Global South Metro Exchange
Featured In Issue: CLT.biz Insights 16.10.08
Southeast Synergism Collaboration is the New Competition The Global South Metro Exchange held its first event in Greenville in July, branded “Collaboration is the New Competition,” sponsored by JPMorgan Chase, with support from the Brookings Institution. Multi-regional business leaders coalesced…Read More »
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Charlotte City Council approved a $900,000 expenditure of airport funds for a consultant study as…Read More »
The Truth About Immigration by Steve Rattner Perhaps the most emotional issue of this year’s…Read More »
The Charlotte metro is the fastest-growing in the United States. From 2009-2014, 634,000 people people…Read More »
Click here for Full screen version / Youtube video Immigration: the new Godwin’s Law This map shows…Read More »
MBAJ Architecture’s favorite projects are the ones their clients love. Judging by the stellar reputation of the firm and the repeat business it enjoys, that means that pretty much all of them.
From its inception in 1981 as a sole proprietorship in Shelby, N.C., the architectural firm has experienced impressive growth, opening the Charlotte office in 1988 and the Raleigh office in 1996.
MBAJ Architecture has six principals practicing out of four offices in North and South Carolina. The ownership of the firm is shared by 17 employee shareholders including the principals. In what Rob Johnson calls “a really good culture,” the firm focuses on leadership, serving projects which support their client’s mission and cultivating new opportunities.
“What we don’t emphasize are hierarchy and seniority,” says Johnson. “Over the last decade, we have strategically aligned ourselves,” and Johnson lists the principals with their complementary emphasis: Stan Anthony, finance and business; Rick Brown, firm development and technology; John Thomas, project management and quality assurance; and Angie Crawford Easterday in Raleigh and James Golightly in Charlotte, the principals in charge day-to-day.
Johnson, himself, has an emphasis on marketing, external relations and new business development. Each principal is a registered architect, actively engaged in projects, focused on client satisfaction and active in their community.
The MBAJ Blueprint
MBAJ Architecture provides a broad range of services from pre-funding studies and assessments, programming, and master planning to architectural design, bidding and procurement, construction administration, and digital imaging. Throughout the implementation of these services, the firm is committed to cost control, schedule management, quality assurance and sustainable design.
“Critical thinking, problem solving and collaboration form the foundation of our work,” says Johnson. “We’re really helping people who have needs associated with educational, civic and governmental, religious and commercial facilities to understand and prioritize their needs and desires, so we can then creatively offer alternative ways to accommodate their needs, incorporate their desires and determine the best-fit solution to implement.”
Frequently, MBAJ is called in before clients have obtained their funding for a project and, in today’s economy, clients are trying to decide between refurbishing, new construction or phasing over time.
Typically, MBAJ Architecture is hired by the owners of the building project and often handles the bidding process for contractors. “Once contractors are awarded the commission, we look after it and make sure it’s being built according to the drawings and specifications,” says Johnson. Architects are selected on the basis of qualifications.
“We primarily do public work,” says Johnson. “Consequently, we work mostly with boards of education, county commissioners, community colleges, local governments and state agencies.” The firm also does commercial/private work and has completed a variety of banking, office and church projects.
Examples of the firm’s work include First Ward Elementary School, Myers Park High School, Selwyn Elementary School, Bailey Middle School, South Pointe High School (Rock Hill), Highland School of Technology (Gastonia), Mitchell Community College Advanced Technology Center, Surry County Judicial Center, Iredell County Department of Social Services, Yadkin Valley Bank, Holy Angels Group Home (Belmont), Episcopal Church of the Redeemer, and Stuart W. Cramer High School (Cramerton).
“We’ve been fortunate to work on a wide variety of new buildings and also many challenging additions and renovations,” says Johnson. The firm is also responsible for the architectural work at Central Piedmont Community College’s first satellite campus—the North Campus.
The firm’s design teams are carefully compiled, according to Johnson; contracting and consulting with multidiscipline engineers and specialized consultants. MBAJ also assembles a project team that identifies key client participants.
Johnson’s inspiration to become an architect arrived at the age of 10. Living in his hometown of Wilmington in the mid-’60s, he experienced his parents building a new house. They sketched the plans and hired a local architect who refined the plans, drew sections and elevations, and on numerous occasions came to their home.
“They let me sit in on the meetings with the architect and later the contractor and by my doing so, along with watching our house being built, I knew from that time that this was what I wanted to do. I’ve never wavered,” says Johnson.
The second piece of direction came from his high school guidance counselor who told him about UNC Charlotte developing a new school of architecture. There he met fellow student, Stan Anthony III, who agrees, “We both feel that we received a fabulous education.”
Johnson went on to earn his master’s in Architecture from the University of Illinois and Anthony did the same from Georgia Tech. He joined MBAJ in 1988. The other principals are similarly educated. Golightly and Thomas are also graduates of the University of North Carolina at Charlotte as is Brown, who additionally is a Virginia Tech grad; and Crawford Easterday graduated from Texas A&M and North Carolina State University. Anthony also serves as the mayor of Shelby, his home town.
Johnson touts the academic rigors demanded of architectural students: “We receive a well-rounded education. As an architect, you are a generalist; you have to know a little about a lot of stuff.”
Johnson likes to point out that the 1980s musical group Talking Heads was made up of architecture students, as was the late songwriter, Dan Fogleberg. “It speaks well of our profession,” he chuckles. “We’re flexible and can blend into a lot of different professions.”
More seriously, Johnson speaks of the need to migrate on your feet: “The difference between building airplanes and cars is that they are built inside. Buildings are built in the weather; coming out of the ground. There are a lot of decisions that happen in the field; it makes for an exciting way to earn a living.”
A New Era
Advances in technology have made huge inroads in architectural design and analysis, providing many opportunities for creativity and problem solving. First, there were two-dimension drawings, then some three-dimension tools. Now, all the components are ‘smart’ and work together.
AutoCAD came along in the 1990s allowing drawings to be done by computer. Next came Building Information Modeling (BIM), which allows architectural, engineering and construction components to be observed and manipulated in relation to each other.
“It’s incredible the power of the computer,” says Johnson. “What we’re seeing now will seem like child’s play in the future, but right now we’re greatly benefited by being able to create and visualize designs. It is a great communication tool for our clients and us. BIM can also run conflict resolution between the components to determine if that light and that beam and duct work are all in the same three-dimensional space.”
As with any discipline or firm, there are challenges. “The main one is the reduced level of funding going into building facilities since the downturn,” says Johnson. “We also have a reduced number of architectural graduates continuing on to registration, preferring instead—and having the ability—to use their skills within other industries and concerns such as energy or real estate.”
As the recession unfolded, 2010 and 2011 were wrought with challenges for the firm. “K-12 school projects stopped in their tracks,” says Johnson. “We were accustomed to a handful of large projects at any given time; however, the shift in the marketplace caused us to seek several handfuls of smaller projects.
One of the main things that kept the firm going in the downturn were existing clients who used the downturn to assess their needs, conduct feasibility studies and complete very economical small additions and renovations. “Also, in that it can take a year to design larger projects and a couple of years to build, the cash flow income from these larger projects were a big factor in sustaining the tough times.”
Johnson describes breaking even as the recession eases as ‘the new normal.’ “Although we’re still in the curve coming out, it is incrementally upward and our peace of mind is much better than a few years ago,” says Johnson.
Johnson actually cites positive impact from the financial difficulty: “We’ve used the downturn in the economy as an opportunity to turn things around to fully utilizing BIM.” Plus, he sees a different, more responsible climate.
“Now building is being done a lot more thoughtfully. People appreciate energy more. Before, the goal was to build it fast and inexpensively without much regard to sustainability,” Johnson says.
He also detects a new attitude towards architects: “The downturn has actually helped in terms of people realizing what an architect can do for them. As a field, we are more appreciated. As we work to design buildings with much fewer resources, we’re back to being problem solvers. This means being involved from the beginning of a project and helping to determine the best use of space.
“There’s a lot more pre-design—analysis and feasibility studies. It used to be people figured out what they wanted and then called in an architect to draw up blueprints—just slide them under the door. Now, they call in an architect to figure out what they need and desire. The profession is a lot more challenging but fun because expectations have gone up. It’s a new day and forever different; it’s exciting.”
A Families Affair
“The firm is made up of not just principals and employees, but 25 families,” says Johnson. “We know one another. We work hard and we play hard.” The firm values opportunities where employees and their families can spend time together away from the office: “We’ve had deaths and been faced with cancer—we rally around each other.”
“Our culture is an outgrowth of our shared kindred spirit,” says Johnson. “We all believe that our personal lives are just as important as our professional lives. It’s all about the people you meet along your path. In the end, you probably won’t worry about your sketches or technical aspects but you will be comforted by the fond memories of the many people you have met thorough our firm and the profession.”
For the last eight years, the principals of MBAJ Architecture have been involved with UNC Charlotte’s architectural professional practice classes. “They ask us to come in and talk about all aspects of being a mid-size firm and our marketing, human resources, technology—things that make a firm work.”
They also sit on the Central Piedmont Community College Architectural Technology Program Professional Advisory Board. Johnson attests, “Mentors were important to me and I want to mentor in turn.”
“We seek to make a positive difference in the communities we serve,” says Johnson.
“It’s good to be proud of the things you’ve been a part of but better, still, is the ongoing lineage,” he continues. “For an architectural firm to sustain multiple generations is a real accomplishment.
“We want clients to describe us as genuinely good people—trustworthy people who greatly support and advance their mission—a firm they would like to work with again.”
