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2014 FROM THE PUBLISHER
I
would like to thank our Newsmakers sponsors and partners for joining us in this look back in history. Newsmakers is our moment to reminisce about the impactful stories that affected the Upstate business community in 2014. Our editorial team has combed through thousands of news stories we shared both in print and online this past year and compiled a reflective look back in time while giving updates on the stories and how they might affect the Upstate economy in 2015. Newsmakers stories reflect abbreviated and updated version of those stories that made a dif-
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Throughout 2014 we have had the honor of being part of the fast-growing and highly diverse business community in the Upstate. As we reflect on 2014 and the events that have continued to push our economy forward, created more and better paying jobs, and continued to give all of us the opportunity to build wealth and provide for our families, I would remind everyone reading this to take the time to examine your own personal financial needs, goals and objectives. Sandlapper Securities is here to help you every step of the way. Whether you are in the beginning of the investment
period of your life or trying to manage your money in retirement, we may have the right solutions for you. Visit us at www.GoSandlapper.com for more information.
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ference. An editor’s note complements each page to add context, spotlight trends to watch or just note a bit of information that might have otherwise been overlooked. Here’s your invitation to take some time to reconsider 2014. You might be surprised at how much has happened to the Upstate business community in 12 short months. If you have ideas, suggestions or comments, please contact myself or anyone of our team. On behalf of the entire GSA Business staff we wish all of you a prosperous 2015. Lisa Jones, Publisher, GSA Business
Karen Burgess, Campus President Brown Mackie College, Greenville
Trevor L. Gordon, Founder and CEO Sandlapper Securities LLC and the Sandlapper Group of Companies
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NEWS MAKERS 2014
Looking at pay from atop the ladder The annual salary of the Upstate’s highest paid public-company executive is more than five times the average pay of CEOs across the state and 21 times more than the average salary of people working in South Carolina.
This graphic tracks the pay of the 10 most highly compensated CEOs of publicly traded companies in the Upstate, ranked by base salaries that each company must disclose with the Securities and Exchange Commission. Annual cash incentives, or
$
$
Base salary $841,900 Annual bonus $60,900
Base salary $816,000 Annual bonus $81,600
bonuses, are also reported. Bonus figures reported here do not include stock awards, deferred compensation or other long-term incentives. Figures were taken from recent company filings with the SEC.
$
Base salary $800,000 Annual bonus $496,395
No. 1 John S. Gilbertson
No. 2 Per-Olof Loof
No. 3 Michael Baur
AVX Corp., Fountain Inn Gilbertson has been AVX’s CEO since 2001 and has worked there since 1981.
Kemet Corp., Simpsonville Loof has been CEO of Kemet Corp. since 2005 and was previously the managing partner of QuanStar Group.
ScanSource Inc., Greenville Baur co-founded the company in 1992 and has served as CEO since 2000.
No. 4
No. 6
No. 8
No. 10
Delta Apparel Inc., Greenville Base salary $760,000 Annual bonus $268,450
World Acceptance Corp., Greenville Base salary $432,250 Annual bonus $391,230
Regional Management Corp., Greenville
Palmetto Bancshares Inc., Greenville Base salary $286,000 Annual bonus –
Robert W. Humphreys
No. 5
John C. Miller
Denny Corp., Spartanburg Base salary $650,000 Annual bonus $737,750
Sandy McLean
No. 7
Thomas R. Fortin Base salary $350,000 Annual bonus $122,207
Samuel L. Erwin
No. 9
Art Seaver
Southern First Bancshares Inc., Greenville Base salary $420,000 Annual bonus –
James D. Ferguson
Span-America Medical Systems Inc., Greenville Base salary $320,233 Annual bonus $28,198
And the pay for everyone else Figures show the average annual salaries of the highest-paid management positions in South Carolina, as well as for the average worker.
All other occupations $38,560
IT manager $98,880
Sales manager $99,090
Marketing manager $99,260
CFO $101,070
COO $103,920
CEO $156,530
SOURCE: U.S. Bureau of Labor Statistics Illustrations/Jean Piot
4
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
CLIFFS AIMS TO CLIMB BACK THE CLIFFS
By the numbers
8
communities The Cliffs opened the Gary Player-designed golf course at Mountain Park in Greenville County. (Photo/Provided)
23,000 acres
W
hen The Cliffs Club and Hospitality Group tumbled into bankruptcy in early 2012, buyers partnered to combine the capital, golf clubs and undeveloped real estate needed to rebuild the Cliffs empire. Now one of those partners, Fla.-based development group Arendale Holdings, has taken full control of Cliffs Club, betting that The Cliffs reputation and the
continued recovery of the market will help the award-winning brand of luxury golf communities, clubs and amenities rebound. The Cliffs, first developed in 1991 by Upstate native Jim Anthony, was hit hard by the recession as home sales stalled and banks stopped lending on lots. Arendale Holdings, which has bought out former Texas-based partners
The Carlile Group and SunTx Urbana this year has renovated the golf course at Keowee Keys and opened the clubhouse at The Cliffs at Mountain Park. As part of an effort to update amenities, Arendale also updated some the Cliffs’ golf shops and is now focused on future residential development at the Cliffs at Mountain Park, Keowee Springs and Walnut Cove.
