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The Feasibility of Mini-Hub

Development in the Research Triangle


Regional Partnership Region
Michael Luger, Ph.D.
Office of Economic Development
Kenan Institute
The University of North Carolina at Chapel Hill
(919) 962-8870
Fax: (919) 962-8202

February 2003

for:

Research Triangle Regional Partnership


Charles Hayes, President
Ted Abernathy, Vice President

Acknowledgments
We owe a debt of gratitude to several organizations and individuals whose partnership made the project possible and whose help improved its quality. Most important,
we thank the Golden LEAF and its executive director, Valeria Lee, for providing the
funding for the study to the Research Triangle Regional Partnership (RTRP). The Foundation considered a study of mini-hub development promising not just for citizens of
the non-core counties of the RTRP region, but in other regions in the state, as well.
Accordingly, we approached the project as a pilot that could be replicated elsewhere
in North Carolina and around the country where there is a relatively prosperous and
densely developed core surrounded by less prosperous and less developed counties.
RTRP was not just a client for this work, but also, an active partner. Indeed, while
Charles Hayes did not invent the idea of mini-hubs, he had the imagination to commission a study to see if they made sense in his region. He and Ted Abernathy provided support, data, contacts, and advice to us throughout the project.
Early in the project, Charles and Ted invited a cross-section of business and political leaders to convene and advise us about the likely feasibility of the concept. Those
individuals included: Dee Freeman, Ronnie Goswick, David Lawrence, Andy Levine,
Neil Mallory, Paul Meyer, Susan Seymour, and Jim Talton
Among the members of the advisory group was Neil Mallory, executive director
of the Kerr-Tar Council of Governments (Region K). He recognized the possible value
of a mini-hub for the five region K counties and invited us to several meetings to
present the concept to his constituency. Those meetings were important testing grounds
for us. We received helpful comments that we then incorporated into the plan. Significantly, the audiences to whom we presented seemed to agree with our assessment
and wanted to move ahead as a pilot site.
We also need to thank the county economic developers who helped us evaluate
their industrial sites: Benny Finch, Ronnie Goswick, Jerry Hartgrove, Bob Heuts, Allen
Kimball, Glen Newsome, Mike deSherbinin, Robin Spinks, Tony Tucker, and Leon
Turner.
The Office of Economic Development team that worked on this report included
Leslie Stewart, OEDs associate director; Brande Roberts, OED staff; Jonathan Perry, a

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

Ph.D. student in the Department of Public Policy, and Jun Koo, a Ph.D. student in the
Department of City and Regional Planning.
Of course, neither Golden LEAF nor RTRP is responsible for any errors of fact or
interpretation. Neither are the ideas we present intended to constitute the official
policy of the University of North Carolina at Chapel Hill.

ii

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

Contents
Acknowledgments ................................................................................................................ i
I. Introduction ....................................................................................................................... 1
II. The Problems to be Addressed by Mini-Hubs ......................................................... 3
Economic Disparities ................................................................................................... 4
The Failure of RTP to Spin-off Manufacturing ....................................................... 8
The Limited Effect of State Policy Efforts .............................................................. 12
Too Little Inter-county Cooperation, Too Many Industrial Parks ..................... 13
III. The Mini-Hub Concept .............................................................................................. 17
Mini-hubs Defined .................................................................................................... 17
What Mini-hubs Are, and Are Not ......................................................................... 18
How Mini-hubs Can Pay Off for the Sponsoring Counties ............................... 21
IV. What Needs to be Done to Create Mini-Hubs ....................................................... 23
Areas Currently Designated for Mini-hub Sites ................................................... 23
Sub-regional Steering Committees ......................................................................... 23
Decisions to be Made ................................................................................................ 24
Ownership/management options ........................................................................... 24
Choice of sites ............................................................................................................. 25
Choose appropriate cluster focus ........................................................................... 26
Necessary enhancements and incentives .............................................................. 26
Financing ..................................................................................................................... 28
V. Some Examples ............................................................................................................... 31
Missouri Research Park ............................................................................................. 31
The Milwaukee County Research Park .................................................................. 32
Stout Technology Park .............................................................................................. 34
References ............................................................................................................................. 37
Appendix A: Office of Economic Development Site Survey Instrument ............... 39
Appendix B: Notes on Potential Sites in Northern and Southern Counties .......... 43
Appendix C: Industry Groupings within Sample Clusters ....................................... 51
Appendix D: Legal Considerations and Examples of Revenue/Cost Sharing ........ 53

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

iii

List of Tables and Figures


Table 1:

Differences in Demographics Among RTRP Counties


Core, Southern, and Northern ......................................................................... 6
Table 2: Cross-commuting in 2000 .................................................................................. 7
Table 3: Population Growth Core, Southern, and Northern Counties ............... 9
Table 4a: Largest Employers in Northern Tier (Kerr-Tar) Counties, with
Size and Year Established ................................................................................ 10
Table 4b: Largest Employers in Southern Tier Counties, with
Size and Year Established ................................................................................ 11
Table 5: Mass Layoffs in RTRP Peripheral Counties, 19962001 .............................. 12
Table 6: Recent Cluster Studies for the Region ........................................................... 19
Table 7: Radius data for Northern Sites, 2000 ............................................................. 27
Table 8: Radius data for Southern Sites, 2000 ............................................................. 28
Table 9: Business Concentrations in Select Cluster Areas in the
Northern and Southern Counties .................................................................. 29
Figure 1: Tier Designations ................................................................................................. 4
Figure 2: The Thirteen-county Research Triangle Region ............................................ 5
Figure 3: Differences in Educational Attainment within the
Research Triangle Region ................................................................................... 6
Figure 4: Traffic Counts ....................................................................................................... 9
Figure 5: Regional Industrial Parks and Available Acreage ........................................ 14
Figure 6: Linkages Among Mini-Hubs and RTP ........................................................... 21
Figure 7: General Siting of Two Mini-Hubs ................................................................... 24
Figure 8: Candidate Sites in the Northern Counties ................................................... 25
Figure 9: Candidate Sites in the Southern Counties .................................................... 26

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Office of Economic Development, Kenan Institute, UNC-Chapel Hill

SECTION ONE

Introduction
Fifty years ago, visionary leaders in North Carolina hatched a plan for a new kind of
industrial park. Raleigh, Durham, Chapel Hill, and its environs were suffering a considerable brain drain of talented, young individuals whose skills and aspirations were
out of sync with the jobs that were available at home. So they took their new college
degrees with them to San Francisco, Boston, and other such places.
Romeo Guess and Luther Hodges, among others, targeted land in the center of
the triangle of cities to be home to new kinds of businesses not the traditional
manufacturing companies that had been the staple of the region, but research and
development (R&D) operations associated with burgeoning new high-tech companies. The objective was to create jobs that would retain the best and brightest. The
success story of the Research Triangle Park (RTP) is well documented by Link (2002),
and Luger and Goldstein (1991).
Research Triangle Parks founders understood that R&D firms required close proximity to research universities and an airport, and RTP had those attributes. But that
raised another concern: what about the parts of North Carolina that also suffered
brain drain and lagging economic development, but did not have those features? The
answer the founders gave was that their initiative would benefit those other parts of
the state nonetheless if the companies locating in RTP also moved their manufacturing facilities to the state, to be near their R&D labs.
That did not happen to any large degree. Consequently, the gap between the
best-off and worst-off counties widened. In this region, the core counties (Durham,
Orange, and Wake) have median family incomes above the national average and what
Goldstein and Luger (1992) have termed a brain draw. But the outlying counties of
the greater region still suffer relatively low wages, higher unemployment, and the
loss of talent. The same is true for other peripheral and rural counties in the state.
In retrospect, the failure of the RTP to generate associated manufacturing activity outside the core counties is not surprising. It was merely a hope, not a plan of
action. No sites were identified to receive those related plants. No connections were
established between possible locations and the RTP. No incentives were provided to
induce specific companies to co-locate R&D and manufacturing in the same state.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

The mini-hub idea that is the subject of this report is an attempt to provide the
plan of action that has been missing from the RTP model. The concept is to provide
enhanced sites appropriate for mid-tech businesses that would benefit from proximity to the RTP and the resources located in the core counties of the region, but require
more and/or cheaper land than is available in the RTP itself. These mini-hubs would
be different from the many traditional industrial parks that are a common element in
counties economic development repertoire. They would be focused on specific clusters of businesses that are consistent with the states and regions strategy for the 21st
century. They would include facilities, services, and amenities that would be particularly attractive to those types of businesses. Ideally, they would have a special certification as an RTP-affiliate, so they can benefit from the cachet of that park. And, possibly, they would provide special incentives to targeted businesses to induce them to
come.
The cost of developing these mini-hubs will be greater than for traditional industrial parks, because of the enhancements. Even with federal and state support (which
is yet to be determined), the cost would be too high for any single non-core county to
incur. Accordingly, the mini-hubs are conceived as multi-county projects, with shared
costs and benefits. Cost and revenue sharing are not new concepts in the U.S., but
have not been used much in North Carolina. Experts argue that multi-jurisdictional
cooperation as embodied in cost and revenue sharing is required if regions are to
compete successfully in the global marketplace of the 21st century.
This report is intended only to outline in broad strokes the mini-hub concept,
not to be an operational document. It is meant to provoke sufficient interest among
stakeholders in the RTRP region to justify the next, operational phase.
The report is divided in to four further chapters. Chapter 2 expands upon the
problems faced in this region today, which demand some type of response. Chapter 3
presents the mini-hub idea: what mini-hubs are and are not meant to be. Chapter 4
specifies the steps that need to be taken to move the idea forward. And Chapter 5
provides some examples of parks elsewhere in the U.S. that bear some resemblance to
what we describe here. We relegate some supporting material to the appendices.