In his book, The Coming Jobs War, Gallup CEO Jim Clifton describes the global jobs war and what he thinks every leader must know about the future of job creation. Clifton maintains that local tribal leaders, super mentors and universities, need to come together, creating “supercolliders” for job creation.
With regard to the first component, he says, “A city with highly talented local tribal leaders is essential for creating the jobs that will re-ignite America’s GDP and save its economy.”
With regard to the second, he says that whether the U.S. stays a world leader or even solvent will be determined by three kinds of people: entrepreneurs, inventors, and super mentors described as university leaders, chancellors, presidents and deans in addition to bankers, venture capitalists, private equity executives, and government leaders.
With regard to the third component, he continues, “A prime foundry or petri dish for the energy and brilliance of these people is the university system. Universities are a critical part of new-company formation everywhere in the world, but America has a decided advantage. Why? Because America’s top…universities are its most differentiating global strength in this war for jobs.
“Great universities are the origin of most highly successful startups. Universities have, by design, the best ecosystem for entrepreneurship and innovation. More super mentors of all kinds are highly involved and swirling around the top…universities in a wider variety of activities than anywhere else.”
This combination of active tribal leaders, entrepreneurial mentorship, and universities—he says, “This is America’s supercollider for sudden job growth.”
Clifton seems to be describing the Charlotte region, its local leadership, its business community and UNC Charlotte—the Charlotte Research Institute, in particular.
Charlotte Research Institute
UNC Charlotte has experienced several names changes since it was first created in 1946. First known as Charlotte Center and then Charlotte College, it was re-created by the state of North Carolina in 1965 as The University of North Carolina at Charlotte, more commonly UNC Charlotte. Its focus has always been service to the Charlotte region and its businesses.
When Jim Woodward assumed the mantle of chancellor at UNC Charlotte in 1989, the University was 43 years old and still did not have a single doctoral program. The problem, he diagnosed, was speed or the lack of it. He likened the school to a Galapagos tortoise while other universities raced forward like English hares.
“The Ph.D. is critical to continued growth in both research and service,” maintains Woodward, a Georgia Tech Ph.D. in engineering mechanics. Under his watch, UNC Charlotte ramped up its evolution.
In 1993, four years into his chancellorship, UNC Charlotte inaugurated doctorate programs in electrical engineering, mechanical engineering and applied (not theoretical) mathematics. Today, the University boasts 19 doctorate programs turning out 100 new Ph.D.s a year.
But Woodward thought more was needed. “We asked, ‘What could we do to be more aggressive in service?’” he says. “How could we make the University more available to the greater community?” The University’s answer was, “Research.”
In 2000, UNC Charlotte broke ground on a 102-acre free-standing research campus adjacent to what is today the new football stadium. The Charlotte Research Institute (CRI) nicely blended the last two steps in university evolution—research and service. By 2014, there will be 12 buildings at CRI with 1.6 million square feet of academic, research, and partnership space.
These evolutionary giant steps were capped by the Millennial Campus Financing Act of 2000. With that important legislation, the North Carolina General Assembly not only stimulated the development of research campuses throughout the state, they also lifted restrictions on who could work there.
“We could bring companies to campus, charge them rent and collect the money,” says Woodward. “A research campus was another step in enabling UNC Charlotte to engage the community at the right level.”
The Charlotte Research Institute is often confused with the act that created it. It is UNC Charlotte’s version of the “millennial campus” referred to in the act.
“North Carolina State University calls its research campus Centennial Campus,” says UNC Charlotte Chancellor Philip Dubois “We have never formally taken the name Millennial Campus. We have always called it Charlotte Research Institute.”
CRI connects businesses, researchers, governmental agencies, and academia with exceptional facilities and equipment to enhance intellectual capital, accelerate technology commercialization, cultivate the development of entrepreneurial and start-up ventures, create global educational and industry partnerships, and spur economic growth regionally and nationally.
CRI supports interdisciplinary research centers that tackle complex problems in bioinformatics and genomics, biomedical engineering and science, optoelectronics and optical communications, precision metrology, cyber defense and network assurability, energy production and infrastructure, environment and sustainability, life sciences, nanoscale sciences, motorsports engineering, visualization, and biology and translational research.
Most CRI buildings are concentrated just off of North Tryon Street, along Snyder Road, north of the new football stadium, but the campus also includes Woodward Hall, Cameron Applied Research Center and other academic buildings on the main campus.
“CRI looks like a congressional district,” says Dubois. “Despite its amorphous shape, CRI’s message is crystal clear,” he continues. “The University is open to business.”
Open to Business
Teaching, the first step in a university’s evolution, was not overlooked in the development of CRI. Companies that either come to CRI or spin out from faculty research often need graduate and undergraduate students. For students, that means combining the practical and the theoretical during the school year and part-time employment during the summer.
Dr. Robert Wilhelm has directed the evolution of CRI since 2005 when he was named CRI’s executive director. Prior to that, he was a UNC Charlotte mechanical engineering professor. Wilhelm was appointed to his present position, vice chancellor for research and economic development, in 2011.
The traditional yardstick for measuring a research director’s impact is how much he or she spends. CRI’s “spend” is currently $30 million with 80-82 percent from federal grants and 15 to 20 percent company-based grants.
The Department of Defense accounts for most of CRI’s government dollars. Older and larger research campuses like North Carolina State University or Clemson University have a $150 to $180 million spend. Wilhelm’s goal for 2020 is to boost his “spend” to $50 million.
“Bob Wilhelm is the perfect person for this job,” says Woodward. “He is a full professor, a status that was earned because of his outstanding teaching and research, and he started his own business. His role is to encourage and coordinate, to be engaged in the business community, learn what they need and bring that back to UNC Charlotte to get it done.”
Wilhelm has had a place at the table for all decisions regarding CRI since 2005, Dubois’ first year as University chancellor. Decisions to significantly expand CRI to include a more than $4 million motor sports facility as well as to lobby city government for two light rail stops were initiated since that pivotal year.
“UNC Charlotte has never been better prepared to engage the Charlotte regional business community than we are today,” says Bob Wilhelm. “We are ready, willing and able to help businesses advance their products and services.”
Currently there are 16 small, rent-paying companies residing at the research campus. “These companies work with faculty members to produce prototypes or small quantities,” says Wilhelm. “We are not really in the quantity business here.”
For techno-centric start-ups or spin-outs, CRI is a dream location. It combines high powered Ph.D.-level talent, top-end lab and office facilities, new equipment, a university library, campus eateries, information technology experts, Internet, maintenance and local phone service. Annual rent ranges from $19 to $21 a square foot.
Cutting-edge insights, advice and assistance provided by faculty members may result in inventions with great commercial potential. That benefit belongs to CRI’s rent-paying business partners, not CRI or the University. CRI is a landlord with oodles of assets for its partners, but it doesn’t own their patents, trademarks, copyrights or ideas. If it did, few would come knocking on their door.
That sweet deal takes a different track for the University’s faculty and staff. Professors must disclose their inventions to CRI’s technology transfer office, which reviews the invention and tries to determine the best strategy for commercializing it. That could involve filing for a patent or patent protection, but neither option shuts out an entrepreneurial professor. Faculty inventors may obtain a license to produce or commercialize a patented invention from the University.
“We are a little different from other universities,” says Associate Director Brad Fach of the Office of Technology Transfer. “Our policy is to encourage faculty and staff to be entrepreneurs. We help them do that.”
Partnership, Outreach and Research
In early 2014, Charlotte Research Institute is expecting a giant uptick in its real estate. That’s when the 96,000-square-foot PORTAL building opens its doors. A portal is an entry way and the new building is another way for business to enter into the life of the University. PORTAL is Wilhelm’s acronym for partnership, outreach and research to accelerate learning, and he played a large role in its design.
Ten thousand square feet of PORTAL’s first floor will be devoted to a sensitive compartmented information facility (SCIF). The acronym is pronounced “skiff” and in defense and security parlance may be referred to as a Red Room. The “information” in SCIF is derived from federally-funded and classified CRI research. Access to the SCIF is limited and all activity, even casual conversation, is restricted from the public.
There are 13 other SCIFs at UNC Charlotte. Foreign students are excluded from working in these sensitive areas. Like Greta Garbo, SCIF may want to be alone, but there will be other commercial enterprises and research facilities near its first floor sanctuary.
PORTAL’s second and third floors will house Ventureprise, Inc., formerly the non-profit Ben Craig Center. Since 1986, the University-sponsored, CRI-affiliated Ben Craig Center has provided coaching, mentoring and business incubator services to startups, early-stage businesses and client tenants. Currently it has 22 client tenants; all are expected to make the move to PORTAL.
President Paul Wetenhall explained the difference between CRI’s business partners and his client tenants. “For companies to succeed commercially they must produce a superior product and compete in the marketplace. That is not something a university research facility can figure out. Business incubators provide day-to-day help with strategies, plans and models. They build commercial capability.”
Wetenhall encourages small businesses to move to PORTAL incubators where rent is even more reasonable than CRI’s research locations. A small commercial office runs $400 a month; larger space rents for $16.50 to $17 a square foot with all coaching, mentoring and normal office accessories included.
Ventureprise has adopted a new mission to go with its new moniker: Help the Charlotte region establish a strategy for entrepreneurship. Wetenhall added flesh to that intriguing skeleton. He is working to recruit and retain inventors. Ventureprise wants to secure venture capital, provide access to public sources of money and encourage favorable public policy all on the inventor’s behalf.
