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NHRMC’s team doubled revenue to $1.2 billion in the past decade (and more growth is coming)

SUMMER 2019

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Greater WWilmington G Published by

reater ilmington BUSINESS BUSINESS JOURNAL JOURNAL

2019


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THE REGION'S HEALTH CARE INDUSTRY

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CLINICS SAFETY NET

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NHRMC’S ECONOMIC INJECTION

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INDUSTRY TRENDS

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WELLNESS FACTOR

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PULSE SNAPSHOT

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IN PROFILE: ED PAUL

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MEDICAL OFFICES

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DENTAL DIRECTIONS


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LETTER FROM THE EDITOR BIZ BITES BEHIND THE NUMBERS SOUND OFF NEWS DIGEST C-SUITE CONVO RESTAURANT ROUNDUP TAKEAWAY

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WATER PLAY

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BEACH RENTALS ON THE HOOK

ON THE COVER

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Members of NHRMC’s executive team: 1. Andre Boyd, chief operating officer; 2. Ed Ollie, chief financial officer; 3. Joe Norris, chief information officer; 4. Lynn Gordon, chief legal officer/general counsel; 5. Philip Brown, chief physician executive; 6. Kristy Hubard, chief strategy officer; 7. Keith Strawn, chief human resources officer; 8. John Gizdic, president/CEO; 9. Mary Ellen Bonczek, chief nurse executive

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Wilmington B iz

CONTRIBUTORS

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SUMMER 2019 – $4.95

J E N N Y CALLISON JENNY CALLISON is a former Greater Wilmington Business Journal reporter who continues as a freelancer with the Business Journal and WILMA. Before moving to Wilmington in 2011, she was a university communications director and a freelance reporter covering a variety of beats. Callison talked with local federally qualified health centers about their role in the health care system (PAGE 18) and profiled optometrist Ed Paul (PAGE 40).

Publisher Rob Kaiser

rkaiser@wilmingtonbiz.com

President

Robert Preville rpreville@wilmingtonbiz.com

A s s o c i at e P u b l i s h e r Judy Budd

jbudd@wilmingtonbiz.com

Editor

Vicky Janowski vjanowski@wilmingtonbiz.com

A s s i s ta n t E d i t o r Cece Nunn

cnunn@wilmingtonbiz.com

JESSICA MAURER JESSICA MAURER is a chef and writer with degrees from Hartwick College and The Cambridge School of Culinary Arts. Her column, Restaurant Roundup, appears each week in the Greater Wilmington Business Journal and she is a regular contributor to WILMA and Wilmington Magazine. She talks with the owners of Clean Eatz about their latest projects (PAGE 62).

Reporter

Christina Haley O'Neal chaley@wilmingtonbiz.com

VP of Sales/Business Development Melissa Pressley

mpressley@wilmingtonbiz.com

Senior Account Executive Craig Snow

csnow@wilmingtonbiz.com

Account Executives Polly Holly

pholly@wilmingtonbiz.com

MICHAEL C L I N E SPENCER MICHAEL CLINE SPENCER, owner of Michael Cline Photography, is a Wilmington-based freelance photojournalist with over 15 years’ experience working at several prominent North Carolina newspapers. He specializes in corporate, editorial, pet and wedding photography. He photographed this issue’s cover, NHRMC representatives (PAGE 21), optometrist Ed Paul (PAGE 40), commercial fishermen (PAGE 59) and welders on the Battleship North Carolina (PAGE 64). michaelclinephoto.com

Ali Buckley abuckley@wilmingtonbiz.com

Business Manager Nancy Proper

nproper@wilmingtonbiz.com

Events Director Maggi Apel

mapel@wilmingtonbiz.com

E v e n t s / D i g i ta l A s s i s ta n t Elizabeth Stelzenmuller

events@wilmingtonbiz.com

D e s i g n & M e d i a C o o r d i nat o r Molly Jacques

production@wilmingtonbiz.com

Content Marketing Editor David Dean

ddean@wilmingtonbiz.com

T E R A H WILSON TERAH WILSON is a Wilmington-based freelance photojournalist with over 16 years’ experience in photography and art. She is a mom of three, an artist and an avid coffee drinker. In this issue, she photographed project manager Brian Spaller (PAGE 43), dentist Sarah Pless (PAGE 46) and shot a stylized vacation shoot about the beach house rental market (PAGE 56). terahwilson.com

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Contributing Designer Suzi Drake

art@wilmingtonbiz.com

C o n t r i b u t i n g P h o t o g r ap h e r s

River Bondurant, Megan Deitz, T.J. Dreschel, Michael Cline Spencer, Terah Wilson

Subscribe

To subscribe to WilmingtonBiz Magazine,visit wilmingtonbiz.com/subscribe or call 343-8600 x201. © 2019 SAJ Media LLC


WHAT THE

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spent a lot of time at the hospital’s coffee shop working on this issue. Multiple interviews at New Hanover Regional Medical Center had me going back-and-forth between our office in the Mayfaire area and the South 17th Street hospital. So, caffeine was a good friend. On one of those pit stops, I checked out a history display across from the café. These displays are dotted throughout the hospital’s main-floor hallways and lobbies, showcasing items from the area’s local medical history. This one, though, is perhaps the best. Amid the nursing uniforms and antique medical instruments sits a horse saddle. It belonged to Dr. Bertram Williams, and he used it when riding by horseback to check out the densely wooded site not yet accessible by cars. It was 1961, and New Hanover Memorial Hospital, merging the community’s white and black hospitals in the midst of the civil rights period, was about to be built there. Fast forward nearly 60 years, and that hospital has morphed into a health system that plays a significant role in the local economy and employs more people than anyone else in the area. For those reasons, as well as its role in individuals’ health and medical needs, we chose to look at NHRMC’s rapid growth for our inaugural summer issue focusing on the region’s health care industry. In the 2019 Pulse section (starting on page 17), you’ll find out how New Hanover Regional got as large as it has and get a preview of its future focuses. But you’ll also learn more about trends impacting care overall (page 30), the community’s health status (page 35) and current market demand for medical office space (page 44). Ever notice that there seem to be more

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dentists in Wilmington than in other similarsized cities? We did too, so we asked some of them how they stand out from the crowd. It turns out that going to the dentist’s office these days looks a lot different than it used to (page 46). It’s not all health talk this issue. This being summer, and tourism still being a major sector here, we also introduce our annual Waterways section, focusing on the businesses and activities that fuel the coastal lifestyle (starting on page 49). Up next this year is our Spark issue in the fall with stories about economic development and innovation in Southeastern North Carolina. And in December, we launch our WilmingtonBiz 100 list – an issue that highlights the area’s top 100 Power Players, Influencers, Innovators, Connectors and Rising Stars. For story ideas on those upcoming issues or feedback on this one, as always, reach out anytime. Here’s to your health.

VICKY JANOWSKI, EDITOR vjanowski@wilmingtonbiz.com

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B i z B i t es BEHIND THE NUMBERS |

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THE DIGEST

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Wilmington’s Greenfield Lake Amphitheater, which has brought artists such Mavis Staples and Michael Franti (left) to the Cape Fear, has seen a larger audience in recent years. Attendance increased from nearly 10,400 in 2014 to about 31,500 in 2018. With plans for a new outdoor stage at North Waterfront Park expected to accommodate as many as 6,780 a show, city officials plan to differentiate the amphitheater. “The two venues will be very different; most markedly in terms of seating capacity, which in part drives the type of artists the venues are marketed to,” said Amy Beatty, community services director for the city of Wilmington, which owns both venues. “Although the Hugh Morton Amphitheater at Greenfield Lake features regional and national acts and will continue to, it will always remain at 2,000 or less in terms of seating capacity.” photo by T.J. DRECHSEL

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JOBS PANCON EXPECTS TO CREATE IN NAVASSA

MANUFACTURER TO BOOST BRUNSWICK ECONOMY WITH NEW JOBS BY JENNY CALLISON

THE DECISION BY PACON MANUFACTURING CORP. to relocate its operations from Somerset, New Jersey, to Navassa is expected to provide a shot in the arm for the community’s economy. The company announced April 5 that it will purchase and renovate a boat-building facility in the northern Brunswick County town. The promised 299 new jobs represent the largest single-company employment infusion the area has seen in recent years. Salaries for the 299 new jobs are expected to average about $31,000 a year. The New Jersey manufacturer also committed to a $37.6 investment in the new site and operations there. “The buildings do not have loading docks, which Pacon needs, but Pacon will build a structure to connect the existing two buildings, and that structure will have loading docks,” said Bill Early, director of Brunswick BID. The announcement that Pacon had chosen Navassa was accompanied by a further announcement that the project had been awarded a $300,000 One North Carolina Fund grant. Funds will be released in increments to Pacon as the company hits hiring and capital investment targets. Pacon also received a $700,000 Rural Infrastructure Authority grant to support of the facility renovation. Renovation expenses are estimated at about $2 million, according to Early. The grant requires a 5% local match from the county, totaling $35,000. Founded in 1949 as a paper broker and converter, Pacon Manufacturing codeveloped the first sterilizable paper used for wound care dressings, according to its website. With this material in hand, Pacon transitioned into flexographic printing to serve the medical marketplace. The company’s product portfolio grew to include the converting and packaging of sterile towels, drapes and dressings for the medical industry. In the 1990s Pacon expanded into the consumer products arena, initially as a copacker for Ponds pore strips. Bridging into the new century, Pacon commercialized the first water-activated cleansing formula and used this technology to its advantage in the fast-growing wipes market.

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BRUNSWICK COUNTY

299

NEW HANOVER COUNTY

NUMBERS

$212.2M

1Q

RESIDENTIAL CONSTRUCTION PERMITS VALUATIONS (NEARLY DOUBLE OF 1Q LAST YEAR)

$2.1 BILLION

$

FDIC

BANK DEPOSITS INSIDE MARKET

12.3%

O F R E SI DE N T S U N D ER A GE 65 A R E WITHOUT

HEALTH INSURANCE WILMINGTON

BEHIND THE

WILMINGTON MSA

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N E A R LY

2,800

Sources: N.C. Department of Commerce, FDIC, U.S. Census Bureau, UNCW


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AN ANNUAL CHECKUP

HAVE A CONFESSION TO MAKE: I AM AN ECONOMIST AND AS SUCH VIEW THE WORLD, ITS PROBLEMS AND SOLUTIONS THROUGH THE LENS OF SCARCE RESOURCES AND OPPORTUNITIES AND OFTEN MAKE JUDGMENTS IN DOLLAR TERMS. But this single-lens perspective is no different than a physical therapist who thinks everything can be solved with stretching, a chiropractor who says spinal alignment can cure my cold, a lawyer who thinks a regulation will guide behavior or a psychologist who believes system 1 thinking is overpowering system 2 – or something like that. Remember, I’m an economist. Each of us is a specialist in our own way, with our own valuable tools, but occasionally we need a good generalist to look at all the pieces and assess our overall health. A friend once asked me why communities have so many scorecard events, outlook conferences, forecast breakfasts, Garner reports, state of the city/county speeches, etc. when they often say similar things. I think the answer is the same as your annual physical. You may not learn much you didn’t already know, but looking at all the pieces together often reveals the “new.” The same is true with our community’s health. Each of us is a specialist in our issue of choice, but only by looking at all the pieces together can we see the big picture and opportunities for the “new.” Our economic health affects our

A D A M J O N E S physical and mental health, which, in turn, affects our economic health. One need not look far to find studies linking work-related or financial stress to physical and mental health issues, and those issues also have economic consequences. Major depressive disorder alone is estimated to cost the Wilmington metropolitan area over $170 million in lost economic output. But it’s not just economics that matter. Our physical, social and cultural environments all play a crucial role in the region’s health and, thus, its economic success. Wilmington’s physical environment feeds back into our economic success through several channels, including physical and mental health, not to mention the geographic disparity of economic opportunity. Passive recreation projects such as the cross-city trail, Empie Park renovations, green space preservation and the potential Wilmington Rail Trail allow us to be physically active and clear our minds as a way to recharge and approach issues from new perspectives. The benefits of such projects show up, in economic terms, as increased demand for homes near the projects and, in mental health terms, as a positive relationship between access/availability and greater mental well-being. Research finds parks have a dose-response relationship and that more visits

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lead to greater mental health. Measure these relationships – including air quality, water quality, traffic congestion, etc. – using your tools/ lens, and the result is likely the same: A solid physical environment correlates with better health outcomes. Finally, our culture and supporting amenities play into our economic, mental and physical health as well. Communities with arts organizations such as an opera, symphony or ballet have about 2% more knowledge workers than those without. Amenities such as the Wilson Center provide critical support for the attraction and retention of knowledge workers, but importantly, they also provide gathering places for people to connect. Academic research is starting to look at the effects of suburban development and finds isolation leads to a declining number of adult friendships. There is strong evidence that people with close bonds to others have higher levels of health than those who are socially isolated. Public spaces that encourage repeated, chance encounters help to encourage social connections and build the community’s social capital. When we think about health care, the environment and pollution, affordable housing, economic opportunity, the arts or any other issue, remember, they are all components of our region’s overall health. So bring your tools, and we’ll see you at the community’s next annual physical. Adam Jones is a regional economist with UNCW’s Swain Center and an associate professor of economics in UNCW’s Cameron School of Business. S U M M E R 2019

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WHAT TO DO ABOUT PROJECT GRACE’S FUTURE AT ISSUE: Project Grace is the name for the potential redevelopment of a New Hanover County-owned block in

downtown Wilmington. The block includes the main branch of the New Hanover County Public Library and the former Register of Deeds building, along with a parking deck and surface parking lots. Proposals for Project Grace envision a block that along with the parking deck includes a modern library, a relocated Cape Fear Museum, housing and commercial space. But while progress was made last year toward making Project Grace a reality, some are concerned about losing the library and former Register of Deeds buildings and the potential expense.

