2021 Site Selection Upstate Intelligence Report

by ADAM BRUNS adam.bruns@siteselection.com

Sightseers take in the view from atop the Blue Ridge Escarpment at Caesars Head State Park in Greenville County.

Photo courtesy of South Carolina Department of Parks, Recreation and Tourism

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INTRODUCTION

A VISIT ON THE FRONT PORCH

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hen I visited Upstate South Carolina in early May , graduation ceremonies were underway at Clemson University, Spartanburg Community College and other institutions. The Greenville Drive baseball team got to play its home opener vs. the Bowling Green Hot Rods at Fluor Field in Greenville — the first game at the stadium in  days. A banner off the left-field foul line proclaimed, “Live Fearless.” New residential development climbed toward the sky behind the stadium. The city’s Sound Check concert series had just kicked back into gear. The streets buzzed with spring, people and possibilities.

It’s a feeling the  counties of the Upstate have been experiencing for some time. U.S. Census Bureau figures on in-migration show the region welcomed , new residents from  through , arriving at the rate of  per day.

Very few are leaving.

Residential permits have tripled since

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 to nearly ,, with healthy recent increases in Spartanburg and Anderson taking some of the pressure off the white-hot Greenville market. But city economic development leaders also are making sure attainable housing is part of the picture, injecting $ million into workforce housing and making robust use of public-private partnerships to support hotel, conference and park projects across the city.

Warm Welcome Many of the Upstate newcomers have come from foreign countries, including nearly , from Asia, Europe and Central and South America landing in Greenville County alone. And they’ve arrived from all  other states (yes, even  from Hawaii).

Craig Brown is one of them. The owner and president of the Boston Red Sox South Atlantic League affiliate Greenville Drive minor league baseball team once found himself leading the search for a new city after a stadium

deal fell through in the state capital of Columbia. “That is how the Capital City Bombers became the Greenville Drive,” he tells me. “Having spent -plus years in New York City where you might pass thousands of people every day without ever looking anyone in the eye, I was surprised to find such a sense of community in Greenville.

From the very start Greenville city leaders were excited about partnering with us as our self-financed stadium would help anchor the West End which was still being revitalized, and business and community members were thrilled that baseball would be returning to Greenville.”

In  the Greenville News referred to Fluor Field as the front porch of Greenville. “I came to understand that the front porch is where the family gathers — where it celebrates its victories and comes together in times of adversity,” Brown says. “That’s exactly what we hope our team and ballpark is for the Upstate, and we are very grateful

Since landing in Spartanburg County, BMW’s economic impact has ballooned to $11.4 billion invested, more than 11,000 jobs on site and more than 40 direct Tier I suppliers in the state (plus 260 others across the U.S.).

Photo courtesy of BMW

for the continuing support of this wonderful community.”

It’s not a stretch to call the Upstate the front porch of South Carolina. The region in 2020 saw 57 announcements connected to more than $1.2 billion in capital investment and 3,017 jobs.

Announcements have continued to flow this year: filtration company Pall Corp. in Duncan; Sweden’s Frauenthal Gnotec in Greenville County and China’s Gissing North America in Laurens County, but both in Fountain Inn; Standard Textile investing $15 million and creating 45 jobs in Union County; and Oshkosh Defense creating 1,000 jobs at a new postal vehicle plant it will locate in a repurposed warehouse in Spartanburg.

“It doesn’t look like we went through a pandemic,” says Aimee Redick, director of global engagement for the Upstate SC Alliance, citing data that show manufacturing up by 1.5% and construction up by 5%. The Upstate is an outlier in terms of the pandemic’s economic impact. But crisis response and bounce-back is now a more prominent site selection criterion. “Site selection experts are saying their customers want to go to a state that minimizes their risk of shutdown,” Redick says. “We think we weigh really well on that. Manufacturing and construction were considered essential businesses in South Carolina.”

The Upstate SC Alliance represents the 10-county region whose population now has surpassed 1.5 million, consistently growing at more than double the U.S. rate. The Alliance is celebrating its 20th anniversary, and so is the Greenville Area Development Corp, with new study results that estimate the total economic impact of the county on the region at $6.9 billion annually, supporting 82,693 jobs. That includes a new record set in 2020. Not a bad haul for what’s universally regarded as a bad year.

Indeed, I felt the year of panic and worry fading as I rode my bike on my last day in town along part of the 22-mile Swamp Rabbit Trail that takes you out of downtown Greenville all the way up to Travelers Rest. Refurbished mill buildings abounded, as did a healthy crosssection of the population, as we made our scenic way toward the campus of Furman University.

It felt like everything would be much more than OK.