9,000
lots
1,443
completed homes
2,700
club members
HISTORY OF THE CLIFFS 1962 Pickens native Jim Anthony makes his first real estate investment
1960s – 70s Anthony works as a telephone line repairman traveling Upstate mountains
EDITOR’S
NOTE
6
1980s Anthony devotes himself full time to real estate, amasses 3,500 mountain acres
1991 Anthony opens his first Cliffs Community, The Cliffs at Glassy
‘90s – 2000s Cliffs opens six more residential communities with golf clubs, but lot sales worsen as the Recession sets in
2010 Cliffs members invest $64 million to complete planned Cliffs golf clubs, as Anthony’s company faces economic hardship
2012 Cliffs clubs go bankrupt, are sold to Silver Sun Partners LLC.
2013 Gary Player-designed Golf course opens at Cliffs at Mountain Park
2013 Arendale Holdings, part of Silver Sun, buys out partners’ stakes
Arendale will still be repaying club members who altogether had invested $64 million in the Cliffs over the next 19 years. That $64 million was originally going to fund the now-finished Gary Player Championship Course in the Cliffs at Mountain Park and the yet unfinished Tiger Woods-designed course at the Cliffs at High Carolina.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
NO MONEY, NO SKILLS,
LITTLE CHANCE Released inmates Eric Mayes, left, and Thomas Clinkscales, right in blue shirt, are among passengers arriving at the Greyhound bus station on Woodruff Road in Greenville. (Photo/Bill Poovey)
T
he S.C. Department of Corrections in fiscal 2013 released about 4,840 criminal offenders who finished their sentences and left without any probation, parole or other community supervision. Many leave with just a bus ticket and the clothes on their backs. With no prospect of landing a job to make an honest buck, those rides to freedom often end at a Greyhound counter near a residential neighborhood or in a shopping area with no familiar faces waiting. State records show one in four will end up back behind bars. Some prisoners are qualifying for Jump Start, a nonprofit rehabilitation ministry based in Spartanburg County that tries to help keep them from return-
EDITOR’S
NOTE
8
Eric Mayes, 35, arrived recently at the Greyhound station on Woodruff Road with several other released inmates who discovered that Greenville’s bus station had been relocated from downtown. Mayes, who served two years on a drug conviction, sat outside the station as inmates, some unsure where they were, asked other passengers to borrow their cellphones.
ing to incarceration. Chartered in 2008 and run by former inmates Tim Terry and Don Williams, Jump Start is recruiting business partners to provide jobs for released felons. Those prisoners get screened in 40-week character classes, and if accepted, are released to roundthe-clock monitoring and job training. Terry said the private Jump Start program has 44 former prisoners either in training or placed in jobs with business partners. Since it began, Jump Start has taken in 126 former inmates and hopes to add at least 60 in 2014. Businesses partnering with Jump Start can qualify for a $2,400 tax credit for each new hire and a federal bonding program that protects employers from stealing, forgery and other crimes.
The challenge for inmates, prison officials, politicians and taxpayers is slowing prison re-entry. As a whole, recidivism is down in recent years, and that rate is lower still among inmates participating in the prison system’s work programs, but improving their success rate is problematic, as there are not many jobs available.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
Oconee County not waiting on private sector
Top: Oconee County begins an industrial utility project. (Photo/Bill Poovey) Right: The Oconee Industry and Technology Park. (Photo/Provided)
74,273 population
J
ob recruiters in Oconee County are putting final touches on more new industrial and commercial sites along South Carolina’s western edge. Success with county-funded speculative buildings has energized the mindset about economic development in this sparsely populated, outdoors community willing to invest in its growth. In August, county officials began readying a 111-acre industrial site near Shiloh Road and U.S. 123 that will have a direct rail link to the new S.C. Inland Port at Greer. The county also is in the midst of a $7 million utility project that will link to the Golden Corner Commerce Park and its
EDITOR’S
NOTE
10
About Oconee County
277 developable acres near Interstate 85. The park and 13-mile sewer project that was mostly county-funded is the first phase of extending infrastructure for commercial and industrial development on I-85. The commercial park has attracted the attention of least one commercial developer who is discussing what could become the county’s third spec building. County Administrator Scott Moulder said the county has agreed to provide 50 acres at Golden Corner to Pattillo Construction Corp. of Stone Mountain, Ga., for construction of a 75,000-square-foot spec building. Larry Callahan, CEO of Pattillo Con-
struction and Pattillo Industrial Real Estate, said getting utilities closer to the interstate is “visionary leadership.” Installation is in the final phase of a fiber-optic network project funded with a $9.8 million grant from the U.S. Department of Commerce’s National Telecommunications and Information Administration Broadband Technologies Opportunity Program, Blackwell said. Oconee County already has built and filled two spec buildings. Lift Technologies Inc. bought the first building in 2007, creating 50 jobs. In 2012, A.I.D. Co.-RBC Bearings Inc. bought the county’s second spec building and 19 adjacent acres, creating 75 jobs.
24% estimated 10-year population growth 33% population with high school degrees 13% population with bachelor’s degrees 31,397 labor pool 7% unemployment rate 12,738 commute out of county to work 5,376 residents working in manufacturing, the top employment sector
SOURCES: U.S. Census, U.S. Bureau of Labor Statistics, S.C. Department of Employment and Workforce
With industrial real estate in tight supply, counties are feeling pressure from economic developers to invest in construction, particularly more rural counties where private developers are not building speculative real estate. Following Oconee County’s example, Anderson County purchased land to develop a speculative building, for example.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
‘SUPER BOWL’ OF FISHING returns to the Upstate
Anglers gather at the 2008 Bassmaster Classic at Hartwell Lake. (Photo/Provided)
S
ome 75,000 people could attend The Bassmaster Classic in what could be one of the Upstate’s largest tourism draws. The Bassmaster Classic will return to Hartwell Lake in February 2015, bringing with it a projected $17 million in revenue to the Upstate. Weigh-ins are set for Feb. 20-22, and the Bassmaster Classic Expo will be held those same days at the TD Convention Center in Greenville. National event coverage by ESPN and other media is expected to spotlight the Upstate as well. The event was last held at Hartwell Lake in 2008. Chris Stone, president of VisitGreenvilleSC, said the 2008 tournament attracted more than 75,000 people.