PORTAL’s benefit to business begins in 2014. Its benefit to tax-payers has already taken place. “It was built with receipts from federally funded research and long-term bonds,” says Dubois. “There were no state appropriations involved.”
Strategies for Entrepreneurship
CRI has many success stories. One is Camber Ridge, a tire testing company. It graduated from CRI’s Motorsports and Automotive Research Center to CRI’s business incubator at Ventureprise. Dr. James Cuttino, a mechanical engineering professor on leave from the University, is its president and owner.
Cuttino’s invention is a testing machine that pulls a tire around a 1.25 mile paved oval track at speeds approaching 200 miles per hour. Race fans and visitors to the NASCAR Hall of Fame know that tracks at American racing venues have different surfaces. The Camber Ridge track, now in the planning stages, will have four asphalt textures. The company is anticipating five to 10 technical jobs to initially run the facility and one to two engineering staffers.
Cuttino’s potential clients are tire companies, auto and truck manufacturers, the defense industry, auto racing teams and suspension systems manufacturers. “His process is a more efficient and less costly simulation than building an entire automobile to test tires,” says Ventureprise’s Wetenhall.
Cuttino was a finalist in the 2010 Charlotte Venture Challenge, a fact that contributes to his status as an up-and-coming entrepreneur. Formerly called Five Ventures Business Innovation Competition, the Challenge is CRI’s showcase for some of the region’s most successful early-stage companies.
In 2012, 18 finalists out of 117 applicants were awarded cash prizes totaling $113,500. Each pitched their company to a panel of venture capitalists that winnowed the field to nine and then one overall winner. All applicants attend workshops that hone their verbal and oral presentation skills.
Will Camber Ridge and other fledgling businesses survive the harsh realities of the world outside the campus? “We create the conditions for success and make introductions,” says Wetenhall. “But at the end of the day, the individual entrepreneur has to have the spirit and drive to make it happen.” That may be a researchable topic for UNC Charlotte’s psychology department. The social sciences now have a small folding chair around CRI’s techno-centric table. They may need more room.
If Charlotte is prepared to engage its own “supercollider for job creation,” it appears that everything is in place to make our very own. It will ultimately depend upon civic leaders, business leaders, university officials, faculty and staff, entrepreneurs, innovators; they must participate and come forward with new ideas, challenges and insights from their own experience to boost innovative thinking in our regional economy.
Charlotte can do this and have a significant impact on wealth and job creation nation within the global marketplace.
The story of Park Sterling Bank is actually two stories. The first story is about the startup and growth of a bank from the idea and vision of a handful of people. The second story, as important as the first, is about a sense of community and an understanding of a region. Where these two stories intersect is Park Sterling Bank.
Park Sterling Bank, founded in 2006, is a Charlotte-based commercial bank that offers both consumer and commercial products and services including traditional deposit and loan services as well as wealth management, residential mortgage and commercial and industrial lending services. But its goal and beginnings are what makes its story.
From a Seed
The seed of Park Sterling began with Bryan Kennedy. Kennedy helped start Park Meridian Bank in 1991 where he served as executive vice president. Prior to Park Meridian Bank’s sale to Regions Bank in 2001, Kennedy served as North Carolina president at Regions. But in late 2005, other bankers around him started suggesting it was time to, once again, start another bank.
“You start a bank,” Kennedy explains, “because you think you can put together the right people and resources to deliver a higher level of service to the customer than they can currently find in the market. Our founders saw a need for a more comfortable, more personal banking solution.”
With that intent, Kennedy, as CEO, put together a board of directors, some from the old Park Meridian Bank, and started raising capital in March of 2006. By June, they had finished with the largest startup bank capital raise in North Carolina history—$45 million. Park Sterling Bank officially opened for business in October of 2006.
Kennedy is serious about his responsibilities to Park Sterling’s shareholders. “When you sit across from folks and say, ‘I want to start a bank. Please trust me with your money and I’ll do something good with it,’ you feel a real obligation to do just that. We never forget that we need to make a return to our shareholders.”
Kennedy had the intention of growing the bank quickly and had a definite strategy to do it. “I put an infrastructure in place that would support growth. You can either put the right people and the right technology into place from the beginning or you can try to shortcut things and have people wear different hats, none of them well, and continuously play catch up.”
Kennedy’s plan for Park Sterling’s growth got an unexpected boost in 2010 when an industry associate introduced him to Jim Cherry and David Gaines. Cherry had spent more than three decades in banking in both North Carolina and Virginia for the former Wachovia Bank working as head of trust and investment management and as chief executive officer of Mid-Atlantic banking.
He also served as president of the Virginia Banking Association and even after officially retiring from his day job in 2006, Cherry stayed on to chair the association.
“I wanted to remain involved,” Cherry says. “I continued to look for ways to get back into banking. I started meeting with people in the industry. Meanwhile, we had the economic crisis of 2008. At the same time, in the banking industry, it was clear that there was going to be a unique opportunity for consolidation. A combination of low interest rates and an increasing regulatory environment was making the small banking business model untenable.
“I began by recruiting David Gaines who is now Park Sterling’s CFO. He was the controller for legacy Wachovia and their chief risk officer for corporate and investment banking after their merger with First Union, so he had significant finance, merger integration and risk experience.
“We started talking with regulators and other bankers and realized there was a void of regional banks in the Carolinas and Virginia. This was surprising since this area used to be the home of the regional banks—NCNB, Wachovia, First Union, BB&T, Southern National, CNS, Sovereign and Signet. There was just a whole cadre of regional banks and all of them, either one way or another, merged or consolidated or grew up and for some reason, unlike other regions of this character or size nationally, no one had followed in between. There were virtually no banks in this area in the $5 billion to $20 billion in asset size.
“This was significant because those were the banks that were typically large enough to have a broad array of products and services and some geographic diversity but still small enough to serve customers in a community banking framework. We recognized we had an opportunity to fill a need.”
A Shared Vision
Cherry wanted to partner with a bank to take advantage of that opportunity and in anticipation of that, Cherry and Gaines recruited a prestigious prospective board including Walter Ayers, retired president and CEO of the Virginia Banking Association; Jeffrey Kane, retired senior vice president of the Charlotte branch of the Federal Reserve, and Bud Baker, former chairman and CEO of Wachovia.
At the time that Cherry and Gaines met with Kennedy, Park Sterling was three and a half years old with about 50 employees, $500 million in assets and offices in Charlotte and Wilmington, N.C. It was a good match with shared philosophies on risk and customer service and Cherry admits he was impressed with the “smart things Bryan had done up front with Park Sterling.”
“It was state of the art,” Cherry says, “with a technology platform ready for growth and a quality management team in place.”
When an offer to partner was extended, Kennedy says he and the Park Sterling Board had to “do some soul searching.”
“It came down to our mission,” says Kennedy. “Was this the best thing for our shareholders? Should we go with a slower growth strategy, raising capital in small chunks or change direction, partner, and go with a larger capital raise? In hindsight, the decision to partner was 100 percent the right choice.”
“Bryan and the board had an even larger purpose to consider,” adds Cherry. “Which way would better serve the customer? How could they provide more products, services and capabilities to a growing customer base without more capital and other resources? It really was a continuation of the original vision but it was an acceleration of it. When most banks were retreating, this was an opportunity to advance. We agreed we had a vision to create a regional bank in the Carolinas area.”
In August of 2010, Park Sterling Bank became Park Sterling Corporation, trading on NASDAQ, and raised $150 million in an initial public offering. “It was one of the last and largest successful bank IPO’s in the current credit cycle,” explains Cherry. “As part of that capital raise, we were hired by Park Sterling.”
Kennedy left his position as CEO, becoming president and Cherry was named the new CEO. Gaines came on as the new CFO, a position previously held by Steve Arnold who became treasurer. The board was reconstituted but much of the key management was retained.
“We immediately began a two-pronged strategy,” Cherry explains. “First to expand in Charlotte and Wilmington, and go into other high growth markets like Raleigh, Charleston and Greenville, S.C. and recruit what I call the ‘A’ talent in those markets. We’d look for the very best people who were already doing business there and well regarded in that particular market, to build the Park Sterling franchise.
“The second part of the strategy was to use our capital and industry knowledge to partner with other banks in order to gain deposits, talent and other products and capabilities for our customers.”
Partnering for Growth
Park Sterling’s first partnership with Community Capital Bank in upstate South Carolina closed in November of 2011. Not only did the 25-year-old Community Capital fit well with the investment Park Sterling was already making in the Greenville market, it also brought them a mortgage brokerage product, a wealth management and a cash management product that they could now import into other markets.
Plans for their second partnership with Gastonia-based Citizens South came in March of 2012. Citizens South, which began in 1904 as Gastonia Mutual Building and Loan Association, had, prior to the merger, $1.1 billion in assets with 21 offices located in Gaston, Iredell, Rowan, Mecklenburg and Union counties in North Carolina, York County in South Carolina, and Towns, Union, Fannin and Gilmer counties in Georgia.
The merger further enhanced products, providing more robust cash and wealth management and providing capabilities for C&I (commercial and industrial) lending in addition to the real estate lending previously available to Citizens South customers. The merger also expanded the Park Sterling footprint into a new state—Georgia.
When it closed on October 1, 2012, the acquisition of Citizens South made Park Sterling the largest community bank in the Charlotte metro area and next to Bank of America, the second largest bank headquartered in Charlotte.
With current assets of $2 billion, Park Sterling’s acquisitions have essentially caused it to twice double in asset size in the last 14 months.
