES FOR PRIVACY AND SECURITY BE REVIEWED? WHO SHOULD BE PART OF THE PROCESS? RODGERS: Yearly at minimum. If you have an incident, you would have to review everything at that point. This is one of those jobs nobody likes. What I prefer is reviewing policies and procedures on a rolling schedule. So you’re not confronted with this monster job at the end of calendar year or fiscal years. As far as who should be part of the review process, the data owner

certainly has to be there. A lot of people think of IT as the data owner. They are helping process the data to get where it needs to be, but are not the data owner. If you look at these policies and procedures there may be a need to purchase another tool so then you need finance reviewing the documents as well. If you don’t get everybody in on this decision and working together, the decisions you make will not be optimal at all. STERNSTEIN: In addition to that, I would highly recommend you review your policies if your business changes. If you are expanding to a different market or collecting different types of data than before. RODGERS: For those of us who have kids, before you had kids you got to do whatever you wanted to whenever you wanted to. Whenever you have a baby, every single decision you make going forward you have to look at what the impact is on that baby. Cyber and data privacy are your new baby now. Whatever changes, whatever you do, you must think of what the impact is on cyber and data privacy first? You can’t wait until the end and slap it on. You have to think of it in the beginning. Cyber is your new baby. ■

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2022 LAW JOURNAL

2022 LAW JOURNAL At Business North Carolina’s request, top lawyers were asked to provide insight into key business legal issues. Business law is complex, but these experts bridge the gap on two topics: the power of the New York Convention in international arbitration cases and how North Carolina and the business community can benefit from the increasing interest of big-city dwellers and investors in smaller cities and rural areas. Three talented Tar Heel lawyers share their knowledge on these issues in this report.

THE POWER OF THE NEW YORK CONVENTION — WHY NORTH CAROLINA BUSINESSES SHOULD TAKE ADVANTAGE OF IT

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BY MICA NGUYEN WORTHY AND KAYLA N. MCDANIEL Cranfill Sumner LLP

REAL ESTATE DEVELOPMENT IN THE FACE OF RURAL MIGRATION BY KATIE DOWELL, Raleigh Real Estate Law

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2022 LAW JOURNAL

THE POWER OF THE NEW YORK CONVENTION WHY NORTH CAROLINA BUSINESSES SHOULD TAKE ADVANTAGE OF IT.

BY MICA NGUYEN WORTHY AND KAYLA N. MCDANIEL Cranfill Sumner LLP

he best markets for many of our business clients in North Carolina are overseas or online, with customer bases spread across the world. As they grow their business on a global scale, they inevitably grow concerned with being able to “hold the other side” to the deal. International arbitration is one powerful tool businesses engaged in the global economy have to mitigate this risk. When drafted properly in the parties’ contract, a North Carolina company can file a claim in arbitration, have it heard and adjudicated in North Carolina, and then be able to enforce the arbitral award in almost any country in the world where the other side has assets.

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The enforcement of arbitral awards is based on a treaty called the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). The United States is a contracting state to the New York Convention along with about 168 other countries and territories.

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THE NEW YORK CONVENTION APPLIED IN NORTH CAROLINAFOREIGN AWARDS ENFORCED. On June 24, 2022, the Fourth Circuit Court of Appeals affirmed the North Carolina federal court’s ruling in Reddy v. Buttar, enforcing a Singaporean arbitration award under the New York Convention, against a citizen and resident of North Carolina. The plaintiff Rachan Reddy initiated arbitration proceedings against the defendant Rashid Buttar after a dispute arose concerning the sale of real property in the Philippines. The parties executed a purchase agreement (Agreement) under which Buttar was to sell Reddy shares of companies, which purportedly owned an island in the Philippines, for $3 million. Reddy paid several advances totaling $1.5 million, as well as $50,000 for taxes. Reddy later alleged that Buttar had breached the Agreement’s warranty of title and demanded a refund of $1.5 million. However, Buttar refused and instead sought to enforce the Agreement and obtain the remainder of the purchase price, along with applicable fees and costs, for a total of $1.99 million. C A R O L I N A

