Monday , September 21, 2020


    Famous business magnate Walt Disney once said, “Do what you do so well that they will want to see it again and bring their friends.” In the economic development arena, this has been South Carolina’s winning strategy.

     “It’s a strategy started in 2011,” explains South Carolina’s Secretary of Commerce Bobby Hitt, “guided by Governor Nikki Haley’s leadership, bringing our state together as ‘Team South Carolina’ to attract business and jobs to the Palmetto State.

     “And now with our teamwork approach to economic development, South Carolina is producing record results, and emerging as a Southeast magnet for new jobs, investment and growth.

     “In the last four years,” Hitt continues, “we’ve celebrated major recruitment wins, including announcements by the world’s top automotive and aerospace companies, boosted opportunities for small businesses, and created an environment that encourages existing industry to continue expanding within our borders.

     “For a state relatively small in size, we have made big gains. Our economic development reputation has earned us the moniker ‘Beast of the Southeast,’ and South Carolina is consistently ranked as one of the top states for doing business by Area Development, Chief Executive and Business Facilities magazines.

     “Moreover, we’ve increased our state’s global reach,” Hitt touts. “For two years in a row, IBM named South Carolina the top state in the U.S. for new jobs created by international companies, on a per-capita basis. Our unprecedented success shows we are doing the right thing, the right way, and the world is taking notice.

     “As a state, we encourage companies to come and discover what global heavyweights BMW, Boeing, Bridgestone, Continental, Google, Michelin already know—South Carolina is just right for business.

     “By nurturing our talent, building a business-focused environment and working together as a team, we are winning here at home,” he affirms decisively.


Focused Representation

     Bobby Hitt was one of Governor Nikki Haley’s first appointments when she assumed office in January 2011.

     As manager of corporate affairs at the BMW plant in Spartanburg, Hitt had been running interference for BMW through all the questions, complexities and concerns of the public and government bureaucracy affecting BMW since before its first completed vehicle came off the Greer assembly line in September 1994.

     The success of the ever-expanding BMW production facility has been a remarkable testimony to South Carolina’s ambition to successfully woo more advanced manufacturing plants to its territory and Hitt knows how to tell that story. He calls it “The BMW Effect.”

     Today, BMW manufacturing employs 8,000 people to produce the X3 and X5 Sports Activity Vehicle and the X4 and X6 Sports Activity Coupe. The 1,150-acre, 5-million-square-foot campus generates its own power, offers an on-site family health center, and provides 24-hour security and firefighting personnel.

     To date, BMW has invested nearly $7 billion in its South Carolina operations. It was the fastest factory start-up in automotive history—a record 23 months from site groundbreaking to first car produced. With a daily output of about 1,200 vehicles, it has produced over 2,900,000 to date. It has 270 North American suppliers with 40 located in South Carolina itself.

     Hitt not only has an intimate knowledge of the BMW experience, he also has spent nearly 20 years in the journalism business. Out of college, he went to work at the Columbia Record in 1971 and was named managing editor in 1980 to 1987, and then managing editor of its sister publication, The State, which he held until 1991.

     Raised in Charleston and a graduate of the University of South Carolina, Hitt is a serious-minded public servant with a dry sense of humor, who is uniquely dedicated to the task of bringing jobs to South Carolina.

     He is nonchalant in manner, but keenly focused on his targets and what needs to be done to close deals with companies who are choosing new locations in a very competitive arena. He is especially conscious of the global nature of international commerce and always ready for the next challenge.


Formula for Success

     Early on in his position in the Department of Commerce, Hitt was asked what works for South Carolina. “So much of success is attitude,” he responded, “and our success boils down to one thing: We do what we say we will do. Outsiders will tell you that South Carolina is a success because of cheap land and cheap labor. Nothing could be further from the truth.

     “The bottom line is this. We run a customizable state. We don’t attempt to steer companies or campaign for business plans that benefit our state over the business. We look for strong companies, provide them with the resources they need, and let them conduct business as they see fit. We make sure South Carolina is just right for all of our companies, and it works. In South Carolina, business is part of our culture.”

     The state’s most recent success was capturing Volvo Cars and Mercedes Benz Sprinter Vans. Hitt comments: “It’s the Port of Charleston, with its new terminal and its system of ports and the highways and railroads, that become a statement to the world that South Carolina gets it.”

     The state has made a $2 billion commitment to building the port, expanding its capacity and networking that port through a system of highways and railroads that are part of a supply chain system serving advanced manufacturing and logistical needs.

     Hitt continues, “This is an international economy that’s expanding rapidly. Southeastern ports have the advantage because of weather and rail capability. The pie is getting bigger and there will be traffic everywhere.

     “For example, South Carolina produces more tires than anyone in the world and there are no rubber trees here. Everything comes in and everything goes out. We produce 90,000 tires a day. Logistics is the key.”

     Speaking of tires, it was around this time last year that Singapore-based Giti Tire Group announced its plans to build a $560 million plant in Chester County to produce over 5 million radial passenger, light truck and SUV tires annually. They join Bridgestone Americas and Michelin North American already in the state.

     “Our state is always ready to provide new companies with the resources they need, no matter their focus,” attests Hitt. “We do our homework. We learn what we don’t already know and employ a workforce that is good at what they do.

     “South Carolina has been a manufacturing state for many years. We have universities and technical colleges to train workers for advanced manufacturing.”

     Indeed, since January 2011, South Carolina has recruited over $6 billion in capital investment and well over 15,000 jobs that include the automotive sector as well as the aerospace sector.


The Secret Weapon

     “We are in the relationship business,” maintains Hitt. “South Carolina went to Europe 40 years ago; Hoehst Celanese came here 35 years ago as a direct result.” With BMW, even Hitt admits it was a bold move. South Carolina cold-called BMW. They tried to find an interest level and transform it using all the association links they could find. Hitt categorizes BMW as a game-changer.

     “We have investments from many countries. Germany and Japan have alternated number one and two over the years, but we have sought Chinese companies and we recently went recruiting in India with Governor Haley looking for companies interested in entering the U.S. domestic market,” continues Hitt.

     Then he points up the state’s secret weapon—Governor Nikki Haley. “She is a remarkable governor. I have been around a while. I have worked around the state capital since I started in the newspaper business in 1971. In that time, the two governors who really knew and understood business were Carroll Campbell and Nikki Haley. She is very good.

     “The governor is a big player. She is very attentive, asks great questions and is really great to make calls. She will pick up the phone and speak directly to the CEO or the contact person we are working with. And she follows through with them or by telling us what needs to be done. She works for the close,” attests Hitt.

     “We want to get deals done and done well to mutual satisfaction. Governor Haley is fully integrated into our program. She is good. She knows everybody in the room. She is an economic development governor. She is aggressive.

     “She was extremely valuable on our trip to India having Indian heritage. We visited six Indian states. We are trying to establish relationships with businesses from those countries that want a presence in the U.S. markets. We are building global relationships.

     “We have relationships with the USC Moore School, the Clemson engineering school, the College of Charleston. We are constantly looking for people with contacts and relationships that can be helpful to us.

     “We don’t just recruit businesses or work on big business,” explains Hitt, “we work on medium to small businesses as well. We work on business relationships—helping businesses connect with each other and helping them grow. If a business is having a problem, I want to know about it.”


Making It Happen

     “Business goes to where business works,” Hitt sums it up.

     South Carolina boasts low taxes with a five percent corporate tax rate and no state property tax, local income tax, inventory tax, or sales tax on manufacturing equipment, industrial power or materials for finished products. There isn’t even a wholesale tax or unitary tax on world profits.

     The state has a significant incentive package that is customized to the needs of different businesses which include corporate tax credits for jobs, corporate headquarters, research and development, investments, and biomass resources. They also identify discretionary income, license and withholding incentives for job development and job retraining as well as corporate moratorium, trade incentives and port volume increases.

     South Carolina works to provide a stable job market as a right-to-work state with a low unionization rate of 3.3 percent.

     For more than 50 years, the SC Technical College System has provided well-trained employees to qualifying companies. The ReadySC program includes 16 community-based technical colleges and serves over 240,000 students.

     Hitt continues, “We have all the ingredients for smart growth. We are aware and knowledgeable about logistics and know the value of RO/ROs in the Carolinas. Halfway between Miami and New York City, we are perfectly positioned to take the lead. We can build near our ports or the I-85 corridor. We are even looking to develop the I-77 corridor from Charlotte to Columbia. It would be great to have an industrial corridor along I-77, but we are missing the essential infrastructure meaning sewers and water, etc.

     “I think Rock Hill has done a pretty remarkable job building younger communities. These places are figuring it out and learning. One place learns from another; they are thinking ahead.

      “The name of the game in growing our economy,” maintains Hitt, “is new money. And we see foreign direct investment as new money. South Carolina has international offices in Munich, covering Europe, Shanghai, covering Asia, Tokyo and India. We will keep building and nourishing relationships to make things happen for South Carolina.

     “Companies come here to make a profit. And what we know is that if they come here and are profitable, then they are going to hire more South Carolinians, and that makes me happy,” Hitt smiles.

     “Manufacturers want a place that is great to work in and great to live in and in this state, we’re able to match both of these needs.

     “That’s the South Carolina advantage—what we can give to companies is the knowledge that if they come here, they’ll find success. We want companies to know that South Carolina is a business-friendly state.”

    South Carolina’s ports are being propelled by sheer momentum—the momentum of the state’s economic development successes.

     The Port of Charleston’s 2014 fiscal year container volume was up 8 percent from the prior year and up 29 percent since fiscal year 2010. Non-container business at both Charleston and Georgetown was strong, especially in the power-generation, metals, and roll-on/roll-off vehicle commodity sectors.

     Even better news, South Carolina’s freight base is growing rapidly through aggressive economic development efforts. Major investments from international brand leaders such as BMW, Continental Tire, Michelin Tire, Giti Tire, Bridgestone/Firestone, Toray Industries, Harbor Freight, Northern Tool, Belk, and a 10-fold increase in cold storage facilities foretells a bright future.

     When Secretary of Commerce Bobby Hitt was asked about the reasons for success recruiting Volvo Cars and Mercedes Benz Sprinter Vans to South Carolina, he quickly responded, “It’s the Port of Charleston with its new terminal and its system of ports and the highways and railroads that become a statement to the world that South Carolina gets it.”

     Indeed, the state of South Carolina has made over a $2 billion commitment to building the port, expanding its capacity and networking that port through a system of highways and railroads that are part of a supply chain system that serves advanced manufacturing and their special logistical needs.


Strategic Assets

     Established by the South Carolina General Assembly in 1942, the South Carolina Ports Authority (SCPA) is tasked with promoting, developing, constructing, equipping, maintaining and operating the state’s harbors and seaports. The SCPA owns and operates the public port and transportation facilities at the South Carolina Ports of Charleston and Georgetown, as well as the South Carolina Inland Port in Greer.

     The largest facilities are located at the Port of Charleston, where the SCPA operates five major ocean terminals capable of handling breakbulk and container shipments in addition to passenger vessels. All of the SCPA’s container terminal facilities are at the Port of Charleston, where the primary focus is the movement of containerized shipments to and from the vessels. A sixth facility—a new container terminal at the former Charleston Navy Base—is currently under construction, set to open around 2019.

     The Port of Georgetown facility along the Sampit River is the SCPA’s second largest and serves as a bulk and break bulk facility handling the top commodities of steel, cement, aggregates, forest products, mill scale, alloys and scrap metal.

     Opened in the fall of 2013, the South Carolina Inland Port in Greer extends the reach of the Port of Charleston more than 200 miles into the interior. Connected to the Port of Charleston via Norfolk Southern’s overnight rail, the inland port handles containerized goods to and from the fastest-growing part of the Southeast—the I-85 corridor.

     An economic development engine for the state, the SCPA handles international commerce valued at more than $63 billion annually while receiving no direct taxpayer subsidy. According to an economic impact study, port operations facilitate 260,800 jobs across South Carolina (one in every 11 jobs) and nearly $45 billion in economic activity each year.

     Jim Newsome is president and CEO of SCPA Newsome has served in the role since 2009, but his background is steeped in transportation and logistics. He previously served as senior vice president and then president of the Americas of Hapag-Lloyd AG; executive vice president and then president of the Americas for Nedlloyd Lines; and various positions before becoming president of Strachan Shipping Company’s Hoegh Lines Agency Subsidiary.

     The Savannah native received his bachelor’s and master’s degrees in Transportation and Logistics from the University of Tennessee in Knoxville.


Building on Economic Development Success

     “The Port of Charleston has emerged as a driver of port business in the South Atlantic states over the last four years,” Newsome points out. “Container volume continues to grow well above the market, making it the fastest growing major port in the U.S.” The state’s economic development efforts are aggressively growing the South Carolina port freight base with significant progress. The momentum generated is creating new opportunities and driving new investments.

     Nowhere is the momentum more visible than in the Port of Charleston’s recent container volume numbers. Since 2011, Charleston’s volume is up 16 percent. The overall U.S. container market grew only 6 percent in that same period. Even more remarkably, the Port of Charleston captured 72 percent of all the container volume growth that has occurred in its competitive range since 2011.