A FUTURE THAT RESPECTS THE PAST

IT’S JUST NOT SIGNIFICANT

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or 53 years, Historic Wilmington Foundation (HWF) has been preserving and protecting irreplaceable historic resources. We’re delighted by the increased interest in our unique community, but we all must ensure that growth-based construction does not cause our city to lose its historic character. Our 1966 Articles of Incorporation address historical and architectural interest, aiming “to preserve neighborhood design in mass and structure.” Why? Because historic preservation plays an invaluable role in our economy, culture, community, environment and, ultimately, quality of life. We do not advocate (nor have we ever advocated) only for the pretty buildings. Neither are we anti-development. HWF has never opposed building on the Project Grace parcel, and we honor Compatible

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B E T H RUTLEDGE New Construction projects annually at our Preservation Awards. New shouldn’t have to replace old. It is not one or the other. Further, from the standpoint of financial viability, your readers should be made aware that heritage tourism is a major local economic driver. Unlike many structures that come to HWF’s attention, the library isn’t crumbling or abandoned. Built in 1951 as a Belk’s, this brick structure has weathered several hurricanes, and thrives as an example of the National Trust’s Reurbanism initiative. (Reurbanism means that adaptive reuse should be the default, demolition a last resort.) HWF has heard claims

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n terms of the historic significance of a building, there’s a difference between a contributing structure and a non-contributing structure. “A building contributing to the historic significance of a district is one which by location, design, setting, materials, workmanship, feeling, and association adds to the district’s sense of time and place, and historical development,” according to a federal government manual for state historic preservation boards. “A building not contributing to the historic significance of a district is one which does not add to the district’s sense of time and place, and historical development; or one where the location, design, setting, materials, workmanship, feeling, and association have been so altered or have so deteriorated that the overall integrity of the building has been irretrievably lost.”

G E N E MERRITT The former Belk-Beery building, at 201 Chestnut St. in downtown Wilmington, was constructed as a retail facility in the 1950s. It replaced a number of then-existing contributing historic structures. In 1978, New Hanover County purchased the building and renovated it for use as the main location of the public library system. At the time of its construction, there was some fenestration on the corner of the building at Second and Chestnut streets. That was also the main entrance to the building. The building is not, nor ever has been, architecturally or historically significant. It does not contribute to the historic fabric of downtown Wilmington in that


B i z B i t es

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O N FA C E B O O K . C O M / W I L M I N GT O N B I Z WHAT WOULD IT TAKE TO BRING HIGHER-PAYING JOBS TO THE WILMINGTON AREA? “CLEAN WATER, GOOD SCHOOLS and the desire to create jobs that are not waiting tables or cleaning hotel rooms” – DEBORAH GOODMAN “AN UPGRADE IN INTERFACE between the region, tech companies, investors and talent …” – KRISTIN MARINE “A TOP-NOTCH ENGINEERING program at UNCW and CFCC …” – MARK ANTHONY MUELLER “BOSSES WILLING to pay more. That’s what it would take.” – BLAKE BAXENDELL

T W I T T E R : @ W I L M I N GT O N B I Z DOES WILMINGTON NEEDS MORE APARTMENTS?

YES 27%

NO 73%

“I DIDN’T SET OUT TO CREATE A TECHNOLOGY COMPANY. It was the result of trying to solve a problem, and I found that technology was the best way to solve it.” – ROSS HAMILTON, CEO OF CONNECTED INVESTORS,

ON BEING NAMED THE 2019 COASTAL ENTREPRENEUR OF THE YEAR “AIRLIE GARDENS WAS CLOSED for the longest period of time, but thanks to countless hours by dedicated volunteers and staff, they were able to reopen in time to host their signature Enchanted Airlie holiday event.” – CONNIE NELSON, WILMINGTON AND BEACHES CONVENTION & VISITORS BUREAU SPOKESWOMAN, ON HURRICANE FLORENCE’S IMPACT ON AREA ATTRACTIONS

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RUTLEDGE of the library’s “wasted” space and damp basement. But along with the Bellamy, HWF stores some archival files in a library basement we know to be dry. As for underutilized space, wouldn’t an interior redesign be simpler and more responsible than demolishing and building anew? It makes no sense to tear down a viable structure before exploring and exhausting other options. And as to claims the building is historically insignificant? The State Historic Preservation Office (SHPO) wrote that the library building had been too altered to be eligible for the National Register’s Study List. However, in that same letter, SHPO wrote “… the Belk-Beery Department Store building is indeed historic and a significant element in Wilmington’s downtown landscape … our

office does not encourage further demolition or destruction of historic aspects of the building.” The Borst building is a contributing structure. This former Chrysler showroom is one of the last Second Street buildings that comprised the former Automobile Row. It maintains much of its 1926 architectural integrity. It’s a physical reminder of our transportation history, and is one of just two old buildings remaining on that block. The city is required to approve its demolition for Project Grace to happen. Although Project Grace is complex, HWF’s stance is simple. Keep reusing buildings. Thoughtfully combine new construction with the old buildings comprising our historic downtown, lest its character and charm be lost forever. Beth Rutledge is executive director of the Historic Wilmington Foundation.

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MERRITT area. It is a large concrete and brick box. What little original fenestration existed is gone. Age alone does not define a contributing building. Unattractive and/ or downright ugly buildings have been built in the past, and they don’t contribute because of their age. Demolishing this structure to accommodate a new library and museum will not be a cultural loss to the city of Wilmington. The same is true for the old Register of Deeds building. Over the past 40 to 50 years, very few structures have been demolished, except during the Urban Renewal (or as I like to call it “Urban Removal”) days, when a number of old buildings were demolished on the downtown waterfront on or near Water Street. Since that time, you can count on your fingers the number of buildings demol-

ished. We have maintained our preservation ethic with some reasonable degree of effectiveness, especially in comparison to other cities of similar size and history. Future redevelopment in the downtown area should complement the existing historic fabric. That does not mean we should build “phony” historic structures (reproduction architecture). Modern architecture is fine as long as it “blends well” within the historic fabric. The existing library building could be upgraded to improve its outward appearance. And it could be retrofitted on the interior to accommodate a possible museum space. On the other hand, if it is demolished, it will be no great loss to the city. Gene Merritt is a longtime real estate developer and historic preservationist from Wilmington. S U M M E R 2019

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DIGEST THE

A R O U N DU P O F R E C E N T NE WS

PHOTO BY CECE NUNN

HELLO AGAIN,

H E N R I E T TA PHOTO C/O N.C PORTS

PORT WELCOMES N E W- PA N A M A X S H I P

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hile the arrival of the firstever 12,000 TEU vessel at the Port of Wilmington in April was a milestone itself, Paul Cozza sees the choice of ZIM, a container shipping company, to dock its new-Panamax category cargo ship in Wilmington as a spyglass view of things to come. “When this ship came in… it was the largest capacity vessel we have had. We are continuing to upgrade (the port) so we can take 14,000 TEU vessels,” said Cozza, CEO of the N.C. State Ports Authority. “As we increase the width of our turning basin, we can take longer ships – we hope, by the end of the year.” The new arrival, the Kota Pekarang, is operated by ZIM in partnership with the 2M Alliance which links Asia to Wilmington, N.C.,Ports announced in a news release. A TEU, or 20-foot equivalent unit, is equal to the average length of

a cargo container. With the expanded size and depth of the Panama Canal, a new generation of larger ships, ranging from 12,000 to 14,000 TEUs, are transporting more freight and, Cozza said, have greater logistical efficiency. The successful handling of the Kota Pekarang, he added, is an advertisement for the Port of Wilmington’s capabilities that he hopes will attract more shipping lines. He also hopes it sends a message to major retailers like Walmart, Lowe’s Home Improvement and Home Depot that their imports can be processed through Wilmington. “We’re continuing to invest,” he said. “(Shipping lines) want to know we’re with them now and in the future. That’s why we are investing as a state, and why it makes sense for Maersk and others to put their big ships in at the Port of Wilmington.”

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Another Henrietta has floated into downtown Wilmington. The owners of Cape Fear Riverboats, which previously owned Henrietta III and Henrietta II before selling them, bought a 118-passenger riverboat-style vessel named the Southern Belle in Alabama and have renamed it Henrietta, bringing it home to the Port City. The boat was refurbished for sightseeing and dinner cruises and private charters, said Capt. Carl Marshburn, who runs Cape Fear Riverboats along with his son, Capt. Daren Marshburn. The new Henrietta has already generated some buzz. “We’ve had a lot of interest. We’ve had a lot of calls from people who saw it and said, ‘We’re so glad we got a Henrietta back,’” Carl Marshburn said. “People just missed it.”

Number of locally based companies that made INC. magazine’s BEST WORKPLACES list:

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C-SUITE C O N V O

K E E P I N G PAC E

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and then we’re like, ‘Okay, we need more. We don’t have enough.’”

HELBOURN STEVENS BECAME PRESIDENT OF NOVANT HEALTH BRUNSWICK MEDICAL CENTER IN 2012, BUT HE’S BEEN WITH THE WINSTONSALEM-BASED HEALTH SYSTEM SINCE 1990. He came to the area when Novant took over management of the former Brunswick Community Hospital facility in 2006. They moved from that site in 2011 to a newly opened 74-bed hospital in Bolivia. The hospital’s medical staff now totals more than 320 including advanced care practitioners. There also are 26 clinics located throughout the county, with physicians who are part of the Novant Health Medical Group. Before moving into administrative roles, Stevens started his health care career as a respiratory therapist. WHAT MADE YOU GO INTO THAT FIELD, RESPIRATORY?

“Well, I had family members that were sick, so I always knew I wanted to do health care. Checked into nursing, and it was in the late ’80s, and there was a three-year waitlist. A lot of industries in Winston-Salem had closed and shut down – Hanes and Reynolds had let all those people go – and I thought, ‘I’m not waiting.’ Somebody suggested respiratory, and I said, ‘Okay.’ That’s what I did. I really got into it, and I loved it.” Stevens took on other leadership roles, including director of cardiopulmonary services for Novant Health Forsyth Medical Center, that led

BY VICKY JANOWSKI

IS IT THAT THIS MARKET HAS FEWER PRIMARY CARE DOCTORS FOR THE POPULATION? OR IS IT JUST PART OF THE FACT THAT EVERYWHERE NEEDS MORE PRIMARY CARE?

SHELBOURN STEVENS PRESIDENT

Novant Health Brunswick Medical Center

to his current role. YOU’VE BEEN PRESENT HERE FOR SO MANY YEARS NOW. WHAT HAVE YOU SEEN IN TERMS OF GROWTH FOR YOU GUYS IN BRUNSWICK?

“We’ve seen a lot of growth here at the facility. Having a new facility has really helped a lot, having all private rooms. People in the community, if they can, they want to stay local. And with the population growth here in the county, that drive some days can be a lot longer to get to Wilmington or Myrtle Beach. So we’ve been able to add other specialties. We had general surgery; we’ve grown that now to six surgeons. And then OB (obstetrics) we have grown. They were doing right at 100 deliveries a year in 2006, and in 2017, we hit over 500. … We’re seeing a lot of the outpatient services really taken off. One of the biggest growths, too, has been in our primary care needs. With more folks moving here, they’re looking for their primary care provider. It feels like we get some hired in, and we think we’re doing it,

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“Everywhere needs more primary care, just because of population. And then there’s some primary care physicians who had their own practices in the market who decided to go to concierge medicine where they have smaller panels but they’re available 24/7. A lot of people don’t want to pay the annual fee, so we had a lot of people coming to us trying to reestablish with a new primary care. … The schools are not putting out as many physicians as they once were, so that’s why we’re having to look – as all hospitals are – at the use of physician assistants and nurse practitioners to help fill that void and demand. And we’re all fighting for the same provider. So it’s not uncommon (that) we get a provider here and they say, ‘I was just at New Hanover yesterday or Wilmington Health or even Seacoast McLeod (hospital in northern Horry County).’ Because the demand is so high there’s lots of jobs. And some specialties are very, very hard to find. We’ve been trying to recruit psychiatrists to help us with our behavioral health, and there’s just not enough of them out there. But it’s all good growth. I mean, there’s other communities, their hospital system’s looking to close their doors. We’re nowhere near that; we’re trying to keep up with the demand.”

S U M M E R 2019

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PiecINg puzzLE TOGETHER HEALTH CARE’S

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n any given day, MedNorth and CommWell health centers could be saving area hospitals a significant amount of money. That’s because the two centers provide care to a population in Southeastern North Carolina that might otherwise turn to hospital emergency departments for primary care. “The ER is such an inappropriate starting point” for health care, said MedNorth CEO Althea Johnson, adding that, by the time an uninsured individual decides to visit the emergency department, “some problems can become giant.” The bill could be giant as well, especially if the uninsured person has postponed getting treatment until the condition becomes a crisis. A 2013 National Institutes of Health study calculated the median cost of one visit to the ER at $1,233

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– and costs have risen since then. Uninsured and underinsured people, who are the most likely to use the emergency department as their primary source of health care, often can’t pay for the cost of their visit. In many of those cases, the hospital must absorb the cost. Enter the community health center. In the jigsaw puzzle that is health care in the United States, community health centers provide primary care in underserved urban and rural communities. These pieces are essential to holding the puzzle together and in reducing health care costs. Christopher Ray Vann, CommWell’s chief development officer, cites a study that found when a federally qualified health center, or FQHC, lands in a county, there is a 30% reduction in emergency room use. MedNorth, located in Wilmington’s Northside community, served about 7,000 of New Hanover County’s low-income residents in 2018, 53% of whom were uninsured and another 36% were on Medicaid or Medicare. CommWell Health, with 16 centers in Southeastern North Carolina, reaches into Brunswick County’s more M A G A Z I N E

rural areas with locations in Bolivia, Shallotte and Ocean Isle Beach that, combined, served 3,300 patients in 2018. It also runs an FQHC in Pender County’s Willard community. In Southport, Goshen Medical Center Inc. also operates as a federally qualified community and migrant health center organization. It offers pediatric as well as family medicine services. Like puzzle pieces, each of these centers is distinctive, reflecting the community it serves. Each FQHC gets a set amount of federal funding each year, but the clinics can also apply for other federal

WE A R E OFF ERI NG A Q UA L ITY P R OD UCT, A N D WOUL D LOVE FOR P EOP L E TO KNOW TH AT COMIN G HERE I S N OT A STEP DOWN. ALTHEA JOHNSON CEO, MEDNORTH