Pursuant to the parties’ Agreement, Reddy commenced arbitration in Singapore, although Buttar objected on the basis that he had not signed the Agreement. Thereafter, Buttar failed to attend the arbitration hearing. After reviewing evidence including emails between Buttar and Reddy, the arbitrator found both parties signed the Agreement, and enforced it against Buttar for $1.55 million, along with nearly $500,000 in legal fees and costs. When Reddy sought to enforce the award in the Western District of North Carolina under the New York Convention, Buttar moved to dismiss. The District Court found Buttar’s arguments unpersuasive and denied his motion to dismiss before ultimately granting Reddy’s motion for summary judgment to enforce the award. Buttar appealed to the Fourth Circuit and argued the District Court lacked subject matter jurisdiction because the New York Convention required an agreement to be in writing and signed SPONSORED SECTION

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by the parties to be enforceable. However, the Fourth Circuit disagreed, and held the specific written-and-signed requirements went to the merits of establishing an award’s enforceability under the New York Convention, rather than subject matter jurisdiction. Buttar also argued the District Court lacked general personal jurisdiction over him as he had moved to New Zealand prior to Reddy filing suit. After conducting jurisdictional discovery, the District Court concluded Buttar had not overcome the presumption that general personal jurisdiction existed over him in North Carolina. Factors weighing in favor of general jurisdiction included Buttar’s involvement in multiple business ventures in the state, maintenance of numerous local utility accounts and addresses, receipt of legal documents within the state, and listing of a local address on his sole bank account. Buttar also maintained North Carolina medical and pharmacy licenses and was registered to vote in the state. Finally, the Fourth Circuit rejected Buttar’s contention that the arbitration agreement was a forgery, finding no evidence to support this claim. Rather, the evidence demonstrated that Buttar attempted to enforce the purchase price against Reddy using the very same agreement and only alleged it was false (or a forgery) after Reddy initiated arbitration proceedings against him. Noting that an arbitrator’s findings of fact are entitled to deference, the Fourth Circuit upheld the District Court’s opinion in its entirety. The Reddy decision is an example of the powerful enforcement powers that come with international arbitration awards under the New York Convention.

TIME FOR NORTH CAROLINA BUSINESSES TO TAKE ADVANTAGE OF THE NEW YORK CONVENTION. Recent cases have shown examples of the enforcement of foreign arbitral awards in North Carolina, which means it is time for North Carolina businesses to take advantage of this powerful tool as well. In a prime example of how powerful the New York Convention can be, the

federal court in the District of Columbia confirmed and enforced a $27.4 million arbitral award against the Belize government in BCB Holdings Ltd. v. Gov’t of Belize. On August 18, 2009, the petitioners obtained an arbitral award against the Government of Belize (GOB) before the London Court of International Arbitration. The petitioners sought enforcement of the award in Belize, but Belize’s highest court ruled the award was invalid and unenforceable as “repugnant to public policy.” On July 1, 2014, the petitioners filed a confirmation petition in the federal court in the District of Columbia under the New York Convention. The District Court confirmed the award for about $27,430,000. The GOB subsequently issued legislation that made it a criminal offense to seek enforcement of an “unlawful” judgment against it. The petitioners filed a second action in the federal court in D.C. seeking an injunction to prevent the GOB from interfering with their collection efforts. The District Court ultimately held it was unnecessary to rule on the injunction because property of a foreign state located in the United States “is not immune from attachment” from the judgment being enforced against it. So, the petitioners could collect on the GOB’s assets located in the U.S. The GOB’s refusal to enforce the award in Belize did not prevent it from being enforced in the U.S. or any other jurisdiction that was a signatory to the New York Convention. The New York Convention can be a powerful tool, even in the face of a foreign government’s refusal to recognize an arbitral award and legislation to criminalize its enforcement. Using international arbitration will afford North Carolina businesses the right to seek enforcement of their awards in any New York Convention contracting state.

PRACTICE TIPS FOR NORTH CAROLINA BUSINESSES In reviewing and drafting international sales and distributor contracts, we recommend the use of well-recognized arbitral institutions for the dispute resolution clause. Doing so not only provides the company with the potential enforcement power described in this

article but also shows the counterparty that the North Carolina company is sophisticated in international contracts and willing to resolve disputes efficiently and effectively. We often recommend clients review the AAA-ICDR “Clause Builder” tool or stick to the “model clauses” published by international arbitration institutions, like the International Chamber of Commerce (ICC). Of course, every transaction may be sufficiently unique to call for different terms to be negotiated. When drafted properly, North Carolina businesses will be able to enforce arbitral awards across the globe with the power of the New York Convention. ■