     Another sign of momentum is the rapid growth of port-dependent business locating in South Carolina. From January to December 2013, the state closed 127 economic development projects, totaling $5.4 billion in capital investment and 15,457 new jobs. Many of those projects included port-dependent business.

     Among them are BMW’s $1 billion plant expansion in Greer, S.C.; Continental Tire’s large-scale tire manufacturing plant near Sumter, S.C.; Michelin Tire’s $900 million expansion in Lexington and Anderson, S.C.; Bridgestone Firestone’s new$1.2 billion large-scale mining tire production plant near Greenwood, S.C.; and Giti Tire’s new $560 million tire manufacturing plant in Chester County, S.C.

     Other notable port-dependent business expansions included Element Electronics, Harbor Freight Tools, Northern Tool, Keer Group, JN Fibers, and Toray Industries.

     Seeing such an immediate return on investment is bringing confidence about improvements lined up for the future. The SCPA’s board approved an ambitious 2015 fiscal year plan that includes across-the-board increases in cargo volumes, operating revenues and capital investments. Operating revenues are expected to reach $172.8 million in fiscal year 2015, up $13.2 million from projected 2014 totals.

     Above-market growth for the ensuing years is a critical part of the port’s strategy, which includes diverse port operations. In non-containerized cargo business segments, the SCPA plan includes breakbulk tonnage increases of 9.8 percent in Charleston and 0.5 percent in Georgetown, driven largely by strong performance of state manufacturers.

     “Volume across all business segments continued to grow through the 2014 fiscal year, giving us the confidence to approve this aggressive plan,” according to SCPA Board Chairman Bill Stern.. “Our port’s performance is a strong reflection of our state’s economic development successes, and it positions us well to serve imports and exports for our nation.”

     The Charleston Harbor has been a key economic driver for more than 300 years. Charleston is already a well-positioned port in the Southeast. Among other ports on the Eastern seaboard, it has the deepest water, highest productivity, best value proposition and capacity; its proximity to the growing Southeast market puts it at a huge advantage.


Connect the Dots

     When South Carolina’s Inland Port of Greer opened in 2013, it was not a “build it and they will come” experiment, says Newsome. SCPA had already secured a commitment from BMW, the German luxury auto manufacturer, to move their export operations there. BMW’s leading role in the Inland Port’s early life is one of two critical differences between the Greer and Charlotte intermodal facilities.

     With BMW, Greer had an anchor tenant; Charlotte does not. Using shipping lingo, Newsome observes, “Charlotte’s intermodal facility doesn’t have a base cargo; that’s the least freight that makes a shipment worthwhile. Charlotte lacks a significant importer or exporter to anchor its intermodal facility.”

     Newsome points out that having access to rail directly to ports is equally important. Greer has a direct connection to the Port of Charleston by Norfolk Southern. “That’s Charlotte’s second problem. Charlotte has a beautiful, state-of-the-art, world-class intermodal facility, but it is essentially a terminal,” says Newsome. “Charlotte’s intermodal facility does not offer a world-class connection to a port.”

     In his conversations with Charlotte business leaders, he was told that they wanted a rail connection. “You have some work to do if you want that to happen. There has to be overnight train service between Charlotte and Charleston. It’s pretty simple. Inland ports only work if there is an overnight train service,” says Newsome.

     Establishing a relationship requires reciprocal initiative and commitment. “It’s really up to the railroad to decide,” says Newsome. And it’s up to the importers and exporters to use that facility. All the raw material is there to make something of it at Charlotte; someone has to connect the dots.”

     Last year BMW Manufacturing cited the Inland Port of Greer as a major factor in its decision to announce a $1 billion expansion. In addition to the X3 and X5, BMW will soon produce a new, large SUV, the X7. The X7 means adding 800 jobs to a payroll that already exceeds 8,000. When the X7 is in full swing, BMW expects their South Carolina production to top 450,000 vehicles a year. And if current trends continue, they will export 70 percent of production from Greer to more than 140 countries through the Port of Charleston.

     Despite BMW’s dominant role in the initial development of the Inland Port, SCPA officials knew there were others who would find it attractive. “We had a marketing plan to zero in on those clients one by one. Today BMW is less than 50 percent of the container volume that goes through the Inland Port,” says Newsome. “I consider the Inland Port at Greer a success story.”


Digging Deep to Compete Globally

     Greer feeds the massive Port of Charleston, North America’s fastest growing port according to a May 2015 report by commercial real estate and investment firm CBRE. Taking into account port infrastructure, real estate and industrial factors, the Port of Charleston ranked seventh among the 15 large ports studied by CBRE. Of North America’s top 10 ports, Charleston had the second lowest occupancy costs, behind Savannah, and the second highest shipping volume, behind Houston, a market 16 times the size of Charleston.

     The Port of Charleston is comprised of five terminals. Two are located on the historic Charleston peninsula: Columbus Street and Union Pier. Further up the Cooper River are Veterans and North Charleston. One more is located on the Wando River at Mount Pleasant, the 689-acre Wando Welch Terminal.

     In 2010, SCPA invested $30 million to convert the 155-acre Columbus Street Terminal from a container-handling facility to a modern, large-scale roll on/roll off, break bulk and project cargo terminal. “The big idea was to diversify the cargo business,” explains Newsome, “and work aggressively to recruit more non-container cargo business. Since the conversion, break bulk cargo at Columbus Street has increased 36 percent.”

     In shipping, break bulk cargo are goods that must be loaded individually, and not in intermodal containers nor in bulk as with oil or grain. At Charleston, the leading break bulk export is rolling stock, primarily automobiles. Columbus Street is where thousands of BMW vehicles come for export. Automobiles driven on and off a ship using their own power are given the alliterative title RO/RO for roll-on/ roll-off, but they are still break bulk. On the import side, Charleston’s leading break bulk commodities are steel coils and wire, rolling stock and heavy lift items such as turbines and generators.

     The 74-acre Union Pier includes the SCPA headquarters building, warehouses and, Newsome describes, “a single vessel, single cruise passenger homeport terminal location.” That’s bureaucratese for an unattractive warehouse with a concrete deck over the Cooper River that serves as the embarkation and disembarkation points for Carnival and other cruise ship lines. Carnival now bases its 2,000-plus passenger liner Fantasy in Charleston.

     By the end of this decade, Charleston will boast its sixth terminal and a deepened river channel. “These things work in tandem,” says Newsome. The new terminal is on the site of the former federal Naval Base and Charleston Naval Shipyard which the Pentagon closed in 1996 as a cost-savings measure.

     The channel is being deepened from 45 to 50 feet; the dredged sand and clay are being used to in-fill a new man-made wharf at the old base. The first phase of the massive project began in 2007. In addition to creating the wharf, SCPA is demolishing the old Navy Base buildings, constructing new buildings, building the container yard and linking the waterfront to Interstate 26 and to a new intermodal rail yard.

     When the first phase is completed it will add 171 acres to the Port of Charleston and increase its container capacity by 50 percent. “A terminal takes a long time to build,” says Newsome. “It is moving along fine.”

     “At some point in the 2030s, the Charleston and Savannah Terminals will reach their practical capacity limit,” says Newsome. Faced with uncertainties about what world trade, ship sizes and the economy will look like in 20 years, ports officials can’t wait for ports to run completely out of capacity before looking for new property.

     “At 80 percent capacity,” comments Newsome, “we need to think about bringing another terminal on line. And as unlikely as it seemed in 2007, there is a high probability that the next new American port will be the Jasper Ocean Terminal. That is a 1,500-acre site on the South Carolina side of the Savannah River, upriver from the Port of Savannah and may be the last potential deepwater port on the East Coast.

When two successful companies join forces, it often means that one enterprise falls subject to the other, loses its identity and perhaps employees as well. Not so with the combination of AirTight Mechanical, Inc. and FaciliTech, Inc., two heating and air conditioning (HVAC) companies home-grown and prospering in Charlotte.

Today, they are thriving as AirTight FaciliTech, under the umbrella of Denver-based Service Logic, one of the largest privately-held energy and HVAC/mechanical services holding companies in the United States. Its mission is to build a national footprint of high quality companies through the acquisition of boutique HVAC service companies that retain a strong local presence.

Service Logic acquired FaciliTech in 2007 and, with the intent of expanding the Charlotte market, acquired AirTight in 2014. Eventual merger of the two companies is a planned component of the acquisition.

Combined HVAC Strengths

AirTight FaciliTech services include general HVAC services, operational assessments, planned maintenance, emergency repair, energy optimization, design build, critical site services, and professional consultation.

“The primary reason for the combination is to merge complementary skills,” says Scott Gugenheim, senior vice president of the combined entity. “Each company has its strengths—and weaknesses. Now we can go after the full portfolio of client needs.”

Whereas FaciliTech’s focus is on heavy industrial services such as automation and integration of building controls, chillers and boilers, AirTight is highly involved with mission critical cooling systems, UPS (uninterruptable power supplies) support services of electrical systems to commercial and industrial mission critical sites, as well as the comfort cooling markets of commercial office buildings.

Both companies are very active in the health care and higher education markets, primarily with maintenance service and repair. The company’s expertise is diagnosing equipment failure and problems, assessing and working on different systems and brands, and getting equipment back online quickly and safely—while staying in constant communication with its clients.

Most of the company’s customers are located within a 100-mile radius of the Charlotte region. The majority of its work comes from repeat business. An increased focus on mission critical services to IT data centers and mechanical systems has allowed the company to expand its base to South Carolina, Georgia, Florida, Nevada, Pennsylvania, and Tennessee. Customers include data centers, banks, motor sport and health care facilities, as well as new construction projects.

“The merger has not gone as smoothly or quickly as we would like,” admits Greg Crumpton, co-founder of AirTight along with his wife and partner, Connie. “Although the companies are almost identical on paper and successful in their methodology, they are about as far apart culturally as you could get.”

AirTight, established in 1999, had an inverted pyramid structure—a bottom-up leadership model. Crumpton describes the AirTight environment as “a funky culture and personality” and being “very entrepreneurial.” FaciliTech, founded by Nick Sarif in 2001, was more traditional in leadership from the top over a core group of long-term employees.

“Scott is taking the best of both cultures and blending them into one,” explains Crumpton. “With more than 75 employees, we needed to go for more structure, but we are trying to keep that entrepreneurial spirit. It’s a work in progress. We’re working hard to keep the mojo on the good side.”

One major change is the hiring of a new vice president of operations in April. Russ Correll, originally from Illinois, has been in the Charlotte area since 1988. He is a 35-year industry veteran and formerly employed with Siemens Building Technologies.

“Russ will be the guy to let the rubber hit the road,” says Crumpton. The company saw few other changes in staff as a result of the merger.

“Right now, we’re busy learning about each other’s customers,” comments Gugenheim, “and internally learning about each other’s business and employees. The merger is also helping to provide some of our employees with new and expanded career opportunities.”

Being On Call is Mission Critical

“We have a considerable amount of autonomy from Service Logic,” affirms Gugenheim. “We’ve kept our names and cultures. We’ve built our local senior management teams and they run the company.”

“Our industry is littered with bought-up companies that are then white-washed to be alike. Service Logic liked the uniqueness of this company. They don’t come in heavy-handed. They do merge everybody onto a common accounting platform, but as far as decision-making, it’s very locally driven,” says Crumpton.

AirTight FaciliTech joins 11 other operating companies and 26 independent offices under the Service Logic umbrella.

AirTight, which started out in a former single-family home in Charlotte, grew to a 6,000-square-foot facility on Stuart Andrew Boulevard. FaciliTech operates out of a facility on Mathews Mint Hill Road in Mathews. Plans are underway to house the combined company in a new facility on Hundred Oaks Drive in Charlotte this coming September.

Both Crumpton and Gugenheim point out that much time, effort and resources are given over to education of the employees. “We are firm believers in education for all employees,” says Crumpton who expects to spend a significant amount of money in 2015/2016 on education and training for staff, including the labor associated with getting it done. “It’s a significant investment that pays for itself over time.”

“I believe in a read, learn and share mindset,” says Crumpton. “The industry is constantly changing. Once employees learn something new, I expect them to share it,” says Crumpton.

“We have modeled our training program for the technical side as an apprenticeship,” explains Gugenheim. “Technicians work during the day with peers for on-the-job training and then we expect them to go to a technical community college for HVAC- related curriculum. We pay for their training.

“Many employees will go to Central Piedmont Community College here in Charlotte; others to Rowan County Community College or Cabarrus County Community College. The company works with CPCC, Wake Tech and Cleveland County Community College to train mission critical operators through the MCO Program.

“This was made possible through a federal grant to North Carolina to help technicians learn and understand the environments of critical missions and the specific aspects of their operation.”

“Mission critical equipment affects multi-million dollar operations and many lives that depend on those operations,” says Crumpton. “We’re trying to build a workforce to support these needs. We’re always trying to find that next rising star to get them on their way.”

The company also does work in the comfort aspect of HVAC—specific needs within the building as well as with chillers and boilers.