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grants for specific projects. “Nineteen percent of our patients want to be addressed Vann said that the federal monies make up about half of in a language other than English,” Johnson said. “I’m always CommWell’s overall budget. amazed at the languages we hear in here: Congolese, Karen, FQHCs charge their patients on a sliding scale based on Swahili. We’ve even had calls for American Sign Language, their incomes. Those at the lowest income level are charged Farsi, Cantonese, Mandarin. We do have people on staff who $30 per visit. can speak some of these languages.” Both MedNorth’s MedNorth also uses a Johnson and CommWell remote translation service Health CEO Pam Tripp when needed. emphasize that the majority Spanish is the primary of their patients do have language of CommWell’s jobs, but these jobs often Brunswick patients who don’t pay much and do not don’t speak English, provide health benefits. according to Vann. “These are the “Over half of our (staff ) people who wait on us in colleagues are bilingual, restaurants, wash our cars and we also contract with a and till our fields,” Tripp company that provides realsaid. “People are happy time video interpretation we’re here, and they are services for hundreds of happy to pay.” languages and American Both centers aim to Sign Language,” he said. be one-stop shops for In carrying out their health care, with physical, demanding mission, FQHCs behavioral and dental care develop partnerships or for children and adults. informal relationships with Because these centers other health care providers. practice integrative care, a One of MedNorth person who comes through collaborations is with Cape the door with one health Fear Clinic, a charity care issue can be assessed for health care center in New – and treated for – other, Hanover County that also often related, problems. provides a range of services Both local FQHCs to the uninsured and are Joint Commission underinsured but does not accredited, meaning receive a federal subsidy. they have been assessed CommWell Health and certified by The has a similar collaborative Joint Commission, an relationship with New Hope independent, not-forClinic, also a charity care PHOTO BY MEGAN DEITZ profit organization. Such center, in Brunswick County. Dental hygienist Mina Carey performs an exam and cleaning for certification recognizes an Because these charity care Ayana Armstrong at MedNorth, a federally qualified health center organization’s commitment clinics charge less for a that serves New Hanover County. to meeting specified patient visit, they serve performance standards. the very poorest in their “We hire professionals, and all of them are board communities. certified with years of experience with the population we To ensure that it is reaching patients who may not wish serve,” Johnson said. “We are offering a quality product, and to visit the clinic itself, MedNorth partners with First Fruit would love for people to know that coming here is not a step Ministries, a Wilmington organization that provides food, down.” shelter and related services to the homeless. FQHCs are required to serve patients in the language “It’s amazing how many vets are in the homeless of the patient’s choice. MedNorth has a full-time Spanish population,” Johnson said, pointing out that veterans interpreter and several Spanish-speaking staff members. But suffering from PTSD may be uncomfortable in institutional speakers of other languages visit the clinic as well. settings or in situations where they are around groups of w i l m i n g t o n b i z m a g a z i n e . c o m

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people. “First Fruit Ministries goes out and brings people in (to its facility) and gives them a shower, clothing, a hot meal. We provide health care. They don’t necessarily want to come to MedNorth. We meet the community where services are needed,” Johnson said. In the next six months, she added, MedNorth plans to launch van service, providing transport to the clinic from First Fruit and various public housing developments. In Brunswick County, CommWell has forged ties with several faith communities, schools and other organizations to build a supportive health care safety net. Its first mobile clinic came about thanks to New Beginnings Community Church. CommWell also has the use of Novant Health Brunswick Medical Center’s mammography equipment. Each FQHC is required to have an advisory board. These boards must be consumer-led, meaning at least

51% of the members should be those who use the health center as their main source of care. The intention is to ensure the center is responsive to the needs of the communities it serves. CommWell’s advisory board has been active in fundraising for CommWell Health in Brunswick County. One immediate goal is to purchase and set up a mobile dental unit. Another is to have a medical/ behavioral health mobile unit that can go to area schools. “We have schools that are 100% free lunch,” Tripp said of the organization’s service area. She added that often students at these schools lack access to medical and dental treatment and, increasingly, behavioral health care. “We get calls a lot from schools, saying ‘Can you help us with behavioral health?’ We are looking forward to doing that through a mobile unit,” Tripp said. Despite the annual federal

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subsidy and potential availability of other grants, FQHCs must find other sources of funding to carry out their mission. Vann says about half of CommWell’s budget for its entire 16-clinic operation is covered by an $11 million subsidy and another $1 million in other grant monies. “We have to develop (other) revenues ourselves,” he said. “We’ve been building a foundation with our Wonderful 100 Campaign. In six months our board and colleagues have raised $170,000.” CommWell and MedNorth, like other FQHCs in the state, are following the state legislature’s debate on whether to expand the state’s Medicaid program. Qualifying more of the state’s poor for Medicaid coverage would mean that FQHCs and other charity care clinics could get reimbursed at Medicaid rates for patients they are now treating for much less. “That would be a beautiful thing,” said Johnson of the Medicaid expansion proposal. “We have to generate additional revenue. Staff want to be paid the market rate and will leave if they can find a better-paying job. We are always in recruitment mode, which has an impact on patient care.” Expansion of the state’s Medicaid program would benefit whole communities, Vann said. “We would see a significant increase to our revenues with Medicaid expansion,” Vann said. “We could expand more jobs, for the sake of our communities. Our leadership estimates a $3 million addition to our revenue. That $3 million would be considered an investment to the community because it translates to $5 million in terms of economic benefit. Right now, there is a restaurant being built down the street from our north Sampson County center; it’s opening because we are right here, and we pull in a lot of people.”


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From a community hospital, NHRMC expands into a 7,000 employee, $1.2 billion force

NHRMC President and CEO John Gizdic

BY VICKY JANOWSKI | PHOTOS BY MICHAEL CLINE SPENCER & MEGAN DEITZ

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NHRMC President and CEO John Gizdic speaks during a leadership “huddle.” The health system uses huddle standup meetings throughout the hospital for teams to check-in with each other.

9 A.M. EXECUTIVE OFFICES LOBBY IT’S A TYPICAL MONDAY MORNING MEETING with announcements and scheduling – until people start getting choked up. John Gizdic, president and CEO of New Hanover Regional Medical Center, pulls up an email from the son of a patient who underwent open heart surgery but ultimately passed away after weeks in the ICU. The son had written to share appreciation for specific staff members, strangers who all of a sudden became part of the family’s daily sphere. “Jeff, a nurse manager, checked on my dad every day of the 40 he spent on the ninth floor, even when he wasn’t his assigned patient,” Gizdic reads to the dozen or so hospital vice presidents and executives gathered at

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their regular huddle meeting. “John Russell, ICU nurse, was … there when dad’s trajectory turned irrevocably for the worse. He maintained such professionalism while providing unrivaled compassion during the most difficult hours of our lives. His care for my father and family will be emblazoned in my memory for many years to come.” When it comes to the business of health care, there are few other industries that directly impact people on such a personal level – in good and bad situations – and few others that have undergone such rapid changes in recent years. For NHRMC, whose patient levels have ballooned, those changes are constant. As its footprint has grown with the area’s growing population and additional services, so has its revenue. Last year, NHRMC’s operating M A G A Z I N E

revenue surpassed $1.1 billion and is forecast for more than $1.2 billion this fiscal year, which runs through the end of September. Those figures include its physician group and accountable care organization – entire operations that didn’t exist a decade ago. Without the separate physician group and ACO factored in, the hospital’s annual operating revenue crossed the $1 billion mark last year for the first time, up 64% from 2011, according to its financial reports. Earlier this year, Gizdic was preparing materials one evening for an upcoming executive retreat. He was trying to find a way to put into context that the hospital was now a billiondollar operation. So he turned to Google and started looking up companies that were household names with similar revenue results.


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The Wendy’s Company, holding company for the fast-food chain, came up, as did action camera maker GoPro. “Last year they just crossed a billion dollars in revenue. So we’re bigger than GoPro,” Gizdic said. “If we were not a public, not-for-profit, we would be a Fortune 1000 company. And when you look at the Fortune 1000, which I did, it’s staggering to put New Hanover Regional Medical Center in perspective.” The hospital, however, is not a private entity, which makes a difference in its bottom line. While NHRMC doesn’t use local tax dollars, as a not-for-profit organization it’s not subject to paying income taxes. As revenue has grown so have expenses, leaving the organization with an operating margin of 5.47% last year. In recent years that margin has ranged from 6-9.5%. With the excess funds, said Ed Ollie, NHRMC’s chief financial officer, the hospital uses money for routine capital replacement – an average of $60 million a year. “What is not spent is placed into cash reserves for future capital and/or equipment additions or replacement,” Ollie said. Money also is socked away to add to its days of cash on hand, or the number of days it could continue to fund operations after a catastrophic event with no income coming in. That reserves target goes up each year as daily expenses increase, and Standard & Poor’s would like to see the hospital sit on 300 days of cash on hand as part of its credit rating process. “In round numbers, it roughly costs us about $3 million a day to run our organization,” Ollie said. The recent growth isn’t lost on Gizdic, who has been with NHRMC for 15 years, first as a vice president and now as head of what is far and away the

largest employer in Southeastern North Carolina. “It used to be easier to get around and see everybody when it was 3,500 employees, and we were basically on one campus,” said Gizdic, who began moving into the head role three years ago as former CEO Jack Barto transitioned into retirement. In those 15 years, the employee count has doubled to 7,000. And NHRMC’s presence has grown to dozens of locations dotted throughout the region. Construction, which has taken place pretty much nonstop for years, has resulted in 2 million square feet of hospital space, most of it at the continually expanding South 17th Street campus. That total doesn’t include the more than 30 physician group locations now in NHRMC’s network. Even the name has slowly morphed from New Hanover Regional Medical Center – the hospital – to NHRMC – the health system. “If I go back to 2004 when I came here, this was sort of a sleepy community hospital,” said Ollie, Barto’s first hire when he arrived. “Obviously, it didn’t have a women’s and children’s hospital. We have renovated the (patient) tower. We’ve added on the outpatient surgery and all that … We didn’t really have the number of locations that we have now around the community. So it was just a hospital, and it’s transitioned from that to a health care system now, anchored from what was a community-based hospital.” New Hanover Regional is the ninth-largest hospital in North Carolina and the largest county-owned public hospital in the state. Once its new orthopedic hospital opens – construction for the three-floor tower is going on now in the back of the main campus – New Hanover Regional will have a total of 800 licensed beds.

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Its major expenses come from medical supplies and salaries. Last fiscal year, personnel costs exceeded $590 million, and supply costs topped $261 million. “Maintaining your staff and recruiting good staff is the hardest thing in health care because there’s more and more demand, and people keep raising wages,” Ollie said. “And so if you’re not going to continue to raise your wage, you can’t recruit.” One way the health system has tried to contain costs over the years is through an organizational-wide devotion to the lean process. Attention to lean – finding ways to streamline waste or inefficiencies to cut costs – started in the past decade under Barto and is now pretty much a part of NHRMC’s DNA, with ideas coming from all employee levels. It’s to the point that health systems from other states, or in one case Scotland, pay for consulting site visits to learn from NHRMC’s model. “In the past seven or eight years, we have documented savings of over $200 million in real hard dollar cost savings as a result of that process,” Gizdic said about implementing staffers’ lean ideas. “And not a single employee has been laid off to achieve that.”

2:45 P.M. PATIENT TOWER DALE ODOM HAD BEEN FEELING SICK to his stomach for days. Not sure what the problem was, the Ogdon resident saw his doctor, who as Odom’s symptoms got worse, recommended he go to the hospital’s ED-North, a standalone emergency department that opened in 2015 to serve S U M M E R 2019

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residents in the northern part of New Hanover County and Pender County. “The drives from Ogdon to here while being nauseous would not be fun,” said Odom, who ended up after several visits being admitted to the main hospital. Checking his vitals, hospitalist physician Charmaine Lewis asked Odom if his care team had visited yet and if anyone had talked with him about post-discharge plans. Yes, Odom confirmed, “They’ve been talking about me seeing the headache specialist after this.” Both of those areas – bringing interdisciplinary teams together to meet at patients’ bedsides and helping patients navigate follow-up care after leaving the hospital – are projects Lewis has worked on since she joined the hospital a decade ago. Doing a better job at reducing

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hospital readmissions kicked up in earnest industrywide after the Affordable Care Act established financial penalties through Medicare for hospitals with high return rates. That, coupled with the shift to bundled payments in which the government’s reimbursements are paid in total for procedures instead of individual services, has had significant impact on the health care landscape. About seven years ago, orthopedic surgeons were among the first to see the writing on the wall about the move to bundled payments, and Lewis worked with them on a preoperative clinic to get patients better prepared for their surgeries. “What kind of interventions do we have on patients that reduce readmission rates, make their stay shorter, make them feel better as they go through the process?” Lewis said.

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“How do we collaborate the education and patient experience from office to preop clinic to hospital to posthospital discharge or post-acute care?” That look at outcomes and data as well as navigating patients through the process before and after procedures moved to general surgeries and now is used for about 45,000 surgical patients at the hospital’s Surgery Navigation Center that opened in October. Lewis serves as quality director for NHRMC Physician Group-New Hanover Regional Hospitalists, one of a number of physician groups that the hospital has either formed or acquired in recent years. “A decade ago, we didn’t have a physician group,” said Gizdic, who in his former role as an executive vice president initially developed the network. “This year, we will cross 300 providers in our physician group – so


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Hospitalist physician Charmain Lewis visits patient Dale Odom at New Hanover Regional Medical Center’s main facility.

from zero to crossing 300. That is an entire company that we didn’t have as part of our organization.” NHRMC is not the only health care organization to add physician groups. Novant Health has done so in Brunswick County as have other systems throughout the country. The adoption of electronic health record systems, incentivized by the federal government, helped accelerate the consolidation of doctor offices as the cost for electronic records became a burden for some individual practices. Today, while there are a few independent practices that remain in the market, NHRMC’s group is the largest, spanning primary care to cardiology to OB/GYN. It is followed up in size by Wilmington Health. While the number of individual providers continues to grow for patients, their choices for which health company to pick have decreased. At the hospital, NHRMC holds 78.7% of the market share when it

comes to inpatient care for the tricounty area, as of 2017. With such a dominant presence, the onus for continuing to innovate and improve service falls on the organization instead of competition. “So in a Raleigh or a Charlotte, you’re going to have multiple hospitals and multiple health systems competing for that growth,” Gizdic said. “I actually look at our situation as a very positive situation, not selfishly because I don’t have any competition as one would think. I look at it in the way of since we’re able to focus, we’re able to grow and meet the community’s needs with specific expertise.” As an example, Gizdic said, the hospital would not have two pediatric surgeons on staff if it had more competition. The volume wouldn’t sustain it. “Think of the pediatric subspecialties we now have in this community: pediatric endocrinology, pediatric neurology, pediatric GI. We

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have multiple pediatric subspecialists that we didn’t have a decade ago because of that focus and being able to support that expertise. There would not be enough critical mass or volume if that was split over two or three different organizations,” he said, adding other examples such as neurology and stroke specialists. “And so I think there are multiple ways to look at being or having a monopoly,” Gizdic said. “I think we’ve used it for good and not evil.” When you consider the entire seven-county region, 45% of inpatient business came to New Hanover Regional about a decade ago. Today, that’s closer to 55%, Gizdic said. “The secondary service area, which would be Onslow, Duplin, Bladen and Columbus counties is, I would say proportionally, where we’ve seen the most growth,” he said. “A decade ago, or a little more than a decade ago, we didn’t have a partnership with Dosher hospital or Columbus hospital. We do now and have actual relationships and affiliations with those organizations so that we can try to work with them to keep what’s appropriate local right there in their community and just transfer the next level of care, the higher level of care, that we’re capable of providing.” In the past, Novant Health was primed to make a move into New Hanover County. It received approval from state regulators in 2007 to open a surgical center in Autumn Hall. The recession changed those plans, and they decided to focus on services in Brunswick, said Shelbourn Stevens, the president of Novant Health Brunswick Medical Center. Earlier this year, the two hospitals entered an agreement for NHRMC to station its third AirLink patient transport helicopter at the Novant hospital in Bolivia. Strategic partnerships are one way S U M M E R 2019

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Joe Conway (right), NHRMC’s director of health equity and human experience, talks with barber Frank Walker and customer Joshua Jones at Just Cut It barbershop on Castle Street.

hospitals now are looking to expand, Stevens said. As an example, he pointed out the difficulty Novant had in recruiting cardiologists, who are in short supply, to Brunswick County. “So it just made sense to reach out to Cape Fear Heart (Associates, part of the NHRMC Physician Group) and say, ‘You need a presence in the county. We’re going to send them to you. So they expanded and hired more providers who cover Brunswick County as their main office, and then on weekends and after hours, they have a presence here,” Stevens said. “And you know, who’s to say down the road? I might call John and say, ‘I can’t get this specialty x, and do you want to a partner with us here to cover that? Because from a New Hanover standpoint, if it’s a patient

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that we can keep here locally, they want that because they’re full.” From an inpatient setting, the hospital nears capacity every day. “How do we make sure it’s the right place for them to get care and really focus on growing our ambulatory and outpatient presence as well as our primary care presence?” Gizdic said. “Last year was the first year that outpatient revenue exceeded inpatient revenue for our organization. That was a turning point.” In 2014, the hospital’s daily census, or number of patients admitted, averaged 519. That’s increased 17 percent to a forecast average of 607 people a day this year. One way to manage patient volumes is to keep people out of the

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hospital to begin with, something NHRMC’s working on.