MICA NGUYEN WORTHY

Mica Nguyen Worthy serves as legal counsel to clients in the aviation and global supply chain industries. As a Certified Global Business Professional, Mica has a specific focus on assisting global clients with their international operations including trade issues, international contracts, trade credit payment disputes, international arbitration, and dispute resolution. Mica has been recognized by North Carolina Super Lawyers® in the field of Civil Litigation and maintains an AV rating with Martindale Hubbell. KAYLA N. MCDANIEL

Kayla N. McDaniel concentrates her practice on employment, civil rights, and government liability defense for both public and private entities. Kayla has effectively represented private and municipal entities facing claims for wrongful termination, retaliation, hostile work environment, breach of contract, and discrimination under Title VII, REDA, ADA, ADEA, FLSA, and FMLA. N O V E M B E R

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2022 LAW JOURNAL

REAL ESTATE DEVELOPMENT IN THE FACE OF RURAL MIGRATION

BY KATIE DOWELL Raleigh Real Estate Law

he recession of 2007 saw unprecedented numbers of people move to urban centers and metropolitan areas in search of employment and housing. The post-pandemic market tells a different story presenting a unique opportunity for commercial and residential real estate development.

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COVID-19 transformed American society. It sent us to work from our couches, made us cancel our travel plans, and led us to avoid social interaction with all but a select few. But it also changed the employment landscape and caused a sharp shift in personal values. It taught us to embrace the availability of remote work. To value smaller communities, proximity to family, more affordable housing, and a lesscongested quality of life. In North Carolina, and other states, that value shift translated to a great domestic migration out of urban areas to rural communities at a previously unheard of pace. Rural counties in North Carolina that had sustained population decline

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for a decade before the pandemic (such as Warren and Nash Counties) saw a reversal of that trend in 2021. Despite decreasing birth rates and increasing mortality rates in these areas during the same period, they continue to grow as more and more people embrace small towns and the value of life they provide. With rising interest rates pricing many homebuyers out of metropolitan and suburban areas, and seemingly no end in sight for the popularity of remote work, migration to smaller towns is expected to continue. It’s also created a recent but strong demand for housing and commercial development to meet the needs of these growing communities. While mainstream development has largely focused on urban areas, those commercial and residential real estate developers following this demand face a variety of unique benefits and incentives. Here are some of the benefits early adopters of the rural development movement can expect based on my experience representing commercial and residential developers following this trend.

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LOWER COST AND BETTER INVENTORY The inflationary market of materials and rising cost of labor have led to soaring costs of construction for new developments and increased rent pressures in urban areas. These same costs aren’t necessarily reflected in rural markets where the cost of living, labor, and ultimately construction are lower. In addition to the lower cost of construction, developers in these communities face a far lower cost of acquisition of existing inventory and far greater availability of raw land compared to the extremely competitive metropolitan or suburban markets. While the lower acquisition costs and available inventory in rural communities might not be new, the population growth in these areas and resulting consumer demand is a recent development that many developers have yet to capitalize on. As a result, compared to similar projects in popular suburban and metropolitan areas, developers can now acquire inventory (raw land included) at a fraction of the cost, build residential homes and SPONSORED SECTION

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commercial developments for cheaper, and sell or hold with comparable demand and cash flow as similar more expensive projects in urban areas. This dynamic is particularly true for commercial development of existing structures. Developers can invest in commercial buildings at well below market value, for far less than the cost to build the same structures new construction, and well below the cost to acquire a comparable property in metropolitan areas. And with minimal effort and expense (but far greater incentives than similar projects in metropolitan areas as discussed below), are renovating, revitalizing, and repurposing these structures into modern commercial retail and office spaces, the ever-popular multi-family, and mixed-used developments, often with full occupancy to show for it.