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

SECTION TWO

The Problems to be
Addressed by Mini-Hubs
The mini-hub concept was developed to address persistent problems that affect regions, like the Research Triangle Partnership, that are characterized by a relatively
healthy core and a less-vibrant periphery. The core-periphery differences show up in
many measures of economic performance and have several undesirable effects. They
reflect the market tendency for economic activity to concentrate near the most developed resources (for example, the most complete infrastructure and best-educated labor), creating a gap between have and have-not regions that public policy has difficulty overcoming. The problem is compounded by a lack of coordinated effort among
the peripheral counties. Going it alone, which is the typical approach to economic
development, invariably results in duplication of effort and destructive competition.
The mini-hub idea is not new. It is based on the same rationale as research parks
(which, in our parlance, are the hubs) that were developed as growth poles in lessdeveloped and/or more rural regions. In those locations, the parks have provided the
urbanization and localization economies that were absent.1 Of course, not all research
parks have been successful, but some have been shown to be an important engine of
regional development (Luger and Goldstein, 1991). One of the most notable examples
is the Research Triangle Park (RTP).
The idea of mini-hubs as an instrument of rural and smaller town economic development in North Carolina dates back at least to the first two terms of James B.
Hunts governorship. He proposed the idea of a Triangle East park, to be developed
amid Zebulon, Rocky Mount, and Wilson, providing a locus for manufacturing facilities that may have R&D operations in RTP. That idea was picked up again during the
Vision 2030 meetings throughout the state, where regional leaders puzzled over ways
to provide the impetus for cluster development outside the major urban centers. The
1. Urbanization economies are present in well-populated areas where the density of households
and businesses enables a large number of support services and amenities to be economically
viable. Localization economies arise when many similar businesses co-locate to take advantage of
a density of a common pool of workers and other similarly demanded inputs.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

Rural Prosperity Task Force also raised the question of whether mini-hubs might be a
viable rural development strategy.

Economic Disparities
The unevenness of economic development among North Carolinas counties has long
been recognized, and has been a focus of state policy for decades.2 In 2001, for example, the five healthiest counties had an average unemployment rate 8.7 percentage
points lower than the five worst-off counties (2.7 vs. 11.4 percent),3 and an average
median household income $23,262 higher ($49,339 vs., $26,077).4 Those types of differences have persisted through good and bad economic times.5
The worst-off counties in North Carolina generally are rural and toward the periphery of the state. That can be seen in the most recent tier map of North Carolina
(Figure 1) which shows five levels of counties by level of distress. Those tiers are
used to target tax incentive and other programs toward the counties most in need.
Tiers 1 and 2 (the worst-off) tend to be at the states rural edges.
FIGURE 1: Tier Designations

2. An early example of this was the 1986 North Carolina Commission on Jobs and Economic
Growths year-long study to identify the major economic challenges facing the state. Chief among
its findings was the growing disparity between rural and urban North Carolina. That study led to
the creation of the North Carolina Rural Economic Development Center in January 1987.
3. The worst-off counties in 2001 in terms of unemployment rates were Halifax, Swain, Cleveland, Robeson, and Yancey. The best-off counties were Watauga, Orange, Currituck, Chatham,
and Camden. Source, U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics.
4. The worst-off counties in 2001 in median household income were Bertie, Tyrrell, Hertford,
Halifax, and Graham. The best-off counties were Durham, Cabarrus, Mecklenberg, Union, and
Wake.
5. In 1997, for example, the difference between the top and bottom five counties in unemployment rates was even greater 1.88 vs. 11.34 percent.

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

Each of the seven economic development partnership regions of the state has
marked variation among its constituent counties, though to different degrees. The
Northeast Partnership, for example, contains just Tier 1, 2, and 3 counties. Other regions have at least a few Tier 4 and 5 counties to go along with their lower tier counties.
The Research Triangle Regional Partnership (RTRP), shown in Figure 2, is perhaps the most interesting case because it contains three of the wealthiest counties in
the state (Durham, Orange, and Wake), which house major universities and sophisticated high-tech companies. The core part of the region is centered on one of the
worlds oldest, largest, and most successful research parks. At the same time, RTRP
includes a Tier 3 (Person) and two Tier 1 counties (Vance and Warren).
Some of the differences in demographics among counties can be seen in Table 1.
Figure 3 shows differences in educational attainment.
The tale told by the data is one of two subregions: the haves and the have-nots.
Residents of the core counties Durham, Orange, and Wake had better access to
jobs, with November 2002 unemployment rates at 5.5, 2.9, and 4.8 percent, respectively, compared to 7.4, 8.8, 12.3, and 8.8, and 12.3 percent in Harnett, Person, Vance,
and Warren, Counties, respectively. Citizens in the higher unemployment counties
that did work tended to commute longer to their jobs. Over 20 percent of all workers
in Harnett, Warren and Person Counties drove more than 45 minutes to work, compared to 11 percent or less in each of the core counties. Job quality and pay follow

FIGURE 2: The Thirteen-county Research Triangle Region

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

TABLE 1: Differences in Demographics Among RTRP Counties Core, Southern, and Northern
Percent
Workers
Commuting
45 or More
Minutes to
Work