4:30 P.M. JUST CUT IT

JOE CONWAY STOPS INTO JUST CUT IT on Castle Street, checking in with barber Frank Walker and owner Cedron Emerson. It was here in November 2017 that the hospital tried something new. In an effort to move preventive health into the community, off-campus health workers visited the barbershop with flu shots. “And then we did blood pressure,


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and we had our pharmacists that were involved, our nurses were involved. That was the first time we’d actually reached out in that particular way,” said Conway, who has worked at NHRMC for more than a decade but in 2017 became its first director of health equity and human experience. So they repeated the barbershop visits. Then they added Dancin’ in the Park events on Saturdays at Portia Hines Park on North 10th Street, sending out fitness dance instructors and health workers for screenings. “You’re talking health and wellness. Well, we just can’t say this is what we want to do, we’ve got to actually do something,” Conway said. “That took off.” And now his department facilitates a task force to try and get a grocery store open on the Northside to address the area’s food desert, with the idea that it could become a community-run co-op. He defines the term health equity as “assuring support to individuals in achieving their highest level of health.” “What is the best possible health for you?” Conway said. “If you’re coming in uninsured, you have Medicaid, or you’re underinsured, you don’t make more than $23,000 a year, you live in a particular zip code – which can say probably more about your health status than even your race – when you’re looking at all of those things, you got to be very, very careful in the approach.” The efforts tie into to NHRMC’s mission statement that Gizdic updated when he became CEO: “Leading our community to outstanding health.” A healthier community would mean fewer admitted patients, fewer doctor visits – less business if you’re in the business of healing, right? But with the industry shift toward bundled payments, which are reimbursements for caring for the

patient overall instead of episodic care, the incentives back the community outreach efforts as well. “We can be a model region for improving health, which ultimately lowers the dollar for spending on health care,” Gizdic said. “And as a community, every dollar we spend on health care is a dollar we’re not spending somewhere else in our community and in our economy.” The amount of patient revenue NHRMC doesn’t collect because of unpaid bills and charity care rose to more than $180 million last year, including $74.4 million for charity care. There are nearly 18,500 Medicare patients enrolled in NHRMC’s accountable care organization, a voluntary program the health system has signed up for with the federal government to provide coordinated care for enrollees in exchange for potentially sharing cost savings. The ACO spent about $9,600 on health care costs per Medicare patient in the program in 2017, according to the most recent performance report. Wilmington Health also runs an ACO, with 13,500 enrollees and spent about $8,700 per person. Both programs have received national rankings for quality of various services and screenings.

5 P.M. TEKMOUNTAIN

BESIDES GETTING OUT INTO THE COMMUNITY MORE, another recent focus for NHRMC is on the next phase of health technology. Seven years ago, its biggest tech project was adopting a multimilliondollar system for electronic health

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records and convincing doctors to stop hand writing patient charts. Today, Chris Hillier, who was hired last year as NHRMC’s first executive director for innovation, sits at tekMountain helping to judge the final pitches from a group of budding health entrepreneurs. Last month NHRMC finished up its first cohort for Speed of Health, a 10-week program to develop ideas into potential business opportunities. Participants this round came from the hospital’s workforce but also included a team from the New Hanover County health department. In his new role, Hillier is tasked with helping to make innovation part of the hospital’s company culture, so that employees throughout the health system start thinking about it. He also is looking into projects the hospital might take on to become more competitive digitally. For example, from his office at tekMountain, Hillier demonstrates a digital human who could one day soon interact with local cardiac patients. Under the working name of Hanna (a play on Hanover), she would be available online and through smartphones or other devices around the clock for patients’ questions. The avatar would be built on artificial intelligence, and its language programmed from a blank slate to reflect speech patterns specifically for this area. “It will be nonjudgmental. It will be anonymous,” Hillier said, “and they’ll be able to ask this cardiac coach questions about their therapy, make appointments and discuss concerns but in true conversation, real-time conversation.” Hillier, who comes from a tech entrepreneurship background and worked on health care innovation for Blue Cross and Blue Shield of Florida, is collaborating on the cardiac coach idea with the Australia-based Centre S U M M E R 2019

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for Digital Business to potentially license the technology. Already, NHRMC has equipped some patient rooms with Amazon Alexa-enabled smart speakers and is about to use robot mapping throughout its facilities for an app to help people navigate. “We’re looking at how do we use cryptocurrency as it relates to health and incentives and changing behavior,” Gizdic added. “How do we really embrace different ways of thinking that our industry hasn’t necessarily been the most progressive on?” The push is about more than just having cool new toys to play with or supporting startups for employee morale. There’s real pressure on the industry from outside companies, from tech startups and giants to national retailers, to disrupt how patients engage with health care by solving

some of the system’s clunkier problems. Those include consumer access and cost transparency. “Health care knows that they have to move from fee-for-service to valuebased, and every other industry on the planet is moving in that direction. Health care is actually last,” Hillier said. “If you look at banking, banking is the most conservative industry out there historically, but yet, even banking has moved into a consumer-friendly approach to everything, and they’re very risk-averse.” The reason health care is “last to the table” in this area, Hillier said, is because the industry is so complicated. “The complexity of health care is a real challenge, but the consumer doesn’t care,” he said. Amazon is exploring a range of health-care projects, partnering with companies on activities from selling consumer-targeted medical devices

to developing a cloud-based drug discovery platform. Amazon’s joint venture with J.P. Morgan and Berkshire Hathaway, dubbed Haven, formed to tackle the issue of rising health care costs. “The complexity of health care makes it almost impossible for anyone to understand how much they’re paying and for what, so that’s another pressure,” Hillier said. The U.S. Senate is expected to discuss a wide-ranging bill addressing health care costs, price transparency and insurers’ contracts with hospitals. Legislation changes, technology shifts and aging populations are all issues that will continue to shape how NHRMC does business in the future. Because of its size, how it manages those changes will play a vital role in the area’s economic health. According to a 2012 study, the most recent one done, NHRMC accounted

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Chris Hillier, NHRMC’s executive director for innovation, discusses a pilot project for an artificial intelligence-based cardiac coach to help patients aroudthe-clock.

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Lloyd Singleton on tree management for storm prep Page 9

February 1-14, 2019 Vol. 20, No. 3

wilmingtonbiz.com

M A G A Z I N E

$2.00

DIGITAL EXCLUSIVE

“Buoys” by Nicole Roggeman – oil on canvas

for 11.1% of the economic activity in the tricounty area. That most certainly has gone up since. “When you think about investment, which is exactly what I call it, the past decade or so, give or take a year, we’ve invested over a billion dollars in facilities, technology, equipment,” Gizdic said. With the area’s population expected to continue to grow in the years ahead, the need for health care services won’t slow down anytime soon. “What has made our organization successful over the past decade is not necessarily what’s going to make us successful over the next decade. And what got us here isn’t going to get us to where we need to be,” Gizdic said. “That is really kind of a cultural shift that we need to make as an organization. So I think, over the next decade, it is really transforming our organization and what our organization looks like to really meet the health needs of our community.”

BOB is here

The 2019 Book on Business is out. To get a copy or order a downloadable version, go to wilmingtonbiz.com/bookonbusiness

Closing up shop

Several national retailers are shuttering stores Page 10

Cheers for causes

The social side of philanthropy Page 19

Index Banking & Finance ................................ 4 The List .....................................5, 14, 15 Health Care .......................................... 6 Economic Development ........................ 8 In Profile ............................................... 9 Real Estate ................................... 10-12 Business of Life ............................. 18-19

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PHOTO BY MICHAEL CLINE SPENCER

Preparing for takeoff: Julie Wilsey, director of the Wilmington International Airport, stands outside the facility where an expansion is set to take place over the next few years to accommodate growth.

B ETSON DOWNTOWN

JAMES GOODNIGHT

ILM’S NEXT FLIGHT PLAN

L

BY CHRISTINA HALEY O’NEAL

anding a third carrier and new flights at the Wilmington International Airport triggered unprecedented growth in passenger traffic last year. The new additions came as the airport embarks on its $60 million expansion that will increase ILM’s ability to handle more travelers in the coming years. Just over 934,000 passengers flew through the airport in 2018, 12 percent more than the previous year’s record. And that was despite a winter storm last January, a series of flight cancellations in the summer because of PSA Airlines’ technical issues nationwide and major disruption due to Hurricane Florence in September. Officials are now eyeing a milestone mark this year. “One million is an exciting number for us,” Airport Director Julie Wilsey said. “As we get closer, or break that 1 million passenger mark, it opens a lot of opportunities for ILM.” ILM wants to grow the airport but at the same time maintain that small-town, Southern charm that it has been known for, said Gary Broughton, the airport’s deputy director.

“Our growth has been well thought out,” he said. Pushing the airport expansion forward is the biggest focus for ILM officials in 2019, with construction underway over several contracts between now and 2022. The airport is expected to grow from 95,000 square feet to more than 173,000 square feet, based on the most recent designs, and would be able to accommodate an estimated 705,000 outbound passengers a year, when the expansion is complete. There are times at ILM now when areas of the airport are reaching capacity, Wilsey said. “We need to get the building expanded so we can support more services and more passengers as the airport grows,” Wilsey said. And as ILM gains more travelers and more capacity, possibilities open up for the regional airport. That includes employing more people. Currently, there are about 480 people working there, 50 of whom are ILM staff, Broughton said. ILM will need to hire more help in the future, but just how much help is still being determined, he said. Airport officials continue in 2019 to market for addi-

2019

BOOK ON BUSINESS

He’s rehabbed some of the city’s historic structures as outside investment continues to grow OCEANIC REBUILDS AFTER FLORENCE WHAT’S UP WITH CHUCK (SCHONINGER)

See ILM, page 13

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w i l m i n g t o n b i z m a g a z i n e . c o m

S U M M E R 2019

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T

TO WATC H

TRENDS

TRENDS

BY VICKY JANOWSKI

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MEDICAID EXPANSION

MEMBERSHIP MEDICINE

So far this legislative session lawmakers have not moved on the issue of expanding Medicaid in North Carolina. Gov. Roy Cooper has pushed for the state to join dozens of others that already have done so. In 2012 when the U.S. Supreme Court weighed in on the Affordable Care Act’s validity, the justices upheld the law’s individual mandate requiring people to have insurance coverage. But the court at the same time found that the ACA overstepped when it called for a penalty on states that did not expand Medicaid coverage, which is funded by federal and state governments, effectively making it an optional policy decision. For states participating, the federal government plans to cover 90% of most states’ costs for 2020 on. Thirty-six states have adopted Medicaid expansion, according to the Kaiser Family Foundation. “Expanding Medicaid coverage would extend insurance to approximately 500,000 people across North Carolina, including many residents of Brunswick County,” said Dosher Memorial Hospital trustees. Critics warn about signing up for change without knowing what could happen with future federal funding.

he health care landscape is rarely static, and this year is no different. From changing models of payment to potential legislative overhauls, health care could see the impacts. Here are just a few of the issues providers, payers and patients are keeping an eye on.

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M A G A Z I N E

Medical practices set up on membership or concierge models continue to be a primary care trend. With them, patients pay a membership fee for primary care services for what providers pitch as access to more personal attention and more predictable budgeting costs. In direct primary care, the providers do not contract with third-party payers for insurance, instead using monthly patient fees to provide a slate of services. At concierge practices, the fees are often higher, and providers often still accept insurance. Internal medicine doctor Stephen Liederbach runs Wilmington Adult Medicine based on a partial concierge model. He sees all his patients personally and keeps the patient load small. In mid-2017, physician Brian Lanier opened Promina Health in Wilmington as a direct primary care practice. With the monthly membership, patients receive unlimited office visits and services such as physicals, chronic disease management and acute care. “We’re at about 400 members, and our goal is about 600 to 800 members per physician. That’s compared to 2,500 to 3,000 per physician in the typical fee-forservice model,” Lanier said. “We’re hoping to add a second physician by the end of the year.”


TRENDS

3

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OPIOID LAWSUIT

VACCINATION EDUCATION

RETOOLING ACOS

There should be movement this year on the national opioid lawsuit that includes local complaints from New Hanover and Brunswick counties as well as the city of Wilmington. New Hanover County in late 2017 filed its suit against several drug manufacturers and distributors for what county officials claim is the companies’ roles in the opioid crisis. “According to the N.C. Department of Health and Human Services, from 1999 to 2016 more than 12,000 North Carolinians died from opioid-related overdoses. New Hanover County has been one of the hardest hit areas in the state,” county officials said at the time of the filing. A wave of similar lawsuits from flooded in about the same time. There were so many that the suits were bundled together and transferred to U.S. District Court for the Northern District of Ohio. U.S. District Judge Dan Polster is overseeing the multidistrict litigation, which includes claims from more than 1,500 state and local governments and tribal councils. A settlement is still possible, but the initial trial is scheduled for October, starting with the claims of two counties in Ohio.