EDITOR’S
NOTE
12
Bruce Akin, CEO of B.A.S.S. LLC announced the tournament’s return to the Upstate in January in a news conference in Greenville. Gov. Nikki Haley joined elected officials and Upstate hospitality industry representatives in welcoming the event described by the Birmingham, Ala.-based company as the “Super Bowl” of bass tournaments. The Green Pond Landing Event Center on Hartwell Lake is being developed by Anderson County to host large-scale fishing tournaments. Phase I cost around $2.6 million, and a future phase of construction will include a 500-seat amphitheater for fishing tournament weigh-ins and a restroom building.
CLASSIC NUMBERS 75,000 projected attendance $17 million projected revenue to Upstate
WHAT, WHEN AND WHERE February 2015 – Fishing at Hartwell Lake Feb. 20 to 22 – Weigh-ins at Bon Secours Wellness Arena Feb. 20 to 22 – Bassmaster Classic Expo at TD Convention Center
The Bassmaster Classic is one of few tourism events that spans multiple Upstate communities, with the tourney on Hartwell Lake and the weigh-ins and expo in Greenville. The impact of thousands of visitors to the Upstate could be huge for hospitality, and the event should bring national media exposure to the Upstate.
NEWSMAKERS 2014 | GSA Business
&217,18,1* 3$571(56 5(*,21$/ 9,6 ,21$5< 5(*,21$ 5(*,21$/ 9,6,21$5< 21$5
NEWS MAKERS 2014
Forged in the
Iron Yard successes » ChartSpan Medical Technologies LLC, co-founded by CEO Jon-Michial Carter, obtained a $1 million investment before setting up its headquarters in Greenville. The ChartSpan app allows consumers to electronically manage their health care records.
1
2014
» Kevin Barry and Thad Tarkington founded FilterEasy, a service that arranges delivery of home air filters. Barry said they have closed a $310,000 seed second round and have built a relationship with a manufacturer. He said they are “anticipating tens of thousands of subscribers” by year’s end. » Jesse Wonder Clark, CEO of Kydaemos LLC, said the “monetization service” enables wagering on head-to-head action games on mobile devices. “Players can bet real money on real skills and win cash, and developers can ... monetize their games without annoying their players,” Clark said. » Diane Szoke as a co-founder of Relocality, a relocation service that helps find a neighborhood that best matches the user’s personality and lifestyle, said the startup was incorporated before getting picked for the Iron Yard accelerator. She said they are seeking partners.
Iron Yard alumna Madiken Scholl, co-founder of TipHive, works at the Next Innovation Center. (Photo Bill Poovey)
S
teven Bong turned down acquisition offers from Thomson Reuters, Sageworks and Patantir. Instead, the founder of auditing software provider AuditFile.com raised $2.54 million in 2013, including $32,000 from the sale of common stock, $230,000 from an initial convertible debt offering and $2.2 million from a second convertible debt offering. As 2013 started, Bong said he and his brother were “working on our mom’s dining room table” and surviving on credit cards. Now, Bong is among the most successful entrepreneurs trained in Green-
EDITOR’S
NOTE
14
ville’s Iron Yard. “We turned all three away and we remain committed to building a large company,” Bong said in an email about the acquisition offers. “Today we continue to move the accounting profession forward by leveraging the trends and new technologies that are changing our world: cloud, mobile and data science.” Since starting the accelerator program that nurtures young tech businesses, Peter Barth’s Iron Yard LLC has accumulated 6% stakes in about 40 of the ventures. In return for those ownership shares,
the Iron Yard provides the business founders with mentors and advice, introduces the business founders to investors and provides them with $20,000, without any certainty of a return. The business launching pad started in Greenville in 2012, expanded last year to Spartanburg and a third opened in Asheville. Founders of the businesses frequently have their business models designed to attract investors with deeper pockets either buying in or buying them out. “The ultimate goal for us financially is there is some kind of acquisition or they
go public,” Barth said. He said the $20,000 seed money for each of the ventures in the Iron Yard’s portfolio has come from investors. “To date we have raised about $2.5 million that we have invested in the companies,” he said of the total provided by more than two dozen investors. Barth said all but one or two of the Iron Yard-nurtured businesses are surviving and a few have attracted investments of $1 million or more. “We’re doing really well,” he said. A typical venture investment fund “makes all their money on 30% of their companies.”
The Iron Yard continued to expand its footprint this year by opening coding schools in Mount Pleasant and Atlanta. Look for further expansion and increased activity from The Iron Yard and other accelerators in coming years. Readers of the GSA Daily email voted Forged in the Iron Yard as the 2014 reader’s choice top story.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
SOUTH CAROLINA VS. SNOW AND ICE Businesses are counting the financial losses tied to the snowstorm that stretched from the Upstate to the Lowcountry Feb. 11 to 13. Roads were impassable, and the S.C. Inland Port ceased operating, choking off the flow of freight from the Upstate to the world. BMW Manufacturing Co. briefly stopped making cars in Spartanburg County. Health care offices, restaurants, retailers, manufacturers and other businesses closed. Those that stayed open likely saw fewer customers. The economic cost likely reached $15 billion nationally, Evan Gold of the business weather intelligence firm Planalytics told NBC News. State officials and utility crews, meanwhile, worked diligently to put South Carolina back to work. Here are the numbers behind South Carolina’s fight against the snow and ice.
1,539
765
STATE ROAD WORKERS IN ACTION
Pieces of state equipment in use
3,904
weather-related calls for service to the state highway patrol
14,080
tons of SALT SPREAD ON S.C. ROADS
160,000
Duke Energy customers had power restored as of Feb.13
3,900
Duke Energy employees worked to restore power outages, including personnel from the company’s Midwest and Florida operations
power lines in roadways
1,115
TREES in roadways
247
abandoned vehicles
NEWSMAKERS 2014 | GSA Business
1,109 vehicle collisions
91,000
power outages remained on Feb.14 in Duke’s North Carolina and South Carolina service territory.