Percent
Workers
Working
at Home

Median
Household
Income,
1999

Unemployment
Rates,
Nov 2002

Total
Population

Percent
Population
White

Percent
Population
Black or
AfricanAmerican

Durham
Orange
Wake

7.2%
8.0%
11.0%

2.7%
4.4%
3.8%

$43,337
$42,372
$54,988

5.5%
2.9%
4.8%

223,314
118,227
627,846

50.9%
78.0%
72.4%

39.5%
13.8%
19.7%

32.2
30.4
32.9

Chatham
Harnett
Johnston
Lee
Moore

17.5%
21.5%
23.3%
15.6%
10.6%

4.5%
1.9%
2.3%
1.8%
4.1%

$42,851
$35,105
$40,872
$38,900
$41,240

5.3%
7.4%
5.1%
7.2%
6.2%

49,329
91,025
121,965
49,040
74,769

74.9%
71.1%
78.1%
70.0%
80.2%

17.1%
22.5%
15.7%
20.5%
15.5%

38.8
32.5
34.2
35.9
41.8

Franklin
Granville
Person
Vance
Warren

30.8%
18.4%
25.0%
13.6%
21.0%

2.1%
1.9%
2.5%
1.3%
3.2%

$38,968
$39,965
$37,159
$31,301
$28,351

6.1%
6.5%
8.8%
12.3%
8.8%

47,260
48,498
35,623
42,954
19,972

66.0%
60.7%
68.8%
48.2%
38.9%

30.0%
34.9%
28.2%
48.3%
54.5%

35.8
36.2
38.0
35.0
39.7

County

Median
Age, both
sexes

Sources: U.S. Census Bureau, 2000 Census of Population; North Carolina Employment Security Commission.

FIGURE 3: Differences in Educational Attainment within the Research Triangle Region


60.0%
Core

Northern tier

Southern tier

50.0%

40.0%
No high school diploma
30.0%

Bachelor's, graduate, or
professional degree

20.0%

10.0%

Le
e
M
oo
re

ur
ha
m
O
ra
ng
e
W
ak
Fr e
an
k
Gr lin
an
vil
le
Pe
rso
n
Va
nc
W e
ar
Ch ren
at
ha
m
H
ar
ne
tt
Jo
hn
s to
n

0.0%

Source: U.S. Census Bureau.

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

similar patterns. Median household income in the core counties ranged from $42,400
to $55,000 compared to around $30,000 in the Tier 1 counties in the northern part of
the region.
The commuting patterns that arise due to the unevenness of quality job supply
can be seen in Table 2. That table uses recently released 2000 data to show the cross
commuting among the 13 counties in the RTRP region. The shaded cells along the
diagonal indicate the percent of workers that stay within the same county of residence to work. One hundred percent minus that amount (shown as the column totals) is the proportion of workers commuting out of their county of residence.
We can see that 74.9, 57.6, and 80.5 percent on the workers in Durham, Orange,
and Wake Counties, respectively, were able to work within their home counties. In
Franklin, Harnett, and Warren Counties (for example), the percentages were much
less: 34.9, 39.2, and 44.9 percent, respectively. Moreover, the gap between the core and
non-core counties in within-county commuting has grown since 1990.
There are at least three consequences of long commutes from outer to inner counties. First, there is an equity issue with lower-paid workers having to spend more time
than higher-paid core county workers every day in their car, incurring out-of-pocket
costs as well as the opportunity cost of their time.6 Second, the commuting creates
TABLE 2: Cross-commuting in 2000