With the largest measles outbreak in the U.S. in 25 years, health providers will continue to promote the need for keeping up-to-date on vaccinations. This year through May 17, there have been 880 measles cases reported nationwide, according to the U.S. Centers for Disease Control and Prevention. The viral disease, which was declared eliminated in the U.S. in 2000, has now reappeared in 25 states though not yet in North Carolina. Last year, the state saw three reported cases of measles. In one case an unvaccinated person got sick after returning from a trip overseas, and the respiratory disease spread to other members of that household, according to state public health officials. “Measles is a highly contagious, potentially life-threatening infection that is preventable using vaccination,” said David Priest, Novant Health’s chief safety and quality officer. “We recommend reviewing your immunization history and talking to your doctor about whether you need additional vaccination.”

Groups that run Accountable Care Organizations are facing major changes to the program this summer as federal officials look to save Medicare money. These ACOs, under the Medicare Shared Savings Program that launched in 2012, provide coordinated care for participating Medicare beneficiaries. Most of the ACOs signed up for a model in which they share in the savings if they keep spending below their benchmarks. CMS, however, now plans to move ACOs to a model in which they also will be on the hook for some of the losses if spending comes in above targets. Wilmington Health’s ACO, called Physicians Healthcare Collaborative LLC, included about 13,500 Medicare patients in 2017, according to CMS’ latest available performance report. Physician Quality Partners LLC, from NHRMC, covered nearly 18,500 Medicare patients. In the past, Wilmington Health’s ACO has ranked second nationally in overall quality and fifth in overall cost containment. “The ACO for 2018 should again be at the top,” Wilmington Health CEO Jeff James said about the next report. “The hospital’s ACO in quality (measures) has come up dramatically. To have a couple of the top-preforming (in) quality ACOs in the country in the same community is, I think, a testament to the quality of the physicians in the community.”

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S U M M E R 2019

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PULSE 2019

H E A LT H I E R COMMUNITIES BY DESIGN BY JOHANNA CANO PHOTO BY RIVER BONDURANT

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he convenience of having a trail near residential communities can be seen on a sunny Belville morning at the Brunswick Riverwalk. There are people walking and running at the riverwalk’s 1/3-mile trail and using the picnic shelters, playgrounds and other amenities at the park. While the riverwalk is accessible and often used by residents from nearby neighborhoods, Jim Bucher, park manager for the town of Belville, said the riverwalk was developed with the surrounding community in mind. “The whole region uses our riverwalk,” Bucher said. “We built

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our park for the region, not just for Belville.” Such projects, whether planned by municipalities or developers, can add to a community’s list of quality-oflife and health activities – providing additional options for residents to get moving and, potentially, make nearby neighborhoods more attractive to homebuyers. Belville’s riverwalk, located by the Brunswick River off River Road, had its grand opening in 2016. The project was overseen by former town commissioner Joe Breault, who had the vision of building a riverwalk with open classrooms, trails, a boardwalk and fishing pier, Bucher said. The park cost $390,000 with the town paying half, Breault said in an email.

M A G A Z I N E

“We (the town) had five years to complete it, and we did it in two years under budget, and it didn’t cost the taxpayers a dime,” Bucher said. “Mr. Breault was able to obtain grants and several other pledges by Duke Energy to build a classroom.” While the first phase of the riverwalk is complete, phase two, which would take the boardwalk down to Old River Road, could start construction in about two to five years when the town gets the required budget, Bucher said. Besides offering a place for people to exercise and enjoy nature, the park also economically promotes the surrounding residential communities. “I think it has a huge importance, especially for the value of your home,” Bucher said. “I think it increases the value of the area.”


PULSE 2019

On July 12, the Belville Town Planning Board approved preliminary site plans for a 144-unit luxury apartment complex that would be built along River Road, within walking distance to the riverwalk. Belville commissioners have not yet voted to approve the plans. The apartment project is part of plans to develop a $200 million mixed-use project that would connect to a 22-acre riverfront park and include condos, retail, restaurants, entertainment, office space and a waterfront hotel. Those plans are on hold due to past lawsuits between the town and the developer, Urban Smart Growth. “What we hope in the future is to have Mayfaire-style storefronts on the bottom and condos above them and a restaurant with a marina,” Bucher said. Across county lines, the 15-mile Gary Shell Wilmington Cross-City Trail is one essential amenity the city offers and is a tool for luring businesses, residents and tourists to

the area, said Amy Beatty, community services director for the city of Wilmington, who describes the trail as the city’s spine. The multi-purpose trail, which spans from Eastwood Road to Wade Park, was led by former Wilmington Parks and Recreation Director Gary Shell and was completed in 10 years with a $10 million price tag. “Seventy percent of (the total cost) was funded through external agencies, grants and land donations,” Beatty said. “We keep counts of the usage of the trail at three different points on the trail, and we see increases in use year over year.” Wilmington had been behind other communities when it came to trails, which demonstrated the need for the project, Beatty said. “Walking and biking facilities always rank at the top of the amenities,” Beatty said. “So we’re trying to respond and get these things built.” Most recently, the city completed

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improvements at Empie Park at 3405 Park Ave. The project, which was part of the city’s 2006 parks bond, includes five additional tennis courts, 61 additional parking spaces and sidewalk connections to the cross-city trail. “Most importantly, the project also provided connectivity from Wrightsville Avenue to Park Avenue, so you can enter from either way,” Beatty said. “That was important for transportation reasons but also for social equity reasons.” Communities have expectations about having parks and recreational opportunities available where they live, and that can motivate people and businesses to move to the region, Beatty said. “I know quality of life is probably an overused buzzword. But we do continually hear that from our business community, especially in respect to some of our new tech companies that are locating in Wilmington that may have a younger S U M M E R 2019

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PULSE 2019

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workforce population,” she said. “Those folks expect to have parks, athletic and recreation opportunities. And so to the extent that the city can, we will contribute to increasing our economic influence and attract those types of businesses to Wilmington.” Besides organizations developing trails for residents, some local private institutions have also engaged in building infrastructures that promote healthy living. Mayfaire, a shopping, dining and entertainment center at Military Cutoff Road, held a grand opening in early June for its new 2.8-mile walking trail. The trail is sponsored by New Hanover Regional Medical Center and was created with “an emphasis on preventive health care, fitness, responsible self-care and health education,” stated a news release. NHRMC representatives plan to be on-site quarterly to provide health services and information to walkers. “Together we were able to create an attractive and safe path for residents, hotel guests, employees and customers to walk,” Kurt Bohlmann, general manager of Mayfaire, said in the release. At the Brunswick Riverwalk at Belville, the community has been increasingly using the facility, and its farmers market that includes products by Seaview Crab Co., Great Harvest Bread Co., Noni Bacca Winery and Little Boys Produce among other businesses. The Eagles Island Community Rowing club will also use the facility to store boats and have a launching pier. With phase two of the riverwalk in the works, phase three, which could extend it to Battleship North Carolina via a bicycle and pedestrian boardwalk, is still in sight. “That’s our Walt Disney dream, to bring it across the river and to the Battleship North Carolina,” Bucher said. “I mean you have to have a plan; you have to have a dream to make it come true. But phase two is our goal now. Phase three, you know, it all depends on how things go down the line.”


P U L S E SNAPSHOT

PULSE 2019

W I L M I N G T O N A R E A H E A LT H I N D U S T RY H I G H L I G H T S

PHYSICIANGROUPS

Ranked by the number of local doctors (2019 Book on Business)

LIST IS BASED ON VOLUNTARY RESPONSES TO A BUSINESS JOURNAL SURVEY

1

GROUP

NO. LOCAL DOCTORS

NURSES

NP / PAs

STAFF

TOP LOCAL OFFICIAL

NHRMC PHYSICIAN GROUP

198

140

85

700

2 3

DAN GOODWIN (VICE PRESIDENT OF THE PHYSICIANS NETWORK)

WILMINGTON HEALTH

134

161

87

811

JEFF JAMES (CEO)

NOVANT HEALTH MEDICAL GROUP

41

47

25

241

JUSTIN ASBURY

AMERICAN ANESTHESIOLOGY OF THE CAROLINAS

31

7

7

ROB SHAKAR (MEDICAL DIRECTOR)

4 5

DELANEY RADIOLOGISTS GROUP PLLC

26

6

94

EMERGEORTHO PA

27

28

342

STEPHEN L. DEBIASI (FACHE, CMPE)

7

COASTAL CHILDREN'S SERVICES

22

30

60

8

FERNANDO MOYA (MEDICAL DIRECTOR,WOMEN AND CHILDREN'S HOSPITAL; CEO OF CCS)

MEDAC HEALTH SERVICES P.A.

9

9

WILMINGTON PATHOLOGY ASSOCIATES PA

9

DERMATOLOGY ASSOCIATES

7

6

10

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30

PAULA BRUNER/MARK WRIGHT (DIRECTORS OF OPERATIONS)

2 14

12

BABATUNDE A. OLATIDOYE (PRESIDENT)

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KIMBERLY EDWARDS (PRESIDENT)

S U M M E R 2019

35


CATEGORY

NEW HANOVER

BRUNSWICK

PENDER

NC

UNINSURED ADULTS

13%

18%

16%

15%

UNINSURED CHILDREN

4%

5%

5%

5%

PRIMARY CARE PHYSICIANS

1,110:1

2,150:1

3,280:1

1,420:1

OTHER PRIMARY CARE PROVIDERS (POPULATION RATIO)

578:1

1,393:1

2,258:1

912:1

DENTISTS

1,310:1

2,910:1

2,770:1

1,800:1

MENTAL HEALTH PROVIDERS (POPULATION RATIO)

260:1

1,210:1

1,420:1

440:1

LIFE EXPECTANCY

78.9

78.3

76.7

77

HEART DISEASE (DEATHS PER 100,000)

146.5

161.4

152.8

159.8

DIABETES (ADULTS)

7.8%

8.1%

10.3%

9.6%

(INCIDENCE RATES PER 100,00)

CANCER PREVALENCE

464.3

460.7

461.9

470

FOOD INSECURITY

16%

14%

15%

15%

PHYSICAL INACTIVITY

19%

22%

24%

23%

ACCESS TO EXERCISE OPPORTUNITIES

87%

76%

60%

73%

INSUFFICIENT SLEEP

30%

31%

32%

34%

(POPULATION RATIO)

COUNTY

HEALTHVITALS

PULSE 2019

SOURCES: COUNTY HEALTH RANKINGS & ROADMAPS, N.C. INSTITUTE OF MEDICINE

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2019 I N S U R A N C E I N S I G H T S

PULSE 2019

NEW HANOVER 217,425 88.8%

BRUNSWICK

PENDER

POPULATION 121,634

56,059

87.5%

87%

% INSURED %UNINSURED

11.2%

12.5%

13%

5%

5.4%

5.1%

UNINSURED >19 YEARS OLD

UNINSURED 19–64 YEARS OLD

16%

21.1%

19.9%

0.6%

0.2%

0.5%

UNINSURED <65 YEARS OLD

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WORK COVERAGE N.C. COUNTIES WITH THE HIGHEST % OF PEOPLE WHO HAVE EMPLOYER-BASED HEALTH INSURANCE 1. WAKE COUNTY

64.3%

8. IREDELL COUNTY

55.4%

2. ORANGE COUNTY

64.2%

9. JOHNSTON COUNTY

54.1%

3. UNION COUNTY

61.8%

10. WATAUGA COUNTY

53.9%

4. CABARRUS COUNTY

59.8%

5. DURHAM COUNTY

57.3%

52.8%

6. MECKLENBURG COUNTY

16. NEW HANOVER COUNTY

57.1%

29. PENDER COUNTY

49.6%

7. GRANVILLE COUNTY

56.4%

44. BRUNSWICK COUNTY

46.4%

...

SOURCE: U.S. CENSUS BUREAU, 2017 AMERICAN COMMUNITY SURVEY

S U M M E R 2019

37


THE SCENE WilmingtonBiz Events

Snapshots from WilmingtonBiz Expo, Health Care Heroes, WilmingtonBiz After Hours, Coastal Entrepreneur Awards and the 2019 Book on Business Launch. Stay tuned to upcoming events at WilmingtonBiz.com.

Nancy Mihle, Marian Powell Wright, Bo Burch, and Jonathan Weiss at the 2019 Book on Business Launch.

Brian Stillmock (left), Josh Harcus (center) and Sara Rose Harcus at 2018 Health Care Heroes.

Craig Stinson (left) representing MoMentum Companies at the 2019 WilmingtonBiz Conference & Expo.

David Hartnell (left) and Shaun Olsen play a low-tech game at the 2019 WilmingtonBiz Conference & Expo.

Susan R. McCarley (right) and friends at WilmingtonBiz After Hours.

Ross Hamilton of Connected Investors, winner of the 2019 Coastal Entrepreneur of the year.

Tama Tea founders Wells Struble, Kelly Struble and Rocco Quaranto celebrate their MADE Award win at the 2019 WilmingtonBiz Conference & Expo.

Jay Witmer, Amy Dover Witmer and Valerie Ownley at WilmingtonBiz After Hours.

Gregg Howell at the 2019 WilmingtonBiz Conference & Expo.

U PCOM I NG EVE NTS WilmingtonBiz After Hours July 24

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Power Breakfast September 10

WilmingtonBiz After Hours September 25

Health Care Heroes November 15


Dr. Robert Andrews (seated), the Lifetime Achievement Winner, at the 2018 Health Care Heroes.

A crowd enjoys drinks and networking at WilmingtonBiz After Hours at Marina Grill.

Girard Newkirk of KWHCoin speaking at the 2019 Coastal Entrepreneur Awards.

Craig Snow (left), John Dewberry and Jeff Feldstein at WilmingtonBiz After Hours at Poe's Tavern.

Kelly Erola at the 2018 Health Care Heroes Awards.

Janene Beutel, Rick DeCrescente and Kandra Romeo with Excite Credit Union at the 2019 WilmingtonBiz Conference & Expo.

Steve Matthews (left) and friends enjoy an afternoon at WilmingtonBiz After Hours.

WilmingtonBiz After Hours November 2019

WilmingtonBiz 100 December 10

Power Breakfast December 12

w i l m i n g t o n b i z m a g a z i n e . c o m

Book on Business Launch January 2020

The Greater Wilmington Business Journal team enjoys a Pre-Garden Party.

Judy Budd (left) with Kathleen and Thom Barber at the 2019 Book on Business Launch.

Power Breakfast March 2020

WilmingtonBiz Conference & Expo March 18, 2020

S U M M E R 2019

39


PROFILE

FIELD OF

VISION

BY JENNY CALLISON | PHOTO BY MICHAEL CLINE SPENCER

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PROFILE

To

c o n t i n ue

i n n o vat i n g in the field

o f e y e c a re , o p t o metr i st

E d P au l

has

n a rr o w e d h i s

P

f o c us

aul treats patients with vision loss resulting from a variety of causes, but most have age-related macular degeneration (AMD) – by far the largest cause of vision loss.