AirTight FaciliTech employees are on-call 24/7. Scheduling of both primary and secondary on-call technicians is necessary during hot weather months.

“Our work involves mission critical equipment, so we can receive calls any time,” says Crumpton. “An IT professional could call at 3 a.m. because an alarm is going off in his facility. We answer the phone and get someone to start helping his situation immediately.

“By 8 a.m., we’ll be back in touch with our client to review what’s been done and keep them updated—that’s important as well. Our job is to make sure their equipment is up and running; to give them peace of mind.”

AirTight FaciliTech has excellent first-responder capabilities—it’s not uncommon for AirTight FaciliTech staff to be the first on the scene, according to Crumpton.

Synergistic Gains

Crumpton also points out that education of existing customers and potential customers is equally important. In order to further efficiency, prevent breakdowns, save money and further sustainability, customers need to know what is changing in the market.

“Our willingness to embrace current and emerging technology allows us to show our customers how to look at their businesses holistically all the way down to access control,” explains Gugenheim. “We need to know the questions the CFO is going to ask next year before they know it so we can guide them on capital planning and execution of their capital budget.”

“We’re not the cheapest people in town to work with, but the work is done right and they don’t have to redo it,” says Crumpton. “We do quality work on the front end so it’s more cost-effective down the road.”

“We know that customers must succeed for AirTight FaciliTech to be successful,” Crumpton explains. “We make a concerted effort to learn and understand the customer’s business. By understanding your clients and working hard to anticipate and satisfy their needs, you build long-term relationships.”

Crumpton got his mechanical leanings from his father who worked in HVAC for a large company in Atlanta. “Mother wanted me to be a lawyer or doctor,” remembers Crumpton. “I wanted to be in something in the mechanical industry.” Crumpton went to work in the same company as his father, working his way up to division leadership, then part ownership of the company.

He sold his interest in that company to start up AirTight. “I’m a serial entrepreneur,” admits Crumpton who also describes himself as a lifelong learner. “I didn’t care much for formal education until I was an adult and learned how much I needed it. I went back to school at night at Clayton University in Atlanta and have been in continuing education ever since.” Crumpton is also behind two new start-ups in Charlotte.

Gugenheim grew up in Charlotte, then moved to Raleigh to attend and graduate from North Carolina State University. He was working with Piedmont Service Group, also owned by Service Logic, when he was tapped for the senior vice president and general manager position at AirTight FaciliTech. His new position facilitated a move back to Charlotte.

The company finds it important to give back to the community, according to Crumpton. This is reflected in their support of the National Children’s Cancer Society, Special Olympics, Cool Kids Campaign, and Susan G. Komen for the Cure.

Crumpton admits to feeling the impact of the 2010 recession but says the company came through pretty lean but debt-free. “We still were able to collect 99.2 percent of every dollar invoiced,” says Crumpton. “Even training went forward; we knew things would turn around and we needed to be prepared.

“It allowed us to look at a merger through a good lens,” affirms Crumpton. “There was nothing making us want to be acquired or making us want to merge outside of it being a good business decision. People make bad choices when you get into a crack. We were never in that position. We’re very happy to be part of Service Logic. It feels like a partnership; a very strong relationship.”

Service Logic has bought out the interests of both the founders of the companies, Crumpton and Sarif. Both will remain on board in a consulting capacity. Crumpton works on the Service Logic executive team, is active in mergers and acquisitions, and is also the liaison to the mission critical world on a consulting basis.

The company’s five-year plan is to double the Charlotte market business.

“We have a little green swish under our logo,” says Crumpton, referring to the Service Logic graphic. “We’re still AirTight and FaciliTech—we’re just better.”

Cloudbilt has been on an upward trajectory since its founding in 2009 by successful serial entrepreneurs CEO John Stewart and CTO Ben Brantly.

Initially named Saber Business Solutions, Inc., the Charlotte-based company started out providing managed services and custom app development to users of Salesforce. Growth came rapidly. Stewart and Brantly hired their first employees in 2010, released their first ezCloudAudit app in August 2011, and followed that shortly after with what is now their flagship MapAnything app in December 2011.

By 2012, both Stewart and Brantly thought it time to branch out to develop client relationships and increase accessibility. They identified Atlanta as a primary hub for software development, and in May 2012, Brantly moved there to head up Cloudbilt’s Office of Technology in the northern suburbs.

Brantly and his staff of developers is tasked with expanding the company’s inventive technology strategy and vision, developing innovative CRM software. Brantly also evaluates emerging technology and industry trends to provide technical direction to both clients and staff.

A few months later, in September 2012, the company released its ezFileLoader app.

About that time, Stewart took stock and decided it was time for a shift in focus: “It was a couple of years in when we started looking at patterns in the projects we were working on and what products was promoting in their AppExchange, which is their marketplace for applications (think of it like the Apple iTunes store for business apps within Salesforce.)

“After determining the most prevalent customer needs, we started building products for the AppExchange, and in late 2012, they really started to take off. As a result, we decided to rebrand the company using the Cloudbilt name and focus solely on producing cloud-based software applications for users of Salesforce.”

Cloudbilt is now a Salesforce AppExchange ISV Partner with four business applications on the market and over 500 customers, including multiple companies in the Fortune 500. In 2014, Cloudbilt ranked #227 on the Inc. 500 after experiencing 2000 percent revenue growth in three years.

There’s no doubt about it, Stewart and Brantly are successfully making it work in the cloud!


Saber-rattling in the Cloud

Prior to Cloudbilt, Inc., Stewart had founded Saber Design and Analysis Services, LLC, a consulting firm providing engineering and manufacturing services to the aerospace and defense industry. A New York native, he holds a B.S. in Mechanical Engineering from Worcester Polytechnic Institute in Massachusetts. He successfully sold the company in 2011.

Prior to joining up with Stewart, Brantly had co-founded several other companies including Southern Computer Innovations, Educational Network Solutions, and In addition to his position at Cloudbilt as CTO, Brantly acts as the company’s Chief Architect, a role in which he directs the development of Cloudbilt’s AppExchange products along with custom client solutions and Salesforce deployments. Brantly was born in Georgia and attended Georgia State University.

As Stewart recalls, in 2008, as the financial crisis began to affect industries across the country, he started looking for new opportunities. At the time, however, “cloud computing” had yet to become a real thing that companies were considering.

“People weren’t really saying ‘cloud computing’ until around the time that IBM did their Super Bowl ad using the term in 2009,” remarks Stewart, “and from there, interest in cloud computing has been growing like you wouldn’t believe. So we jumped into it, knowing that we had the expertise and ability to develop, deliver and support new apps.”

Cloudbilt is a 100 percent cloud company that sells its apps on’s platform, meaning is responsible for delivery to the client. This puts Cloudbilt in the unique position of having very little infrastructure and virtually zero footprint. Alongside the main office here and the development office in Atlanta, it has remote field sales employees in Boston and San Francisco.

Though there’s never a “typical” day in his business, Stewart comments, “On a day-to-day basis, I do a lot of different things, from wearing the sales hat, to forming business partnerships, to sourcing new vendors for our products. Even though its software, we still license content from other people to add value for our clients, so it’s a variety of things.

“I love what I do; I’m passionate about it! The products, the company, these are my babies—mine and Ben Brantly’s.”

“We’ve seen Cloudbilt grow from zero end users to north of 23,000 licenses of our MapAnything application. And, really, the possibility of seeing that figure climb to 100,000 users in the next year or two, that’s what keeps me coming in. That’s exciting!”

“We do have a little bit of competition,” explains Stewart, “So, I think that it is important that we get the feature-function part of our apps correct. We have a product advantage due to the unique intellectual property inside our apps. We certainly know how to market, sell and navigate within the ecosystem. This gives our team the ability to approach building brand equity unlike anyone else.”

As Stewart puts it, Charlotte is also a key to adding value to a customer’s experience for a multitude of reasons. Although Stewart has family ties to the Charlotte region through his wife, he strategically chose the area so that he could find the best people to deliver amazing products and service to customers.

“I think that Charlotte contributes to our success and our ability to provide value to our customers because there are a lot of people here that came from other places, myself included. In fact, the majority of my neighborhood has come from elsewhere,” says Stewart.

“Charlotte is a melting pot, which is great, as we have a very tech-savvy, educated workforce here. I credit the banks for creating this environment. When you really boil things down, banks these days are basically IT companies. In Charlotte, the banking companies have drawn in a large population of highly-skilled, educated people in the high-tech space that we can leverage and recruit to expand the company and deliver the best to our customers.”

Cloudbilt’s success and ability to provide real value to clients, especially in the high-tech and software worlds, is really dependent on the people. Stewart states that, because the origins of Cloudbilt came from providing Salesforce development and customization services, the company is in a better position to truly help customers through off-the-shelf software solutions in the cloud using the resources that’s platform provides in regard to development.


Staying on Top in the Cloud

Weighing in at 25 employees, Cloudbilt is able to offer advanced products without the bureaucracy that similar companies have to deal with. Says Stewart, “In terms of our structure, we really only have a few departments, including development, sales, marketing, and client services.

“Client services include our customer success managers who are responsible for training, adoption, and maintaining our customer base as well as our support functions. From a structural standpoint, the heads of departments report to me, and we try to keep things as simple as possible.”

Also, Cloudbilt is dedicated to reaching out to customers where they are, and this involves showcasing at’s trade show events, including the annual Dreamforce event that is highly attended. Stewart points out that Cloudbilt also spends a lot of time educating engineers and employees as to the benefits of the company’s cloud-based products.

Stewart makes it clear, “We’re very focused on a single marketing channel. We try to build our brand equity within That, in turn, drives traffic to our AppExchange products and increases our downloads, and ultimately, this gives us more opportunities with customers.”

“Brand loyalty is created by making sure we produce a great product and employ a great services team to deploy the apps and train users,” Stewart continues. “This has resulted in a lifetime renewal rate of 92 percent. We’re not talking annually; we’re talking about the lifetime of the products. You build the loyalty by providing a fantastic application, listening to feedback from users, offering top-notch support, and making upgrades based on customer recommendations and desires.”

The company’s most popular product is MapAnything, an app that resides within’s platform and is used as a geo-location tool to engage in territory management, route optimization, and other mapping functions for field sales agents.

Cloudbilt’s ezCloudAudit app is a usage monitor and auditing tool built specifically for Cloudbilt’s AddressAnything app provides address verification and predictive type ahead and auto-complete functionality. And, most recently, Cloudbilt’s ezFileLoader is a drag-and-drop attachment utility tool.


Apping the Future of Cloud Computing

Given their growth, Stewart is confident in the company’s strategies. “There are definitely verticals that make a lot more sense to us as we progress,” he says. “Certainly, financial services is one as we have a bunch of credit card companies as clients, but we also have five telecom companies you would recognize the names of that are very successful in using our products.

“Essentially, wherever there is a large number of field people (sales and services), that is the optimal fit for our MapAnything app because it really drives field productivity. Those are our ideal customers.”

When determining a need for employees, Cloudbilt’s senior management plans 12 months into the future. Each year, a budget is created for a headcount of new employees, and although department managers hold initial screenings, Stewart holds a personal interview with each candidate to ensure that he or she is the right fit for Cloudbilt, not just based on experience, but also based on a culture fit and a personality fit.

In terms of managing employees to build the future of cloud computing, Stewart credits a fairly straightforward hierarchy. In his opinion, this keeps things on track and ahead of the curve. When discussing success measurement, Cloudbilt relies on setting objectives for all departments that must be met in order to redeem success.

He claims, “I’m an engineer by degree, so in my world, it’s either pass or fail. We do a lot of management by objectives because this helps to keep our company on track, but it also sets clear standards.”

To add to Cloudbilt’s hiring and management strategy when seeking to provide excellent products and service, there needs to be a forward-thinking attitude at hand, and this is where Stewart demonstrates his leadership.

“I think cloud technology is the way of future, definitely,” continues Stewart. “It’s highly unlikely that any software provider will do anything but cloud delivery in the coming years. Highly unlikely.”

“As an industry, we’ll also continue to see a consolidation of platforms; no one will own their own infrastructure. So, you’ll build an app and deliver it on Amazon Web Services, or Oracle, or Salesforce, or Google’s app engine stack. I think you’ll see five or six players there, and everybody’s delivery of applications will be on one of those platforms. Everybody will rent software, but almost no one will own it.”

Mobile technology is also a big part of Cloudbilt’s strategy. In the past, mobile business apps were “view-only,” meaning field sales agents only had the chance to receive information, not interact. Today, however, these same agents are trading in desktops and laptops for tablets and smart phones and being given the chance to communicate in real-time with the office from the road. This can be anything from providing quote info to logging cost information.

Stewart feels that the cloud and Cloudbilt’s best days are ahead. He says, “For us, I don’t necessarily have any industry-specific concerns, but when I was in engineering, manufacturing would slow down and that would be a big problem. Because Salesforce is so diverse, we’re not tied to one industry, per se. That’s nice and leads to advancement. There’s always an industry that is experiencing growth.”

He adds, “Our biggest challenge, however, is finding the right people. The other challenge is continuing to grow in such a way that, with the resources that we have, we can continue to maintain quality in our software products and for our customer support…we have to balance that. In the end, however, I think we’re doing an excellent job of meeting these challenges.”