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CORPORATE SNAPSHOT: MILLIKEN & COMPANY

QUIET GIANT: MILLIKEN & CO. PRODUCTS ARE EVERYWHERE But the pioneering company’s longtime home is in one place: Spartanburg County.

Halsey Cook

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f BMW’s $11 billion of investment put Spartanburg County on the map, Milliken & Co. was the mapmaker.

That’s not just a metaphor: Textile legend Roger Milliken almost singlehandedly got BMW to locate where they did after the German company had committed to the state in general in 1991.

“BMW needed 1,500 acres. They were going over to Clemson,” David Britt, vice chairman of the Spartanburg County Council and a player in the BMW process himself, tells me over lunch on a patio at Cribbs Kitchen in downtown Spartanburg. “Mr. Milliken met with them, and said, ‘You don’t need to be over there. We have all this property. I’ll make it happen,’ and he convinced the BMW executives.” What happened next in an area decimated by the loss of 25,000 textile jobs was “a godsend,” Britt says.

Many would say the same of Spartanburg-headquartered Milliken & Co., which employs more than 7,000 associates globally (3,200 in South Carolina), and is known for having accumulated 2,200 U.S. patents and

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more than 5,000 patents worldwide across its work in chemicals, composites, floor coverings, industrial textiles, performance apparel, protective fabrics and specialty textiles.

Milliken & Co.’s identification with South Carolina began with its 1884 investment in Pacolet, South Carolina, a town whose name was adopted as part of Pacolet Milliken, a separate company charged with looking for development opportunities for legacy Milliken land.

In 1958, the company, like BMW 33 years later, moved to a peach orchard, where it maintains a unique headquarters and R&D campus called the Roger Milliken Center (pictured above). That’s where I met Halsey Cook, Milliken & Co. president and CEO, who came on board in 2018.

“I think it’s the most business-friendly place I’ve ever worked in,” he says of the Upstate. “I find the business leadership really engaged with government leaders in South Carolina in a way I’ve not witnessed in other states.”

Milliken & Co.’s first recycling policy dates to 1901. Today, sustainability is part of the company’s transformation

strategy. Moving into new areas through acquisitions is too. “Over time we might want to bring some of these acquisitions into the Upstate,” he says. “There is a lot of benefit to being close to our core R&D resources and HR. We’ll look for opportunities to put more of Milliken here over time.”

Cook says the only governor on further growth is labor supply. “We’re being more aggressive and inventive,” he says. “In the same breath we’re also trying to be as inclusive and attractive an employer as we can be. You look at our research scientists and it looks like the United Nations. We want them to be in communities where they feel exceedingly welcomed. The way we’re thinking about it is not to move to a place with more labor, but become a more attractive employer.”

That said, Cook would still love to see more companies setting up headquarters in the Upstate.

“I think Charlotte has 11 or 12,” he says. “Atlanta has many more than that. The Upstate doesn’t have a lot of companies headquartered here. We’d love some company.”

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TALENT & BRAINPOWER

Located in the historically under-served West End of Greenville, the award-winning A. J. Whittenberg Elementary School of Engineering routinely places its student engineers alongside professional engineers in the Upstate corporate community.

Photo courtesy of National Blue Ribbon Schools and A.J. Whittenberg

THE UPSTATE’S TALENT ROI IS SUBSTANTIAL AND GROWING

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very year, the South Carolina Teacher of the Year gets the same honor: the privilege of driving for an entire year a brand new BMW X manufactured in Spartanburg (in addition to a nice check for $,).

It’s just one way the German carmaker and other major employers in Upstate South Carolina are connecting with the education system supplying the skills and talent they need.

Among its , employees, the BMW plant employs hundreds of equipment service associates and maintenance technicians. How do they find the people? In  the company decided to grow its own, creating the BMW Scholars program with four technical colleges in the region where curriculum was developed for what BMW needed, and students attend school nearly tuition-free while working  hours a week at the plant. The program has graduated over  people in its first decade, and every one of them has been offered a job at BMW. The company also has worked with the 88

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technical colleges and the University of South Carolina Upstate to develop a Bachelor of Applied Science (BAS) degree completion program that allows students with an Associate of Applied Science (AAS) in Mechatronics, Industrial Electronics Technology, or Automated Manufacturing Technology to pursue a four-year degree.

Those credentials mean something: An April  report from the South Carolina Manufacturers Alliance notes that transportation equipment manufacturing experienced an average annual employment growth rate of % between  and , helping to drive up the annual wage of the average manufacturing job in South Carolina to $,, compared to $, for all jobs.