AMD is a disease Paul calls the “silent stealer of vision.” He cites the National Eye Institute’s statistic that about 11 million people in the U.S. suffer from this degeneration of their central vision. “Macular degeneration is the leading cause of (vision loss) in Americans 55 and older,” Paul said. “In patients aged 75 or older, the prevalence of AMD is 35%, and it goes up from there. It is not a natural part of aging. Cataracts are natural.” A problem in treating macular degeneration is convincing people to admit they have it. “Many people live with it silently. People are very private about the diagnosis. They don’t want to be labeled, and they are afraid their kids will put them in ‘the home.’ When they lose their driver’s license, then fear sets in,” Paul said. Paul, owner of Paul Vision Institute, has been a practicing optometrist for more than three w i l m i n g t o n b i z m a g a z i n e . c o m

decades. His practice is also a training facility for optometric interns/residents. Currently it is hosting one from Arizona College of Optometry and one from Southern College of Optometry, Paul’s alma mater. Paul is active beyond caring for patients and training tomorrow’s optometrists. Equipped with a Ph.D. in nutrition, he has also developed two dietary supplements that address eye problems he sees daily. The first is Tozal, which Paul launched commercially in 2010 to both prevent and treat age-related macular degeneration. While other such supplements, familiarly termed “eye-vites,” are on the market, they at best slow the progress of macular degeneration, Paul said, while Tozal can stop progress in 23% of cases and restore some vision in another 56%. To find the right formula, Paul spent a couple of years reviewing all the literature on the treatment of AMD through supplements. “I would jot down all the elements identified,” he said. “I got a pharmaceutical company to sponsor my work, and that led to clinical trials at ophthalmology centers and U.S. medical schools. The trial placebo was the standard dietary supplement at the time. We got statistics on (patient) improvement.” Those results were published in British medical journal BMC Ophthalmology. Tozal, which Paul describes as a “super-rich dietary supplement that specifically addresses the causes we know” of AMD, has high levels of zinc. There is evidence that zinc deficiency could be a contributing cause of AMD. “We followed patients for two years and found vast differences between the patients given Tozal and those given the

placebo,” he said, adding that study participants were also given lifestyle counseling, encouraged to increase their physical activity, lower their consumption of fatty foods, combat elevated cholesterol and stop smoking. The reason for those lifestyle and dietary changes? “We don’t completely know what causes AMD, but the theory is it is at least in part the result of inadequate circulation and inadequate oxygen,” Paul said. “Every cell in the body needs nutrition. If you improve circulation and oxygenation, it improves nutrition to the cells.” Obesity, a sedentary lifestyle and Type 2 diabetes can make a person more likely to develop AMD, the optometrist said. So can smoking: A smoker runs a 300% higher risk of developing the disease, according to Paul. “It’s a multi-faceted, complex disease,” he said, acknowledging that while lifestyle and diet changes can help patients, “the easiest thing to get a person to do is swallow a pill.” Originally available only by prescription, in 2016 Tozal became available over the counter. And recently, Paul reformulated Tozal to reflect new research findings. “Science does not stand still,” he said. “The formula I developed in 2014 was outdated. I added new nutrients, based on new bodies of evidence. For instance, we were using 80 milligrams of zinc; now we know that 25 milligrams is just as effective. The original form of Tozal had no vitamin D. We just learned that a vitamin D deficiency increases chances of AMD by 700%. When that research came out I had to put vitamin D in there.” While declining to give sales figures, Paul said that sales of Tozal continue to top 20% growth each year. To avoid potentially toxic levels of some vitamins in a S U M M E R 2019

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PROFILE

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patient’s system, Paul formulated Tozal with the assumption that the person was already taking a daily vitamin supplement. Despite his emphasis on AMD, Paul’s newest product addresses what he says is a common – and growing – eye problem: dry eye. He has formulated a dietary supplement, O3+Maqui, that is now on the market. “Maqui berry has been used for centuries to stimulate the eye’s ability to produce natural tears,” Paul said. “Omega-3 has been used more recently for dry eyes. I combined the two.” Paul’s new product underwent a clinical study that used each element – maqui berry extract and omega-3 – separately and then as a combined formula. His study was published in the Journal of Clinical & Experimental Ophthalmology. “Two plus two did not equal four in this case; it was more like seven. The two elements are synergistic,” Paul said of the trial results. “I think this product will surpass Tozal in sales.” Problems with dry eye are growing, according to the optometrist, because of the prevalence of air conditioning and chronic use of antihistamines by many people. Long exposure to dry ambient air and antihistamines – as well as lack of sleep – affect the eye’s mucous membrane. As he did with Tozal, Paul selected a pharmaceutical company to manufacture and distribute O3+Maqui. He said delegating that part of the business to an established drug company that is experienced in working in a highly regulated environment frees him to continue doing what he does best: treating patients and working on new products. Paul said his newest quest involves developing dietary supplements that will address children’s vision loss, diabetic eye disease and glaucoma.


MEDICAL

HOMES MEDICAL OFFICE SPACE IS EXPECTED TO REMAIN IN DEMAND IN THE WILMINGTON AREA

BY CECE NUNN

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ike others in his profession, Wilmingtonbased commercial real estate broker Paul Loukas keeps an eye on the medical office market in the Cape Fear region. The prognosis from Loukas and various local brokers is that the market’s current growth trends could continue because of a number of factors.

PHOTO BY TERAH WILSON

Demand for medical office space is coming not only from public hospitals but from private providers as well, according to Brian Spaller, Clancy & Theys Construction Co. project manager working on the interior of Wilmington Health's new space at The Offices at Barclay.

“Demand for medical office space has changed dramatically since health care reform took center stage in our national politics. Uncertainty about the future was a significant catalyst for the acquisitions of private practices,” Loukas said. “New Hanover Regional Medical Center and Wilmington Health are clearly the two major health care providers within our community that have showed significant and

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continuous growth. But the growth in our medical market is somewhat isolated, as we have not seen expansion in the smaller physician groups like we did in the previous decades.” In the case of Wilmington Health, one of its latest locations is at The Offices at Barclay, a new office park off Independence Boulevard under development by Cameron Management. Wilmington Health will occupy 30,000 square feet in the office park’s first 60,000-square-foot building. When choosing space, the provider keeps future needs in mind, said Chris Bunch, COO of Wilmington Health. “We typically try to anticipate our needs three to five years out,” Bunch said. “Several of our buildings were constructed with expansion plans already in mind, and we plan to fill those spaces with new physicians and services as the patient population and demand around those offices continues to grow.” According to CBRE Research, a national real estate research firm, growing demand for health care services fueled the medical office market nationwide in 2018. One of the main drivers was the fact that the population of people ages 65 and older increased by more than 26% between 2010 and 2017, the CBRE report stated, with projections of 32% growth by 2025. The second main driver, according to the report, was a decrease in the population of people who are uninsured; that percentage fell from 15.5% in 2010 to 8.7% in 2017. Fast-growing areas that attract retirees are naturally going to shows more demand for health care space. “It follows a broader trend,” said Hill Rogers, broker in charge of Cameron Management. “If a market is growing in population, especially an older population, the need for health care services is going to be more enhanced for that population, that market, which would lead one to S U M M E R 2019

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believe that there’s going to be growth in the medical office market.” And brokers tend to go after tenants in industries that are growing, he said, adding that in the case of the first The Offices at Barclay building, “since Wilmington Health was the lead tenant, the anchor tenant, we want to keep this building a medical office building. “We plan to build more buildings adjacent to it,” Rogers said. “They don’t have to be medical. I’d love for them to be something else for diversity.” Another example of location being key is the facility that EmergeOrtho, a growing orthopedic practice in the Cape Fear region, has been building in Brunswick County, where retirees from northeastern states have been flocking for years.

L IKE A L L COMME RCIA L R E AL ESTAT E , T HE P R O P E RTI E S T HAT HAV E T H E R I GH T LOCAT IO N A N D ACC E S S WIL L B E PRIM E F O R R E DE V E LO PM E N T OP PO RT UNIT I E S .

PAUL LOUKAS COMMERCIAL REAL ESTATE BROKER

Last summer, EmergeOrtho broke ground on a new medical services office building that includes Brunswick's first ambulatory surgery center offering a range of orthopedic services, including surgery and diagnostic imaging with advanced MRI. The three-story, 55,578-squarefoot facility was made possible through a certificate of need awarded to Brunswick Surgery Center by the N.C. Department of Health and Human Services, according to an EmergeOrtho news release.

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EmergeOrtho's decision to locate its new medical services office building at The Villages of Brunswick Forest reflects providers' desires to be situated near growing population centers. RENDERING C/O EMERGEORTHO

“An analysis of the state’s 2016 facilities plan revealed the need for an additional operating room in Brunswick County to meet the needs of the growing population,” officials stated in the release. The release also said, “This location at 1168 Cutlar Crossing in the Villages of Brunswick Forest will mean more convenience and less travel time for patients, not only in Brunswick County, but in New Hanover and Columbus counties, as well.” An additional benefit, according to EmergeOrtho officials: Independent ambulatory surgery centers tend to be a more affordable setting than hospitals. Another factor in the Wilmington area’s own uptick in demand for medical office space is the passage of time. “In general, there’s a lot of older, less efficient, more obsolescent medical offices in town,” Rogers said. “As practices get bigger, those buildings are harder to more effectively operate a modern-day medical practice in.” A trend in medical office space over the past 10 to 20 years, he said, has been similar to retail: “They go where the population growth is so they can be convenient. That bodes well for midtown,” Rogers said, referring to the area of Wilmington where the Barclay office park is located. “That’s why there’s a lot of practices in the Landfall/Mayfaire area whereas 50 or 60 years ago, all the doctors opened up their offices

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where the hospital was. That’s true for any community.” Loukas said even with all of the consolidation of medical practices that has taken place, the area’s medical office market has a relatively low vacancy rate. “I fully expect that some of the current medical office space will have some functional obsolescence in the future,” Loukas said. “Like all commercial real estate, the properties that have the right location and access will be prime for redevelopment opportunities.” While public hospitals like New Hanover Regional Medical Center are growing, some of the demand for medical office space seems to be coming mainly from private providers such as Wilmington Health, said Brian Spaller, the Clancy & Theys Construction Co. project manager for the indoor upfit of Wilmington Health’s space at The Offices at Barclay. “You’re seeing more of these big facilities going up all over the place that are private and not run by the hospital itself,” Spaller said. Swain & Associates has included at least 75,000 square feet of medical facility space in its plan for CenterPoint, a $250 million mixeduse project that’s expected to rise in the coming years on land off Eastwood and Military Cutoff roads. “When we began envisioning CenterPoint we realized that medical services needed to be an integral part of the development. Right now, the


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main campus for New Hanover Regional Medical Center is on the opposite side of town. It takes anywhere from 15 to 30 minutes to drive there, depending on the time of day. As our community continues to grow, chances are that drive time will increase,” said Jason Swain, developer with Swain & Associates. “Access to health care is critical, and in an emergency a drive across town may take entirely too long. That’s why we’ve committed to having a health care component to CenterPoint. We want residents in the northern portion of the city to be able to get to excellent quality medical care quickly and in a firstclass environment.” Location also is part of Wilmington Health’s strategy. “Our goal is to make access to health care, in every respect, as ‘painless’ as possible for our patients. We believe that this access is not isolated to the availability of appointments, though,” Bunch said. “The time people spend traveling to and from their doctor’s offices is time spent away from their families, work, etc., and we want to limit that. Based on this philosophy, for years, we have been placing our services in locations where our patients live, work and are able to enjoy the wonderful restaurants and shops that communities we serve have to offer. The Barclay development fit very nicely into this model.” Looking toward the future as the Wilmington area continues to experience rapid growth, Loukas said, “I believe you will see new medical office space develop systematically throughout the region following residential growth and development. Although telemedicine has the potential to play a role in the need for less brick-and-mortar locations, as we are currently seeing in the retail sector, I still predict a robust medical office expansion over the next decade.” w i l m i n g t o n b i z m a g a z i n e . c o m

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Dentist Sarah Pless sees practices increasingly focus on making patients relaxed and comfortable in the dentist chair.

DRILLING DOWN IN THE AREA'S DENTAL INDUSTRY BY KEN LITTLE | PHOTOS BY TERAH WILSON

THE REGION’S POPULATION GROWTH IN RECENT DECADES REAFFIRMS THE NEED FOR QUALITY DENTAL SERVICES, PROVIDERS SAY. AND CONTINUED GROWTH PROJECTED FOR YEARS TO COME LEAVES SPACE FOR MORE SOLO AND GROUP DENTAL PRACTICES IN THE TRI-COUNTY AREA.

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“There is (opportunity), but you’ve got to be a little creative on how you do it, and everybody has got to figure it out,” said Robert Schiffel, chairman of the New Hanover County Board of Health. Schiffel, who opened his dental practice in 1986 near Laney High School and retired in 2007, has seen the local industry grow in size over the years. He said that at the time of his retirement there were nearly 100 dentists or practices in the Wilmington area, including those practicing in specialty areas such as

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endodontics and pediatric dentistry. “Everybody seems to find a little niche,” he said. Currently there are 286 licensed dentists practicing in the tri-county area, according to the N.C. State Board of Dental Examiners’ database. New Hanover County alone has 205 licensed dentists. The two other North Carolina counties closest in population to New Hanover have 85 dentists (Gaston County) and 98 (Union County), licensing board officials said. Statewide, there are nearly 5,300 licensed and active dentists.


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FILLING IN

In the local market, Schiffel said, location remains all important in deciding where to open a new practice, adding that areas of Brunswick and Pender counties are not yet saturated and offer opportunities. “You’re going to have to pick your spots just right,” Schiffel said. A practice with unique features also can catch the public’s eye in the competitive market. Ben Friberg was thinking along those lines as he put together a business model for Thrive Family Dental at 8115 Market St., Suite 204, in Porters Neck. He moved to Wilmington about three years ago from Portland, Oregon. “I did research, and (Portland) was a really saturated market,” Friberg said about one of the reasons for moving to the Port City. “There is no town in the East like Wilmington that’s affordable that provides all these amenities.” And the fast-growing area of Porters Neck proved attractive. “We’re the second of three practices that have opened within four months here, and at that point, the market will have reached its saturation point,” Friberg said.