COOPERATIVE MUNICIPAL GOVERNMENTS Cooperative small towns and municipal governments condense the timeline and bureaucracy of the development process when they are motivated to encourage projects that will economically benefit the communities they serve. From contract negotiations in privatepublic development projects to various municipal approvals, project timelines are significantly shortened thanks to this dynamic. For example, whereas zoning matters such as rezoning requests may take up to a year to resolve in larger counties like Wake County, they are often resolved in as little as ninety days in smaller communities. The same can be said for easement approvals, annexation, lot line adjustments, and approvals for planned unit developments – all of which take far less time to obtain with much less bureaucratic hoops to jump through. Because the development process in rural communities is extremely condensed, the carrying costs are much lower and returns are actualized faster. As an added bonus, some smaller towns are so motivated to encourage development that developers are increasingly successful in negotiating contracts with local government entities to provide public funding

toward development costs such as the construction of parking lots and engineering utilities to planned unit developments. Put simply, there is less red tape and more enthusiasm to see developments in many small towns resulting in shortened project timelines, public funding to subsidize costs, and higher rates of returns.

FINANCIAL INCENTIVES AND CREATIVE FINANCING Eligible development projects in rural areas may qualify for numerous grants and tax credits. For example, The Historic Rehabilitation Tax Credit Investment Program is particularly appealing. Founded on the idea that restoration of existing structures and redevelopment into housing, retail and office spaces creates jobs and promotes economic growth, developers receive a tax credit for rehabilitation of existing historic buildings equal to a percentage of the renovation and construction costs. Although available statewide for qualifying projects, the State tax credit is highest for rehabilitation developments in Tier 1 and Tier 2 counties (Warren County, for example) for a total possible tax credit of 20% in addition to the Federal 20%. Thanks to 40% tax credits combined, the return on rural developments can be far higher than comparable projects in urban markets. Developers may also qualify for grant money similarly geared towards incentivizing economic development in these communities at the State and Federal level - because of the type of industry they are encouraging, location of the development itself, or the number of jobs created upon completion of projects. The variety and availability of grant funds are too numerous to provide examples here but, depending on the project, could cut the cost of construction significantly. Aside from tax incentives and grants, especially in the commercial arena, we are also seeing seller-financing arrangements explode in popularity in rural markets to the benefit of both parties. The terms of these arrangements vary wildly, are heavily negotiated, and are incredibly transaction specific. However, commercial buyers

generally enjoy lower interest rates (if any), funding that does not contribute to their debt-to-income ratio, and flexible terms without the hassle of traditional underwriting and funding. Sellers enjoy various tax incentives from not actualizing a large lump sum return in a single tax year. From tax incentives and grants to non-traditional funding options, rural development is particularly attractive.

CONCLUSION The great domestic migration to rural communities has led to increased demand for real estate development in those markets at both the residential and commercial level. As a result, rural opportunities abound post-COVID in unprecedented ways that developers focused on urban development have not experienced. Cooperative municipal governance, acquisition opportunities, and financial incentives unique to rural development should not be ignored. While market research into particular communities should be done in deciding where to focus development efforts, in many rural areas inventory is easier to acquire, cheaper and faster to develop, with the demand to support healthy returns. ■

KATIE DOWELL

Katie Dowell is owner and attorney at Raleigh Real Estate Law with offices in Raleigh, Lake Gaston, and Halifax. A graduate of Campbell Law, Katie’s practice focuses on transactional real estate matters, representing clients in residential and commercial purchases and refinances, as well as builders and commercial developers in various development projects across North Carolina. She’s also been recognized by her peers and fellow attorneys as Business NC’s Legal Elite List for Real Estate Law in 2021 and 2022 as well as Super Lawyers Rising Stars List for 2022 and 2023. N O V E M B E R

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COMMUNITY CLOSE-UP

CATAWBA COUNTY

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he Manufacturing Solutions Center has been part of Catawba Valley Community College since 1990. It conducts more than 20,000 tests a year “on anything from apparel, industrial, automotive products, sound-proofing materials, firefighting turnout gear, military products and more,” according to the director Jeff Neuville. A $9 million special appropriations state grant to the City of Conover is funding a second building for the center to better support U.S. manufacturers and create more manufacturing jobs. Construction on the 75,000-square-foot building known as MSC II began in April 2021. Operations will start moving in before the end of the year with a public opening in early 2023. The expansion is a partnership 78