But along with growth, something else is just as important to Park Sterling’s management. “Because the banks we’ve acquired are community banks, they share our commitment of service to our area,” says Cherry. “This is our home. We grew up here and spent our careers here. We love this area and we know the people here and understand their needs and want to be a solution for them.”
A Solution for the Community
“Banking is a people business,” Cherry continues, “and people like doing business with people they know that live and work here and care about their community. We want to be an alternative to the larger, more impersonal banks. Our objective, in its simplest form, is to be large enough to help our customer achieve their financial aspirations and still small enough to care that they do.”
Their message appears to resonate with customers. Bill Crawford, who is founder of Wilmar Leasing and current chairman of the board for Wilmar Inc., has been a customer of Park Sterling since its beginning.
“We’re a vehicle leasing company so we use Park Sterling’s lending services,” says Crawford. “It’s been a wonderful experience. They have a great group of people. Bill Newbold handles our account and he’s the finest commercial loan officer I’ve ever worked with. He knows our business better than anybody and represents us well to the bank. With a community bank, character matters. When we meet with Park Sterling’s credit committee they know who we are, they know our business; they know our character.”
“With Park Sterling, relationship banking is not just something printed on a business card,” says Bob Salvin, founder and CEO of Salvin Dental Specialties, Inc. “Park Sterling took time to get to know us and establish a solid relationship. Several members of their management team, including the CEO, came out to our business to get to know us. They understand business entrepreneurs and, unlike some of the big banks, they view our business as unique.”
Customer Chris Moffat says he’ll “never go back to a big bank.” He uses Park Sterling not only for commercial banking and corporate borrowing in his role as vice president of Morehead Properties but also his personal banking. “I like their people,” he says. “They know us and anticipate our needs.”
Park Sterling currently has 44 branches with 17 in the greater Charlotte area and while further expansion may be in their future, Kennedy assures that there is “no build and flip strategy here.” “We want to build something we can turn over to the next generation of leadership,” he says.
“All of our executive management have had full careers in banking,” Cherry adds, “and have achieved their career aspirations. Now we share a common motivation. We want to recreate a strong regional community bank here. We’ve all come together to create something special in this community.”
The conference room is decked out in Florida Gators gear, and the bulletin board boasts a picture of “Weebee,” the company mascot. In one corner is a giant trophy with their names on it: Bill Crawford, 2008. Scott Crawford, 2012.
They’re the first father-son team ever to have both been awarded the trophy, recognition for receiving the National Vehicle Leasing Association’s Lifetime Achievement (NVLA) Award. Bill is understandably proud of his son.
Scott is a little more reticent. “I’m only 43, so it’s a little premature for me,” he says wryly.
But he was president of the association when the recession hit, and he guided it through the worst possible times for the industry. They froze the board in 2008 due to the recession, and as a result he served two years in a row, keeping the lights on during what was an otherwise grim period for the association.
The Weebee mascot atop the bulletin board represents the Crawford team’s dedication to “Working In Your Best Interest”—WIYBI, or Weebee. It’s that dedication, combined with determination and business acumen, that carried both the NVLA and Wilmar through.
In 1969, Bill had been into and then out of the Navy after graduating from the University of Florida. He was married with two children and a third on the way when he decided to join up with Hill Truck Rentals, a full-service truck leasing company founded four years earlier.
The company was based out of an old Amoco Service station in Orlando. Bill’s office was a 14-foot travel trailer plugged into the lady’s restroom for power, and he was paid $500 a month for his work as a salesman.
He was so successful as a salesman, that the company asked him to move to Charlotte in 1973 to open a new branch. After two years in that role, he moved into finance leasing with Leasing Consultants of Charlotte. Five years later, he decided he could do better on his own, and left the company in 1979.
Bill and his wife Marilyn, who was a Charlotte Country Day School teacher, had just bought a house and had $700 in savings. It wasn’t much, but Bill felt confident he could make it fly.
“Thanks to First Union, anyone could become an independent used car dealer,” he says. “They would back the financing, and you’d just find people who wanted to lease a vehicle.”
So he obtained a dealer’s license, and started working out of his very young daughter’s bedroom, the only room in the house with a phone jack. He named the company for himself and his wife: “Wil” for “William,” “Mar” for “Marilyn.”
Wilmar did well, and before long Bill had moved his office into the Key Man building, and then a small house they purchased for the purpose on Monroe Road.
Meanwhile, those three children were growing up. Both boys attended Bill’s alma mater, the University of Florida. In 1990 the eldest, David, graduated and joined the family business. Scott followed the year behind him. Elizabeth, a University of Georgia graduate was not far behind.
David is still in the business as vice president and salesman, and Elizabeth recently stepped out in order to become a full-time stay-at-home mother. Scott says that initially, he joined the company part-time, “just to keep me busy and make a little money while I decided what I wanted to do with my life.”
What he decided, is that he loved the family business and wanted to run it. He now serves as president.
In 2004, Bill and his children worked with their accountant to structure an ownership transfer in conjunction with re-branding the business. At that time, the legal entity name was Wilmar Leasing, Inc. That year, Scott and his siblings founded Wilmar, Inc and took over the overhead, rent, and employees. As leases expired under Wilmar Leasing, they were taken over by Wilmar. Seven years later, nearly all the leases—some 3,800 of them—are now handled under Wilmar Inc.
Full Menu of Services
The change in name from Wilmar Leasing, to Wilmar, Inc., represents not only a change in leadership, but also a clearer understanding that leasing is only one element of the company’s offerings. From fuel management to acquisition and financing, Wilmar provides customers with a full a la carte menu of services designed to help make the most beneficial fleet decisions for their companies.
Leasing is often at the core of these services. According to the Crawfords, more than 80 percent of U.S. corporations lease some or all of their equipment. Often, leasing makes more sense than buying because it offers financial flexibility, tax advantages, and the ability to leverage new technologies as they emerge.
Still, many companies avail themselves of other Wilmar services regardless of whether leasing is in the picture for them. Services include maintenance plans, administrative services, fuel management, acquisition, disposal, fleet policy, replacement cycling analysis, motor vehicle records, financing, roadside assistance, accident management, and expense control.
All of which is offered up with an old-fashioned dose of committed customer service. Bill explains: “I grew up in a time when your name meant something. You didn’t do anything to affect the reputation of your name. You didn’t blemish that.”
For Wilmar, this means that they work hard to uphold their company motto: “Working In Your Best Interest”—even when it may not be in their own short-term interest.
For instance, Bill relates a recent incident in which a customer called to ask about leasing a $45,000 truck. The customer had just won a large new contract that would require transporting large quantities of material, and he was excited and eager to enlarge his fleet to accommodate the work. Bill thought he might need to know more.
“I said, let me come out and visit with you,” says Bill. After understanding the situation, Bill told his customer he did not need a $45,000 truck, even though it would have meant a nice profit for Wilmar. Instead, he suggested that the customer buy a $5,000 trailer, and hook it up to the pick-up truck he already had in his fleet.
“You can load it up, drive it where it needs to go, leave it there, and pick it up again in the afternoon,” he explained. “Instead of insurance and maintenance and fuel, and another lease payment, you can tow it with what you already have.” Bill helped the customer purchase the right trailer, even though Wilmar made no money off the deal.
Bill explains that their business approach has always been to take care of the customer so that instead of trying to make a lot of money at once, you can make a little bit of money, every month—forever.
“A retail car salesman works on a commission and he’s trying to make as much money off each sale as he can, because that’s his income,” he says. “Our business is totally different. We don’t care what car you lease, and we don’t care about knocking a home run on every deal. If we help our customers make the right choices and set up the lease correctly, that customer will come back year after year.”
Because Wilmar doesn’t need to lease a particular make, model or year of vehicle, they are able to provide customers with unbiased information necessary to make the very best decision for their company.
When a new customer contacts Wilmar, a salesperson takes the time to understand what their business is like, take a look at what they’re driving, and help them make good selections based on their needs. In addition to cost per mile, they look at company role and the needs of the drivers.
For instance, a highly paid salesperson will require a different sort of vehicle from an entry-level technician. They likewise take the time to understand how much cargo each vehicle may need to carry and choose an appropriately sized vehicle with the right capabilities and options.
Wilmar lives and breathes numbers, using them to help customers make smart choices about their fleet. “We know what a vehicle is worth the day you buy it, what it’s worth every month through its life, what it costs to fuel it, and what it costs to maintain it.”
“It’s about cost per mile,” explains Scott. “That’s the bottom line. You take the lease payment, plus what you paid in fuel, insurance, and maintenance, plus what you lost or gained on the sale at the end, and divide that by the miles driven. That’s the equalizer.”
Wilmar prides itself on providing this kind of information to customers so that they can make intelligent fleet decisions for their companies. It’s this commitment to work in the client’s best interest that helped Wilmar and many of its customers make it through the recession.
Few industries were hit as hard as the auto industry by the recent recession. Scott says that for Wilmar, the downturn began in 2007, and by 2008 the entire business came to a near standstill.
Wilmar had been through three previous recessions, and outlived them all. But this one was something different, and they could see that from the beginning. Previous recessions had driven more owners and managers to seek Wilmar’s cost-saving services. This recession simply drove businesses to a standstill.
“Owners began to drive vehicles into the ground,” says Scott. “They were so afraid to commit to another vehicle. Our revenue dropped 20 percent in ’07 and 45 percent in ’08.”