State officials estimated that South Carolina suffered $435 million in damages from the Feb. 10-14 winter storm, including $360 million to its timber industry. With the National Oceanic and Atmospheric Administration predicting a colder and wetter than normal winter in the South, the question arises, are we prepared for a winter storm in 2015?
SOURCES: Gov. Nikki Haley’s office and Duke Energy, as of Feb. 13, the final day of the storm. 16
159
tons of sand dumped on roads
National Guard soldiers deployed
NOTE
gallons of calcium chloride used to melt ice
5,350
232
EDITOR’S
67,371
NEWS MAKERS 2014
The 54-hour startup T
his year Spartanburg hosted Startup Weekend, a three-day event which gave entrepreneurs hours to transform an idea into an end product. The Spartanburg event was the second in South Carolina but the first in the Upstate. On one Friday in February, participants checked in at The Mill, The Iron Yard’s co-working space in Spartanburg. They ate dinner and then pitched business ideas, from apps and software to brick-and-mortars and manufactured undergarments. Some, such as Clemson University MBA-in-entrepreneurship candidate Drew Felty, came with working prototypes, while others, like Converse College student Nadia Gathers, improvised.
EDITOR’S
NOTE
18
Established professionals joined the ranks of college students in voting to create teams, as each participant chose the idea and the team they thought would be most successful. At the end of the weekend, each business idea was presented to a panel of judges: The Iron Yard Chief Strategy Officer John Saddington; Wofford College The Space Dean Scott Cochran, Capital Angels Managing Director Charlie Banks and Contec Inc. President Avi Lawrence. When the 54 hours were up, winners were announced. Pictures were taken. Beers were downed. And the participants shifted their focus to the months and years ahead. More than one team said they would carry their idea forward, especially if
their team members expressed interest in staying on as well. Daniel Donaldson, a student at The Iron Yard Greenville’s Code Academy and father of four from Greenville, Texas, said, “Even if you don’t get your startup, the point is the experience.” “I wasn’t coming to build an enterprise,” said Gathers, who plans on fur-
From left: Daniel Donaldson, Joshua Maxwell and Andrew Ramos discuss business plans at Spartanburg’s Startup Weekend. (Photo/Staff)
ther developing her peer-to-peer lending platform, Hustl. “But now I can say, ‘Oh, I can do this.’”
Felty’s team, including Donaldson, Joshua Maxwell, Andrew Ramos and Lorenzo Barberis-Canonico, took first place with Talespinner, a system that helps children learn to read with customized storybooks. As no one on the team could readily use the grand prize, a year’s worth of work space at The Mill, they gave it to another Startup Weekend project.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
2014
BMW’s ‘X’ A BIG MULTIPLIER BMW’s big expansion at Greer crosses significant production threshold, opens new opportunities BMW Manufacturing Co. unveiled the X4, now in production at the Greer plant. The automaker also announced plans to make the new X7 there. (Photo/Scott Miller)
B
MW Manufacturing Co.’s decision to manufacture up to 450,000 vehicles a year starting in 2016 crossed a significant threshold for the plant at Greer and puts South Carolina in the discussion for an engine plant, according to an analyst for automotive supplier companies. The German automaker will boost annual production capacity by adding a new, larger X7 model to its four other X model lines at the plant. In 2012 BMW announced plans to invest $900 million to accommodate production of the new X4. The automaker rolled the new vehicle off the line March 28, the same day it announced plans to invest another $1 billion and hire an-
EDITOR’S
NOTE
20
X-pansions at the Greer plant 2010
$750 million investment 1.2 million-square-foot assembly line added
2012 X4
$900 million investment
2014 X7
$1 billion investment 800 jobs added
X-pectations for the Greer plant, year-end 2016 450,000 cars produced 8,800 employed
other 800 people, this time to produce a new X7 model. BMW also has plans to build a plug-in hybrid of the X5. BMW executives, manufacturing industry representatives and economic analysts all predict the automaker’s expansion will trigger more than a trickle of growth in the supply chain. Bloomberg News, quoting three unnamed sources, reported in December 2013 that the Munich-based company was weighing the possibility of an engine plant in North America, saying the decision could be made in 2014. Harald Kruger, BMW Group’s head of production, said BMW has not made a decision on building an engine plant in North America.
A streak of record months of BMW brand sales in North America came to an end in November, when sales dipped by 2.3% year over year. Ludwig Willisch, president and CEO of BMW North America said he still expects a record year. There has as yet been no word of a decision on an engine plant in North America. Readers of the GSA Daily email selected this article as one of the 2014 reader’s choice stories of the year.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
SCIO BETS ON PINK
to get it out of the red Scio Diamond President and CEO Gerald McGuire describes the company’s diamond-making process at the shareholders meeting held in Woodruff. (Photo/Bill Poovey)
A
fter two years of financial struggles in Greenville, Scio Diamond Technology Corp. has a new board, a new executive team and a new business plan. The diamond-making lab at the Next Innovation Center has added “fancy” colored diamonds to its product showcase along with colorless stones for jewelers and cutting devices and electronics for manufacturers. Speaking at the company’s first shareholder meeting, CEO and Director Jerry McGuire said he and the other six new board members are “driving for breakeven” by March. Board Chairman Bernard McPheely of Greer said the financials show revenues of “about $250,000 a month is where our break-even point is right now. We are right on target. We have actually
22
driven cost out of the business by the tune of almost $100,000 since 2013.” “We are very encouraged about hitting our break-even point,” McPheely said. “That’s never been done before.”