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between CVCC, the city of Conover, the Whiskbroom private investment group and private investor Ingram Walters. “The MSC only exists because of its strong partnerships with business and government on local, statewide and national levels,” Neuville says. “The MSC has received strong support from the City of Conover and the NC state legislature as well as groups from throughout the region and state.” The center’s expansion is among several projects impacting Catawba County’s future. Housing starts are plentiful along with mixed-use downtown centers and rural developments. The widening of N.C. Highway 16 to four lanes between Charlotte and Newton is inspiring economic development along the corridor. Also Appalachian State’s new App State C A R O L I N A

at Hickory Campus will start classes in fall 2023, giving the county three higher education institutions. Lenoir-Rhyne University in Hickory is adding degree programs in high-growth fields, including computer science/cybersecurity, human resources, professional sales, project management and supply chain management. Catawba Valley Community College is a longstanding educational resource. “App State at Hickory and CVCC’s expansion of the Manufacturing Solutions Center will absolutely be transformational,” says County Manager Mary Furtado. “Those initiatives are only the tip of the iceberg in terms of the exciting things in store for Catawba County.” In Newton, its four-phase Economic Infrastructure Revitalization

DOWNTOWN HICKORY PHOTO CREDIT: BPOPE PRODUCTIONS

Catawba gets a manufacturing training center, Appalachian State University campus and revitalized downtowns.

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PHOTO CREDIT: APPALACHIAN STATE UNIVERSITY

DOWNTOWN HICKORY PHOTO CREDIT: BPOPE PRODUCTIONS

Project and a Strategic Plan penned in 2019 are nurturing business and entrepreneurial advancements. This paired with N.C. 16’s upgrade, are what town manager Jonathan Franklin calls a “rapid transformation.” “Staff and elected officials are working to ensure growth in Newton is fostered in a way that makes life better for both longtime residents and newcomers by reviewing land use plans and zoning ordinances, and by making strategic investments in public infrastructure and services,” Franklin says. “These investments are intended to encourage growth in a manner that avoids the pains of explosive development we’ve witnessed in some of Charlotte’s neighboring communities while making it easier to live and work in Newton.” In Conover, town manager Tom Hart says a newly developed strategic plan will kick off in 2023. “I presented a draft to the City Council in September, and I think we’re about 90% complete,” he says. “It’s going to give the city a roadmap over the next couple years and will keep us focused. I mean that literally; the plan identifies focus areas including quality of life, infrastructure, responsible growth and others. Conover has always tried to be innovative and stay at the forefront, and I think you need a plan in place to accomplish that. If you don’t have a game plan, you get stuck being reactive.” “Catawba County has enjoyed some wonderful success in growing jobs and private investment in our tax base,” says County Manager Furtado. “We’d like to see the economic growth continue, and our collective focus on countywide workforce development efforts will be key to making that happen. We’ve got alignment of the right players, public and private, and we’ve got the

right strategies in place. “We need to be savagely focused on execution in order to ensure our employers are well-positioned to meet their labor needs and remain competitive economically.”

APP STATE AT HICKORY App State Chancellor Sheri Everts says there are “numerous possibilities for the Hickory area to engage with the university’s sustainability initiatives.” In late September Everts said in a released statement, “In our meetings with Hickory area government, education, civic and business leaders, we have learned that the academic needs of the community include business, education, health care, engineering, design and building sciences.” Both Hart, Conover’s town manager, and Franklin, Newton’s town manager are App State graduates.

“The (Hickory) campus,” Hart says, “is going to really open some opportunities for our area. ASU has a strong public administration program and a lot of city and county managers are alumni so I’m excited about the new campus so close to home. We have a great community college in Catawba County and there’s a lot of industry and innovation here, so I think the opportunities for collaboration with ASU are endless.” ASU purchased the six-story, 225,900-square-foot former Corning Optical Communications building in Hickory in November 2021 for $1 million and received $9 million in support from the N.C. state budget for upgrades. The building, on 15.7 acres with parking for 700 vehicles, is less than two miles from Hickory Regional Airport and four miles from Interstate 40.

Concept art provides an aerial view of the former Corning Optical Communications building in Hickory. The six-story, 225,800-square-foot facility is the largest in App State’s building portfolio.