Stewart concludes with, “We’re going to continue to enhance our primary offering, MapAnything, and we’ll probably develop offshoot applications, child applications if you will, that are industry specific, but still part of the MapAnything family. That’s likely where our development strategy is going, and we’re confident about the future, especially with the backing of all that Charlotte has to offer.”


A wise adage says, “Shoot for the moon. Even if you miss, you’ll land among the stars.”

When it comes to marketing communication, the professionals at Red Moon Marketing take this maxim to heart, boasting an impressive list of clients including The Coca-Cola Company, Brown-Forman brands such as Jack Daniel’s, MTD’s Cub Cadet, Huber Engineered Woods, Snyder’s Lance and Harris Teeter.

While known primarily for its experiential marketing expertise, Red Moon Marketing shines in a variety of fields including brand promotion, event entertainment and sports marketing, branding, visual communications, as well as interactive media and public relations. And with a roster of more than 30 consumer and business-to-business clients, Red Moon Marketing has truly become a full-service marketing company.

“The unique thing about us,” says founder and CEO Jim Bailey, grinning, “is that we have what we call the ‘Red Moon Virus.’ Once we get in—and clients experience our service, expertise and total commitment to customer satisfaction—we end up sticking around for a long while.”

Bailey has significant experience creating partnerships and activating sponsorships within major sports properties including the NCAA, NASCAR, NHRA, NBA, MLS, MLB and the NFL and for clients such as General Mills, Pillsbury, Cinnabon, Mattel and more.


Mobilizing the Moonies

Bailey is a veteran marketer with over 30 years’ experience, including more than 20 years working with Coca-Cola during the “Cola Wars.” In 2001, Coca-Cola reorganized the department Bailey had been working in, moving a good segment of his responsibilities to the parent company in Atlanta. Bailey had three children in school in Charlotte and did not want to uproot them, so he decided to open an agency himself.

Bailey remembers vividly the autumn night in 2001, when he left his office on the fourth floor of the Coca-Cola Consolidated office building in SouthPark, knowing his time with the company was coming to an end. He remembers his mixed emotions as he left the building.

“The future was full of opportunity,” says Bailey, “and I knew I’d be taking valuable Coke marketing experience with me, but it would be hard to let go of the fierce brand loyalty I had developed over the years.

“Thinking about these things, I looked up at my office from the parking lot. The lights were still on, and through the corner of one window I could see the giant red Coca-Cola sign hanging on the wall—it looked like a large red moon.”

In that moment the idea for the company’s name and philosophy was born based on the Coca-Cola culture which works to create win-win situations for both itself and its clients. And while Red Moon Marketing now has dozens of clients in various business segments, it is proud of its Coca-Cola heritage, and even maintains offices in the headquarters of Coca-Cola Bottling Company Consolidated to this day.

“I’ve been in this building for a long, long time,” remarks Bailey, referring to the Coca-Cola Plaza. “As a matter of fact, my car can drive here pretty much on its own,” he jokes.

It was just a couple of months after the Coca-Cola reorganization that opportunities started coming Red Moon’s way. Bailey was joined by an old friend Greg Mercer, as well as Shyloe Cummings (now Shyloe Luehrs), Greg Luehrs and Jimmy Harte, who had all worked with him at Coca-Cola.

Bailey remembers the early days as “exhilarating, but not easy.” The hours were grueling, but the team pulled together as a tight-knit family.

“In Red Moon Marketings’s early days, everyone wore a lot of hats; something we still do to this day,” says Mercer. “Red Moon Marketing has a real team atmosphere with everyone willing to help each other out. Something you’ll never hear at Red Moon is, it’s not my job.”

In addition to Mercer, Shyloe Luehrs, Greg Luehrs and Harte, Bailey was joined by senior leaders Mike Adams and Tyler Sigmon, plus a host of other ‘Moonies.’ Bailey says he expects Red Moon Marketing to keep growing each year, a trend that has been the norm since the company’s founding.

“If it weren’t for these talented folks,” acknowledges Bailey, “we wouldn’t be anywhere near as successful as we are today.”


The First and Following Phases

Bailey recalls, “The first truly big piece of business we picked up was the WUSA, the Women’s United Soccer Association, featuring Mia Hamm and Brandy Chastain. From there, we picked up Charlotte icon Harris Teeter in 2003, and also partnered with Cinnabon on their NASCAR efforts and promotional efforts.

“In 2004, we were fortunate to enter a relationship with Brown-Forman, makers of fine distilled spirits, and also worked with YMCA when they opened the Lowe’s YMCA in Mooresville.”

Red Moon Marketing has dozens of successful relationships to its credit—teaming up with Procter & Gamble, Chick-fil-A, Huber Engineered Woods, the Zac Brown Band, Snyder’s-Lance, Woodford Reserve, and even helping develop the brand MolliCoolz!, a pelletized ice cream product featured on major networks, which was later purchased by Dole Foods.

Adams, approaching his third year of service, manages the Mello Yello NHRA Relationship. Adams is another former Coca-Cola Consolidated employee.

“I started with working for Coca-Cola Consolidated under Jim through his retail-tainment programs, grand openings, and other activities,” says Adams. “I worked for a number of other companies afterward and ended up back in Charlotte, staying connected to Jim, which brought me to Red Moon Marketing.”

Red Moon Marketing seeks out a younger demographic for its event marketing teams. Greg Luehrs points out, “The majority of our ambassadors are under 25. Charlotte offers UNCC, Queens College, Johnson C. Smith and Johnson & Wales graduates…it’s good to have all of these universities here to talk with about career opportunities. We travel extensively, so the Charlotte airport is also a benefit.”

Red Moon Marketing also played a huge part in the Charlotte racing community history by introducing the first primary spirits sponsorship to NASCAR with the Jack Daniel’s 07 Chevrolet with Richard Childress Racing. This sponsorship, along with several other new clients in 2007, led to Red Moon Marketing being recognized on the Inc. 500 list of Fastest Growing Companies.

“Our niche at Red Moon is experiential marketing. It’s going out and talking to the consumer, face-to-face, about all of the great brands we represent,” Sigmon says. “We’ve got people moving across the country every single day of the week. I’m on the phone every day with the folks that are on some of the programs I manage, making sure they’re getting the job done the Red Moon Way which means with tremendous attention to detail. But I also want to ensure our associates are enjoying what they do, learning from it, and growing in their careers.”

At Red Moon Marketing, there is no typical eight-to-five day. Virtually seven days a week, Red Moon Marketing’s teams fan out across the country handling projects ranging from the Jack Daniel’s Experience to the hundreds of other events such as the Cub Cadet Challenge and the Huber Engineered Woods tour.


Family Camaraderie

All agree that Red Moon Marketing is about family and relationships, both internally and with clients and their brands. Just recently, Red Moon Marketing was designated one of Event Marketer’s “2015 Best Places to Work in Events.” One associate described it, “Red Moon is a wonderful and special place. The people here are the only ones that can truly understand it. I love the company and I love the people.”

Red Moon Marketing is also consistently recognized by the Charlotte Business Journal as one of “Charlotte’s Best Places to Work.”

Longevity is important within the Red Moon Marketing family, both client longevity and associate longevity.

“I started with Jim 12 years ago,” says Greg Luehrs, “after we both worked at Coca-Cola together. From the outset, I was determined to get involved with his vision, so I worked as an intern on my days off at first. After about a year, when Harris Teeter came on board, I managed that account, and from there, since 2004, I’ve been in charge of Brown-Forman’s Jack Daniel’s account.”

Shyloe Luehrs says as much: “Jim was known for success within Coca-Cola, and I admired his decision to create Red Moon Marketing. As a result of his leadership, we’ve been able to grow unlike any other marketing firm in the greater Charlotte area.”

Sigmon adds, “I think a big part of our history is being able to not only maintain our core clients, but actually grow those clients much like Greg has done with Brown-Forman. It started with Jack Daniel’s, but now we work with a number of their other brands including el Jimador and Woodford Reserve. While it’s rare in the agency world, longevity of client relationships is what has helped us to grow and keep growing.”

In his 10th year at Red Moon Marketing, Harte adds, “I worked with Jim Bailey at Coca-Cola and moved over to Red Moon Marketing a few years after he started the company. I oversee most of our Coca-Cola business and help manage our Procter & Gamble business.”

Asked about the camaraderie, Harte says, “It’s pretty simple. We all have very similar passions from the top down, and we all enjoy helping people, making people happy—that is a lot of what we do—making our clients happy. Additionally, delivering over and above expectations every single day. This helps form a family atmosphere, a place you’d want to hang out for a while.”


Beaming With Satisfaction

Customer service never takes a back seat at Red Moon Marketing. In fact, the entire team is dedicated to providing excellent customer service through the entirety of each interaction, whether that be face-to-face or through email, text or other means.

“Our clients’ customers often send notes up the chain saying, ‘Hey, these guys are an extension of our team.’ That’s probably one of the best compliments that you could ever get. For me, that’s what our philosophy is all about,” says Bailey.

Bailey comments, “Everybody in this business can do a better job of marketing themselves. We spend a good deal of time, energy and effort to raise up awareness and familiarity with the brands that we represent and their products. So, at the core, the best way to promote ourselves is by doing the best we can on everything we do.”

Red Moon Marketing represents top brands in the country and across the world, and endeavors to recruit top-notch talent to keep the company growing and its clients satisfied. But when evaluating potential team members Red Moon is looking for more than experience or a specific skill set; it is looking for the right attitude.

“I believe the selective gene is attitude, especially in a talent-filled city like Charlotte,” says Bailey. “We’re much more interested in the attitude a potential employee has versus the credentials or experience. We want everyone to exhibit the attitude that they can be better tomorrow than they are today.”

Bailey admits he is amazed when he thinks of all of the technological changes that have occurred during his career. “Over the many years I’ve been in this business, we’re now going to a much more personal experience with media. I think that’s where Twitter, Facebook, Instagram are becoming so much more important—because if I have a certain set of needs or set of interests, I can tailor the information I get simply by the people I follow, the companies I follow.

Sigmon acknowledges that while it’s important to keep up with technology, “The development of people here is a big thing. We work in an industry with a high potential for burnout. It’s important that we maintain a supportive and inspiring environment. Keeping people happy, giving them the chance to grow so that they don’t feel like they’re stagnant…that’s the key. If everyone in the company is growing, and the company is moving in the right direction, then we’re good.”

It is hard not to be overwhelmed by the portfolio of Red Moon Marketing’s customers and the scale of their work.

Bailey is excited, “Look—we picked up Procter & Gamble last year and what great fun that has been for us. If you think about all the brands they have, from Crest to Charmin to Bounty, this relationship is going to give us a lot of new doors to be knocking on.”

So, after more than 10 years, thousands of successful events, hundreds of sales building programs and dozens of happy clients, what’s next for Red Moon Marketing?

While no one can predict the future, one thing seems certain…Red Moon Marketing will always keep shooting for the moon for its clients.

For decades, improbable outcomes like David’s victory over Goliath in the biblical battle have energized politicians and administrators. With the highly anticipated completion of the Panama Canal Expansion next year and the expected increase in East Coast traffic from post-Panamax deep-water ships, North Carolina’s ports have been struggling to position themselves to vie for opportunities against neighboring Goliaths.

How can the Port of Wilmington and the Port of Morehead City effectively compete with deep-water ports of Charleston, Savannah and Norfolk? That is the question Paul Cozza, chief executive officer of the North Carolina State Ports Authority [NCSPA], has been grappling with.

He knows that with the volume of international trade continuing to grow, forward-looking businesses and industries are increasingly relying on competitive access to global markets.

He maintains that North Carolina’s ports of Wilmington and Morehead City, plus inland terminals in Charlotte and the Piedmont Triad at Greensboro, have the capability and capacity to serve as competitive alternatives to ports in neighboring states. For Cozza, it is a significant challenge, as an estimated 75 to 80 percent of North Carolina businesses engaged in import and export trade already take their business to ports other than Wilmington and Morehead City.


Compared to Goliath

“North Carolina ports are never going to compete with others,” Walter Turner, historian at the North Carolina Transportation Museum, makes clear in his book Waterways to the World. “Just look at the map. There is too much to overcome.”

Wilmington is at somewhat of a geographic disadvantage of being located 26 miles from the open ocean on the Cape Fear River. Container ships travel two to three hours from the port before arriving at open water, although that’s only 30 minutes longer than at the Port of Savannah. And neither port meets the general deep-water standard of 50 feet or more channel depth for a fully laden post-Panamax containership, nor does it make practical or economic sense to dredge them.

Jeff Miles, former acting executive director of NCSPA, has remarked similarly, “Charleston, Norfolk and Savannah today are just behemoth container operators. Engaging in an ‘arms race’ with those guys is a prescription for a serious loss. We can’t go toe-to-toe with them today.”

Clearly, going toe-to-toe with other port facilities would not be a wise business plan. Rather, as Miles also points out, we can compete against other ports because we are better, faster and overall have a better customer service record than any other East Coast port.