Marked by infighting
Scio uses a chemical vapor deposition
NEWSMAKERS 2014 | GSA Business
process to grow single-crystal diamonds. The company attracted statewide attention in late 2011 when the headquarters and lab opened. Since starting diamond production in mid-2012, Scio’s struggles have been marked by legal infighting among founding board members. The company failed to pay a $1.5 million loan that was due in June. Platinum Capital Partners has since agreed to extend the loan for a year. McPheely, a retired Hartness International president, led an investor takeover of the board last spring. He and McGuire were among seven board members elected at the company’s first shareholder meeting held Oct. 29 in Woodruff. An agreement with former directors has ended the infighting. Some of Scio board Chairman Bernard McPheely talks to stockholders at the company’s first shareholder meeting. (Photo/Bill Poovey)
the new directors are investing more of their own money, and the company is attracting new shareholders in an ongoing offering of stock at 30 cents a share. Some of the $700,000 offering will pay for equipment upgrades that will expand production. The company’s report for its fiscal year ended March 31 showed an accumulated deficit of $14.5 million. That report showed net revenue of $1.4 million in the fiscal year, compared with $881,748 the previous year. The company reduced operating expenses from $8.1 million to $5.6 million in the fiscal year.
Adding color
McGuire and McPheely said they are optimistic about ramping up production, largely due to a new joint venture. They declined to disclose terms of their agree-
HOW TO GROW A DIAMOND
Scio exposes thin slices of diamond in a vacuum chamber to a mix of gases and carbon under extreme temperatures, causing them to grow.
ment with Boca Raton, Fla.-based Renaissance Diamonds Inc. Renaissance makes and sells colorless, pink, canary yellow and blue lab-grown diamonds. Founded in 1994 by president and CEO Neil Koppel, Renaissance plans to launch an in-store distribution program in early 2015 at a prominent retailer, according to a statement. “The joint venture we’ve done, it brings a lot more cash into the company,” McPheely said. “And it changes our dynamics ... And now we are going forward with those things that we have found orders and customers for.”
McGuire, a former senior vice president at Fairchild Semiconductor, said the lab-made diamonds are “roughly a 30% discount to mined of equal quality. What it does is it gives our customers a choice, or it gives the consumer a choice. At a budget they can go for a larger clearer stone, or for a fixed stone they could save some money.” He said Scio’s “process delivers diamonds that are chemically, physically and optically identical to mined diamonds. These are diamonds. They are just grown in a lab above the ground instead of below the ground.” McGuire showed the “fancy colored” pink stone that Scio grew and compared
EDITOR’S
NOTE
SCIO DIAMOND DIRECTORS ELECTED TO 1-YEAR TERMS
» Bernard M. McPheely, 62, chairman of the board, appointed June 23. McPheely was a member of the board from August 2012 until he resigned in May 2013. McPheely sued the former board, contending they misused company finances. He led an investor group known as Save Scio that demanded changes and reached a settlement with the original directors that included a change in the company’s leadership. McPheely retired in December 2012 as president of Hartness International after more than 35 years. He is currently on the board of Dorner Manufacturing Corp. in Hartland, Wisc.
» Gerald A. McGuire, 53, is Scio’s president, CEO and a director, appointed to the board May 27. McGuire was most recently a senior vice president and general manager of the low-voltage and mid power analog business at Fairchild Semiconductor.
» James A. Korn, 57, appointed to the board May 27. Korn is CEO of TempAir Inc., a manufacturer of temporary industrial and commercial heating, ventilation and air-conditioning equipment.
» Karl V. Leaverton, 58, appointed to the board on June 23. Leaverton has
Identical to mined and sell for less
Don’t call them synthetic
The process produces rough single-crystal diamonds with the same properties as mined diamonds, according to Scio Diamond.
been the chairman of SNW Asset Management Corp. since July 2012. He has also been the principal of Blakely Management Company LLC since 1993.
» Bruce M. Likely, 50, appointed to the board June 16 and serves as vice chairman. Likly has spent the last decade as principal at Kovak-Likly Communications. His work previously included assisting Apollo Diamond, the assets of which Scio Diamond Technology Corp. acquired in 2011.
» Lewis T. Smoak, 70, appointed to the board June 23. Smoak is a founding partner of Ogletree, Deakins, Nash, Smoak & Stewart. He has served on the firm’s board and compensation and pension committees for more than 45 years. He currently serves as chairman of the board of Zumur LLC, a startup Internet search engine for consumer products.
» Benjamin Wolkowitz, 69, appointed to the board June 23. Most recently he headed Madison Financial Technology Partners and previously was a managing director at Morgan Stanley. Wolkowitz was previously with the Board of Governors of the Federal Reserve System where he was in charge of Financial Studies, a department in the Division of Research and Statistics responsible for analyzing and advising the board on financial markets and financial institutions. He has written and lectured on economics and finance and co-authored the book, Bank Capital. SOURCE: Scio Diamond Technology Corp. SEC filing
Scio’s diamonds are then cut and polished for the gemstone market. Diamonds have industrial applications as well.
it to a man-made pink dimond that recently sold. McGuire said: “Naturally occurring pinks are very, very, very rare ... There was a pink that recently sold in Hong Kong for over $2 million a carat.” McGuire, who has been Scio’s top executive since June, said the company can generate the pink stones “with fairly high yields.” McPheely commended the work of former Scio CEO Mike McMahon, saying McMahon did an outstanding job during difficult times. He said McMahon’s departure was part of the company changing direction. He said an ongoing Securities and Exchange Commission inquiry is aimed at former directors and does not involve the company or any former top executives. The SEC has declined comment about the subpoena for records related to “transactions” between the company and the former board. Scio Diamond has more than 50 million shares outstanding, and the company is issuing more at 30 cents a share to generate $700,000, some of which will pay for equipment upgrades that will expand production. Koppel told shareholders at the meeting that the lab-made diamonds are not cultured or synthetic diamonds. “It is a created diamond. End of story,” Koppel said. “A synthetic diamond is something that isn’t a diamond but is made to look like a diamond.”
Scio Diamond Technology Corp. is a company that’s seen its share of tumult in 2014. The diamond-maker has a new board, leadership team and business plan in place, but is that enough to allow the company to hit its March break-even target, much less dig itself out of the hole it’s been in? Either way, look for Scio to continue to make headlines, not only in March but also through 2015.
Salt d.