SETTING CHANGES

Sarah Pless has seen many changes in the business of dentistry over the past decade. “Going to the dentist isn’t what it used to be. We’re seeing all kinds of add-ons to improve the patient experience. Focusing on patient relaxation in what can be a stressful situation is increasingly popular,” said Pless, who opened Renaissance Dental Studio at 7205 Wrightsville Ave. Many practices “now offer a variety of adjuncts like aromatherapy, headphones and television, and massage dental chairs,” Pless said. “Wilmington has its first emergency-only clinic as well, so patients who don’t have a dental ‘home’ can seek care there for one-off type issues,” she added, referring to ASAP Urgent Dental Care, which opened in

the Landfall area last year. It’s important dental practices set themselves apart to appeal to a “certain segment of the market,” Friberg said. “My office is sort of a spa-type deal. There are no pictures of teeth on the wall,” he said. “It doesn’t smell like a dental office.” Examination rooms have televisions and headphones for patient convenience. Drills and cables are arranged behind the patient’s chair. Western red cedar shelving provides a “distinctive air,” Friberg said. Dentists “are not unlike other business owners in seeking to differentiate themselves, so I would expect continued creativity to attract new patients,” Pless said. One of those differentiators can be adopting new technology for patient services. “In designing my model, I sought out dental technologies that would complement the focus on patient comfort, convenience and value. There are so many hurdles that keep patients from seeking proper dental care,” Pless said. “Fear and interruption to their daily schedules are right up there.” At her practice, Pless added a Solea laser that can remove cavities without having to use a numbing agent. That “patients can return to work without a fat lip or drooling has been a game changer,” she said. Thrive Family Dental uses 3D X-rays for sharper images and less radiation exposure. The practice also uses digital intraoral scanning instead of making impressions of teeth. Renaissance Dental Studio also has incorporated a dental 3D printer that can print a crown in 10 minutes, so patients don’t have to schedule multiple office trips or get “numbed up” several times to fit a permanent crown. “We also homed in on technology that can help us on the business side too,” Pless said. “Our studio uses texting to communicate with our busy patients. We can handle appointment changes, questions about emergencies, questions about insurance – all on their time. We

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3D printers to make crowns, like this one at Renaissance Dental Studio, are one way practices are incorporating technology for patients.

ESTIMATED NUMBER OF DENTAL PRACTICES OPERATING IN THE REGION: NEW HANOVER CO.

74

GENERAL PRACTICES

BRUNSWICK CO.

29 16

GENERAL PRACTICES

PENDER CO.

GENERAL PRACTICES SOURCE: DENTAGRAPHICS

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can send the bill to patients via text, which helps us not kill trees and is more convenient in today’s cashless culture.” Improved technology is common among all professions, Schiffel said. “There’s some really cool stuff out there, (but) all of it is really expensive,” he said “It lends itself to the bigger practices. The technology is really great, and we all benefit from that but there is a price to it.” Schiffel said dentists must navigate changes in the industry. “People are going to figure out a way with the insurance discounts and (other incentives),” he said. “You will see more people for less money, and if you’re creative, you can figure it out. Value is important.”

OUT-OF-THE-BOX PAYMENTS

The internet and boom in social media keep patients more informed about the types and cost of dental care in the region, Pless said. Still, Pless said that 40 percent

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of consumers nationwide don’t have dental insurance, “which contributes to 50 percent of U.S. consumers not attending the dentist at all.” “Cue the intro of dental membership plans, which typically get patients access to preventative care and discounts on restorative dentistry services without a third-party involvement,” Pless said. With a recently opened practice, Friberg is making the rounds of local businesses explaining the small business discount plan his practice offers. Many smaller businesses don’t offer dental care plans, and Friberg said lack of insurance keeps many people from receiving regular dental care. “It’s a really complicated element in our industry,” he said. “Patients believe they have to have it to get to a dentist in our region. Dental insurance limits perceived access to care.” In response, Friberg offers a small business discount plan because so many businesses in the Wilmington

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area do not offer dental insurance. “My goal is to get these discount plans into the hands of every small business in the community in order to make these plans easy to access and affordable. Everybody I’ve talked to has been really excited about it,” Friberg said. “It doesn’t cost them anything.” Pless said the market for dentists offering quality services in the Wilmington area remains strong. “When I started practicing in Wilmington a decade ago and was part of dental society leadership, I was amazed at the number of dentists we had in the tri-county area relative to our population size … They’re largely all still open,” she said. “Since my studio opened about 18 months ago, I can count seven others who have opened or have announced plans for brand new offices,” she said. “If a practice is clear in its vision and provides a quality experience, there will continue to be more and more successful startups.”


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BUS IN E S S TO F U E L T HE COASTAL LI FESTYLE

WATER PLAY BEACH RENTALS ON THE HOOK

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rom watching the region’s landscape suspended in the sky, to testing out one’s balance on the ocean’s surface, to diving deep in the water in search of hidden ecosystems, businesses in the Cape Fear region have long embraced water sports at every elevation.

WAVE RIDER

Tony Silvagni learned how to ride waves at a young age at Kure Beach, eventually becoming a professional surfer. Silvagni (right) found, along the way, that his passion was teaching and nurturing surfing skills in others. Silvagni, the owner of Tony Silvagni Surf School in Carolina Beach, has competed in worldwide events winning titles including the 2016 Trump Hyuga Pro Longboard Champion in Miyazaki Japan. Silvagni and instructors have been teaching young and older students about proper paddling, stance, wave formation and water safety, among other skills, since the surf school opened in 2008. Silvagni’s family moved from Williamsburg, Pennsylvania, to Kure Beach in 1993 where Silvagni received guidance and support from his friends and family to start surfing. “I started to learn to surf from a friend, Corey Mullen, who got me into the sport, and then my brother, dad, mom and sister were all super helpful and got me to stand up on a bodyboard and then it evolved from there,” Silvagni said. “Since then I’ve been competing in amateur contests in my youth years. And then I eventually ended up turning pro right around 15 or 16 years of age.” Silvagni received a degree in business marketing from the University of North Carolina Wilmington. During that time, Silvagni discovered what he wanted to do with all the skills he had garnered over the years. “While attending college I ended up working a job and then finally finding my passion and my love and what I wanted to do, and that was teaching

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surfing,” he said. “I always knew that I would want to give the wealth of knowledge of what I learned at such a young age. I was traveling to all these exotic places all around the world, and I knew there would be this opportunity to help other surfers and give them a skill set to be able to build from.” Besides surfing lessons, Tony Silvagni Surfing School offers paddleboarding lessons, surf camps and beach equipment rentals. The business has seen exponential growth over the years, he said, and it moved to a new location at 107 Charlotte Ave. in Carolina Beach in April. “I bought my own first piece of land for my building, which is made out of shipping containers,” Silvagni said. “They are 9-feet-high, 40-feet-long and 8-feet-wide. We connected the two shipping containers to have a storefront.” Because of its prominent sandbars, Carolina Beach is a great location to teach surfing, Silvagni said. “It’s a beach break, so it’s a sand bottom. There’s no rocks and reefs and stuff like that,” he said. “It’s going to be a little bit better off for someone learning to surf.” Carolina Beach is also a great location for all the businesses that rely on tourists and people participating in water sports, he said. “Water sport businesses drive tourism for all local businesses,” Silvagni said. “When you offer these experiences and these amenities people are more willing to come and spend money elsewhere, and I think that is where it helps thrive the rest of the community. “People are here for activities and experiences,” he added. “So I feel like it’s important to have these types of opportunities for people to take advantage of the ocean and learn a new sport.”


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In the cold, dark, deep waters off Cleveland, Ohio, Rob Williams, co-owner of Patriot Dive Center in Wilmington, learned to scuba dive. Williams, who grew up in the Midwest, moved to Wilmington in 2011 to pursue longer diving seasons and experience shipwreck diving in the Cape Fear region. “The coast of North Carolina is consistently voted one of the top five dive locations for shipwreck diving,” he said. “It’s called the Graveyard of the Atlantic, and there’s lots of shipwrecks out here. It can be a little bit more challenging for diving because of the weather conditions and the ocean conditions.” While a student at the UNCW, Williams ran the scuba club at the school and worked with the Wounded Warrior Project, a nonprofit that offers programs and services for wounded veterans. Soon after, Rob Williams and his wife, Heather (left), opened the Patriot Dive Center at 829 S. Kerr Ave. “We had a large community of divers between the veterans and the student population, and we saw an opportunity to grow the education side of the scuba industry in Wilmington,” Rob Williams said. “We decided to pursue business goals with the Patriot Dive Center being a facility focused on training.” Students have many options for diving locations in the region, including popular diving sites such as the Hyde, a ship used to keep waterways open constructed during WWII, and the John D. Gill, a ship sunk during WWII by a German U-boat. The center provides training for all levels, from kids trying it out for the first time to instructor level courses, the couple said. w i l m i n g t o n b i z m a g a z i n e . c o m

“Children who are 8 years old can be involved in the PADI Bubblemaker program, and that involves getting in the pool and trying it,” Heather Williams said. “It’s a great family bonding experience because we can encourage people starting out at that very young age and encourage it to be a family hobby.” The center also works with the Wounded Warrior Project and Patriots for Disabled Divers. “I myself am a service-connected disabled veteran,” Rob Williams said. “I served in the U.S. Army and am an Operation Iraqi Freedom veteran, and scuba has provided me a lot of therapeutic benefits over the years. “I found that was something that I wanted to share with other veterans. So it was a place close to my heart and a mission and a group of individuals that I really connected with.” Businesses in the Cape Fear region that are promoting sports to locals and tourists are important, Rob Williams said. “I think as a coastal community, water and coastal sports or recreation activities are essential,” he said. “I think that we have a big tourism draw towards this community, and a lot of people come for the water activities.” Water sports also can enhance people’s lifestyles by promoting a healthier way of living, they pointed out. “Any way that we can encourage people getting outdoors and getting on the water is great,” Heather Williams said. “We live in an age of technology where people are often sitting on their phones or possibly being inside. The water sports and activities that allow people to get outside and enjoy the water are really essential.” S U M M E R 2019

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BIRD'S EYE

PHOTO C/O WRIGHTSVILLE PARASAILING CO.

VIEW

Water sports can be extreme, requiring athleticism and skills. Those who prefer a more relaxing and picturesque water sport experience have an option with Wrightsville Parasailing Co., a family-run business at Wrightsville Beach that has been open for more than 20 years. Jay Dalton, owner of the company, has flown over 7,500 people in Wrightsville Beach skies using parasails and his boat. Dalton got the idea to start the business in 1998 after seeing people enjoy the recreational activity. “I was on my honeymoon in Jamaica back in 1993, and I saw folks out there doing it, and I thought, ‘Wow, that’d be a lot of fun to do at Wrightsville Beach.’ And that was the extent of my thought about it. A couple of years later at Wrightsville I saw folks out there actually doing,” Dalton said. “The very next year my sister passed away and she was just 37 years old at the time, and it had a pretty big effect on me. I decided a year later that I needed to do something different in life, and I quit my job. My wife was pregnant, and we went to the beach, and I started my little parasail business.” Wrightsville Parasailing operates out of Airlie Marina and has one boat, Live like Libby, named after Dalton’s sister. In parasailing, a person is attached to a sail and a boat and is then elevated and pulled by the boat. A ride above the waves lasts about 15 minutes. One feature of parasailing is that it doesn’t require special skills, making it more accessible to all age groups, said Dalton, who commutes with his daughters from their home in Cary to run the business during summer weekends. “There are a couple of things that people might find surprising, but mainly, it takes no training of any kind. I’ve flown 11 82-yearolds,” he said. “We strap you into the harness,

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and we control you. You don’t have to know how to do anything other than how to get yourself out of the sail in the event of a water landing, which is extraordinarily rare.” The majority of people who parasail with Wrightsville Parasailing are summer visitors, Dalton said. “They are mostly tourists – almost all. I’ve had people from almost every state,” he said. “Tourism is absolutely critical. Wrightsville Beach would die a quick and sudden death without tourism in the summertime.” One of the challenges of running a parasailing business in the area is the weather, he said. “The people that had been doing parasailing in Wrightsville before I was left, and I learned later that they left because it’s too windy and too rough on the ocean most of the time at Wrightsville Beach,” Dalton said. “We did it full time the first couple of summers, and then I went back to working as an engineer (at Duke University’s Shared Materials Instrumentation Facility) and kept the business going just on weekends from that point.” Despite the weather challenges there is still a large demand from tourists wanting to parasail, he said. The Daltons want to maintain the business as a family endeavor. They also started the Elizabeth Dalton Averett Foundation, a nonprofit in honor of Jay’s sister that raises money for the UNC Lineberger Comprehensive Cancer Center for research. “I would like to say that I have a big, bold plan for expanding the business and doing something like that. But the truth is we like it just like it is,” Dalton said. “I haven’t even raised the price in 13 years. For us, it’s a family thing that gets us to the beach on the weekends.” S U M M E R 2019

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CHECKING IN on the vacation season BY CASEY MCANARNEY | PHOTO BY TERAH WILSON

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rightsville Beach and other New Hanover County beaches rocked by Hurricane Florence last fall have spent much of the spring recuperating and preparing for the upcoming summer season. And with hotels and other rentals reopening for the new season, this summer is one that many rentals still are hopeful will be even larger than last year. Shell Island Resort and Blockade Runner Beach Resort reopened in March and February, respectively. Other institutions are beginning to reopen following last fall’s hurricane and are hopeful that tourists and other potential renters are eager to get to the beach. “Since last fall, we had quite a few hotels that were out as well as some of the larger restaurants,” Wrightsville Beach Mayor Bill Blair said. “Blockade Runner came back up mid-February, and Oceanic, which is one of our larger oceanside restaurants, is back in business.” And though there are still a couple of smaller rentals that have yet to reopen on the south end of the island, “all in all, the greatest proportion of hotels are open as well as the restaurants,” Blair said. Blair even noted that in April, during the Carolina Cup paddle race, the beach was “packed.” It is partially because of the activity and involvement in these events that Blair is enthusiastic for the summer season. “I think the trend is up,” Blair said. Carolina Beach has also been experiencing an uptick in reservations for the summer. w i l m i n g t o n b i z m a g a z i n e . c o m

Mayor Joe Benson said that he expects the summer rental season to be strong and noted that some rentals, units and agencies have “already been booked out farther in advance than last summer.” The town, like Wrightsville Beach is gearing up for the summer, with some businesses and rentals using this time to ensure they are in compliance with county standards. “At the moment we have two businesses that are going to make the final needed structural changes to get ready for the season,” Benson said last month. Those two businesses are coffee shop and wine bar Crush and Grind, and The Savannah Inn. There were also a few condos and other rental units that as of May just needed an electrician’s inspection from the county to receive a certificate of occupancy. In addition to gearing up for the summer travel season, Benson noted that there were some positive changes to the town, such as the opening of the Island Greenway this spring. Seeing a rise in room occupancy tax (ROT) rates is important to local beaches as the ROT, or tax on the rental of a room or property, can impact the restoration and upkeep of those beaches. The ROT is a mere fraction of the tax that comes out of shortterm rentals in New Hanover County. It comes out to 6%. An even smaller fraction of that 6% is then given to the beaches to work on restoring and maintaining these natural spaces. “It’s a 6% tax, and half of that tax goes for advertising for all the beaches,” Blair said. “The second 3% percent goes to beach nourishment and local beach activities.” According to the New