Franklin County

Granville County

Harnett County

Johnston County

Lee County

Moore County

Orange County

Person County

Vance County

Wake County

Warren County

11.11%

0.09%

0.18%

0.11%

0.29%

5.73%

0.61%

17.06%

0.03%

0.00%

11.12%

0.00%

11,018

2,739

21

45

26

71

1,413

150

4,206

Durham County

0.31%

74.94%

0.19%

1.25%

0.00%

0.36%

0.16%

0.00%

8.24%

0.24%

349

84,262

211

1,410

409

178

9,262

270

130

13,929

Franklin County

0.21%

4.27%

34.93%

2.77%

0.13%

1.27%

0.09%

0.00%

0.24%

0.13%

4.37%

46.51%

0.27%

47

951

7,772

616

28

282

21

54

29

973

10,347

60

Granville County

0.06%

22.49%

1.16%

53.46%

0.01%

0.40%

0.29%

0.03%

1.21%

1.08%

5.01%

12.15%

0.08%

12

4,609

238

10,957

82

60

249

221

1,026

2,489

16

Harnett County

0.61%

1.35%

0.06%

0.04%

39.20%

3.75%

11.16%

1.25%

0.21%

0.00%

0.04%

21.78%

0.00%

248

547

24

18

15,916

1,521

4,530

508

84

18

8,841

Johnston County

0.21%

2.80%

0.16%

0.18%

2.38%

45.97%

0.32%

0.01%

0.42%

0.01%

0.05%

40.27%

124

1,645

92

107

1,399

26,971

187

246

30

23,628

Lee County

6.04%

1.68%

0.07%

0.14%

1.37%

0.21%

71.56%

3.62%

1.03%

0.00%

0.03%

9.15%

0.00%

1,383

384

17

31

313

47

16,382

828

236

2,094

Moore County

1.24%

0.18%

0.03%

0.05%

0.16%

0.02%

4.50%

76.10%

0.14%

0.00%

0.01%

0.96%

398

57

10

17

51

1,441

24,365

44

308

Orange County

1.30%

27.06%

0.14%

0.32%

0.01%

0.17%

0.15%

0.00%

57.60%

0.23%

0.02%

6.92%

0.01%

792

16,470

83

196

105

91

35,053

142

12

4,212

Person County

0.26%

23.83%

0.05%

3.40%

0.00%

0.10%

0.00%

0.00%

4.06%

58.13%

0.44%

3.71%

0.00%

43

3,939

562

671

9,609

73

614

Vance County

0.00%

3.03%

2.10%

13.10%

0.06%

0.12%

0.06%

0.00%

0.33%

0.16%

70.13%

6.56%

542

377

2,347

10

22

10

60

29

12,561

1,175

329

Wake County

0.26%

12.80%

0.72%

0.42%

0.27%

1.20%

0.34%

0.04%

1.05%

0.05%

0.14%

80.46%

0.01%

873

43,351

2,430

1,422

916

4,050

1,167

145

3,552

166

478

272,432

18

Warren County

0.10%

2.90%

2.74%

4.13%

0.00%

0.21%

0.00%

0.00%

0.70%

0.06%

24.58%

3.85%

44.87%

50

1,757

275

3,208

60.80%
24,683

54.03%
31,704

28.44%
6,511

23.90%
7,653

42.40%
25,807

41.87%
6,922

29.87%
5,350

19.54%
66,170

55.13%
3,941

Working
Outside RTRP

Durham County

44.69%

Total County
Workforce

Chatham County

County of Work

County of Residence
Chatham County

% commuting out
# commuting out

207

196

295

55.31%
13,639

25.06%
28,171

65.07%
14,476

46.54%
9,537

17

15

2,743

0.12%

12.39%

8.99%
24,657

2,217

0.01%

1.79%
112,433

2,015

4.80%
22,248

1,068

2.57%
20,494

526

20.55%
40,599

8,344

0.02%

7.19%
58,675

4,221

5.12%
22,893

0.00%

1,171

16.60%
32,018

5,315

6.06%
60,860

3,687

6.02%
16,531

995

1.84%

2.51%
17,911

449

2.25%
338,602

7,602

15.88%
7,149

1,135

Data taken from the US Census Bureau website at http://www.census.gov/population/www/cen2000/commuting.html. Cells with no values entered had no workers listed; percentages are rounded. Actual number o
shown beneath percentage.

6. The opportunity cost of their time is lower, but the cost as a percentage of their income is
higher.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

bottlenecks on the major arteries. Though I-85 and US 1 generally are not at capacity,
level of service (LOS) is deteriorating. At times now, and increasingly in the future,
there will be serious congestion. The Triangle Transit Authoritys proposed regional
rail will have minimal benefits for the outer counties. The traffic patterns referred to
above are shown in Figure 4. The third, related consequence of long commutes is
increasing air pollution. The Research Triangle metro area already exceeds EPA thresholds for clean air on many occasions. (For example, www.lungusa.org ranked the Research Triangle MSA the 13th worst metro area in the U.S. in terms of ozone in 2001).
Counties in the region also differ in their demographics. Vance and Warren Counties had the highest percent of African-American population in the region and among
the older populations when retirees are excluded. And they have the lowest educational attainment in the region, with Person, Franklin, and Granville close behind.
The southern counties also have older and less well-educated populations.

The Failure of RTP to Spin-off Manufacturing


When the idea of the Research Triangle Park was first promoted in North Carolina in
the mid-1950s, planners envisioned R&D and headquarters facilities locating in the
park drawing their affiliated manufacturing facilities to nearby, but less developed
counties where labor and land were less expensive (Luger and Goldstein, 1991).
That has not happened to the degree envisioned.7 The core counties in the region flourished, but the peripheral counties languished. Table 3 shows that the average annual growth of each of the three core counties over the 19702000 period was
higher than all but one of the Kerr-Tar counties, and Orange and Wake Counties surpassed all of the southern counties in the region. That is the case, despite the fact that
percentage increases are typically larger when the base number is small, as it was for
non-core counties in 1970. We can see that the three core counties added over a half
million residents during that time, two-and-a-half times more than the other ten counties combined.
The peripheral counties have attracted some high-tech manufacturing in such
sectors as instruments, telecommunications equipment, and pharmaceuticals, which
have developed as part of regional clusters (see OED, 2000; Monitor Group, 2002),
centered in the RTP. Examples include Novozymes in Franklin County and Bayer in
Johnston County. But the largest employers in the peripheral counties are still mostly
traditional, lower-skilled manufacturers in textiles and apparel, agriculture-related
products, and building materials and mobile homes. The higher-tech activities are not
only less prominent, but have proven to be unstable, showing up disproportionately
on lists of plant closings in the peripheral counties. Tables 4a and 4b provide lists of
the largest employers in the ten non-core counties, separated into the north and south
groups. Table 5 indicates the sources of mass layoffs during the 19962001 period.