R ers
NEWS MAKERS 2014
Pro cycling returns to Greenville
G
reenville was the first U.S. d. city in 16 years v l to host a para-cycling event when the e BRoad World Cham2014 Para-cycling a d er Labor Day Weekend. pionships came to Vtown The event drew hundreds of spectators and cyclists from around the world, cementing Greenville’s status as a cycling town. The event marked the return of a major cycling championship to Greenville.
Greenville previously hosted a different race, the USA Cycling Professional Road and Time Trial National Championships, for seven years before the organization moved the event to Chattanooga, Tenn., as part of its partnership with Volkswagen of America. USA Cycling is returning to Greenville for the Professional Criterium National Championships in 85 e t 2015-2016. ta
I
By the Numbers: The 2014 Para-cycling Road World Championships
$4.5M
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Economic impact tate ters
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321
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d. in various events Labor Day Weekend in Greenville at the 2014 Para-cycling Road Cyclists compete World Championships. U.S. cyclists led the pack, winning 18 medals. (Photos/Randy Baxter)
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It’s looking like cycling are ready for Greenville, but is Greenville, or South Carolina for that matter, ready for cyclists? South Carolina tied with Montana for the dubious distinction of worst drivers in the U.S. by Car Insurance Comparison’s annual Worst Drivers by State report. The report also ranked the Palmetto State as No. 5 in bicyclist and pedestrian deaths, which appears to have as much to do with infrastructure as drivers.
NEWSMAKERS 2014 | GSA Business
Hamby
Dr.
NEWS MAKERS 2014
Selling the
GREAT OUTDOORS Above: Attendees at Cabela’s grand opening. (Photo/Bill Poovey) Right: David Britt (left), Spartanburg County Council, with Mike Dunham, who will manage Spartanburg County’s Bass Pro Shops. (Photo/Staff)
T
he heavyweights of outdoors equipment and lifestyle apparel are set to face off the Upstate when Bass Pro Shops opens a Spartanburg County location just miles from the newly opened Cabela’s in Greenville. More than 2,500 people turned out for the spring opening of outdoor retailer Cabela’s on Woodruff Road in Greenville. The 100,000-square-foot store is the Sidney, Neb.-based company’s first in South Carolina and its 52nd nationwide. Cabela’s sells fishing, hunting, camping, hiking, boating and wildlife-catching gear, along with clothing and equipment. The store includes wildlife displays, a gun library, an indoor archery range, a mountain replica and fudge shop. Weeks after Cabela’s opened, Bass Pro Shops announced plans to build a
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120,000-square-foot facility by 2016, serving as the anchor tenant and developer for a 75-acre tract of land between Spartanburg and Greenville. Located at Interstate 85 and Highway 101, the store will generate between 200 and 225 jobs, according to Economic Development Committee of Spartanburg Chairman and Spartanburg County Councilman David Britt. The 75-acre mixed-use development will include retail, hotels and restaurants. No tenants have been confirmed as Bass Pro Shops has yet to start development on the space. “This store will be a tribute to the great sporting tradition and heritage of the region and a celebration of the sporting men and women of South Carolina,” said Bass Pro Shops founder Johnny Morris.
CABELA’S 2,500 people attended grand April opening 100,000 square feet 235 employees
BASS PRO SHOPS Opens 2016 120,000 square feet 225 employees
An April GSA Business reader poll found that almost half of respondents preferred Cabela’s over Bass Pro Shops. Nearly 31% said they favored locally-owned stores, while less than 20% voted for Bass Pro. Some readers said they preferred the hunting focus at Cabela’s to the fishing focus of Bass Pro; others said they’d go to Bass Pro Shops to avoid Woodruff Road congestion.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
MAYOR SEES DOWTOWN PROJECT AS
‘GOOD FIT’ FOR GREENVILLE
A
hotel, apartments and other residential units could be part of a mixed-use development planned on the nearly 4-acre site of the Greenville News building. The project in the heart of downtown also could include public plazas, a theater, stores, restaurants, offices and parking garage. The developer, Trammell Crow Co. of Dallas, has named locally-based Centennial American Properties as a partner. Both Centennial American CEO David Glenn and his son, company President Brody Glenn, are natives of Greenville. Mayor Knox White said the developers “have been good listeners and ex-
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pressed an intent to build on the success of our downtown strategy. Bringing in a local partner was a good early step too.” “We like the idea of a mixed-use, walkable place instead of a single dominant building,” the mayor said in an email Oct. 21. “It has the mix of uses and the scale to be a good fit in our downtown.” Trammell Crow is under contract with Gannett Publishing to purchase the property on Main Street across from The Peace Center. The developers and Greenville News executives did not return telephone messages seeking comment. It’s unknown when development will begin on the project or where the
Greenville News will be relocating to. Brody Glenn, who formerly served as chairman of the city’s planning commission, said partnering with Trammell Crow “will allow us to bring in national retailers and restaurants that aren’t currently in Greenville to blend together with some of our great local shops and restaurateurs to create a new entertainment district that will complement the Peace Center.”
The mixed-use development planned for the nearly 4-acre site of the Greenville News building could include a hotel, apartments, stores, restaurants and offices. (Photo/Bill Poovey)
Jackson Hughes Jr., owner and president of Hughes Commercial Properties, will oversee retail leasing for the project, and CBRE, along with their national network, will handle office leasing. The development architect is Atlanta-based Wakefield Beasley & Associates.
This isn’t th only big change the Greenville News has undergone this year. In June, printing at the paper’s downtown operation was outsourced to Halifax Media Group, and in August incoming Managing Editor William Fox announced an overhaul of the newspaper amid the sweeping restructuring that took place at parent Gannett Company Inc.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
2007 – Pop the Cap Law raised the legal alcohol by volume for beer produced here from 6.25% to 17.5%.
2010
– The Tasting Law allowed breweries to serve four, 4-ounce samples of beer to customers who took a brewery tour.