Hanover County Tax Department, 60% of the tax’s other half is given to beach nourishment. The remaining 40% is given to the Tourism Development Authority (TDA) to promote travel and tourism throughout New Hanover County, which includes creating local events. Another portion of the collected occupancy tax goes to the TDA as well but is devoted to promoting travel and tourism to and assisting the needs of the unincorporated areas such as Carolina Beach Inlet, Mason Inlet and Masonboro Inlet. Although Wrightsville Beach experienced decreases in ROT collections from September to December, some beaches reported increases in ROT during the months following the storm, as did New Hanover County as a whole as repair crews and emergency staffers came into the area and needed places to stay. Following Florence, Wrightsville Beach saw its yearover-year ROT shrink for a short period. However, following a 23.6% and 17.4% decrease in November and December, respectively, January saw a 9.2% increase. The ROT across New Hanover County has been on a slightly upward trend since. “In January, the ROT for Wrightsville Beach experienced a 9.22% increase; however, in February, ROT collections decreased by 10.29% over last year,” said Connie Nelson, spokeswoman for the Wilmington and Beaches Convention & Visitors Bureau. “We are hopeful that room occupancy … for Wrightsville Beach will start trending upward now that Shell Island Resort reopened in March and the remaining Blockade Runner rooms (became) available later in the spring.” S U M M E R 2019

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Nelson said that the increases in Wilmington, Carolina and Kure beaches are most likely due to displaced residents and relief workers continuing to fill available rooms, along with leisure and meeting or convention visitors. There is no way for tourism officials to project ROT collections for the summer though, Nelson said. As for how individual rentals are faring based on ROT, those tax collections are reported as a whole and are not broken down by individual properties. The ROT will vary from property to property depending on how much damage was sustained and how quickly the contractors were able to make repairs. Rob Phillips, a manager at Sea Coast Rentals, was able to provide some insight on how smaller rentals are faring. For the spring, Phillips said that they got off to a slow start, but as rental owners began to make repairs and

invest on upgrades to units, there has been a renewed interested in renting near the coast. Particularly, Phillips noted, March and April saw properties go on the market and sell quickly as well as new owners seeking out Sea Coast Rentals’ assistance in vacation property management. “We do comparisons to previous years, and last month we were above in reservations,” Phillips said about April’s numbers. “There still are a few lingering from the hurricane that are just getting the finishing touches done and are expected to be ready to go within the next week or two. “Now we’re over our reservation rate amount. So we’re doing pretty good; things are looking very strong. Just two months ago we exceeded our reservation activity, and the month before we were just a little bit low.” Officials hope the momentum will carry through the summer season. “Thanks, in part to the Wilmington and Beaches Hurricane

Recovery and Comeback campaign and along with word-of-mouth from residents and visitors who have traveled here in recent months since the storm passed,” Nelson said, “the message is spreading that the tourism industry in Wilmington and our island beaches have made a remarkable recovery.” She pointed to a North Carolina post-storm perception study that was conducted in November and January. The study showed that the majority of out-of-state respondents who were planning or considering a trip to North Carolina indicated that Hurricane Florence has not impacted their current travel plans nor their future interest in travel to the coast. “For these reasons, we believe that visitors are ready to return,” Nelson said, “and many realize that the best way that they can contribute to our comeback is to plan a getaway to our area and share their vacation experiences with friends and family.”

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Whitney Blackburn and Michael Styron pack vermilion snapper on ice for Blackburn Brothers Fresh Seafood.

fishing I for the

long haul BY LYNDA VAN KUREN PHOTOS BY MICHAEL CLINE SPENCER

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t’s two o’clock in the morning. A gentle breeze ruffles the water, and the moon, with a few sparse stars, look on while a lone fisherman heads out to sea. For Breece Gahl, commercial fisherman and owner of Wilmington’s Fresh 2U Seafood, it’s just another day at the office. Gahl is something of an anomaly in the Cape Fear commercial fishing industry. He’s in his mid-30s and has fished for profit for about three years. Many of the area’s local commercial fisherman are older, have fished commercially for decades and come from a long line of commercial fishermen. They, like Gahl, wouldn’t dream of doing anything else. “It’s a great way to make a good, honest living,” Gahl said. “It’s fun, and it’s always a challenge.” Though commercial fishermen are getting premium prices for their fish, the industry in the Cape Fear area and the state faces two significant

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challenges: It’s mired in a controversy that has no easy answers – the question of declining fish stock – and the decreasing number of commercial fishermen. Dwindling fish stock has created some rough sailing for the fishermen. A number of regulations, due in part from the battle between the commercial and recreational fishing industries over who is causing the problem, restrict their methods and curtail the seasons for specified species. The N.C. Marine Fisheries Commission sent two such regulations to the state legislature for consideration in February. The “Commercial Fishing License Reform” measure states that commercial fishermen must harvest 1,000 pounds of fish or make 15 registered trips in any two of a fiveyear period. Otherwise, their license would be deactivated and eventually put back into the pool. Also, the fee for a commercial fishing license, under the proposal, would double from $400 to $800 a year. The second measure, dubbed “Let Them Spawn,” would set minimum size limits for fish such as spot, Atlantic croaker, kingfishes, striped mullet and southern flounder to ensure that at least 75% of each year’s harvest spawns at least once. Neither of the proposals has many adherents among commercial fishermen. Though the licensing changes would likely have little impact on full-time commercial fishermen who fish for a variety of species, it could contribute to a decline in the total number of commercial fishermen. However, because part-time fishermen are more subject to bad weather, it could be more difficult for them to meet these stipulations, according to Bret Blackburn, head of purchasing, sales and distribution for Blackburn Brothers Fresh Seafood of Carolina Beach and Rocky Point. The proposals also make it harder for newbies to get into commercial

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fishing, said Sam Romano, co-owner of Seaview Crab Co., who sits on the N.C. Marine Fisheries Commission. Romano added that hiking license fees after the hurricane would be especially egregious. “The regulations seem to be aimed at reducing commercial fishing instead of looking at it as a positive,” he said. The spawning regulation also has drawn criticism from commercial fishermen, who say it doesn’t take into account long-term fluctuations and cycles fish supplies regularly experience. As such, some in the industry argue, this regulation is like others that don’t always reflect commercial fishermen’s reality: They easily locate fish that are believed to be in short supply. Gahl is a good example. He said M A G A Z I N E

he has no trouble finding fish and has never come anywhere near the limit on southern flounder. Therein lies the crux of the problem. Is fish stock declining or not? Romano said not necessarily and that some regulations that limit fish size or restrict the season for certain species should be studied more extensively. Southern flounder, which some say is being over-fished, is one such species, he added. “The stock assessments for southern flounder are incomplete,” Romano said. “The scientific community is tasked with coming up with a number based on limited data collection methods. … Based on their assessment, for the past 20 years we’d never have a sustainable southern flounder harvest. But it’s stayed about the same. If we were seeing this crash


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of the fisheries, we wouldn’t be catching fish anymore.” However, fishery oversight groups, recreational fishermen and some commercial fishermen maintain that regulations are needed to protect a shrinking resource. Of the 13 species tracked on stock status reports, eight are listed as of concern, one is depleted, two are unknown and one is in recovery, said Cameron Boltes, the N.C. Marine Fisheries Commission’s recreational fishing industry representative. Boltes added that the commission’s data is some of the best in the country. “The biggest issue is protecting the resource,” he said. “There does not seem to be the fish there were 10 years ago, and stock status reports support that.” Lee Parsons, owner of the fishing charter Gottafly Guide Service, backs Boltes’ assertions. He says he’s not catching as many fish as he used to, a problem he blames on both commercial and

recreational fishermen who don’t follow regulations and fishery mismanagement. The only way to ensure future generations will be able to enjoy the sport is through regulations, Parsons said. “They’re starting to talk about a moratorium on flounder,” he added. “I don’t want to see that, but if that’s what it takes to cure the fishery, by all means, stick it on them.” Even Blackburn, who opposed regulations in the past, now supports them. He credits regulations for restoring stock and, by doing so, saving the fishing industry. “Even though it was painful, I’m seeing things rebound,” he says. “I’m a big fan of anything that will protect our resources without hurting commercial fishing.” The other issue threatening the industry is the declining number of commercial fishermen. Statistics from the fisheries commission show that issued commercial fishing

licenses have declined from almost 6,000 in 2008 to about 4,800 in 2018. Commercial fishermen first began to leave the industry about 20 years ago, Blackburn said. That’s when regulations were enacted that prevented fishermen from fishing year-round, a situation that cut into their ability to get product. But that’s only one reason area commercial fishermen abandon ship. Commercial fishing is hard. It takes talent, skill and perseverance. Add to that time away from family, the danger, reliance on weather conditions, competition from corporations and rising fuel prices, and the job can be daunting. Finally, commercial fishermen are aging out, and fewer young people are willing to do the job. However, local commercial fishermen who remain can make a profit, according to Blackburn. They’re getting a good price for their fish – a trend that shows no signs of reversing, he adds.

FOR MORE THAN 35 YEARS, OUR GOAL HAS BEEN TO BE A TRUSTED, RESPONSIVE, APPROACHABLE BUSINESS ADVISOR FOR INDIVIDUALS AND ORGANIZATIONS. WE SUCCEED WHEN OUR CLIENTS DO!

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RESTAURANT R O U ND U P

RESTAURANT ROUNDUP

CLEAN

PLATE CLUB BY JESSICA MAURER | PHOTO BY MEGAN DEITZ

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Founded in 2013, Wilmingtonb a se d C L E A N E AT Z c o n t i n ues t o e x pa n d u p o n i t s m i ss i o n to promote h e a lt h y l i fes t y l es v i a c l e a n e at i n g

S

ince the start of 2019, co-founders Evonne and Don Varady have launched three major initiatives designed to help customers battling heart disease and diabetes and to incentivize those who’ve adopted the Clean Eatz lifestyle. “We both have family members who are overweight or dealing with heart disease and diabetes, and we have employees with family members with these health issues as well,” said Evonne Varady. “So it was a goal of ours for this year to educate ourselves on how we can be more active in combating them.” The couple began franchising Clean Eatz in 2015, and now the company has 46 franchise locations in operation, with four currently under construction and another 68 agreements. The Varadys hope to increase that number to 100 signed commitments by the end of the year. Clean Eatz offers in-house dining and online ordering of customized meal plans. w i l m i n g t o n b i z m a g a z i n e . c o m

RESTAURANT ROUNDUP

“When we first started, our target market was the bodybuilding community,” Evonne Varady said. “But we quickly saw that people from all walks of life were looking to change their eating habits and seeking our guidance.” The company recently received certification from the American Heart Association for Clean Eatz chicken, a featured ingredient in many of its dishes. Evonne Varady explained that because Clean Eatz chicken isn’t brined or injected with any sodium-filled solutions, a 4 oz. serving contains only 35 milligrams of sodium and 38 grams of protein. Clean Eatz is now working on getting a new heart-healthy recipe certified each month. The Varadys have also partnered with a medical group in Raleigh to conduct a Type 2 Diabetes research study. They have developed a series of recipes in conjunction with health care professionals, which participants will eat over a set period of time during which they will be medically monitored. The goal of the study is to show that a balanced diet and portion control can help patients manage their symptoms. In January, Clean Eatz launched the We Change Livez Challenge, a social media-based competition designed to reward one customer each month with $5,000 for documenting their efforts to transform their lives through diet and exercise. Participants must show, through video and pictures posted to Clean Eatz social media sites, how they’ve incorporated Clean Eatz into their routines. The company tracks each individual’s progress, incentivizing one person every 30 days for their hard work. The Varadys operate their flagship store at 203 Racine Drive, a Jacksonville location and a Leland location at 503 Olde

Waterford Way that was set to open by mid-May. Last summer Clean Eatz received a place at The Future 50 table, an annual list of the fastest-growing small franchise concepts in the U.S., as presented by Restaurant Business magazine. Ranking No. 43 on the list, Clean Eatz brought in systemwide sales of $24 million in 2017, translating to a year-over-year increase of 32%. As the brand continues to grow, the Varadys say the most challenging part is managing the overall operations for each of the franchise locations to keep things consistent. “A lot of our franchisees have their own ideas that they’re eager to implement, but we’ve been doing this for 10 years now, including the cafe we operated in Illinois before moving to North Carolina, and so we know what works and what doesn’t,” Evonne Varady said. “At the same time, we’ve definitely made some mistakes along the way and we’ve learned a great deal from them.” The Varadys recently formed a support group for local franchisers, with members such as Ray Worrell of Slice of Life, Sean Cook and Matt Piccinin of Shuckin’ Shack, and Steve Schnitzler of Port City Java. The group gathers regularly to work on problem solving and bounce ideas off one another. “We’re fortunate to have an amazing support system here in Wilmington,” Evonne Varady said. The Varadys say there is more to come from Clean Eatz in 2019, but the details were not yet ready for release at press time. For a company that thrives on transforming lives, there’s precious little time to waste. For more restaurant news, sign up for the Business Journal's weekly Restaurant Roundup email by going to WilmingtonBiz.com. S U M M E R 2019

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THE TAKEAWAY

ON DECK

Battleship North Carolina recently completed repairs at its visitor center, which was gutted after Hurricane Florence in September. With a new roof, windows, floor and drywall, the center was repaired with spare time before Memorial Day, said Stacie Hidek, marketing director at the World War II battleship attraction, which draws about 300,000 visitors a year. Meanwhile, repairs to the cofferdam – part of a multiyear project – also have wrapped up, and work to repair the ship’s aging hull is expected to be finished next year. “We’ve reached our goals for phases one and two of the Generations Campaign to fund the cofferdam and hull repairs,” Hidek said. “We’ve launched phase three, Living with Water, to address recurrent flooding at the battleship site by reintroducing wetlands and living shoreline, and to provide educational opportunities around the natural environment that surrounds the ship.” PHOTO BY MICHAEL CLINE SPENCER

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Profile for WilmBiz

WilmingtonBiz Magazine - Summer 2019  

The summer issue of WilmingtonBiz Magazine, a publication of the Greater Wilmington Business Journal, focuses on Southeastern North Carolina...

WilmingtonBiz Magazine - Summer 2019  

The summer issue of WilmingtonBiz Magazine, a publication of the Greater Wilmington Business Journal, focuses on Southeastern North Carolina...

Profile for wilmbiz