7. A notable exception is the GlaxoSmithKline facility in Zebulon, in the rural part of Wake
County.

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

FIGURE 4: Traffic Counts

TABLE 3: Population Growth Core, Southern, and Northern Counties


Total
Population,
1970

Durham
Orange
Wake

223,314
118,227
627,846

132,681
57,567
229,006

2.30%
3.50%
5.80%

90,633
60,660
398,840

Chatham
Harnett
Johnston
Lee
Moore

49,329
91,025
121,965
49,040
74,769

29,554
49,667
61,737
30,476
39,048

2.20%
2.80%
3.30%
2.00%
3.00%

19,775
41,358
60,228
18,564
35,721

Franklin
Granville
Person
Vance
Warren

47,260
48,498
35,623
42,954
19,972

26,820
32,762
25,914
32,691
15,340

2.50%
1.60%
1.20%
1.00%
1.00%

20,440
15,736
9,709
10,263
4,632

County

Average
Annual
Change

Number of
New
Residents

Total
Population,
2000

Source: U.S. Census Bureau.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

TABLE 4a: Largest Employers in Northern Tier (Kerr-Tar) Counties, with Size and Year Established
Franklin county

Granville county

2869 Industrial Organic Chemicals, NEC (Primary)

425

3672 Printed Circuit Boards (Primary)

315

3444 Sheet Metal Work (Primary)

650

1949

2521 Wood Office Furniture (Primary)

314

1940 3444 Sheet Metal Work (Primary)

450

1998

7389 Business Services, NEC (Primary)

165

1993 3262 China, Table & Kitchen Articles (Primary)

450

1984

3564 Blowers & Fans (Primary)

125

2426 Hardwood Dimension & Flooring Mills (Primary)

125

3999 Manufacturing Industries, NEC (Primary)

125

3231 Glass Products Made Of Purchased Glass (Primary)

102

1979 2844 Perfumes, Cosmetics & Toilet Preparations (Primary)

3643 Current-Carrying Wiring Devices (Primary)


1965 3965 Fasteners, Buttons, Needles, & Pins (Primary)
2429 Special Product Sawmills, NEC (Primary)

1,600

1987

300
300

1936

250

1978

1996 3536 Hoists, Cranes, & Monorails (Primary)

240

1942
1976

2796 Platemaking & Related Services (Primary)

101

1912 2295 Fabrics Coated Not Rubberized (Primary)

225

3086 Plastic Foam Products (Primary)

100

1995 2451 Mobile Homes (Primary)

225

1988

3566 Speed Changers, Drives & Gears (Primary)

91

1877 3841 Surgical & Medical Instruments & Apparatus (Primary)

203

1982

3089 Plastic Products (Primary)

88

1967 3011 Tires & Inner Tubes (Primary)

200

1969

2251 Hosiery, Women's Full & Knee Length (Primary)

70

1989 3272 Concrete Products (Primary)

180

1995

2421 Saw & Planing Mills (Primary)

65

175

1975

2435 Hardwood Veneer & Plywood (Primary)

60

1931 2221 Silk & Man-Made Fiber (Primary)

2258 Lace & Warp Knit Fabric Mills (Primary)

165

1901

2439 Structural Wood Members, NEC (Primary)

60

1968 2674 Bags: Uncoated Paper & Multiwall (Primary)

165

2015 Poultry Slaughtering, Dressing & Processing (Primary)

60

2449 Wood Containers, NEC (Primary)

52

1970 2448 Wood Pallets & Skids (Primary)

145

2675 Die-Cut Paper & Board (Primary)

50

1983 2392 Housefurnishings: Textile (Primary)

125

1965

2541 Wood, Office & Store Fixtures (Primary)

50

1989 2421 Saw & Planing Mills (Primary)

100

1987

3444 Sheet Metal Work (Primary)

Person county
2221 Silk & Man-Made Fiber (Primary)

145

1988

Vance county
1,100

1927 2392 Housefurnishings: Textile (Primary)

750

1979

3714 Motor Vehicle Parts & Accessories (Primary)

550

1964 2251 Hosiery, Women's Full & Knee Length (Primary)

600

1960

3568 Mechanical Power Transmission Equipment, NEC (Primary)

525

1993 2281 Yarn Spinning Mills (Primary)

600

1895

Electricity Production

300

1965 2141 Tobacco Stemming & Redrying (Primary)

550

1904

2436 Softwood Veneer & Plywood (Primary)

270

1993 2392 Housefurnishings: Textile (Primary)

350

1952

3354 Aluminum Extruded Products (Primary)

200

1968 3221 Glass Containers (Primary)

300

1960

3444 Sheet Metal Work (Primary)

200

1997 3564 Air Filters

270

1959

3823 Industrial Instruments For Meas, Display & Control (Primary)

200

1985 2451 Mobile Homes (Primary)

150

1987

Genetically Altered Tobacco

200

2001 2047 Dog & Cat Food (Primary)

145

1946

2493 Reconstituted Wood Products (Primary)

140

1993 3089 Plastic Products (Primary)

135

1974

2392 Adult Bedding Products

100

2001 2452 Prefabricated Wood Buildings & Components (Primary)

100

1999

3535 Conveyors & Equipment (Primary)

75

1986 2752 Commercial Printing: Lithographic (Primary)

100

1974

79 Entertainment Complex

60

2000 3792 Travel Trailers & Campers (Primary)

95

1956

2421 Hardware and Building Supplies

60

1958 2511 Wood Household Furniture (Primary)