Beer chasers Inside RJ Rockers’ tasting room in Spartanburg. (Photo/Staff)
S
.C. brewers remain optimistic about the local craft beer industry even though the state is no longer in the running for Stone Brewing Co.’s $29 million East Coast facility. Industry advocates had pushed through key legislative changes that helped both existing and new breweries in the state, according to RJ Rockers owner John Bauknight. Signed in June, the Stone Law allows breweries to sell more than 3 pints of beer per customer if the brewery has a food service permit from the S.C. Department of Health and Environmental Control. Though its nickname references Stone, the new law could act as a gateway for other breweries to make a new home in the state. Meanwhile, some S.C. brewers — including those from New South Brewing, Brewery 85 and Thomas Creek Brewery — said they were more indifferent than disappoint-
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ed in Stone’s decision to take their facility elsewhere. Brook Bristow, general counsel for the S.C. Brewers Association, said Stone’s decision was “purely a logistical, geographic issue ... They wanted a centralized location.” Another reason Stone might have taken South Carolina off the list is the state’s excise tax on beer, which is one of the highest in the country, said Quest Brewing Co.’s Richardson. Another reason might be the state’s self-distribution laws, which were originally in place to protect distributors from larger breweries. Tom Davis, owner of Thomas Creek Brewery, said Stone’s decision doesn’t reflect the thriving craft beer industry in South Carolina. “There are beer people who are craft beer people,” Davis said, “and they’ll be craft beer people whether Stone is in or out of South Carolina.”
2013 – The Pint Law raised the amount breweries could sell per customer from the four small samples to 3 pints.
2014 – The Stone Bill allows unlimited production and beer sales for breweries that also provide food service.
Brewery production
35,296
27,501
2011
2012
Over the past year, at least 10 breweries have opened in the state, and the hubbub over suds is set to continue on into 2015. Carolina Bauernhaus is slated for an early 2015 opening in Anderson, and the World Beer Festival is slated for its seventh straight year in Columbia. Greenville’s Brewery 85 is one of several S.C. breweries confirmed for attendance at the January beer fest.
NEWSMAKERS 2014 | GSA Business
46,900
South Carolina’s brewery-per -capita ratio of 1 to 289,085 ranks 40th in the country. Here’s a look a production over the past three years.
2013 SOURCE: Brewers Association
NEWS MAKERS 2014
Rebuilding downtown Anderson Above: The demolition site of Steve Kay’s downtown Anderson project. Right: Kay (Photos/Bill Poovey)
M
eet the man rebuilding downtown Anderson. After 10 years of heading up commercial and residential restoration ventures in Anderson’s aging downtown, Steve Kay is back at it. This time he has bulldozers smashing down vacant, rotted-out storefronts on South Main Street, clearing the way for a roomy, mixed-use development that will surround a courtyard. Based on the popularity of The Bleckley Inn, a boutique hotel that Kay and his wife Lynn opened in 2011, the electric company owner-turned developer believes he is building a more upscale venue than Anderson now offers. “It would be a little nicer,” Kay said of his project that he expects will take about two years to finish. He declined to discuss amount of investment or to pre-
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dict when the design will be presented to city officials. The 63-year-old Kay said he wants to attract retailers and possibly long-term or even permanent residents. He said the building will wrap around a courtyard and have access from the front and from behind, where the city has an existing parking area. Kay said the building will overlook a courtyard in the center, adding that he is hopeful the city will let him use an existing parking area behind the building.
Kay’s mark
Kay had converted a former bank building on East Benson Street next to the hotel into office space and the apartment where he and his wife live. There had been vacant office spaces in the building since the McNair Law Firm
moved out of Anderson in 2013. “We reclaimed this space to its 1899 look,” Kay said. “It is the nicest office space in Anderson, and someone needs to be in it.” His projects also include the former Dickson Ice Cream parlor on West Benson Street. That space is being used by a restaurant on the ground level, and there are two apartments on the second floor. Kay, who was born in Belton but lived for decades in an Anderson suburb before moving downtown, describes his restoration and development projects as a “second career. I didn’t plan on doing this but I just kind of got into it.” Kay said he is in the process of selling Hill Electric Co.
WHAT THEY’RE SAYING ABOUT STEVE KAY “Every city or town needs a person like Steve Kay who might see something different than an outside developer.” Anderson Mayor Terence Roberts
“He has done several projects that have really cleaned up some neglected buildings, adding to the tax base.” Jeff Gilbault, Anderson city planner
“He realizes that if he doesn’t do it, it likely won’t get done in the near future.” Dr. Marshall Meadors, longtime Anderson resident
Kay isn’t the only one revamping Anderson’s downtown. Glenn Breed, who took over as the city’s economic development director in September, said “there are four or five really good investors with a lot of vision” who are working the downtown area, and mixed-use projects and events are accelerating residential growth. “The sky is the limit” for downtown Anderson, Breed said.
NEWSMAKERS 2014 | GSA Business
NEWS MAKERS 2014
THE TOP ANNOUNCEMENTS
A BIG YEAR FOR ECONOMIC DEVELOPMENT Buoyed by a big expansion at BMW Manufacturing Co. and a new facility for Toray Industries Inc., Upstate economic developers are posting a record year for business recruitment and job growth. Here’s a look at the numbers and some of the business names behind them.
