The Last Days of the Regional Economic Development Partnerships

My original article about the decline in the NC regional economic development partnerships.

THE LAST DAYS OF THE REGIONAL ECONOMIC DEVELOPMENT PARTNERSHIPS

 

On May 12th, an announcement came out of Asheville that five western North Carolina counties were banding together to create a new economic development entity. Called groWNC, the new organization is “designed to get the region thinking collectively about ways to develop the economy with a focus on sustainability.”  According to the article in the Smoky Mountain News, the group will focus on seven core areas: jobs and economic development; housing; natural resources; cultural resources; energy; land use; transportation; and health and wellness.

Without casting aspersions toward the AdvantageWest Economic Development Group (the state-designated economic development regional partnership), the five counties cited a different set of economic development and long-term planning needs.  According to the article: “Each of the (seven) committees has drafted a list of goals that it hopes to work toward that will promote growth and more inter-connectivity between the counties, rather than each county taking its own path.”

Last month, Montgomery County articulated a much more explicit message as talks were held in committee in the North Carolina legislature for the county to leave the Piedmont Triad Partnership and become funded individually by the state.  In very direct terms, Montgomery County leaders expressed the fact that they cannot point to a single economic development project in their county that emanated from the Piedmont Triad Partnership – ever. In a nod to their true geographic focus, the Piedmont Triad Partnership supports the rural county’s exit.

Since then, elected officials from Surry County have expressed the same sentiment and asked to be removed from the Partnership and also retain their representative funding.

This all may seem sudden, but it comes as no surprise. Two years ago in a column I wrote for the News – Record, I openly questioned that if the Piedmont Triad Partnership were to go away, who would miss it(?).  Even with good intentions, there are a variety of factors that make it difficult for the organization – or many of their sister partnerships – to make a substantial difference in the economic development landscape.

The first factor is related to the very nature of arbitrarily putting together “regional partnerships” of unrelated counties for any reason – in this case, the seven regional economic development partnerships.  Contrary to the beliefs of those who promote regionalism at every turn, regionalism doesn’t work in every case on every issue.  It certainly hasn’t in economic development.  The preponderance of evidence shows that cities are the principal drivers of any regional economy; the Piedmont Triad Partnership is tacitly acknowledging that by supporting rural Montgomery County’s exit.

The current PTP Board of Directors’ focus is now squarely on the urban area of the Partnership footprint – particularly the area that spans the I – 40 corridor from Alamance through Guilford and into Forsyth County. Neither Montgomery County nor Surry County fit in the Piedmont Triad Partnership economic development vision and both the counties and the PTP Board know that. At some level, all economic development is local – especially with the arcane tax laws currently on the books. Rather than not being included and feeling ignored, both counties are (at some level) opting out.

The second factor is that despite purporting to be the lead economic development agency for the Triad, the Piedmont Triad Partnership has not been in the economic development project role since its inception. The organization would occasionally participate in projects that, for instance, were in neutral territory like the Piedmont Triad international Airport property and the Skybus project. But principally, the organization had for years been an umbrella marketing organization for its member counties. In that role it had some reasonable successes, but the wide disparity between the urban center and the rural periphery ultimately made for an unworkable marketing message and much of the marketing has been returned to the counties’ ED operations.  Not long ago, High Point and Greensboro banded to create their paired marketing message independent of PTP.

The third factor is very simple: every member county in the Piedmont Triad Partnership (except currently, Caswell and only by proxy, Guilford), has its own substantial economic development organization and staff. All the cities and many of the towns have economic development staff as well. There just wasn’t a need for the duplication of economic development efforts that the Piedmont Triad Partnership brought to the table.

The fourth factor is a current trend and is completely out of the control or critical assessment of the Piedmont Triad Partnership. The economy just stinks. There is nothing they – nor anyone else – could have done about that; the Triad was just hit worse than other areas the country because of the nature of the job requirements and job losses in its legacy industries of textiles, apparel, tobacco and furniture. When times get tough, it seems everybody points a finger finding someone to blame. This case is no different: projects didn’t come to many areas of the Triad during good times and when times get tough elected officials and business leaders – in their frustration – look for reasons for their current situation and find a scapegoat. In that regard, the Piedmont Triad Partnership is low-hanging fruit. This very thing happens to quality staff in slow local economies and it will certainly happen within the loose connectivity with the regional partnership.

 

THE REGIONAL PARTNERSHIP STATUS

The function of economic development assistance from state or regional organizations will undergo significant transformation in the years to come.  The state rightly prefers to locate more opportunities in rural areas to mitigate poverty in high unemployment counties.  Regional partnerships can’t (or shouldn’t) play favorites among their member jurisdictions for economic project siting.  In their world, where jobs go isn’t site specific and doesn’t matter.  Counties don’t see it that way.  New economic development projects are their first line of sight for property tax revenue increases.  In their minds, with property taxes meaning so much to those counties, location matters because – location matters. 

Aside from the Piedmont Triad Partnership, the other six economic development partnerships have at least one major city at its core – with the exception of the 16-county Northeast Commission (covering the remote area in the northeastern part of the state) and the vast area of western North Carolina west of Gastonia and Asheville where 23 of the state’s 100 counties are regionally grouped into the AdvantageWest Economic Development Group.  Regional association and state assistance for the far western counties of North Carolina and the impoverished northeastern corner (perhaps adding rural counties to the west and south of the current Northeast Commission where there are no cities to draw from) makes sense.  Otherwise, there is ample evidence from the examples of self-association and partnership withdrawal that North Carolina’s regional partnership paradigm needs a complete overhaul, major reassessment or reduction to the two non-city affiliated areas of greatest need.

 

PART 2:  The Next Steps for North Carolina’s Economic Development Partnerships

 

*Rob Bencini (MBA, CEcD) is an Economic Futurist providing critical insight for business and government.  He may be reached at rbencini@earthlink.net or www.robbencini.com.

 

 

 

 

 

 

 

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