Anyway, if there were an ‘arms race,’ it was almost certainly lost a long time ago when the North Carolina General Assembly created the Ports Authority in 1945.Turner explains its unintended consequences, “In retrospect it would have been wiser to begin with a clear understanding to make Wilmington the major port, with Morehead City as a secondary port. One of the key reasons the state ports authorities of Virginia, South Carolina, and Georgia have been successful is that each had a mandate to build one major state port.”

Today, containers and bulk/break bulk cargo like dry cement dominate the 284-acre Port of Wilmington. Grains, chemicals, fertilizers, ores, minerals and cement are Wilmington’s chief imports. Forest products like lumber, paper and forage for livestock lead the list of exports with woodchips and wood pulp close behind.

The cargo is quite different at the Port of Morehead City. No container ships dock there. Bulk cargo rules the import and export sides of the 128-acre port. Sulphur products, rubber, scrap metal, potash and ores are its chief imports. Phosphate and phosphate products are by far the terminal’s leading export.


Lead Strategist

Just over a year ago, Cozza took over leadership of the NCSPA from Miles. Cozza, a West Point graduate with a degree in aerospace engineering, previously served as president of The CSL Group, a marine dry bulk cargo service and the world’s largest owner and operator of self-unloading vessels.

He also served in several roles, including CFO, senior vice president finance and administration and vice president for network planning, for Maersk Line, Limited, the world’s largest container shipping company. In addition, Cozza worked for more than a decade with CSX Corporation/Sea-Land Service, Inc., the shipping and container giant.

The breadth and depth of his port operations background brings a broad perspective to the 70-year-old NCSPA. He is upbeat about the future of the ports he oversees.

“I see more opportunities for us to do more good things for the state to improve commerce,” he says. “Surprisingly, Wilmington is the fastest growing container port on the East Coast with container volume up 21 percent. Containerization [Cozza points out the invention of North Carolina native Malcolm McLean] has been the fastest growing segment of United States trade for the past three decades.”

Cozza is looking for ways to compete effectively and grow his customer base. He is quick to point out the advantages of a small port—better customer service, lower cost and better union relationships.

“We are utilizing maybe about 40 percent of the Wilmington terminal,” maintains Cozza. That means less berth congestion and more crane capacity. Cozza brags about gate turnaround time: “For trucks coming on a round trip, we are turning them around in about 40 minutes. That is close to being the best on the East Coast.”


NCSPA Port Expansions

Cozza is overseeing two important expansions initiated by his predecessors. Both come online next year.

The first are two state-of-the-art “skin” storage domes currently being constructed at the Port of Wilmington for the storage of wood pellets. At 170 feet high, the domes are 10 feet taller than the twin support towers of the Cape Fear Memorial Bridge.

Wood pellets are bite-sized bits of dry, compressed biomass used to produce electricity in European power plants. In recent years, the United States has become the world’s leading exporter of wood pellets. Enviva, the South’s largest exporter of wood pellets is contributing financially to the project for the storage of its pellets.

“We expect to export Enviva pellets by end of first quarter of 2016,” remarks Cozza.

A similar two-dome storage facility will break ground in the second quarter of 2016 at the bulk cargo port at Moorhead City, according to Cozza. The project was delayed to allow WoodFuels LLC, another wood pellets producer, time to secure construction funds and to finalize contract details.

Annual pellet production at WoodFuel’s new plant in Sims, N.C., is expected to top 300,000 metric tons. And that is only the beginning—Woodfuels is already planning two additional North Carolina pellet plants.

The contract with NCSPA is what lured the Portland, Maine-based company to build in North Carolina. It’s investing over $116M in constructing the Sims plant and the Morehead City storage domes. When fully operational, Woodfuels will add 20 rail cars to every Norfolk Southern train arriving at Morehead City.

In June, the real estate development company USAInvestCo will break ground on the second major expansion at the Port of Wilmington. Doing business as Port of Wilmington Cold Storage (PWCS), the company is working with the state to build and operate a 103,000-square-foot refrigerated warehouse directly at the terminal. PWCS will blast freeze North Carolina turkeys, poultry and pork and then store, load, handle, unload and manage shipments to foreign and domestic ports.

North Carolina Agriculture Commissioner Steve Troxler is quoted as saying, “The [PWCS] facility is a vital piece of infrastructure that our producers have needed for a long time, and I’m happy that a public-private partnership will be able to make it a reality.”

Transporting turkeys, poultry and pork to Wilmington for export should reduce costs and improve logistics for North Carolina exporters. For years, their preferred destination was the Port at Charleston. With the new PWCS, they may reconsider that decision. Last year, perhaps in response to the PWCS announcement, the South Carolina Ports Authority voted to triple the size of its 55,000-square-foot refrigerated warehouse in North Charleston.


Competitive Advantage in Niche Markets

Ironically, the fact that North Carolina does not have one designated major port may, in fact, be its strongest advantage in competing for port traffic because of the infrastructure supporting all ports and because its ports have specialty niches. Having alternatives for shipping, rail and truck transportation leads to lower costs and better choices.

The port at Morehead City, for example, is serviced by Norfolk Southern Railway. When transporting goods to the inland Port of Charlotte, it utilizes the new Norfolk Southern Intermodal Terminal at Charlotte Douglas International Airport.

The port at Wilmington, on the other hand, is serviced by CSX Transportation, which utilizes the CSX Intermodal Terminal at Charlotte. That’s the rail yard northeast of the airport on Exchange Road.

Unfortunately, basic container service between the Wilmington and the Queen City was discontinued in 1989 for lack of volume. One expansion of foremost on the minds of railroad officials at CSX is resumption of containerized rail service between the Port of Wilmington and Charlotte.

“If that service resumes, it will be driven by demand from the ocean carriers themselves,” says Cozza. “We have full double-stack capability between Wilmington and Charlotte. The infrastructure is there,” he says, describing the prospect for that service to resume as “very likely.”

Both ports are efficient in handling project, dimensional and heavy lift cargoes between vessels and inland transportation modes. Although Morehead City does not accommodate containers, it does handle bulk and break bulk cargo extremely efficiently.

Both ports are located within 700 miles of more than 70 percent of the industrial base of the U.S. Wilmington has vehicular access via U.S. 17, U.S. 74 and I-40 and I-140; Morehead City is likewise connected via U.S. 17.

Cozza’s $135M five-year strategic plan includes some important improvements. At the forefront are berth and crane enhancements at Wilmington so that operators can load or unload two ultra-large Post-Panamax ships at the same time. On-dock rail improvements and additional equipment are planned for shoreside operations at both Wilmington and Morehead City.

Morehead City is North Carolina’s bulk cargo terminal, the center for natural rubber and fertilizer imports and phosphate and sulfur exports. PCS Phosphate of Aurora, North Carolina, is NCSPA’s biggest customer for good reason. The conveyor system at the PCS facility at Morehead City loads ships at a fast 1,000 tons an hour.

Imports at Morehead City provide raw materials for two notable North Carolina industries. It is the country’s second largest port for importing natural rubber, the essential ingredient for Goodyear and Bridgestone/Firestone plants near Raleigh. Charlotte-based Nucor Corporation imports some of its direct reduced iron (DRI) from its plants in Trinidad and Tobago through Morehead City. DRI is the preferred scrap substitute or scrap supplement at Nucor’s steel mills in the United States.

Originally, it was contemplated that North Carolina would have three ports: Wilmington, Morehead City and Southport. However, the Southport development has been all but scrapped. Earlier this year NCSPA announced that it was selling the Southport Marina and 11 other undeveloped properties in Brunswick, New Hanover and Carteret counties. The undeveloped land no longer serves a purpose for NCSPA. They are real estate investments ripe for converting to capital and long term improvements at the ports.

Absent from the for sale list are 600 acres north of Southport that NCSPA planned to develop as a new international port rivaling Charleston and Savannah. Those plans met stiff local opposition from groups such as No Port Southport and others.

“That is a fantastic tract of land,” says Cozza. “Right now, if you look at our strategic plan, we have nothing in place to develop that property. It is not for sale,” he added, “but it would be if there was a significant commerce opportunity.”

Cozza frankly admits that North Carolina ports have underserved their customers. The ports forced Tarheel businesses to go elsewhere because services, equipment and facilities were not available. Cozza understands the economic facts of life.

If North Carolina businesses are using the ports at Charleston, Norfolk or Savannah and getting fantastic service, that’s good, he says. Whatever benefits North Carolina businesses benefits North Carolina. But if Tarheel businesses are experiencing high costs, a lack of truck availability or increased port congestion at Goliath ports, those are the companies he wants to help.

“We are not just looking at growing volume for the sake of growing volume. We are looking at growing capabilities that can help customers in North Carolina run their business better,” maintains Cozza.

That kind of attitude and determination gets the word out and builds satisfied customers, and satisfied customers build better prospects for increasing business. The sheer momentum that Paul Cozza is developing can overcome obstacles, and every so often beat a Goliath.

Following a growing national trend, in 2014 North Carolina became the 16th state to privatize a portion of its economic development responsibilities, moving key areas from under the umbrella of the N.C. Commerce Department to a private-public partnership (PPP, also P3).

Based in Cary and created by statute, the Economic Development Partnership of North Carolina, Inc. (EDPNC) is a 501(c)(3) non-profit PPP tasked with consolidating and enhancing the promotional piece of the state’s economic development strategy, essentially taking over the marketing and sales functions formerly performed by the N.C. Commerce Department.

PPPs for economic development are formed for the purpose of leveraging private sector capital investment, joining public and private sector resources and powers in formulating and implementing economic development policies and programs.

While new to North Carolina, nationally, economic development PPPs have been around for decades. Florida was the first in 1996, but TexasOne, JobsOhio, Arizona Commerce Authority and Missouri Partnership are just several of those currently operating.

Between 2010 and 2014, the Missouri Partnership assisted in recruiting 10,000 new jobs, $500 million in new annual payroll, and $1.2 billion in capital investment to the state. Leading that effort was CEO Chris Chung.

That is the same Chris Chung that has just started as CEO to the EDPNC. In addition to his work at the Missouri Partnership, Chung has an impressive background in economic development.

“I’ve been in the economic development profession for my entire career,” says Chung. “It’s the only career path I’ve ever known.”

Chung graduated Phi Beta Kappa from Ohio State University with a double major in Japanese and economics and has completed significant coursework towards a master’s in public policy and management. He is a certified Economic Development Finance Professional through the National Development Council.

Prior to the Missouri position, Chung began his career with Ohio’s Office of Business Development, eventually serving as manager, leading the sales force attracting new business investment and job creation and the office’s $80 million annual incentives budget.

Chung’s 10 years’ experience in Ohio’s public sector model and seven years’ experience in Missouri’s PPP gives him insight into the pros and cons of both and, he says, leaves him with a clear favorite.

“To me, it’s not any surprise that you have a third of the states in the country now opting to privatize some or all of their economic development functions,” he says. “It boils down to a few reasons—the first and most important is the leverage that you generate by being able to pursue private sector funding through a PPP.

By contract, North Carolina will provide the EDPNC with $17.5 million this year with the condition that the EDPNC raises at least $1 million of private sector money during that period. That fundraising minimum increases to $1.25 million next year. Current fundraising is in excess of $800,000.

Per Chung, the way the EDPNC is structured also avoids conflicts of interest. “In some other states, their PPP controls not only the marketing and sales piece of the economic strategy but also the incentives,” he says. “In North Carolina the Commerce Department retains the purse strings. Only Commerce administers incentives.”


EDPNC Focus Areas

While the responsibilities of economic development PPPs vary by state, in North Carolina the EDPNC focuses on five key areas: new business recruitment, export expansion, supporting businesses generally, small business formation, and tourism.

Responsible for employing 200,000 and a $20 billion economic impact, Chung says, “Tourism is an important industry sector for the state. We’re the sixth most visited state in the country.”

As far as small business formation, Chung explains, “Through our Business Link North Carolina (BLNC) we help small business owners tackle their concepts from ideas to execution, helping them write business plans and getting them financial and technical assistance.

“Our team functions like a call center fielding inquiries—about 15,000 a year—from people who want to start a business, whether it be a retail or community service business or small manufacturer. We help these individuals understand the paperwork, permits, licenses or anything else they need to get up and going as they build their business in North Carolina.”

Supporting existing North Carolina businesses is another key focus area. “We’re leveraging field offices across North Carolina to call on major employers in each of the state’s 100 counties to understand from them what they need to continue growing their presence in North Carolina and what if anything may be inhibiting them from future growth in the state,” Chung says.

“In those cases, we’re trying to connect existing employers with resources they can tap into at the state or local level or even within the private sector to help those companies continue to be viable and growing here.”

In 2014 North Carolina had a record $31 billion in exports. The EDPNC is tasked with fueling that continuing export expansion. “Exporting can be a great way for companies to increase and diversify revenues,” says Chung. “In North Carolina there are something like 11,000 companies that currently export. Many of those are smaller to midsize companies that don’t have sales offices in every country.