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“The programs and resources driving workforce development in our community are largely in place thanks to years of effort from countless educators and stakeholders in the public and private sectors,” Franklin says. “With ASU’s new campus in Catawba County, our ability to attract, support and retain workers can only improve.” “App State has co-admission and articulation agreements with many community colleges, including Caldwell Community College & Technical Institute and Catawba Valley Community College,” says the university’s news and media relations director Anna Oakes. “We offer transfer students a robust array of services so they can complete a four-

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year degree at App State in a timely and cost-effective manner.” Everts says App’s collaboration with Hickory has involved local government, education, civic and business leaders to ensure programs offered will “meet the educational needs of the region.” “These have included members of the General Assembly, representatives from local government entities, higher education, K–12 schools, business, civic and community development leaders,” Everts says. “In July, I convened the first meeting of the App State at Hickory Advisory Council, which has representation from key leaders in the Hickory area.“Many of the discussions and listening sessions we have had so far have

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involved advancing educational attainment for the Hickory area. Common themes that have emerged include innovation, arts and culture, recreation, child care, student support and academic areas that include business, education, health care, engineering, design and building sciences. There are also numerous possibilities for the Hickory area to engage with the university’s sustainability initiatives.” Signage, including the university’s “A” logo, is visible from U.S. Route 321. Everts notes that in addition to the $9 million funding for upgrades, the state budget signed by Gov. Roy Cooper in July includes a 3.5% pay raise for full-time UNC System faculty, retroactive to July 1.

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LIVE, WORK, PLAY Mixed-use developments and more housing both are in demand in the county, says Roger Young, president with David E. Looper & Company in Hickory. Young is accredited with the designation LEED AP (Leadership in Energy and Environmental Design) and is an expert in green developments that implement sustainable practices that lessen environmental impact. His company recently constructed One North Center, a six-story mixed-use development in downtown Hickory with 95 residential units. It leased to capacity in less than two weeks. “Hickory and Catawba County are just starting to see the entry level housing that helps with first-time homebuyers,” he says. “With the improvements to the downtown area, such as City Walk and River walk, the demand for ‘suburban urban’ like ONC is huge. We have plans for another facility downtown as well, as we are working with a partner on an urban active adult facility. Housing options of all kinds help to drive growth.” Location and work-from-home options also spur growth. “This area is attractive for several reasons: close to the mountains, the beach is accessible in a few hours, lower cost of living, less traffic, low tax rates, lots of employment opportunities, good healthcare,” Young says. “It used to be that you lived where you work; now you work where you live. Lots of people only go to the office once or twice a week. Why battle traffic every day when you don’t have to? “Positioned in a great logistical location, this area is poised to continue to grow. And with the N O V E M B E R

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Conover Station is a community-based redevelopment project. The City of Conover is working to stimulate economic growth and encouraging sustainable downtown redevelopment.

addition of ASU’s Hickory campus, we have three great higher-learning options for all,” he added. Young’s company recently refurbished Redden’s Tavern in downtown Hickory, another step in attracting young professionals. Hickory isn’t the only place pursuing a vibrant downtown. “Downtown living, ironically, tends to be fairly balanced with young folks that want to live urban while empty nesters that don’t want to mow grass and possibly have a second or third home,” Young says. “And, I’m told there’s also a demand for more restaurant-breweries, especially in the Newton area. As the population continues to increase, the demand for more services increases as well. “This area is becoming a magnet for good beer, music, outdoor activities and family friendly spots. Hickory and Catawba County have done a great job of creating trails, greenways and parks that draw people. Secondary and tertiary markets are reinventing themselves in North Carolina,” he says. Furtado says housing growth is 82

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about creating “a sense of place,” which “creates an environment conducive to small business stepping in and carving out niches that meet some of these needs.” “Our area has some serious momentum in terms of the promising activity happening in each of our downtowns. It’s all about creating a sense of place or a vibe that draws people to community gathering spaces,” she says. “Practically, this looks like an emphasis on placemaking and creation or enhancement of thriving, walkable mixed-use districts. Because of the way our community has built out over the years, this type of placemaking is more concentrated in our municipalities.”

CONOVER Hart became town manager in March and has previous experience with Main Street downtown programs. He says he’s looking forward to working with local businesses. “I was previously the city manager in Clinton, which has an accredited

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downtown, so I do have some experience with that process,” he says. “Conover also has other staff in city hall with experience running accredited downtowns. We aren’t pursuing formal accreditation at this time, but I am looking forward to working with our local businesses to collaborate and hopefully bring some of our staff’s experience to the table to help benefit our downtown.” When he took office, Hart mentioned tackling local effects of “supply chain issues” and the “forward thinking” needed in his community. “Like any household or business, city governments purchase all kinds of supplies and services to keep themselves up and running,” he says. “Most of Conover’s services are mission-critical and many of the supplies we need are hard to find or have become exceedingly expensive. “As just one example, we’ve had a hard time keeping even basic supplies and materials on hand like water meters. We’ve had new homes constructed and literally didn’t have water meters to install for them. You