Times were tough, but some of the revenue drop was a deliberate and conscious choice on the part of Wilmar. “When things started to go south, we saw it wasn’t going to be good,” recalls Bill. “We got all the sales people in here and we said, ‘Go out and visit all your clients and see how they’re doing. Find out how you can help them.’ And they did. They helped a lot of them downsize.”
For instance, an HVAC company that ran 15 vans continuously during boom times found that it could only keep 10 of them busy in 2008. Wilmar met with them to see how they could help, and found a way to take five of the vans and either sell them or lease them to other customers who needed a good used vehicle.
As a result, Wilmar’s total fleet portfolio shrunk by 33 percent during the recession years. Many company leaders would see those numbers as a bad sign, but Bill and Scott knew better. As a result of their aggressive efforts to help their customers, almost none of their customers ever defaulted on a lease. Even during these difficult recent years, with a portfolio of nearly 3,800 vehicles, they have had only two defaults in three years.
Because the company carries no debt except what is tied up in vehicles on lease, it can afford to take a deep cut in revenue and continue to function. And because the business model is based on long-term leases, even if there were no new accounts or eliminated and reduced accounts, the company’s revenue stream never just goes away.
Says Scott, “We have learned to be more efficient and to control costs tightly, but have never had to cut staff or take other drastic measures to continue to stay afloat. Our customers are still in business, and still paying on their leases. And most of them are devoted, lifetime customers. And the trend is turning upward again.”
Wilmar has been serving Charlotte since 1980, and their client list includes many well-known Charlotte brands like Bojangles, Belk, and Lincoln Harris. With revenues of $18 million, and a fleet of nearly 3,800, the company is poised to serve pent-up demand when the economy improves.
While they specialize in fleets of under a hundred vehicles, Scott says size doesn’t matter as much as whether the company has an inside person dedicated to managing its fleet. He points out that in many small businesses, the owner or controller is responsible for managing the vehicles, and usually it’s a job they don’t relish.
For those companies, Wilmar’s team acts like an outsourced fleet management team, allowing executives and operations managers to focus on their core business. With the customer’s best interests at heart, Wilmar acts like a dedicated employee, ensuring the fleet is managed as efficiently and effectively as possible.
If Scott’s NVLA lifetime achievement award was “premature,” it’s only because he’s not done achieving yet. He has every intention of building Wilmar even bigger and stronger, and looks forward to seeing where it can go in the coming years.
Dot Metrics Technologies, a Charlotte-based technology company, in conjunction with the Charlotte Research Institute at UNC Charlotte, has developed a new cutting-edge technology product that can purify water in a compact system using mercury-free ultraviolet LEDs.
The system, trademarked UV-Pearl, can be easily transported and rapidly switched on and off with negligible warm-up time, which could provide advantages for the pharmaceutical and health care industries, and may also have applications for military and consumer use.
“The UV-Pearl is a good example of how a small company like Dot Metrics can use its size and expertise to develop a product utilizing emerging UV-LED technology,” says Rosanna Stokes, president and CEO. “Working with our partner, Aquionics, we were able to produce the world’s first water disinfection system that uses UV-C LED technology.”
From the Wellspring
Rosanna and her husband, UNC Charlotte electrical engineering professor Ed Stokes, co-founded the company in 2003. The couple, both formerly research scientists at GE Global Research in Albany, wanted to return to Charlotte—their hometown—and start a technology company to pursue innovation opportunities.
Rosanna brings research skills, along with new product, global and business development experience to Dot Metrics. Her background includes identifying new product development opportunities and creating strategic partnerships, along with manufacturing and introducing successful new products to the market.
Ed brings his experience from the university and business worlds, resulting in numerous real-world opportunities at the company for his engineering students, both undergraduate and graduate.
Together, the Stokes formed a company savvy enough to produce exciting new innovations and agile enough to pivot through the pits and challenges of new product development. The ability to work in a small research lab and innovate with competent partners, without bureaucratic tedium, has attracted numerous young researchers, including current Dot Metrics director of research Jennifer Pagan, and research leader Paolo Batoni.
Both Pagan and Batoni, former graduate students at UNC Charlotte, were pursued by larger companies but chose to stay with Dot Metrics.
“Companies like Intel, GE and Motorola were making me offers, but I turned them down,” says Batoni. “They asked, ‘What’s wrong? Aren’t we offering you enough money?’ But I wanted to stay in Charlotte and be at a small company.
“We engineers are natural-born control freaks, so it’s nice to be able to work on your own product and have control over it,” he affirms.
“It’s a tough business model for a small technology company like Dot Metrics,” says Rosanna. “The lack of available venture capital money makes the company strategically focus on its partners and ways to use partner channels, such as sales and marketing, to help put its product in the marketplace.”
“We can develop the technology but we have to look for synergy with our partners to make our company’s products successful,” she explains.
The Charlotte Research Institute (CRI) at UNC Charlotte is Dot Metric’s partner for facilities and infrastructure, while Aquionics is its executive partner for sales and marketing of the UV-Pearl. The company is continuing to search for additional executive partners for different products, she says.
“There is about a 10x multiplier advantage in being able to work with CRI,” says Rosanna.
“We’re just a small company, but we’re housed in Grigg Hall, a big, beautiful building. We can use the various conference rooms when we need more space to host guests and we have access to other office amenities. And, we’re right across the hall from Ed, so it’s easy for us to interact with him,” she says with a nod.
“One challenge to the company,” says Ed, “is operating on real time while the rest of the university operates on ‘campus time.’”
“The University operates in terms of months and semesters, while Dot Metrics looks at weeks and hours because that’s how you run a business,” he explains.
Dot Metrics is one of 16 companies located at CRI, according to Gail Keene, financial and administrative operations manager of the CRI Millennial Campus at UNC Charlotte.
Pagan says the company has worked with the CRI team to write grants together, including Small Business Innovation Research (SBIR) grants that provide money to both university and private, innovator partners. Some research money awarded to Dot Metrics also flows back to UNC Charlotte. That money, totaling between $300,000 and $400,000 over the years, is used to help pay for office and lab rentals and graduate student stipends.
“That’s important,” says Pagan, “because the company is a small business and runs lean so funding is always tight.” SBIR grants initially funded R&D at Dot Metrics and are likely to be continuing funding sources, she says.
Another advantage of Dot Metrics being located at the CRI is the access to technology and equipment.
“We can use equipment for our research and development that would otherwise be very expensive for us to buy or lease,” Pagan points out. “It would cost us about $1 million to own the kind of equipment that we need to do our research.”
Private companies like Dot Metrics are encouraged to lease or rent time on advanced technology equipment in the UNC Charlotte Optics User Facilities, says Ed, noting that much of this equipment was purchased using a 2001 congressional earmark intended to encourage regional economic development in optoelectronics through UNC Charlotte and the CRI. Dot Metrics is an example of this development.
Source of Talent
Students are a big factor contributing toward the success of Dot Metrics’ operations.
“We are able to hire exceptional students,” says Batoni. “It’s a win-win situation—it’s convenient for students and it’s great for us to have students interested in research who can work in our labs.
“We rely heavily on guidance from the research and tech people at UNC Charlotte. They augment our ability,” he says. “We can tap into many brains at the University and regularly work with professors to help us solve problems that may be outside our area of expertise.”
Their student interns, says Batoni, leave and go on to pursue Ph.D.s at top research universities or work for top companies like Siemens.
At one point, CRI stepped in to help when a University lab partner of Dot Metrics was having some equipment issues. Batoni says a piece of University equipment necessary to complete some testing—an autoclave—was damaged.
“We tried for a few months to work with the University lab and get the repairs done. It was slow and frustrating,” says Batoni. “Finally, I reached out to Gail Keene, our CRI contact, and told her that the University’s damaged equipment was hurting our customers. She went right to work and got the repair done in one week!”
Keene offers the business an interface to the University that is invaluable to a small company, says Batoni.
“She gives us administrative and marketing help,” he says, “even things like supplying a notary public when we need one. She also helps us solve problems or conflicts with other entities on campus.”
“The University provides research support facilities, equipment and intellectual power,” says Keene. She names other services provided to clients including mail services, parking sticker purchases, data connectivity, local phone service, and networking opportunities, that offer invaluable support to small business partners.
“University-driven research development, outreach and partnership are the foundations to making UNC Charlotte the state’s urban research university,” affirms Keene. “These partnerships both strengthen the University’s campus research platform and drive innovation and economic and job development in the Charlotte region.”
Driven to Innovate
Key to any small business is funding and Rosanna acknowledges that Dot Metrics was fortunate receive funding from SBIR grants to begin operations and their continued funding has helped support the first 10 years of its operations.
“A Phase 1 SBIR grant is usually around $100,000 and a Phase II grant is usually around $500,000 to $750,000. We have received a few Phase I grants and a few Phase II grants,” she says.
The grant program, part of the Small Business Innovation Development Act begun in 1982, encourages high-tech innovation and entrepreneurial spirit to meet specific research and development needs. Dot Metrics, says Pagan, applied for grants that encouraged innovation in the LED field.
“It’s a very competitive process—there’s about a 10 percent win rate for grants in Phase I and a 30 percent win rate for Phase II grants,” explains Pagan.
“We were optimistic that we could focus on one competency—LEDs—and integrate them into a system,” says Rosanna.
The company recently launched its first commercial product, the trademarked UV-Pearl, in association with partner Aquionics, a UV water treatment company. Pagan says its patent is pending and it is “branded for water or other fluids disinfection.” The UV-Pearl is the world’s first water disinfection system to use UV-C LED technology.