90

1978

2399 Fabricated Textile Products, NEC (Primary)

45

1979 2819 Industrial Inorganic Chemicals, NEC (Primary)

80

1981

20 Soft Drinks

40

1961 2491 Wood Preserving (Primary)

75

1999

2451 Distribution of Home Repair Parts

30

1986 2299 Textile Goods, NEC (Primary)

40

1996

Cable Harnesses

25

1972 3272 Concrete Products (Primary)

40

1945

2421 Kiln Dried Hardwood

25

1989 2411 Logging (Primary)

40
35

Power/Steam Generation

25

1986 2842 Specialties Clng, Polishing & Sanitation Prep. (Primary)

2392 Housefurnishings: Textile (Primary)

750

1979

2426 Hardwood Dimension & Flooring Mills (Primary)

155

1970

2281 Yarn Spinning Mills (Primary)

145

1978

2253 Knit Outerwear Mills (Primary)

145

1991

2281 Yarn Spinning Mills (Primary)

125

1917

2653 Corrugated & Solid Fiber Boxes (Primary)

101

2000

2441 Wood Boxes (Primary)

83

1997

2441 Wood Boxes (Primary)

55

1991

2449 Wood Containers, NEC (Primary)

47

1952

1977

Warren county

Data processing

34

1989

7534 Tire Retreading & Repair Shops (Primary)

22

1966

Cast stone & architectural concrete

19

1998

2411 Logging (Primary)

18

1974

2411 Logging (Primary)

17

1986

2421 Saw & Planing Mills (Primary)

1995

2411 Logging (Primary)

1995

2875 Fertilizers, Mixing Only (Primary)

1920

3965 Fasteners, Buttons, Needles, & Pins (Primary)

1989

2752 Commercial Printing: Lithographic (Primary)

1976

10

Source: N.C. Department of Commerce

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

TABLE 4b: Largest Employers in Southern Tier Counties, with Size and Year Established
Chatham county

Harnett county

2015 Poultry Slaughtering, Dressing & Processing (Primary)

750

1952 3621 Motors & Generators (Primary)

800

2221 Silk & Man-Made Fiber (Primary)

700

1980 2731 Books: Publishing & Printing (Primary)

300

1893

2251 Hosiery, Women's Full & Knee Length (Primary)

650

1951 2033 Canned Fruits, Vegetables & Preserves (Primary)

250

1984

2451 Mobile Homes

1967

2221 Silk & Man-Made Fiber (Primary)

600

250

1973

2015 Poultry Slaughtering, Dressing & Processing (Primary)

550

1980 Industrial gases/supplies

200

1932

2015 Poultry Slaughtering, Dressing & Processing (Primary)

400

1980 3713 Truck & Business Bodies (Primary)

160

1966

2493 Reconstituted Wood Products (Primary)

260

1974 2013 Sausages & Meat Products (Primary)

140

1986

2281 Yarn Spinning Mills (Primary)

230

1895 3052 Rubber & Plastic Hose & Belting

120

1979

2451 Mobile Homes (Primary)

225

1987 3199 Leather Goods, NEC (Primary)

120

1985

3089 Plastic Products (Primary)

220

1964 3769 Guided Missile/Space Equip.

114

1975

2436 Softwood Veneer & Plywood (Primary)

200

1986 3272 Concrete Products (Primary)

95

1983

3599 Machinery & Equipment, Industrial & Commercial, NEC (Primary)

150

1973 3444 Sheet Metal Work (Primary)

90

1991

3251 Brick & Structural Clay Tile (Primary)

110

1913 3443 Fabricated Plate Work (Primary)

75

1976

2048 Prepared Feeds For Animals & Fowls (Primary)

105

1969 2011 Meat Packing Plants (Primary)

65

1948

3599 Machinery & Equipment, Industrial & Commercial, NEC (Primary)

100

1981 2911 Petroleum Refining (Primary)

65

1976

2426 Hardwood Dimension & Flooring Mills (Primary)

100

1991 3444 Sheet Metal Work (Primary)

60

1994

2512 Wood Household Furniture, Upholstered (Primary)

100

1991 2439 Structural Wood Members, NEC (Primary)

60

3599 Machinery & Equipment, Industrial & Commercial, NEC (Primary)

100

1990 3612 Power, Distribution & Specialty Transformers (Primary)

55

1974

8331 Job Training & Vocational Rehabilitation Services (Primary)

95

1980 2711 Newspapers: Publishing & Printing (Primary)

50

1950

2439 Structural Wood Members, NEC (Primary)

90

1998 2011 Meat Packing Plants (Primary)

50

1946

1,040

1989
1987

Johnston county

Lee county

2834 Pharmaceuticals (Primary)

1,300

1974 2015 Poultry Slaughtering, Dressing & Processing (Primary)

3663 Satellite Dish Antenna Mfg

800

1988 3629 Electrical Industrial Apparatus, NEC (Primary)

970

Warehouse/Distribution

780

1997 2844 Perfumes, Cosmetics & Toilet Preparations (Primary)

930

1971

3524 Wheeled Loaders

650

1991 3592 Carburetors, Pistons, Rings, & Valves (Primary)