3,401 jobs announced
$3.6 billion capital investment
“TO PUT THAT IN PERSPECTIVE, THAT $3.6 BILLION BREAKS THE PREVIOUS SINGLE-YEAR RECORD FOR INVESTMENT BY MORE THAN $1.3 BILLION. IT IS MORE INVESTMENT IN JUST SIX MONTHS THAN OUR REGION SAW IN 2012 AND 2013 COMBINED.” John Lummus, Upstate SC Alliance
Ranked by expected jobs created
BMW Manufacturing Automotive Spartanburg $1 billion 800
Orian Rugs Textiles Anderson $13 million 125
Toray Industries Advanced materials Spartanburg $1 billion 500
U.S. Engine Valve Automotive Oconee $29.5 million 125 jobs
Esurance Insurance Greenville $2.1 million 450
Suminoe Textile of America Corp. Automotive Cherokee $5 million 100
E&I Engineering Ltd. Energy Anderson $17 million 250 Trelleborg Wheel Systems Automotive Spartanburg $50 million 150
S.C. job growth up to 2% annually
GE Energy Greenville $400 million 80 jobs Plastic Products Co. Auto, consumer, construction, other Oconee $3.2 million 68
South Carolina’s unemployment rate has dropped from an 11.9% high seen in late 2009 to 5.3% in May, and job numbers continue to grow. Figures show South Carolina employment numbers since 2004.
2,500,000
2,000,000
1,500,000
2004
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2005
2006
2007
2008
2009
2010
2011
2012
2013
One potentially huge development came in March when the nonprofit Chinese Economic Development Board of South Carolina held its first meeting in Greenville. The organization aims to attract more Chinese business to South Carolina. Though the group has no office or employees yet, Greenville Mayor Knox White sits on its advisory board.
NEWSMAKERS 2014 | GSA Business
2014
NEWS MAKERS 2014
Upgrading Greenville’s most taxing road
The top project on the Greenville Citizens Roads Advisory Commission’s list is a series of new parallel roads and extensions designed to relieve congestion on Woodruff Road.
385
85
$3 million
$29.7 million
Woodruff Road Parallel Ext.: 5-lane parkway between Verdae Blvd. and a realigned Salters.
Woodruff Road Parallel Route: 5-lane parkway from Miller Road to Verdae Blvd.
85
$5.5 million
Salters Road realignment from Verdae Blvd. to Woodruff Road .
$650M road needs set stage for penny tax debate Other high priority projects G reenville County has more than $650 million in needed road repairs and resurfacing projects that could take decades to complete given current funding levels. That’s according to the Greenville Citizens Roads Advisory Commission, which reported to Greenville County Council in April the need for multiple bridge rehab and replacements, road resurfacings and widening projects, intersection improvements, new turn lanes, signals and additional sidewalks. The top project on the commission’s list is a series of new parallel roads and extensions designed to relieve congestion on Woodruff Road.
36
$10.62 million
$16.15 million
$11.44 million
$30.58 million
Three-lane widening of S.C. North Highway 101 between Highway 290 and Milford Church Road — 2.5 miles
Three-lane widening of Grove Road between Faris and White Horse roads — 1.4 miles
NEWSMAKERS 2014 | GSA Business
Widening of Milford Church Road between S.C. Highway 290 and S.C. Highway 101
Widening of S.C. Highway 290 between S.C. Highway 101 and S.C. Highway 25
Delivering the report to County Council sets the stage for a debate on whether to allow citizens to vote on a potential 1% local sales tax in the November election. Tax revenues would fund the road projects outlined in the commission’s report. The report is the result of a twomonth fact-finding mission by the 18-member citizens roads commission to use citizen input and data to identify the highest road, bridge, pedestrian and resurfacing needs in the county. Projects were divided into four categories: road improvement projects, bridges, pedestrian amenities and resurfacing. “If you look at this list, in my professional opinion, my grandchildren
NEWS MAKERS 2014
Certus hits bump
in road to $5B When CertusBank opened its flagship branch in downtown Greenville last December, then-President Angela Webb said the bank was “well on that path” to $5 billion in assets. (Photo/Jean Piot)
W
ith its 16-screen interactive media wall and dozens of tablets and couches scattered throughout, the CertusBank location in downtown Columbia feels more like a modern, high-tech Apple store than a financial institution. The bank’s flagship location has much the same look, except it has an even larger media wall and occupies what is one of the most modern retail spaces in downtown Greenville. The Greenville office’s media wall was just one of the items cited in a March American Banker article that contended CertusBank had engaged in exorbitant spending. The article reported that the bank racked up $2.5
EDITOR’S
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million in expenses for three executive apartments, paid nearly $10 million to a consulting firm owned by top officers, and that it recorded combined losses of more than $115 million in 2012 and 2013. The article also highlighted emails written by shareholder Benjamin Weinger, managing partner of New York hedge fund 3-Sigma Value Financial Opportunities. The bank came under heavy fire after the article was published, and two weeks afterward, CertusBank announced the termination of senior executives and bank cofounders Milton Jones Jr., Walter Davis and Angela Webb. The bank named 40-year veteran banker John S. Poelker
as interim president and introduced its new chairman of the board of directors Robert Wright that same day. Wright and Poelker both addressed employees via internally circulated emails, with Wright saying Poelker was the “right leader” at an “important time.” Poelker’s experience includes preparing banks for public trading, strengthening liquidity positions, and structuring organizations to improve loan and credit administration. At the flagship’s opening in December 2013, Webb had assured reporters, “We’re still well on that path to get to that $5 billion,” a goal the bank had set in 2011.
CertusBank posted its 12th straight quarterly loss in November. It is also contending with a second lawsuit filed by Jones, Davis and Webb that, according to court records, alleges the bank conspired with Benjamin Weinger to remove them. The action is similar to the suit they filed in April, which was dismissed in October. Readers of the GSA Daily email selected this article as one of the 2014 reader’s choice stories of the year.
NEWSMAKERS 2014 | GSA Business
2014
Her comments came as the bank posted its second quarter of negative asset growth, the third such quarter for 2013, according to Federal Deposit Insurance Corp. records. Certus reported more than $64 million in negative net income attributable to the bank for 2013 on top of $19.9 million in losses for 2012. Certus’ strategy has largely focused on acquisitions to gain footholds in markets. However, its forays into other business segments and new branches suggest a shift toward organic growth. Poelker said he had no immediate plans for further acquisitions.