“We’ve designed a chemical-free way of effectively disinfecting water, and it’s much safer,” says Pagan. “The system uses solid state light emitting diodes that work like LED light bulbs to emit wavelengths that kill inactive bacteria, viruses and cysts that can make you sick.”
The portable system uses UV LED lamps, which emit waves of light in the deep UV spectral (UV-C) range to destroy microorganisms, explains Rosanna. Another advantage is the portability of the UV-Pearl, allowing it to be configured to meet different needs, including integration into water generators and loops, and medical sterilization.
“By designing the system so it can be rapidly turned on and off without warm-up time, you can realize some energy savings,” adds Batoni. “The UV-Pearl is not sensitive to the temperature of water, making it convenient to use in different environments.”
“When the water is flowing, turn it on; when it’s not, shut it off,” continues Batoni. “The UV-Pearl can work on line voltage power (it can be plugged in) or on batteries, and we are working to allow the system to utilize solar-powered batteries.”
Rosanna sees several application uses for the system, and expects with continued R&D, production costs will decrease, spurring even more consumer applications such as use for emergency water treatment in catastrophe settings such as Hurricane Sandy, or providing humanitarian relief efforts to people who need food and water.
A second product of Dot Metrics is Tetra, a UVA LED array that offers a versatile narrow band transfer source based on the application needed. It includes a variety of configurations, based on how many units are added, and can be used in lab applications. Tetra was launched just a few months after the UV-Pearl, last August.
“We’re looking for some partners to help us bring it to the market,” Batoni says. “We’re working on the sales strategy.”
The company’s future is bright, says Rosanna. “At this point we need to get our products out in the market and make some sales.
“With the combination of an excellent technical staff and our combined business experience, we will drive toward commercial success. It’s all about focus.”
No one can accuse Bob Goulet, president of Saprex, of thinking too small. His vision is to make the Charlotte region the go-to place for the development and manufacturing of advanced materials. Towards this end, he is working to provide solutions to industry risks and problems—one product at a time.
Started in 2009, Saprex seeks to expedite the innovation and development cycle for advanced material and subsequent products. Its customers are manufacturers who are challenged to find and manage solutions to risks involving extreme environments such as fire, high-heat, cut or chemical attack.
Saprex’s Advanced Materials Lab is located in Grigg Hall on the campus of the University of North Carolina at Charlotte. There, in partnership with the University’s Charlotte Research Institute and local area manufacturers, Goulet conducts research on advanced materials and collaborates with business and industry to apply those materials to specific manufacturing needs.
“Our value lies in the fact that we are helping to integrate a lot of traditional textile companies to do innovative things,” says Goulet. “This will strengthen the economy and provide stable jobs.”
As the company’s primary scientist, Goulet has developed a line of products aimed at industrial safety and beneficial to a variety of end-users such as firefighters, electrical workers, welders, industrial bakers, race car drivers, steel mill workers, mechanics, military personnel—and even the NASCAR pit crews.
Saprex Axis, an exhaust insulation system which will aid the complex diesel emission systems to perform optimally in large trucks, has been approved by several large truck makers.
“We’ve developed a system that will easily stretch over the pipe and then become rigid once it’s heated up. It must perform from -50 degrees F. to 1,300 degrees F. That’s a big challenge from a fiber perspective.”
Speaking enthusiastically about recent innovations, Goulet picks up a piece of fire-resistant, aerogel-infused fabric which uses technology coming out of the space program. According to Goulet, it is the lightest insulation known to man, consisting of 97 percent air.
Saprex is currently marketing four product lines and set to launch three more in the first quarter of 2013. Saprex FLEX is an innovative and patent pending composite material based on knit construction that allows it to be easily shaped and molded to an endless variety of parts.
Saprex AXIS is an infinitely customizable, high-temperature insulation system. Saprex REACT a flame resistance material that reacts to high-heat by releasing a flame retardant to extinguish itself. This material can be found in many of the race cars including NASCAR. Saprex ARMOR is a line of cut and puncture resistant materials used in the Mechanix Wear ArmorCore line.
Saprex customers are diverse. Mechanix Wear, for instance, is a well-recognized company always looking for the newest technology and innovation. A sponsor of NASCAR, the company has a product called ArmorCore which has been built into gloves that provide the highest level of cut, puncture and abrasion resistance available.
Lincoln Industries reached out to Saprex when they needed help with high-heat insulation. They are a manufacturer of exhaust system pipe and were looking for an innovative high-heat insulation. Saprex also works with NASA, and the U.S. military.
Saprex is a young company in an evolution. They started with a few development customers. By the end of 2013, 75 percent of revenue will come from material sales, according to Goulet. “This was a breakout year for us,” says Goulet nodding. “Next year looks even better.
“Saprex serves as a fairly unique business model. We are offering rapid research and development along with integration of a global supply base so that we can provide the best solution quickly. In our industry you typically find that good innovators don’t collaborate well. While there are some large firms doing good work, I don’t know of anybody in our space who is offering an innovative, integrated solution with speed,” continues Goulet.
Benefits to partnering with the University’s Charlotte Research Institute, are multifold.
“They have a high level of infrastructure here that we as a small company couldn’t afford but can definitely use,” says Goulet.
The University furnishes Saprex with a wet laboratory in a building permitted for research. Perhaps the greatest benefit is the psychology of knowing that there is help and support around.
“We want to be leaders in innovation and that requires us to be where people are pushing the envelope in all different directions. Plus, the University has a lot of technology available for license. We are always interested in new technology” says Goulet.
The University’s primary concern in partnering with companies to further research, innovation and product development is how the work will contribute to the state economy and job growth and stabilization. “From fiber, yarn and fabric construction, we help maintain and create jobs,” affirms Goulet.
Essential for Goulet’s entrepreneurial research and development to succeed are partnerships with other textile businesses. Saprex has engaged yarn producers and finishing companies in McAdenville, Kings Mountain and Lincolnton, as well as chemical companies in Charlotte.
The partnership Saprex enjoys with Beverly Knits, Inc. is an excellent example of how innovative product development can work with textile manufacturing for mutual benefit and job growth.
Beverly Knits, Inc. was started in 1980 as a contract circular knitter. Built upon a research and development background, the company develops new and unique fabrics for diverse markets including intimate apparel, high tech underwear and outerwear, shoes, furniture, medical, industrial, automotive and mattress and bedding. Owned by Ron and Janet Sytz, Beverly Knits has grown to 190 employees and from eight to over 200 knitting machines.
Customers include Patagonia, NorthFace, the U.S. military, Nissan and Honda. “It’s quite possible that you might have some of our fabric in your car or in a composite used in the compressor for your air conditioner,” says Ron Sytz, president of the company.
Beverly Knits operates out of four buildings in Gastonia totaling 290,000 square feet. Beverly Knits was the first production facility to knit Lycra spandex into fabrics. It has survived the movement of the textile industry to other countries and the downturn in the economy by its continued diversification. The company has more than doubled in size and employees in the last 10 years.
Beverly Knits and Saprex work together to develop products and businesses that will create more jobs. “Bob supplies the product development and the customer; Beverly Knits makes the fabric needed,” explains Sytz.
When large chemical companies such as DuPont and Monsanto moved their textile operations offshore, they took their research and development programs along, according to Sytz. “In order to develop products for different industries and markets, you need a research company like Saprex that will speed up the innovation cycle,” explains Sytz. “Many times manufacturers will go to the universities in an area looking for solutions. Partnerships such as Beverly Knits and Saprex are the future of textiles.”
“What Beverly Knits brings to Saprex is first class manufacturing. I can focus on the product development because I have a knitting partner in Beverly Knits that can handle all our knitting needs,” says Goulet. “What I bring to Beverly Knits is a customer and integrated development. It’s provides a great synergy.”
Speed to Market
Saprex is able to work quickly, an important factor in today’s world. Usually, a product is being researched and developed in response to the identification of a risk. These may or may not be accompanied by demands for greater regulations.
“We live in a highly litigious society,” says Goulet. “If there is a problem, you must fix it—now. There is a socially driven conversation to solve risks. Tolerance for a long development process doesn’t exist.”
Walking around his laboratory, Goulet points to shelves and drawers.
“We are focused on rapid development. We stock a wide range of materials and equipment parts. We can build and test a new product in a matter of hours. From chemically treating, to sewing a prototype, to testing it—we have it all here. If we need a need a new piece of test equipment, we could probably have something up and running tomorrow.”
When asked about challenges, Goulet was quick to respond. “Surviving the fluctuation of an early start-up—the on-and-off-again revenue; choosing the right projects with the right people. When you are young, every decision is a big decision because one really bad decision can close the doors.”
Goulet has been in new product development since graduating from the University of Connecticut with a degree in chemical engineering 17 years ago. He came south to earn his master’s degree in chemistry from Clemson University. While there he worked with Milliken doing research. After graduation, he stayed with the company for 10 more years, working in product development, research and marketing and earned his MBA from Duke.
He went on to work in companies in Lexington, Ky., and Salt Lake City, Utah, before returning to the South in 2009 to start Saprex and establish partnership with Beverly Knits.
“I moved to Charlotte because of what’s left of the U. S. textile industry is here,” says Goulet. Working out of an incubator office at the Ben Craig Center, Goulet became familiar with the infrastructure of the city and was introduced to UNC at Charlotte. “There’s a lot of support here once you know that it’s here.”