The Upstate is a big reason for the big numbers. The region’s educational institutions aim to keep it that way, building that proverbial talent pipeline whether the jobs are in advanced manufacturing or other advanced fields such as medical devices and life sciences, cybersecurity and fintech, or software development. It starts at places such as

the A.J. Whittenberg Elementary School of Engineering in downtown Greenville (a  National Blue Ribbon School), and it extends to the upper echelons at Clemson University.

Deep and Wide Pool of Resources The Upstate SC Alliance itself has been in on the game, especially during the pandemic. The Alliance launched Skill Up in fall , aiming to connect individuals with  in-demand occupations that are accessible with  months or fewer of technical training.

The program grew out of the Alliance’s Move Up program, which has an equally broad reach into such fields as financial and creative services.

Other bright spots in the region include Greenville Technical College and its Center for Manufacturing Innovation; Spartanburg Community College’s Workforce & Industry Support Initiatives; Tri-County Technical College; and Laurens County Development Corporation’s “A Higher Opportunity” initiative. In West Greenville, Greenville Tech just opened the Truist Culinary Institute in a redeveloped space across from West

Greenville School in order to train talent for the city’s blooming food scene.

“The challenge for academia is, how do we stay relevant?” says Anand Gramopadhye, Ph.D., dean of the Clemson University College of Engineering, Computing and Applied Sciences. That applies whether you’re dealing with the disappearance of the camshaft from a car engine or the

revolution in telehealth and online education. “We in academia have to respond,” he says during an impromptu chat in the hallway on one of several graduation days on campus this spring, “and Clemson has responded very well.”

Partnerships abound, from the cleanroom Nephron is donating to further work on robotics-filled syringes to the slew of automotive, engineering

and materials companies working with CU-ICAR, the Clemson University International Center for Automotive Research visible along I-85. A sampling of the university’s corporate partners includes Duke Energy, Samsung, Arthrex, Fluor, Honda, Bosch, Siemens, GE, Michelin and Volvo.

“Right now we have around 55 strategic partners,” explains Jack

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Ellenberg, associate vice president, Corporate Partners and Strategic Initiatives, at Clemson. His team, including Angela Lockman, a former KPMG consultant who is senior director of business development, is still in startup mode, having just launched in 2017, though with nearly 80 combined years of experience and more than 400 projects and $64 billion in corporate project investments on their resumes.

They have the tools, including five innovation campuses, six research and education centers across the state and ag extension offices in every South Carolina county (Clemson’s original name was Clemson A&M). Ellenberg helped lead state economic development under three governors in his previous life, running offices overseas and opening up inland ports. He knows whereof he speaks, and companies know he will cut to the chase as fast as they will, if not faster.

“We approach everything with an ROI model,” he says. “No one on our team is an academician, and that’s by design. And we purposely did not use the words ‘economic development.’ We said we were going to make it an enterprise.”

Clemson today has 26,000 students, and is in high demand: Applications skyrocketed from 27,926 in March 2020 to 45,406 in March 2021, even as college applications across the nation trended down. Clemson is the No. 29 public university in the nation with $219 million in total research expenditures, and one of only six official Carnegie R1 institutions to have achieved that designation without a medical or veterinary school.

Against that backdrop, Ellenberg

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develops a portfolio with every corporate partner, looking ahead three to five years, and looking for ways to connect every company’s No. 1 issue — talent — with his team’s No. 1 goal: student engagement.

New Engagement Model Sometimes the engagement proceeds to developing new credentials. That’s what happened when Arthrex in 2017 invested $40 million in Sandy Springs near the Clemson campus. Clemson had the best bioengineers (biology is actually its leading major), but Arthrex leadership needed a specific regimen in order to fill positions such as technology consultants, who sit in the OR with surgeons when they are implanting Arthrex devices in patients. Arthrex

founder Arthrex President and founder Reinhold Schmieding approached the freshly minted Clemson corporate partnerships team.

“Our faculty worked with him across multiple colleges, primarily business and engineering, to develop two certificate programs, open to any student in any major,” says Lockman. Today 15 students are Arthrex scholars, thereby seeding a talent pipeline. And the company works with Tri-County Tech on the credentialing too.

“The students test drive them, and they test drive the students,” Ellenberg says of the Arthrex program. Clemson’s research campuses are ready for a test drive too, with land and space available, backed by an extremely proactive university president in James Clements.

“He likes to use the phrase ‘big and bold’ ” Ellenberg says, “asking questions like ‘How do we transform the industry, and transform society?’ ” For Ellenberg, one way is to listen.

“We like to talk about soil conditions,” he says. “If you prep the soil, companies will prosper. We ask, ‘What do you need?’ and then we listen.