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CATAWBA COUNTY have to adjust and try to be even more forward thinking in anticipating needs and when that fails you just have to improvise and adapt. He’s also eager to see what MSC II brings. “The MSC is a true publicprivate partnership; it’s essentially a manufacturing R&D center component of the Catawba Valley Community College housed with private investments in the form of a business incubator,” he says. “It creates this unique and innovative atmosphere, and there’s a lot of groundbreaking, new textile technology coming out of the MSC. Keeping projects like that moving has been critically important.”

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NEWTON The first two phases of the Downtown Newton Economic Infrastructure Revitalization project, Franklin says, “were administered by city staff, largely self-funded, and delivered under contract for roughly $6 million. Sources of funding included grants from the state of North Carolina, Washington, D.C., and ElectriCities of North Carolina, as well as reimbursement from the N.C. Department of Transportation and a private bequest. The costs of the third and fourth phases of the project are estimated at $6.2 million and $1.8 million, respectively.” The project focuses on investments in Newton’s core business district downtown. “Each phase of the project includes replacement of outdated

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underground utilities and infrastructure and the installation of water lines, sewer lines, electric lines and fiber optic lines that will serve residents and businesses for decades to come,” he says. “Above ground improvements include new paving, widened paver sidewalks, decorative street lights and poles, trees, benches, and trash and recycle bins. The Frank & Sue Jones Amphitheatre on Main Avenue was completed during the first phase of the project. Yount Park, which is at the intersection of College Avenue and A Street, was doubled in size and received with new landscaping and pavers. Construction for the project’s third phase on College Avenue and fourth phase on First Street is expected to begin in 2023.” The town’s strategic plan emphasizes pathways for entrepreneurs and business owners to utilize the state’s Small Business Technology and Development Center, Mountain BizWorks and other entities. “The city of Newton is making strategic public investments and rethinking public services with a renewed focus on creating an environment where entrepreneurs and businesses continue to thrive,” Franklin says. “Toward that end, the city recently purchased a vacant 5,000-square-foot building downtown that will soon become the offices of our planning department and Main Street Program. Bringing these key staff members under one roof and relocating them to the center of downtown Newton will make it easier than ever for potential developers and investors to work with city staff as they turn their vision into reality.”

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MSC II MSC II will have four purposes, Neuville says. 1. An enhanced structural engineering department to provide testing for the furniture industry, as well as prototyping assistance for manufacturers with 3D printers, CNC (computer numerical control) machines and welding capabilities. 2. A fabric formation lab with circular knitting equipment for training and work with manufacturers on product development and prototyping projects.

3. A PPE (personal protective equipment) Textile Resource Lab with materials produced or supplied by U.S. manufacturers. 4. Meeting rooms and conference space.

“The Resource Lab will support U.S. manufacturers who want to produce PPE domestically, reducing the chance of PPE shortages in the future,” he says. The new building also will house four local manufacturers graduating from MSC’s incubator space, Neuville says. “It really separates us from other communities,” says Tim Bolick, Catawba County’s marketing and administrative manager.

The center received a $50,000 grant from the college to purchase PPE testing equipment to combat COVID-19. “When the pandemic hit, we all recognized that there was a shortage of PPE equipment – primarily masks and gowns – but we also saw that there was a great variation in their effectiveness in keeping us safe,” says PPE lab manager Jodi Geis. “This funding allowed us to purchase equipment to test the filtration efficiency and breathability of masks, as well as the amount of protection medical gowns and other products provide to the wearer. “In addition to our testing services, we also work with PPE manufacturers during the product development process to make sure their products can meet or beat industry standards.”

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PPE testing, she says, goes beyond wearable protection. “PPE expands to include fabrics used by other industries such as the automotive industry and industries with exposure to paints, oils, and other chemical substances,” she says. “We’re now in a position to support manufacturers of these products to make sure they’re meeting required safety standards and producing high quality products.” Neuville notes that the MSC also houses a business incubator, with five start-up companies that have created more than 60 jobs with salary and educational attainment levels exceeding local and state averages.