A single father, Goulet spends his time between running the company and raising his son. He is passionate about the outdoors and enjoys backpacking, fishing, hiking and climbing. Always working, he is also passionate about the equipment and gear related to outdoor activity—how to make it more functional.
“I have a drive to build things better; to find the next generation of things,” says Goulet.
Goulet aims to help Charlotte be a global leader in materials. “We need to create a vision and tell our story. We have all the resources for textiles here: a great history in textiles, a good work force, facilities and a number of innovative companies.”
Goulet believes that as business, government and community leaders in the Charlotte region take an appraising look at all of the advanced textiles that are part of our everyday lives and realize that many of the innovations over the next hundred years will involve fibers and fabrics, they will start to wonder, “Is developing a city in the heart of textile country into a world leader in advanced materials that big of a stretch?”
Still, that may not be enough for Goulet. His personal goal is to have an impact as powerful as reaching for the stars.
“I want to be on the first human flight to Mars. No,” he corrects himself. “I want my advanced material to be on that flight; material that breaks the paradigm of what we thought possible.”
Long-term vision is woven strongly into the life insurance firm of Barry, Evans, Josephs & Snipes (BEJS). “A life insurance policy is a contract,” says John Barry. “If you think about it, it’s the longest contract that any of our clients will ever enter into.”
Barry—partner, president and CEO—is the second generation of his family in the firm. His father, Ernest Barry, along with Don Evans, Rick Snipes and Alex Josephs, flipped the traditional business model upside down when they founded the company in 1984.
“The typical insurance advisory firm out there consisted of a large sales force and a small support staff,” explains partner Clint Crocker, “but the principals of BEJS realized that the idea of buying a life insurance policy and putting it in a safe deposit box to gather dust didn’t work for their clients’ level of sophistication. Their clients needed ongoing service of their plans, so for every one or two people they had out in the field marketing, they had three or four people in the office dedicated to serving their clients.”
That founding principle of high level, ongoing service continues today through the leadership of BEJS’ five current partners: John Barry, Clint Crocker, Gerald Applefield, Ernest Barry, and Scott Jones. With close to $5 billion of total insurance in force, BEJS specializes in the unique insurance needs of affluent families, high income executives, and businesses concerned with preparing for business succession or developing select executive benefit plans.
“Attributes of the affluent marketplace require certain products or specialties that can’t be accessed through the routine insurance firm,” explains Crocker. “We can bring those clients something that’s not ‘off the shelf.’ We specialize in helping families and businesses protect what’s important to them.”
“Everything is customized,” adds Barry. “We don’t come with a solution looking for a problem. Our tagline is ‘Priorities Preserved.’ We’re relationship-oriented, so we work on understanding the priorities of each client, and we play long-term, so we can fully understand what those needs are.
“Most insurance agents or brokers take a product they are given and try and sell it, but we have 30 years of experience underwriting the high net worth and executive marketplace, and that knowledge sets us apart and allows us to be innovative.”
One of those innovations is BEJS’ membership with M Financial Group, an elite financial services company that provides products and services specifically tailored for the affluent market.
“We know that because of access to better health care, better education, and a better standard of living, the higher net worth market has a better risk profile,” Barry explains. “Information suggests that an investable net worth of $1 million or more starts to show an improvement in mortality rates and that improved risk should translate into better pricing that we could then deliver to our clients.
“But when we first suggested that to the large insurance companies they laughed at us. The only way the insurance companies would consider doing something like that is if we put our capital at risk, side by side, with theirs. The vehicle through which we invest capital alongside another insurance company is our reinsurance company.”
Through M Financial Group’s reinsurance platform, which represents $47 billion in face amount and $8 billion in assets under management, BEJS is able to offer clients a differentiated pricing advantage that lowers policy costs and offers better value for that cost. They can also offer M Financial Group proprietary products specifically designed for the high net worth and executive market.
“The proprietary products we offer are issued by name brand insurance companies like Pacific Life, The Prudential, and John Hancock, but the product you get from those carriers through BEJS is priced differently and better suited to our clients than the product you would get from your local agent,” Barry points out.
Although the company is licensed to sell insurance in several states and has clients in Texas, Arizona, California, Florida, Illinois and in states along the Northeast corridor, Barry describes BEJS as a “Carolinas company.”
With three founders from Charlotte and one from Rock Hill, S.C., the firm’s original focus was the Charlotte metro area. In the heyday of Southern textile mills, Barry says the firm “owned the textile mill market” from Anderson, S.C., through Greensboro, N.C. The privately held, multi-generational business model so typical of the textile industry is still a big part of the firms’ core client base.
“We take tremendous pride in our multi-generational work. Today, we have families where the grandparents, children, and grandchildren are all clients,” says Barry. “That’s very much a part of who we are, but it’s not what we do exclusively.
With specialized products and services, BEJS can step in when standard employer benefit plans are inadequate to fully protect a high income professional and his or her family. Customized plans can provide additional disability protection or supplement a retirement program.
And in keeping with their long term vision, BEJS has expanded their focus to include high income professionals.
“We realize that there is an entire level of professionals who will one day be leaders in their organizations,” explains Barry. “They’re young, bright, articulate, and aggressive, and they are already doing well and working their way up. They may not be high net worth today, but they’re likely to be high net worth tomorrow, and we want to get the message out that they may be able to benefit from our resources and services now and also in the future when their needs change. We fundamentally believe that acorns grow into big trees and want to invest in building relationships with emerging leadership talent.”
Business succession planning is also a specialty of the firm and one in which expertise is enriched by the company’s own personal experience. “We’ve gone through every type of business transition event possible,” says Barry. “We’ve added partners, had partners retire, and had partners die. We’ve done a reorganization and also a strategic partnership with a public company. We’ve sold to a public company and then bought it back. Having actually gone through those events puts us in a better position to plan for our clients with a great level of empathy.”
And while BEJS can help clients in any one of their specialty areas, they find that their initial work with a client in one area often broadens into other areas. “We may begin by working on executive benefits,” Barry explains, “and that turns into succession planning, which then turns into transfer planning. Or an initial engagement in estate planning turns into executive benefits.
“We never know where we’ll begin with a client, but we do know that because we are relationship-oriented and play long term, we might be involved in multiple projects with a client over a 20-year relationship. The initial project may be at a superficial level, but as that relationship builds over time, other issues are revealed, and we start to address them as well.”
“We not only work with clients, we also work very closely with the clients’ other advisors,” adds partner Gerald Applefield. “Whether it’s their accountant, attorney, investment manager, or trust officer, we do tremendous work advocating and supporting the advisory community. Our efforts are collaborative.”
“Often, a client’s advisors will come to us for help in working through a particular situation,” Barry explains. “Recently, we helped edit a resource book called The Advisor’s Guide to Life Insurance published for the American Bar Association. Providing educational resource to the advisory community in our area of expertise is a part of our culture.”
“There’s a misconception out there that insurance companies all provide about the same service,” adds Crocker, “but we’ve got a service department you won’t find at other firms. We put a lot of energy and resources into taking care of our existing client base rather than just on acquiring new clients.”
“We want to make this a pleasing experience for our clients,” says Barry. “That’s why we spend so much money on our staffing and administration team and do so much training. We have really bright people who have the ability to advocate on the client’s behalf.”
“We can distribute and even assist in manufacturing the product, but we also understand how important it is to properly service the product,” adds Applefield.
“Back in 2003, there was a regulatory change regarding the tax code for a popular insurance planning concept known as ‘split dollar,’” Barry recalls. “Gerald is known for his work in this area, so we were inundated with calls from attorneys asking for help.
“The attorneys told us that other agents were ignoring the issue because they weren’t getting paid for it. It was pro bono work, but we felt it was part of building relationships. Because of that, we ended up getting new work, but the point really is taking care of the client even when, sometimes, it’s not transaction-based. It’s a testimony to making the investment in the long-term relationship.”
Maintaining existing accounts is enhanced by the firm’s customized service process where a firm member sits down with a client in a “shirt sleeves session” to discuss their current situation and what is meaningful to them, ensuring that their needs continue to be met—preserving priorities. The customized service process is complemented by strategic reviews to address specific changes that may affect insurance needs.
“You can’t buy insurance like you used to,” states Barry. “Somebody needs to monitor that insurance to optimize performance with due consideration to goals and objectives that change over time. Just like you would expect a stock broker to manage your portfolio of securities, our clients can expect us to manage their portfolio of insurance.”
An Honored Role
But BEJS’ aspirations run even higher than effectively managing a client’s insurance. Barry describes the greatest affirmation of their work as being part of a client’s “inner circle.”
“In this business,” he says, “there’s always talk of the ‘need moment’ when the unfortunate happens. We are very sensitive to earning the opportunity to be a member of the inner circle in that ‘need moment.’ We believe it’s an honor to be one of those advisors that gets the call.
“It’s important to be included among a client’s other advisors when that client explains how they wish things to be handled so there’s no confusion when they die. That’s a critical role to play and we value the opportunity to be part of that.
“It sounds corny,” Barry continues, “but there’s nothing more satisfying than knowing that you did something that made a positive difference in someone’s life. That’s what we call psychic income.”
BEJS looks at growth differently than most businesses. They mark it with milestones such as when previous partner Ernest Barry Jr. rejoined the firm in 2009 and when Scott Jones, formerly of Executive Financial, became a partner in 2011.
Last year, the firm’s assistance in making TIAA-CREF a carrier partner of M Financial was another growth milestone. As the firm continues to grow there are plans for the addition of new, younger partners because as Barry proudly states, “One of the founding premises of this company is that the institution would be here to service the client in perpetuity.”