“That’s where our team from the international trade group comes in. Our team, some of whom are based overseas, can help companies with market entry strategies or in growing existing export functions. We take export promotion as a serious responsibility because overseas sales mean more dollars coming back to North Carolina to help grow those businesses.”


Business Recruitment

Certainly right now, the most visible focus of the EDPNC is new business recruitment. Boosting that effort is North Carolina’s perception, both nationally and globally.

Accolades come from a number of sources. Most recent is Site Selection’s Top 10 Most Competitive States which ranks North Carolina first place, up from fourth last year. The Southeast dominates the list with Louisiana, Texas, South Carolina and Tennessee rounding out the top five.

Forbes has routinely ranked North Carolina in the top handful of Best States for Business over the last five years, currently ranking it at number three.

And North Carolina ranks third in the nation for having the most favorable climate for businesses according to Chief Executive magazine’s annual survey, moving up one place from last year. (Interestingly, South Carolina ranked 10th, down from fifth last year, despite its ongoing success in recruiting large industrial projects and enticing businesses from North Carolina with generous incentives.)

“I like to brag about the perception North Carolina enjoys in the mind’s eye of corporate executives and business owners,” says Chung. “North Carolina is held in very high esteem as a business climate and that says something.”

Among the attributes the EDPNC highlights are North Carolina’s superior tax and regulatory environment, extensive transportation network providing superior market access, highly skilled workforce (58-campus community college and 16-campus university system helping to provide a workforce that is 36 percent more productive than the average U.S. worker), comprehensive banking resources and wide variety of economic development programs, and a low cost of living and high quality of life that helps recruit and keep talented workers.

While North Carolina has broad appeal for many types of business, the EDPNC is focused on several specific industry sectors. Says Chung, “We’re trying to position North Carolina as competitive for manufacturing, corporate headquarters, data centers, warehouse and distribution operations, financial services, food processing facilities, call centers or some similar back office functions.”

At the time of publication, the North Carolina General Assembly has failed to pass funding for the North Carolina incentives package. Chung remarks that potential investors in North Carolina shouldn’t worry long term about that and refers to it as a “temporary setback,” akin to “the natural conversation all states go through at some point, whether it’s when there is turnover in the legislative or executive body.”

He points out that North Carolina today is benefitting from some significant business-tax reform that has already taken place: “Now you have the corporate tax rates having gone from 6 percent to 5 percent with the opportunity to go to 4 percent and 3 percent in subsequent years, meeting certain revenue projections.”


“Chasing Cars”

Swedish carmaker Volvo recently announced plans for a $500 million manufacturing plant near Charleston, S.C. Volvo sidestepped both North Carolina and Georgia in making their decision.

Chung is frequently asked about attracting an automotive manufacturing company to the state. Surrounded by BMW, Mercedes Benz and Volkswagen plants just outside its borders, North Carolina remains the sole southern state without one.

“North Carolinians shouldn’t be disheartened by Volvo’s decision,” says Chung. “One state winning means a lot of other states did not win.”

Chung understands the frustration. “Automotive is important because of the sheer economic impact an automotive manufacturer can have on a state,” he says. “The trajectories of entire states’ economies have been moved by their ability to attract an auto manufacturer.

“You’ve got $1 to $2 billion worth of original investment made by the company itself, but then you’ve got all those additional suppliers, and that second wave of investment that usually eclipses the job creation numbers of the assembly plant itself. That’s what this game is all about and why it’s such a premium industry for economic development.”

North Carolina has taken an important step in attracting an automaker. Auto assembly plants need large tracts of land, often 1,500 or more contiguous acres with connectivity to utilities, rail, interstate highways and a skilled workforce. North Carolina has assembled four of these megasites: one in the eastern part of the state, two in the Triad region, and another southwest of Raleigh-Durham.

“It’s not easy anywhere in this country to get this much acreage with the needed characteristics,” Chung explains. “You want to make sure that when we are in discussions with automakers that we have some good site options to put in front of them.”

But even with megasite options, North Carolina is still at a disadvantage in luring automakers.

“Other states have been very aggressive in their incentives,” says Chung. “Incentives aren’t the only factor that is part of the decision. You’ve got quality of life, workforce, transportation infrastructure, energy costs, tax rates.

“Sometimes those issues will offset the difference in incentives, but if you did an apples-to-apples comparison of North Carolina incentives versus those of other states, if that were the true tie-breaker, then I think we’d be at a risk of losing in those situations,” he admits.


Focusing on Success

Per Chung, about 30 percent of the recruitment deals in the EDPNC’s current pipeline entail a foreign company or a company with foreign ownership looking at North Carolina. In order to attract foreign investment, the EDPNC uses contract representatives in investment promotions offices in Germany, Japan, Canada and China.

“These are four of the strongest markets for direct investment into the U.S.,” Chung explains, “but I’m also thinking about where else we should have representation. I think Korea makes sense. India is another market that continues to demonstrate potential for direct investment opportunities. Brazil’s economy may have cooled but the U.S. is still an attractive market for some companies there as well.”

The EDPNC works closely with the N.C. Department of Commerce. “We conference with Commerce every week, discussing the deals we’re working on and making recommendations on what we think is necessary to seal the deal for North Carolina,” explains Chung.

“Commerce reserves the right to final decision, as they should, but the EDPNC is dealing directly with the companies. Our job is to have a good finger on the competitive factors and where we are, so that we aren’t paying more than we need to in incentives, but that we aren’t underbidding incentives to the point where we run the risk of losing to another state.”

Regional Charlotte success stories include Sealed Air Corporation relocating their global headquarters ($58 million; 1,262 jobs); Gordon Food Service building a distribution center ($58 million; 275 jobs); Nestlé Waters North America building a water bottling facility ($40 million; up to 50 jobs); AvidXchange building a new corporate headquarters ($21 million; 603 jobs); and Red Ventures expanding marketing and sales operations (580 new jobs).

Recent successes for North Carolina include O’Neil Digital Solutions, a provider of publishing and marketing communications services, which expects to create 250 jobs over five years at a new $140 million printing and data center project in Monroe.

Also, Scott Safety, manufacturer of respiratory and protective equipment for firefighters, police and the military among others with seven global manufacturing locations, which will invest $28.7 million to expand their Monroe-based headquarters, supporting 67 new jobs.

Also, Tosaf USA, a manufacturer of advanced polymers and compounds based in Israel, which will open its first U.S. manufacturing plant in Bessemer City, creating 75 jobs and an investment in excess of $13 million over the next three years.

Also, San Diego, Calif.-based White Labs Inc., supplier of breweries, wineries and distilleries with fresh yeast and related products, which will create 56 new jobs with an expected investment of $8.1 million over five years when it locates its first East Coast operations in Asheville.

Chung makes special mention of the EDPNC personnel who successfully worked to bring a new state-of–the-art poultry processing plant and hatchery to Robeson County. With the new plant, Sanderson Farms, the third largest U.S. poultry producer, will invest approximately $139 million and create 1,100 new jobs.

“These are jobs for people in a part of the state that maybe hasn’t seen that many job opportunities in the past several years and that’s important,” says Chung. “Right now is a pivotal time in North Carolina’s approach to job creation and development and I’m honored to be a part of it.”

Blum has been conceiving, developing and building brilliantly functional and ergonomic home storage solutions for over 60 years. Amazingly smooth, superbly damped motion for doors, pull-outs and lift systems combined with outstanding use of storage space is the Blum hallmark.

      The Blum mission is summed up as “Perfecting Motion.” Their goal is to make the opening and closing of furniture all over the house—but especially in the kitchen—a special experience. The same goes for commercial offices, retail showrooms, hotels and food and beverage outlets.

      Some of the Blum products include: AVENTOS lift systems, TANDEMBOX pull-out systems, TANDEM runner systems, CLIP hinges and ORGA-LINE dividing systems—all designed to inspire with perfect motion: movement so silent and effortless it has to be seen to be believed.


Blum-ing in Charlotte

      Around the world some 6, 500 employees are working on behalf of Blum to create perfect motion in over 300 patented products. Internationally, Blum has seven factories in Vorarlberg, in Western Austria, as well as production facilities in the United States, Brazil and Poland, delivering to more than 100 countries.

      “The company has its roots in Austria,” explains Blum USA’s CEO Karl Rudisser, “and our global headquarters is still located there today in a city called Höchst. Blum was established in 1953 by blacksmith Julius Blum, who, after World War II, began manufacturing horseshoe studs. At the time, horses were used in the area to pull the logs from the forest, and in winter, when the roads were icy, studs were incredibly helpful in traction control.”

      As the company grew and expanded, the U.S. market for furniture manufacturing was growing, centered around the Carolinas and Virginia—Hickory, N.C., in particular. Rudisser, a native of Austria, who is proud to have worked in virtually every position within the company during his tenure, was tasked with determining where Blum would best be positioned for breaking into the United States.

     “We began as a two-man team in Hickory during 1978, but by 1979, we moved to the Charlotte area,” Rudisser explains. “Initially, we brought the products in from Austria, warehoused them here, and then started selling. Although the furniture market was strong in the Hickory area, after careful thought, that really wasn’t our target industry. As we expanded, both in the United States and abroad, our eye was on serving kitchen designers and manufacturers as well as cabinetry professionals, with advanced concealed hinges, drawer systems, and seamless lift systems.”

      Eventually, Blum began to bring the manufacturing of its products to the current location in Stanley, N.C., taking small steps along the way. By the early 1990s, manufacturing had become a key element to Blum’s business model in the U.S. Today, Blum’s U.S. location boasts over 380 employees and is comprised of a number of buildings, including an 85-foot tall, 37,000-square-foot automated warehouse that contains robotic cranes which handle everything from raw materials to finished goods, all of which are perfectly married together through innovative design.

      Rudisser’s day-to-day operations include overseeing and leading teams, in addition to the company’s strategy as a whole, but he is also focused on organizational development.

      “I have a lot of freedom to do things here as long as we are profitable,” comments Rudisser. “The owners are very open to providing freedom and allowing me to innovate. It has been a great experience for me to work here, and undoubtedly, we have a great team of people to work with, many of whom have been with us for over two decades.

      “I moved here from Austria via England where I worked for two years, and started my family here in North Carolina. In fact, now I’m a proud grandfather. I think Blum is a great company, and as a family-owned business, which is unusual for a company of this size, I love the business model and atmosphere that Blum provides.”

      Actually, it’s that family-owned sense that has allowed Blum to thrive. At the company’s U.S. location, a centralized lobby area exists that connects both the manufacturing side with the administrative office side, allowing employees from various departments to congregate, discuss ideas and experiences, and keep in contact regarding challenges that each side of the company is facing.

      This type of interaction and feedback has proven to be invaluable to Blum’s growing success. Rudisser also credits Blum’s orientation process, something that is not only provided to employees upon hiring, but is also promoted throughout an employee’s career.

      “We have what we call our orientation for all employees, and basically this is something that I am very much involved in. I want to make sure people understand our orientation, an outline of our philosophy, from managers on down,” Rudisser explains.

      “We discuss things like what does it mean for us in business internationally, what kinds of products and services we provide, how do we see employees, how do we see society in general, what kind of organization we are. We have 10 subjects that we discuss in the orientation, and we take it very seriously that we spend the time to communicate our philosophy and culture to our employees.”


Apprenticeship 2000 A Game Changer

      In adding to Blum’s innovative approach to employee relations, the company has also partnered with Central Piedmont Community College (CPCC) and other businesses in the community to participate in the Apprenticeship 2000 program. Through this program, senior-year high school students and CPCC students are able to not only learn valuable hands-on skills in the manufacturing and design industries, but they are also able to earn a paycheck while doing so.

      “In the early ‘90s, when we started manufacturing in the Charlotte area, we constantly brought people over from Austria, mainly technicians, and they would stay for a couple of years and then go back,” explains Rudisser. “To find and train skilled workers, we wanted to start an apprenticeship program, which is very common in central Europe, so we partnered with five other companies in the Charlotte area that had the same interest in such programs.”

      Rudisser goes on, “We approached CPCC and they were very excited about the idea, and we basically took the curriculum that the schools teach in Austria or Germany or Switzerland, translated it, and CPCC took it almost verbatim and started the program. Our high school students attend class during the day and then they come to learn at Blum. In the second year of the program, post-graduation, they work four days here and go to CPCC for one day for physics, math, communication skills, and so on, and they get paid for their time as well.”

      Through the program, which encompasses three different sections, apprentices are able to take advantage of dedicated, experienced training instructors who not only provide classroom learning, but also hands-on learning that demonstrates real-world scenarios that an apprentice may encounter during the manufacturing process. Each apprentice will need to complete 8,000 hours over four years in order to graduate and be considered for a position within Blum, and the program is recognized by a variety of institutions, including the Lincoln County School System, Gaston County Schools, Mecklenburg County Schools, CPCC, and the North Carolina Department of Commerce, the last of which provides graduates with a Journeyman’s Certificate upon successful completion.


Choosing Charlotte

      Rudisser explains that the Charlotte’s growing and vibrant potential was a major draw in locating Blum’s U.S. operations.