We’ve flipped it from ‘We want you to give to the university’ to “We want you to invest in the university.’ The days of a company saying, ‘I want to give you $20 million to do whatever you do’ are gone.

What’s the ROI? We have to deliver on our commitments.

“We’ve changed the model,” he says, “of industry engagement among universities and colleges.”

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ENTREPRENEURIAL ECOSYSTEM

WHERE STARTUPS ARE STAKEHOLDERS Photo: Getty Images

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n May  I met with a crosssection of the Upstate’s startup community at NEXT on Main, a second location for incubator and coworking organization NEXT Upstate that opened in in downtown Greenville in  following the  opening of the NEXT Innovation Center. NEXT, which supports more than  highgrowth companies, is one of more than  incubators and coworking spaces that have sprung up in the region, backed by a blend of public and private organizations.

Cliff Holekamp, cofounder, managing director and general partner, Cultivation Capital, relocated to Greenville in  to open Cultivation’s first office outside St. Louis. The early-stage venture capital investment firm, which specializes in tech from the coastal markets, is involved in about  deals a year, and was looking to expand its East Coast presence. Going virtual at the onset of the pandemic, as it did for many, sparked a change in perspective.

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did with regard to where I was living, and how the company was thinking about location and geography,” Holekamp said.

“We looked from Arizona to Florida, Georgia, South Carolina, North Carolina and Texas. After full analysis, we ended up in Greenville.”

Unfollowing the Crowd Scott Pancoast is CEO and founder of Zylö Therapeutics, which has developed a proprietary topical delivery system for various medical applications. He was a San Diego biotech leader for two decades, at one time leading the San Diego Venture Group, whose meetings he watched balloon from a handful of people to an average attendance of   years in. He was first introduced to Greenville when his son attended Furman University. The idea of the city as a place to do business didn’t arise until he was working with Professor Joel Friedman at the Albert Einstein College of Medicine in the Bronx, and the topic of site selection came up in connection to

his nascent company.

“He said it had to be New Jersey or the Philadelphia area,” Pancoast remembers, “one of those centers of life sciences.” But Pancoast looked seriously at Greenville’s incentives, then learned about the broader and growing ecosystem for startups. He was further convinced by the area’s reputation for manufacturing, as Zylö was considering manufacturing the small silica topical drugholder system itself. Once he started hearing about institutional support from NEXT and the South Carolina Research Authority (SCRA), “I made the decision to start the thing here,” he says.

His home is two blocks away from NEXT. Lab space was found at the Clemson University Biomedical Engineering Innovation Campus (CUBEInc.) at Prisma Health Patewood Hospital. A first round of financing was led by Venture South, a growing affiliation of angel venture capital groups in  cities that got started in Greenville.

Two grants have come from the SCRA

as has $200,000 of investment. For manufacturing, Zylö in November 2020 moved into a former Michelin showroom facility with 25-ft.-clear ceilings that can be outfitted as a “box in a box” in the event the company needs a cleanroom environment.

He says Zylö is also benefiting from a regulatory environment quite different from California’s. “To wit,” he says, “every sales tax audit we or my portfolio

companies had in California, they are basically told that you don’t leave the audit until there’s a finding. There were all these claims. Very frustrating.

Contrast it with the first sales tax audit here. He said, ‘You guys are screwing it all up. Here are five tax exemptions you’ve been missing. Look back five years and I’ll help you do it.’

“We’re in the line of airplane approaches for Greenville Spartanburg

International Airport, so it was an extra two weeks for a permit,” Pancoast continues. “But it was nothing. In California, I may have never gotten a permit, and if so, it would have been held up forever.”

California is still a global model for both venture capital and life sciences.

But the Upstate could be home to types of hubs other than those attached to Michelin tires.

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“This has a long way to go to be a San Diego,” Pancoast says, “but it continues to flourish, and I see continuing evidence it will get to be something people outside the Southeast will have heard of.”

Both Pancoast and Holekamp credit university connectivity with helping them ramp up their own networking and talent connectivity. Holekamp, who served as the first full-time faculty member in entrepreneurship at Washington University in St. Louis, knows a blossoming ecosystem when he sees one, and likes what he’s seeing from Clemson, Furman and other schools. “For any entrepreneurial ecosystem, you have to have a combination of talent and density,” he says. “Talent is number one, and having universities as strong partners is really

“Furman hadn’t really played in this space,” he says, “and was not really thought of as a stakeholder in the universe of entrepreneurship.” But they are now. He envisions a time when Furman, Clemson, the University of South Carolina and other schools form a brainpower nexus to rival what UNC-Chapel Hill, Duke and North Carolina State University have done in the Research Triangle. Connecting to the entrepreneurial world is a strategic priority for the school. There’s even a side benefit: All the Furman parents like Scott Pancoast who suddenly discover a region while visiting their child on campus.