“As four of these companies move their operations to MSC II, the Manufacturing Solutions Center is currently looking for new manufacturing start-ups who are interested in incubator space and MSC support.” Jeffrey L. Neuville

FUTURE FOCUS “If there’s one thing we have learned through our strategic planning work, there is no silver bullet to attracting and retaining population. Catawba County is in the business of producing quality of life, and all of the core services the county provides contribute to that,” Catawba County

Manager Furtado says. “We need to be holistic in our focus: People need economic opportunity to provide for their families, and they want to live in an affordable, safe place with strong schools, access to medical services and things to do in their free time. Each of these components is important in and of itself. Together, they’re what moves a community forward. “Catawba County is in a good place and our future is bright. We’re open for business, having been active and deliberate in creating an environment conducive to job creation and private investment, and we’ve enjoyed solid success in this regard, with more than 3,600 (new) jobs and more than $3 billion in investment since 2017,” she adds. “Our community-wide team is energized by the work before us. If you want to be a part of something bigger than yourself, you need to come check us out. We are making living better in Catawba County. It’s what we do.” ■

PHOTO CREDIT: MANUFACTURING SOLUTIONS CENTER

— Kathy Blake is a writer from eastern North Carolina.

MSC II building located in the center of Conover at Conover Station. It is expected to open in early 2023.

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PHOTO CREDIT: MANUFACTURING SOLUTIONS CENTER

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GREENSHOOTS

Revitalizing rural N.C.

POWER UP A creative family builds a military contractor in Murphy.

BY DAN BARKIN

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urphy, a town of about 1,900 people situated 15 miles from Tennessee and half that to Georgia, is an unusual headquarters for a defense contracting firm. But Aegis Power Systems has built a substantial business during two generations of family ownership. Aegis recently won a couple of Small Business Innovation Research grants from the Army, totaling $500,000. These were the first SBIRs won by a Cherokee County business, according to CEO Arlissa Vaughn. Vaughn’s father, Bill Dockery, founded the company in 1995, but the story started when the Murphy native joined the Air Force at age 18. After eight years, he came back to attend UNC Charlotte and study electrical engineering. Then, he and his wife headed westand eventually settled in Colorado where Dockery became a manager at what became the Dish Network. When Vaughn’s mother passed away in 1992, Dockery had to raise two girls. The family returned to Murphy. His original plan to commute to Atlanta, a couple of hours to the south, changed when Andover, Mass-based power electronics firm Vicor asked him to set up a partnership with a plant in any location that he preferred. “He stayed right here in Murphy, North Carolina,” his daughter says. Over the years, Aegis gained important industry recognition from prime contractors for the military, winning awards for a mobile testing platform used to provide repair support and a military satellite terminal contract. When the 20-year agreement between Vicor and Dockery ended, he bought out the company’s share in December 2015. Four months later, he fell ill and was unable to lead Aegis. “Our family was in the position of, OK, what do we do? We’ve got to figure out something about this business now,” recalls Vaughn. “Previously, Vicor would have come in, we would have just sold to them, or something. But we had to make some tough decisions, and with the support of my husband, I went on to become the CEO

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and owner [in 2017.]” It was a life-changing experience, because Vaughn is an accomplished professional artist with a degree from East Carolina University. She, her husband and their two children moved to Murphy from New Bern. Though life is different, they’re happy, she says. The company has 27 employees including 10 engineers, up from three in 2017. “I’ve been aggressively trying to grow our talent pool,” Vaughn says. Recruitment has been a challenge. Aegis has used innovative techniques to attract staff including videos portraying Murphy as a small, picturesque town. GETTING HELP When Aegis separated from Vicor, it was helped by economic developers at the Southwestern Commission, the Small Business and Technology Development Center and the Economic Development Partnership of North Carolina. “So many different organizations have really rallied around us,” she says. ‘This is how we even learned about SBIRs.” One award came through the Army’s xTech Program, through a competition in June. The military is trying to develop clean technologies aimed at reducing greenhouse gas emissions while meeting their energy needs in more innovative ways. The proposed Aegis solution is a unit that can provide electricity conversion for the different power requirements of equipment. Running off batteries, the unit will be able to run quietly for hours and can be recharged by the vehicle engine when it is safe to do so. Vaughn, who is participating in an executive MBA program at the University of Michigan, continues to utilize her artistic background to bring a different dynamic to an engineering-driven company. ■

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