      “My wife and I like to go to movies and plays, and in the past, we’d go to New York in order to get our fill of culture and lifestyle, but now, venues such as the Blumenthal Performing Arts Center offer so much that we have no reason to travel for entertainment. In addition, this location is perfect because you don’t have to be directly in the city, but we have access to all of Charlotte’s amenities.

      “People can live on Lake Norman,” Rudisser continues, “we’re only about 30 minutes outside of the city, but if somebody wants to live in the country, they can do that as well and still have easy access here. People have the choice as to where they can live and still comfortably work with Blum.”

      In the end, although Rudisser has an Austrian upbringing, he states that he, and Blum, recognize and embrace the need for the company’s Charlotte-area location to be American in culture. Upon forming Blum USA, Rudisser fully embraced the culture of not only the United States, but also of the Carolinas.

      “We didn’t want to imitate an Austrian company, we wanted to be an American company and adapt to the culture. As a result, we’ve become a very attractive employer for people who look for longevity, people who want to work with and retire from a company. The bottom line? We want people to stay with us for a long, long time. We offer attractive benefits, health care, vacation, and sick leave, things like that. We’re very flexible with work time, and we speak to our people’s needs.”

      With around 25 subsidiaries, as well as manufacturing sites in Austria, North Carolina, Brazil, and Poland, Blum, is able to provide attractive employment options around the globe. As the CEO of the American branch of the company, Rudisser provides guidance for five different departments, including human resources, logistics, production, and sales and marketing, the latter of which uses trade publications and trade shows in order to promote the brand.

      “We have a large sales organization of about 50 people,” says Rudisser. “They’re in territories and they basically call on distributors that sell our hardware or the direct kitchen manufacturers.”

      “We work with mainly kitchen designers in the Charlotte region and around the world,” he continues, “but also woodworkers and cabinet makers as well as original equipment manufacturers.”


A Win-Win Situation

      Although woodworking has been around for thousands of years, Blum relies on technology in order to design and manufacture its many products in the 21st century.

      “Technology is definitely the most important thing for us,” describes Rudisser. “Whether in our manufacturing facilities or in our partnerships with kitchen designers and installers, technology is at the heart of what we do each and every day. Technology is also at the heart of our apprenticeship program.

      “These are very technical people who have big ideas. If we aren’t able to offer the latest in machines and devices, we wouldn’t be able to appropriately teach or keep up. Technology in terms of energy also fuels our business here. One of the major draws to the Charlotte region is that energy costs are low.”

      Looking to the future, both in the Charlotte region and globally, Blum is poised to expand as a result of technology. Through its partnership with CPCC and other companies, Blum has a more selective hiring process that allows it to recruit more skilled and qualified employees. This translates to increased productivity, which in turn leads to higher revenues.

      Rudisser comments, “Technical positions will always require a more rigorous screening process, but being within the Charlotte area is always a plus in attracting the right people.”

      “I think the future is very positive for manufacturing in general. There’s been a trend of companies moving back to the U.S. in recent years. I think, partly to be in closer proximity to the customer. It’s very important that materials are available right away, and that’s one of the many advantages that Charlotte offers to Blum.

      This is a tremendous market that continues to have positive growth, and that’s what’s important for us, both in terms of professional success and in terms of personal satisfaction.”

 Just last year, France’s largest privately owned design firm opened a U.S. headquarters in Charlotte. Team Créatif USA, located uptown in the Carillon Building at 227 W. Trade Street, brings with it a powerhouse of branding and package design from working with some of the world’s leading brands.

      “The agency was founded in 1986 by Sylvia Vitale Rotta and Nick Craig, two designers who met in Paris, France,” explains Team Créatif USA CEO Attila Akat. “The company’s first major brand was Dannon, the yogurt company, and as Sylvia and Nick grew the business, the pet care division of Mars joined our family of clients.”

      With its global headquarters in Paris, Team Créatif now has international offices in in São Paulo, Brazil, and Jakarta, Indonesia. Approximately 60 percent of its business is generated in 50 countries. The company has annual turnover of approximately $30 million and currently employs 235 people.

      The agency’s work has garnered considerable praise and awards, including winning Design Agency of the Year for the third time at the XXXVe Grand Prix Des Agences De L’année in 2014.

      As Sylvia Vitale Rotta, founder and CEO of the international agency says succinctly, “While advertising gives the consumer a reason to buy a product, very often, the design of the package or product plays a crucial role in swaying the consumer’s choice and staying on top of the mind. Advertising has little meaning without design; clients worldwide are seeing the importance of this craft and its contribution to brand equity.”

      Team Créatif’s global clients include Mars Inc. and its brands Pedigree, Royal Canin and Whiskas; Danone and its brands Volvic, Actimel, Activia and Nutricia; the BEL Group and its brands Bousin and Babybel; Sara Lee; Chiquita Europe; and many more international and national brands.

      The new Charlotte operation is designed to support Team Créatif’s global concept of working with local customers.

      “We chose Charlotte because of its vibrant and international flair and the great creative talent pool in the area,” remarks Rotta. “The combination of lower business costs, direct international and domestic flights, and the proximity to our U.S. customers made uptown Charlotte the perfect location for our U.S. business.”

      Akat adds, “We work on a global level with most of our clients and Charlotte’s international airport and growing global presence, both in terms of the business world and in terms of lifestyle, were compatible. Also, one of the firm’s major clients, Mars’ pet care division, is located in Nashville.”


Growing Into Charlotte

      Akat joined Team Créatif in a rather roundabout way. Fifteen years ago, he had been working with Unilever but left to join Mars as the vice president of marketing for the European division. There, he worked closely with Sylvia Vitale Rotta on developing branding for Mars’ pet care products. Eventually, Akat left Mars and joined Dannon, where he once again worked with Rotta on a number of products in the baby care division.

      Hailing from Germany, Akat ended up moving to the Charlotte area to work with Food Lion/Hannaford as the senior vice president of marketing for the private label division. He comments, “We found a lot of good talent in Charlotte. A lot of people are migrating from the north to the south, and Charlotte was and has been growing.”

      As things turned out, Akat and Rotta reconnected, and Akat came on board Team Créatif to start up its U.S. presence.

      Although Team Créatif USA receives some projects from its Paris headquarters, the Charlotte office is focused on creating relationships in the U.S. while growing business.

      “A lot of American clients who worked with Paris like to work with us,” Akat says. “Sometimes we’ll work in parallel with Paris. Sylvia is managing things on a global level and we’re in constant communication. She travels here every month or so to assist in our development in Charlotte. We’re still in a start up mode here, in a way, and our Paris office has been fantastic in providing support.

      “We’re working hard to build brand awareness in Charlotte and nationwide and we’re excited to be here; our team is in this for the long haul,” he assures.

      Not surprisingly, Akat has invested a lot of time into strategic planning. Currently, he and his team are in the second phase of a three-phase process: “The first phase consisted of doing plenty of market research, finding the best location for our design space, and hiring the right people. Once that was in place, we sent our team to Paris for six weeks of training, which was a blast.”

      The second phase consists of reaching out to the Charlotte community to form relationships and start conversations. Currently, Akat spends nearly 60 percent of his time on business development while leading his team of design professionals and account managers.

      On the business development side, Akat uses personal contact, social media, email, phone calls, online videos, and more to connect with potential and existing clients, while on the account management side, he oversees communications with not only clients, but also with Team Créatif’s other offices around the globe.

      “Our business philosophy is to not just to become an agency partner,” he clarifies, “but to actually become an extension of our clients’ marketing departments. We completely invest our talent and expertise into the brands we represent. In fact, we’ve done such a good job that Sylvia Vitale Rotta is sitting on the Global Brand Board for Mars.”


Everything is Possible

      At the Team Créatif USA office, the notion “Everything is Possible,” is emblazoned across a wall in large print. It is the company’s approach to client relationships. “Once we are completely embedded with a client and we’ve built that relationship,” says Akat, “we really do everything possible to ensure satisfaction. If we need to sit here until 11 p.m. at night, we do it.”

      He goes on, “We’re not just a design agency, we’re not just designing for the sake of designing. We start the design with strategy—really understanding the brand, the divisions of the brand, the brand positioning—and then based on that, we work on the actual design.”

      “We not only talk about the design, but also the products,” says Akat, “so we are really integrating ourselves as a consumer and as a shopper, which is an integral part of our success, both in Charlotte and around the globe. The client’s brand manager or marketing manager, they can import the company’s values, allowing for a very team-centric, family-like professional relationship.”

      A significant part of the company’s success is its client-centric approach as a team.

      “We work very closely as a team…after all, our name is Team Créatif, so the team is very important and the creativity is very important,” maintains Akat. “The account team services the accounts, but they are also the strategic thinkers who work hand-in-hand with the creative side, and the creatives are working closely with the creatives in Paris. We’re very interlinked, and we view Team Créatif as a family without a huge bureaucracy of managers upon managers upon managers.”

      As a result of this approach, Team Créatif has been able to not only build brand loyalty, but attract new clients. Akat says there are many instances where they’ve worked with a marketing professional at one company, who then moves to another company, and asks Team Créatif onboard.

      Team Créatif works directly with clients most of the time, but it also works with other agencies that don’t possess the branding and packaging design expertise that Akat’s team provides.


The Charlotte Team

      Given Team Créatif’s over 30 years in business on a global scale, they know more than a little about team-building. When it comes to finding the right people, Akat says he seeks clear communicators who are ready to invest in Team Créatif’s brands—individuals who are efficient, yet effective, in strategic thinking. On the creative side, he requires design professionals who can provide a portfolio that shows not only talent, but creativity and a desire to excel.

      Akat describes the company’s management style by stating, “Management is all about working together as a team. My experience, initially coming from the client side, is that it’s not about controlling a team. It’s about being involved and being a part—that’s how we do things.

      “Also, it’s about flexibility. Creativity does not simply come along at 9 a.m. on a Monday morning. Sometimes, it’s at 11 p.m. at night. You can’t plan for it, and when it hits, it hits. That’s what matters when I am managing our designers and account professionals.”

      When working on branding designs and structural packaging design, Team Créatif’s employees are also conscious of the changing trends in the food production industry. As more and more people have become aware of the dangers of junk food and fast food, there has been a large shift for producers in not only the ingredients and production of food products, but also in the packaging and branding.

      “I see a major shift in the food branding industry, especially in the younger generation. A lot of people are no longer willing to put junk into their bodies like they used to,” Akat confirms. “The products are becoming healthier with less sugar, less preservatives, and therefore, the design will be a lot more authentic, more truthful. Consumers are no longer willing to put up with half-truths in product labeling.”

      In addition, Team Créatif keeps abreast of the discussion on genetically-modified foods and how these products are impacting communities, both in Charlotte and abroad. Also, with the increasing incidence of allergies, whether this will increase demand for gluten-free products and organics in general.

      Packaging design trends are definitely shifting toward clean, truthful labels that provide consumers with accurate information so that they can make the best choices for their health.


Thinking Differently

      “Technology has a major impact,” Akat reveals. “If you think about technology for the yogurt industry, for example, we’re seeing a trend of going back to nature. So how do you make the products in factories and facilities while still viewing things through this lens?

      “So that is also some of the dialogue that we have with clients. It’s not just about making designs or putting the product in nice packaging—it’s about what our clients actually put in the containers.”

      Taking it a step further, Team Créatif is also concerned with timing in telling a brand’s story, to influence the consumer’s purchasing decisions. “The biggest concern is how we can create brand awareness faster for our clients,” says Akat. “They have something great to offer, a great story to tell, but it’s not only about creating that awareness, but it’s also about having the best timing.”

      Akat also points up that brands are looking to redesign and evolve their products in a far shorter span of time: “We used to design something like a bottle, a product, a food form, a shape, an identity and it would last for many years. You could keep looking after it and polishing it.

      “Now, however, things are going faster and clients want to react quicker, which is of course fantastic for us because they have realized that you must never be fashionable but have to be contemporary, answer the consumer needs and you must never become old.

      “Design, branding and packaging are evolving towards more essentiality,” Akat continues. “Stronger, simpler images, more real and natural, less in the superficial ‘cute’ arena; that is where the big brands have realized that they have to be focused. Design has become more essential, more focused and more respectful of the environment.

      “Influenced by the success of certain brands such as Coca-Cola, Apple and Activia around the world, with their incredible designed look, today many of our clients realize the importance of design to be top of mind of the consumer. And, they are seeking out strategic inputs in design, knowing that it is very expensive for them.

      “They are realizing how design and packaging is the first touch-point—not all people watch television, they do not go to the same websites and they do not do the same things anymore. So, the experience has to start somewhere more solid and that is with the product or the service. Successful branding and packaging sells.”

      “Our plan over the next three-to-five years,” says Akat, “is to grow the business to at least $5 million in revenue as well as to have at least 30 employees here to really extend the team.

      “Additionally, we want to grow our portfolio of clients as much as possible in Charlotte, in North Carolina, and abroad. Currently, worldwide, we have 30 million euro in revenue and are growing nicely.

      “The key is to continue building client relationships,” he adds, “while taking our base business model that has worked very well in Europe and marrying these approaches together. We can’t wait to see what the future brings, and we’re proud to be a part of the Charlotte business community!”