“I’ve heard that story multiple times,” Holekamp attests. Herrera admits it’s part of his duties now.

Young people need to see there is opportunity in medium-sized cities. There is enough scale to build a career in a place the size of Greenville.”

— Cliff Holekamp, Co-founder, Managing Director and General Partner, Cultivation Capital

important. The fact that Anthony is at this table right now and not sitting on campus is huge.”

That would be Anthony Herrera, executive director of Furman University’s Institute for Innovation & Entrepreneurship. The former Toyota leadership development executive from Texas is leading Furman’s entrance into the innovation space.

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“I meet with parents now who are looking to move their companies here.”

Next Level Jacob Hickman, director of business recruitment for the Upstate SC Alliance, is at the table too, and notes how cultivating firms like Cultivation and Zylö is the next level for a region already saturated in

advanced manufacturing. He doesn’t need to say much more, because the company leaders are saying it for him. “I’m on the road all the time, looking for the next Scott,” he says of Pancoast.

“I’ve lived in eight different cities, including New York, Boston, Los Angeles and Oklahoma City,” Pancoast says. “We love Greenville. And recruiting from out of state is a lot harder in New Jersey than Greenville. We’ve recruited five people, and there is not one bit of evidence of resistance to moving to Greenville.”

John Moore, principal, Momenteum Strategies, and the founder and former CEO of NEXT, says the hotness of the market can even sometimes become an HR issue. He was recently at lunch with leaders from a large corporation in the area that brings in people from all over the world. “They complained they had a

big problem,” he says. “People wanted a position here, or they were exiting.”

For Holekamp, the Upstate made sense from a personal perspective and from a growing business perspective. “Our firm is focused on developing ecosystems in second-tier markets. I looked at Atlanta, Raleigh and Charlotte, but as a company we would not have an opportunity to be a leader in the community. We did that in St. Louis. I want to do that again. Here, we have an impact on the community, but proximity to deal flow in Charlotte, Atlanta and Raleigh. I’ve been here four months and I have done a deal in each of those cities.”

Talent Cultivation It’s a contagious philosophy at Cultivation and a growing number of venture organizations — to not just be

Ken Brower

John Moore

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Greenville-Spartanburg International Airport (GSP) is building on its award-winning passenger service with growing cargo activity, sparked in part by a $33 million facility investment in 2019. Photos courtesy of GSP

takers of resources, but community builders. It resonates. “We earn the respect of the entrepreneurs because they see we are leaders in our community, building the entrepreneurial system we operate in,” Holekamp says.

If there is one challenge now, it’s the same as everywhere else: talent provision.

A focus on diversity, equity and inclusion is one avenue NEXT, Clemson, Furman and others are taking. Ken Brower, interim CEO, NEXT Upstate, says 33 of the 121 companies NEXT supports are female- or minority-owned, and the most recent Zoom call had the most diverse crowd he’d seen in a long time. But he knows there are many more faces to be discovered.

“While we support 121 companies, there are probably 400 we should be involved with,” he says. “We are making a very intentional effort.”

Among the spaces in the Upstate

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breathing life into the entrepreneurial scene is Village Launch, which “exists to equip and enable under-resourced entrepreneurs to become providers, creators and contributors in their community,” and is part of Mill Community Ministries in Greenville, headed by Furman University alumnus Dan Weidenbenner. Herrera calls the social enterprise organization the town’s “best kept secret,” with a roster of entrepreneurs that is 90% Black, and fast-growing numbers of women and Hispanic founders.

An additional 7-acre innovation district is rising along Poinsett Highway, within an Opportunity Zone on land between Greenville and the Furman campus. The project is a collaboration between Hartness Development, Furman University and its Institute for Innovation & Entrepreneurship.

With plans for Flywheel Coworking

and others to invest there, the district is intended to provide entrepreneurs of all demographics with access to resources.

Furman’s I&E office itself is forging new partnerships: University President Elizabeth Davis announced in December that the Furman I&E would move into NEXT on Main. The move came a year after the NEXT Fellows program launched in order to engage and retain top entrepreneur talent at Clemson University and Furman.

“It’s much easier to have a seat at the table and to help bring organizations together around a table when that table is literally steps away in a shared space,” Herrera said.

“This is an excellent opportunity for our students, faculty and staff to engage in meaningful work with the city,” said Davis, “and to help make Greenville a leading innovation hub in the country.”