It’s a foundation based on long-term vision.
Modern society takes a lot for granted. We expect that when we flip the switch, push the lever, turn the knob, key in the numbers or press the button that the lights will come on, the elevator will open, phones will ring, the room will be heated or cooled, the toilet will flush, and, if we are threatened, alarms or sprinklers will get our attention. Few people stop to think about how these and many other more complex systems work in the buildings that we inhabit. As long as it’s all working, it’s all comfortably out of mind.
Not so for the engineers and designers of Optima Engineering, a full-service electrical, mechanical and plumbing engineering firm, who not only spend their talents designing electrical and mechanical systems, but also work to make sure that they function in the most environmentally friendly and most cost-effective manner.
“We support the built environment industry by designing systems most people never see,” says Keith Pehl, Optima Engineering’s founder, president and chief electrical engineer. “It’s not just about having these systems work; it’s also about designing an environmentally sustainable building. We call them high-performance buildings; designed to use the least amount of water, electricity and natural gas.”
Started in 1992, Optima Engineering has built a reputation as a leader in the sustainable movement. “It’s one of the things that make us stand out from other firms,” says Pehl. The firm has completed over 150 green projects in the past few years. “Sixty to 70 percent of them are LEED certified (Leadership in Energy and Environmental Design, the recognized standard for measuring building sustainability), but all of them were done with a focus on sustainability,” says Pehl.
“There are a lot of things we do that just make sense that the owner doesn’t necessarily ask to be done—solar thermal water heaters, for instance. Sometimes they argue; mostly they thank us. We go in with the presumption that we are the experts in this. If it doesn’t make sense, we won’t do it,” says Pehl.
Pehl earned his own LEED accreditation in 2004 when LEED methodology was gaining interest around the country. “I pushed my staff to seek accreditation as well. They pursued it first; embraced it later,” chuckles Pehl.
Ronald Almond joined Optima Engineering in 1994 as a partner and continues to serve as vice president and chief mechanical engineer. Together, he and Pehl have built their staff to 35 members. Among them were Brian Thompson and Steven Daley, both of whom arrived in 1997 and have now become stockholders and managing principals in the firm taking on the day-to-day operations.
“Our new positions and focus free up Keith and Ron to spend more time examining new innovations and trends, as well as on business development,” says Daley.
Optima Engineering has a significant presence within the Charlotte skyline. “We’ve worked on most every building in uptown Charlotte at some point or another,” remembers Pehl. The firm has completed over 10,000 projects since it began.
“Seventy percent of our business is in the Carolinas but we are registered in 40 states,” confirms Pehl. Often, out of state work is driven by client expansion. Pehl and Almond attribute their success to the acquisition of talented people, diversification and deliberate growth.
Many well known names comprise the list of buildings, sites and facilities which carry sustainable infrastructure designed by Optima Engineering: Carowinds, Capitol Broadcasting Company, Charlotte-Douglas International Airport, UNC Charlotte, Wells Fargo, NASCAR Plaza, Time Warner Cable, zMAX Dragway, Elevation Church, Charlotte Area Transit System (CATS)—the list is lengthy.
“Projects are generally complex and can take a year or more to complete. Then we offer ongoing support to maintain the sustainability of the building,” says Pehl. “Take Carowinds—it’s a city from our perspective. In the summertime, there are more people there using infrastructure in any given day than the population of most towns in North Carolina. We’ve just finished eight projects out there. They’ve been a client for the past 20 years.”
Historically, most of the firm’s clients were architects—around 80 percent. Now, architects make up about 50 percent of clients due to the impact of the recession on the building industry. The firm has become heavily involved in mission critical work including data centers, hospitals and medical offices. “Mission critical work is typically contracted directly,” explains Almond. “We actually have an architect as a consultant on our team in many instances.”
Becoming Mission Critical
Mission critical work involves buildings which require uninterruptible electric power and cooling systems, largely centered on the functionality of many servers, computers and other technologically advanced equipment.
“My big passion for several years now is called net-zero energy buildings—buildings that consume a certain amount of energy over the course of a year but produce the same amount of energy, as well,” offers Pehl. “It starts with efficient design and ends with solar panels.”
“There are currently only 29 buildings in the United States that perform at net-zero. Optima is currently working on North Carolina’s first such building—Sandy Grove Middle School in Hoke County. This one will actually produce 15 percent more energy than the building consumes,” says Pehl. “To me, that’s where we go as a society.”
Coincidentally, Pehl adds, the military is extremely interested in this technology so they won’t be dependent on the utility companies and vulnerable to security and reliability issues.
“It definitely helps to work with like-minded architects and builders because it’s not just the design but also the methodology,” says Pehl. “To build a clean building you need a ‘bring less on/ throw away less’ mentality.” The aim is for a dust free site which protects duct work and electrical systems.
“You have to realize that there is a lot of cost savings involved,” says Pehl. “We do a lot of education for our clients.” Many efforts, such as recycling, result in side industries. Pehl cites the development of a sheetrock recycling plant which lowers the cost of sheetrock: “You can pay by the pound to throw things in the landfill or get paid to deliver it to another building site.”
Optima Engineering designs dashboards for buildings which monitor and display energy usage by the minute, hour, day and week, etc. “It shows you exactly where your problems and issues are, the number of kilowatt hours being used,” says Pehl.
The firm’s work supports Duke Energy Carolinas’ Envision Charlotte program which is a national model. The kiosk uptown displays the results collectively for all the buildings in uptown. The purpose of the program is to reduce electric usage through awareness of usage. The goal is to see a 20 percent reduction in five years.
“The information affects your behavior,” attests Pehl, who likens the experience to his car, a Toyota Prius, which provides drivers with mileage efficiency information. “I used to be a very lead-footed driver. Now, if I’m not getting 50 miles per gallon, I’m mad. The dashboard has slowed me down. The dashboard does the same thing with a building.”
While there is an upfront cost to having a building dashboard, it’s very insignificant compared with savings, according to Pehl. “If it costs $55 million to build a school and the electrical system is $5 million of that, the dashboard will likely cost about $20,000. If they save five percent of their electrical costs, they have paid for it in six months.”
The work of the 35 Optima Engineering employees is divided about half and half between electrical and mechanical engineering (including plumbing and HVAC—heating, ventilation, and air conditioning). Approximately half of the staff is comprised of engineers.
Optima Engineering has taken on an increasing role in consultation and education. Once per month existing and potential clients come to the firm’s office to attend Optima University, a lunch and learn program which teaches about sustainable building and design. Accredited by the American Institute of Architecture, architects can earn needed continuing education credits.
“We’re not the stereotypical geeky, pocket protector-wearing engineers holed up in their offices,” says Daley, with a smile. “There is a strong emphasis here on communications, both written and verbal; we try to bring every client along on sustainability and that requires teaching.”
Both Pehl and Almond thought they were going to become architects. For Pehl, the moment of truth was when he went off to college at North Carolina State University and saw the solar house installed there.
“I’ve always been fascinated by solar energy,” says Pehl who went on to earn his degree in electrical engineering. Pehl practices what he preaches in his personal life. His home in Denver, North Carolina features solar roof panels and a geothermal heat pump which uses wells in the ground. He also installed solar panels on the roof of the LEED certified building that houses the Optima Engineering offices on South Tryon Street in Charlotte. The firm, which owns a portion of the building, has occupied space in it since 2008.
“I’m a little too optimistic sometimes. My partner, Ron, grounds me,” says Pehl. “He wasn’t sure about the panels on the roof but six months after we put them up and were receiving a check every month from Duke Energy, he said “We need to expand this.””
Almond earned an associate degree in architectural technology but couldn’t find a suitable job. “No one was hiring so I went to work as a draftsman for a mechanical engineer. I was soon hooked and went back to school at UNC Charlotte for a degree in mechanical engineering.”
A high school internship in mechanical/electrical/plumbing engineering solidified Thompson’s interest in the field. He graduated from UNC Charlotte with a degree in electrical engineering.
Daley’s interest in engineering stemmed from childhood. “I skipped the fireman and astronaut phases. I always wanted to be an engineer.” Daley completed his degree in mechanical engineering at Ohio University.
Optima Engineering’s leadership has strong ties to the community and participates in numerous programs to give back. Some of these are: the ACE Mentoring Program, West Charlotte high School/Phillip O. Berry Academy of Technology; South Mecklenburg High School Engineering Advisory Board; Friendship Trays; and the Make a Wish Foundation.
Pehl credits diversification as key in weathering the economic downturn of 2008-2009. Plus, the firm’s core product was, and still is, mission critical work which was never really impacted by the recession, according to Almond.
“The firm’s focus on sustainable building has allowed us to weather the storm economically better than some others,” echoes Thompson. “I see that sustainability is not going away with rising energy costs. People will always be looking to save money.”
The firm is doing more adaptive reuse projects now and pursuing net-zero usage through mixed use buildings in urban areas situated to share energy. Plus, the sustainability industry has created the need for maintenance over time which increases business.
“We do a lot of sustainable work in the Triangle Region so we’re planning to expand to Raleigh next year,” says Pehl. The firm is also considering Greenville, S. C., and Atlanta, Ga., as additional office sites.
The partners have been diligent in raising a second tier of leadership and developing a succession plan. “You see so many firms where engineers work until they’re in their 70s and 80s and then shut the door,” says Pehl. “That’s not us.”
“I’m very proud of the way our firm has evolved over the years to be a leader in the field,” says Almond. “We grew slowly and did a good job along the way.”