  According to the United Nations, 1.2 billion people, or one-fifth of the world’s population, live in areas of water scarcity. It’s a problem that affects every continent and is expected to be an issue for many societies in coming decades.

     In the United States, drought levels from moderate to exceptional stretch from California to Texas; the Colorado River is starting to run dry in places; and Lake Mead, which currently supplies water for 22 million people, may be a thing of the past by 2021.

     When most people think of water scarcities, they think of water for household use: water for drinking, showering, washing clothes or watering lawns. What many don’t realize is the essential part water plays in their local economy.


Water as an Economic Driver

     Water is an economic driver. The agricultural sector most obviously depends on water availability, but so do many other industries. Water supply/demand imbalances also affect decisions on corporate locations and expansions. In other words, an adequate water supply supports a region’s economic growth.

     For the same reasons, a growing region requires more water. And Charlotte is growing. With a projected annual population growth rate of 1.98 percent and an annual job growth rate of 3.1 percent, the Charlotte Metro Area (including parts of Upstate South Carolina) ranked ninth in Forbes 2015 list of America’s Fastest-Growing Cities.

     Water for the people and businesses in the Charlotte Metro Area is supplied by the Catawba-Wateree River Basin extending from the headwaters of the Catawba on the slopes of Grandfather Mountain near Blowing Rock, N.C., to the Wateree River’s confluence with the Congaree River east of Columbia, S.C.

     The Catawba and the Wateree Rivers are essentially one 224-mile river that begins in the Blue Ridge Mountains of western North Carolina and flows through the Charlotte metropolitan area into Lake Wateree in South Carolina, 30 miles northeast of Columbia. The name of the river changes to the Wateree River in Lake Wateree and eventually joins with the Congaree River upstream of Lake Marion.

      There are 11 major lakes or reservoirs in the basin and the dams that form these lakes have a major impact on the flow of the river. Largest of these in terms of usable storage capacity are Lake Norman, Lake James and Lake Wateree which provide recreation, water and hydroelectric power for the area. Duke Energy is the managing authority for the reservoirs and 13 hydropower stations (Catawba-Wateree Hydro Project) under a license from the Federal Energy Regulatory Commission (FERC).

      The licensing process defines how the basin will be managed over the license term, which could be up to 50 years. During Duke Energy’s re-licensing process with FERC (the license, issued in 1958, expired in 2008), a water supply study uncovered a critical problem. Namely that, without intervention, given the current rate of growth in this region, the water demands on the Catawba River would reach maximum capacity by the year 2048.

      It was in conjunction with the re-licensing process, in concern for this situation, that the Catawba-Wateree Water Management Group (CWWMG) was formed in 2007.


Catawba-Wateree Water Management

      The CWWMG is a 501(c)(3) non-profit formed to identify, fund and manage projects that will enhance the capabilities of the Catawba-Wateree River to provide water resources for human needs such as water supply, power production, industry, agriculture and commerce, while maintaining the river’s ecological health.

      The CWWMG has 19 members; one member representing each of the 18 public water systems in North and South Carolina which rely on the 4,750-square mile river basin, and one member representing the utility company Duke Energy Carolinas, LLC, which built the reservoir system beginning in the early 1900s through the 1960s.

      “The CWWMG actually started as something adversarial and turned into something great,” remarks Barry Gullet, director of Charlotte Water and CWWMG chairman since its founding.

      “During Duke Energy’s re-licensing process, Duke explored the idea of charging a withdrawal fee from the public suppliers who take water from the lakes,” Gullet continues. “The water suppliers, naturally, weren’t happy about paying a new fee. We had a lot of back and forth but Duke was very forthcoming about the purpose of the fee—for reinvestment to improve the system.

      “The water suppliers agreed this was a good idea but wanted a voice in the improvements. So we decided to create an entity to include the water suppliers and Duke in which all members paid dues and had a voice in how the money was spent and the management of projects.”

      Funding for the group consists of annual membership dues totaling $550,000 and approximately $1.5 million of contributions from third parties collected since the group’s formation.

      “That sounds like a lot of money,” says Jeff Lineberger, water strategy and hydro licensing director for Duke Energy and CWWMG secretary/treasurer, “but it’s not when you’re talking about doing things on the scale of a river basin. We’ve been able to bring in resources and get meaningful, necessary and important work done that wouldn’t have been done without the CWWMG.”

      “The CWWMG is unique in the region and perhaps, in the country. Both our membership and focus are broad,” Gullet explains. “We’re not a regulatory group and we don’t make policy. Our group’s mission is as a platform and foundation for policymakers, doing the work and providing the science they need to make policy.

      “Also we’re incorporated as a 501(c)(3) which allows us to bring in resources from areas even outside the basin to benefit the region. That’s one of our successes.”

      To date, the group has provided training to public water suppliers in a structured auditing process, partnered with the USGS (U.S. Geological Survey) to expand and monitor a network of groundwater monitoring wells, and set up critical points in the lake to provide data about sedimentation rates to improve their forecast modeling.

      They’ve also worked with North Carolina State University and Duke University on a study of smart irrigation controllers and collaborated with the Water Research Foundation on The Safe Yield Study.

      “‘Safe yield’ is how much water you can rely on getting from the river under all conditions. It measures the dependability of a water supply source,” explains Gullet. “The study looked at what other river systems globally had done to make their rivers last longer, and identified the options available to us for the Catawba and how we should factor in the effects of climate change on long-term projections and in the modeling we had done. The study was a critical foundation for the Water Supply Master Plan (WSMP).”


Water Supply Master Plan

      Issued in 2014 and funded by the CWWMG, Duke Energy Foundation, North Carolina Department of Environment and Natural Resources, and South Carolina Department of Natural Resources, the WSMP is the largest and most ambitious CWWMG undertaking so far.

      The goal of the WSMP is both critical and far-reaching: to ensure the water supply of the Catawba-Wateree River Basin can fully support the region’s growing needs into the next century. Water conservation is a cornerstone of the plan.

      “Without significant effort to manage water consumption, this generation could see a time when there will not be enough water flowing into the Catawba-Wateree River to support more people moving into the heart of North or South Carolina,” warns Gullet. “Not enough water to support new jobs, produce more electricity drive new industry or ensure the quality of life we currently enjoy.”

      “Water is a limited resource,” adds Lineberger. “It’s rainfall dependent. If we don’t change something about the way we use water, we’re going to have problems.”

      Lineberger, a Duke Energy employee for 25 years whose responsibilities include water resource planning and drought management for Duke Energy’s 42 Carolinas’ reservoirs, speaks from experience.

      “It was August 2002 and we were in the fourth year of, at that time, the drought of record for this river,” Lineberger remembers. “Inside Duke, we were sweating the remaining water supply in the lake system from a power generation standpoint. If it didn’t start raining soon, we were going to have serious issues.

      “We called all the water suppliers dependent upon the system to a hotel in Charlotte and informed them that if we didn’t start getting some significant rainfall by the very next summer, we might exhaust the usable water storage in the Catawba River and lake system.

      “That was the worst day of my working career,” he remarks. “I remember thinking that I never want to have to stand in front of these folks again and tell them that I’m afraid we may run out of water.”

      Over four years and with input from public stakeholders representing lake users, local governments, state agencies and environmental interests, the CWWMG updated long-term water use projections for the river basin, evaluated options and developed long-term basin-wide strategies.

      Through the process, the CWWMG found the following. Average annual regional precipitation has decreased about 10 percent over the last 50 years. Through growth, net water use is expected to increase by 122 percent by 2065. Available water could be considerably reduced by climate change due to an expected 11 percent increase in evaporation by 2050. And, basin-wide water use has decreased from 113 to 85 gallons per person from 2002 to 2011.

      The plan’s recommended strategies include further improving water use efficiency and raising summer lake levels in Lake James, Norman and Wylie to increase storage.

      The WSMP also revised portions of the Low Inflow Protocol (LIP) to generate a quicker response to drought conditions. The LIP allows Duke Energy and other large river basin water users to determine the state of the water supply, and through a series of triggers based on conditions, take prescribed actions to conserve that supply.

      If the WSMP is implemented, the CWWMG estimates that the river basin’s water supply can be extended an additional 50 years to 2100, providing a reliable source of water for drinking, continued economic development capacity, and support for the electric power needs of the growing region.


The Water/Energy Nexus

      “This is a long range plan,” emphasizes Lineberger, “but with this plan we’re doing long-range planning across two sectors: water and energy. There’s a water/energy nexus. It takes water to produce energy and meet our customers’ needs but it also takes energy to supply water to our public water suppliers and their customers.

      “You need to plan water and energy together because they both use the same resource and serve the same households. We have to become more water usage efficient to preserve our water supply, but because of the link between the two, becoming more energy efficient will also help preserve the water supply.”

      To that end, Duke Energy has more than 20 different energy conservation programs available to households and businesses in North and South Carolina. “You can be more efficient by paying attention to how you use water and electricity,” says Lineberger. “When you have the opportunity to make changes in your home or business on items that use a lot of water or electricity, our programs can help you make better decisions.”

      While the WSMP is the most significant effort to manage the water supply of the Catawba-Wateree Basin since construction of the reservoir system, it is not without its critics.

      The Catawba Riverkeeper Foundation (CRF), a 501(c)(3) founded in 1997 to advocate and educate for the preservation of the Catawba-Wateree River Basin, has commented on the Water Supply Master Plan as falling short in considering all variables, impacts and possibilities; claiming it fails to take into consideration the economic impact of drought on the revenue to counties, local governments and businesses along the waterway as well as lost recreation to the public.

      They also criticize the water supply plan for not addressing issues about Duke Energy’s power plants’ water consumption and the dramatic effect on water supply made by inter-basin transfers in which water is removed from one river basin and transferred to another river system.

      The CRF also took issue with elements of the CHEOPS (Computerized Hydroelectric Operations and Planning Software) model that provides the statistical foundation of the WSMP.

      “The Water Supply Master Plan is not a ‘one and done,’” says Lineberger. “The current plan is a snapshot of where we are right now but the process is ongoing. There’s going to be more work, more scope added, as well as maintaining data and monitoring trends to make sure we’re on the path we thought we were with the assumptions and recommendations we made.”

      “Water quantity was the first phase but we’re planning another phase to address the critical issue of water quality,” says Gullet. “Once we receive the necessary regional support to advance the master plan, we look forward to pursuing subsequent phases. We will also update the master plan as appropriate or at least by every 10 years to ensure it remains a living document.”

      “There’s a lot more work to be done and the CWWMG is taking on that challenge,” adds Lineberger.


It Takes a Region

      The CWWMG has many supporters. One of particular note is Charlotte Mayor Dan Clodfelter. “If you look around the state, what the CWWMG is doing is very much ahead of the curve,” says Clodfelter. “Ensuring an adequate, sustainable supply of water is critical to the future competitiveness of the region.

      “There’s overriding federal regulatory decision-making over all U.S. navigable waters but in terms of developing strategies and how we’re going to provide sustainable water supplies, those initiatives and that leadership has to come from the local level.

      “If the region grows as projected, a large amount of that growth will occur outside of the Catawba River Basin, so in the next stage of this planning, after that 50-year horizon, we’re going to have to look at the economics of developing the water resource in the Yadkin-Pee Dee River Basin.

      “We’ll need to work with other communities. We’re going to have management and regulatory challenges. We’ve already seen the controversy that occurred a few years back with the inter-basin transfers of Concord and Kannapolis.”

      Not only is water a critical community issue, it is also a controversial one. Concord and Kannapolis’ inter-basin transfer (IBT) out of the Catawba River Basin sparked a Supreme Court case.

      In South Carolina v. North Carolina, South Carolina sought equal apportionment of the Catawba River, claiming that the IBTs allowed by North Carolina limited water flow downstream and harmed South Carolina communities and businesses.

      The case was settled in 2010 in a relatively short period of time, partly because of the relationships and communication engendered by Duke Energy’s re-licensing process and the outgrowth of groups from that process to include the CWWMG, according to Clodfelter.

      “One of the most impactful results of the group is the communication among the water suppliers up and down the basin and with Duke,” says Gullet. “Before the re-licensing process and this group, chances are a water supplier didn’t know the water supplier more than one county away. Now, we not only know each other, but we also know what each supplier is doing and we’re working together on plans.

      “Part of the CWWMG’s five-year strategic plan and a natural outgrowth of the WSMP is a more regional water supply master plan.”

      Currently, North and South Carolina are working well together and Lineberger credits the CWWMG as a fundamental reason for that. “Because of the CWWMG, water suppliers in both states have worked together,” he says. “They’ve recognized that water is a limited resource and we all have our straws in the same cup. We’ve got to be mindful of what each of us needs, not just our own needs, and share in the management responsibility.

      “The river doesn’t care about manmade political boundaries,” Lineberger continues. “Rainfall drives a river and rainfall only follows the law of gravity so we’ve got to figure out ways to get beyond political jurisdictions. We can’t work like self-contained entities from a water standpoint.

      “Water is a global issue with local solutions. This water management group is working together to come up with solutions so the Catawba-Wateree River Basin can last for a long, long time.”


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