740

1976

3564 Filters

400

1994 3432 Plumbing Fixture Fittings & Trim, Brass (Primary)

625

1978

2297 Fabrics, Nonwoven (Primary)

300

1969 3589 Service Industry Machines, NEC (Primary)

500

1971

3643 Current-Carrying Wiring Devices (Primary)

270

1958 Filters/pumps for pools/spas

480

1971

3564 Air Filter Mfg

250

1976 Cotton yarn, spun

475

2834 Pharmaceuticals (Primary)

200

1992 3714 Motor Vehicle Parts & Accessories (Primary)

460

1978

3676 Electronic Resistors (Primary)

200

1945 2451 Mobile Homes (Primary)

450

1972

3462 Iron & Steel Forgings (Primary)


3083 Medical and Electrical Tubing

175
130

1991 2051 Bread, Bakery Prod. Exc Cookies & Crackers (Primary)
1975 Brick clay, common face

450
435

1990
1988

2426 Hardwood Dimension & Flooring Mills (Primary)

130

1986 3491 Industrial Valves (Primary)

400

2339 Women's & Misses' Outerwear, NEC (Primary)

100

1991 Tacho shells, nacho chips

385

3679 Electronic Assembly

100

1944 2511 W ood Household Furniture (Primary)

350

1987

2834 Pharmaceuticals (Primary)

100

1984 2281 Yarn Spinning Mills (Primary)

325

1996

2011 Meat Packing Plants (Primary)

94

1941 3552 Textile Machinery (Primary)

300

1983

2421 Saw & Planing Mills (Primary)

85

1924 2834 Pharmaceuticals (Primary)

300

1988

2657 Folding Paperboard Boxes (Primary)

80

1979 3251 Brick & Structural Clay Tile (Primary)

300

1988

2361 Children's & Infants' Dresses & Blouses (Primary)

80

1966 3531 Skid-steer loaders & work tools

300

1996

Moore county
2273 Carpets & Rugs (Primary)

455

1965

2511 W ood Household Furniture (Primary)

350

1965

3423 Hand & Edge Tools (Primary)

300

1982

2015 Poultry Slaughtering, Dressing & Processing (Primary)

235

1984

2252 Hosiery, Except Women's (Primary)

200

1992

Household furniture, upholstered

185

2451 Mobile Homes (Primary)

160

1985

2511 W ood Household Furniture (Primary)

150

1987

2221 Silk & Man-Made Fiber (Primary)

150

1950

2221 Silk & Man-Made Fiber (Primary)

150

1987

2257 Circular Knit Fabric Mills (Primary)

135

1972

2451 Mobile Homes (Primary)

130

1987

3589 Service Industry Machines, NEC (Primary)

120

1979

2599 Furniture & Fixtures, NEC (Primary)

110

1976

3634 Electric Household Appliances (Primary)

100

1963

3291 Abrasive Products (Primary)

100

1949

3643 Current-Carrying Wiring Devices (Primary)

90

1969

2048 Prepared Feeds For Animals & Fowls (Primary)

90

2711 Newspapers: Publishing & Printing (Primary)

70

1920

2752 Commercial Printing: Lithographic (Primary)

70

1947

Source: N.C. Department of Commerce

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

11

TABLE 5: Mass Layoffs in RTRP Peripheral Counties, 19962001


County
Franklin
Granville
Person
Vance
Warren
Chatham
Harnett
Johnston
Lee
Moore

Number
Recorded
13
5
10
16
3
6
16
15
14
10

Examples
Software, computer networking equipment (2), furniture (2)
Telecommunications equipment (2), infusion systems, textiles/apparel
Apparel/textiles (5), mobile home mfr., furniture, semiconductors
Apparel/textiles (6), mobile home mfr., furniture, tobacco-related (2)
Apparel/textiles (2), wood containers
Apparel/textiles (2), furniture, poultry processing
Apparel/textiles (4), mobile home mfr., furniture (2)
Apparel/textiles (6), mobile home mfr., furniture
Apparel/textiles (5), furniture (2), agriculture, wiring devices/products (3)
Apparel/textiles (3), mfd. homes (2), poultry processing

Source: N.C. Employment Security Commission, Mass Layoff Database

The Limited Effect of State Policy Efforts


The inescapable fact is that rural parts of the region are more expensive to develop
than urban areas because of their lower population densities and higher costs of infrastructure provision. Rural locations also are unattractive to businesses that seek proximity to diversified pools of labor and urban-type amenities. Therefore, there is a Catch22 the very dearth of business development in the rural parts of the region makes
it hard to attract businesses to those counties and the disparity between urban and
rural widens. Concerted strategic action is necessary to break this cycle.
To compound the problem, the national tobacco settlement will end up hurting
several rural counties in the region that are tobacco dependent. As tobacco manufacturers raise prices to earn additional revenues to honor the settlement, demand
falls. At the same time, Congress is cutting back federal price supports. The tobacco
grower is hurt by both developments. Manufacturers may be able to maintain profits
by charging higher prices for less output, but they will employ less labor.
The RTRP region contains several counties that are large tobacco leaf producers.
Johnston County has more than ten thousand acres in cultivation, producing over 20
million pounds of leaf. That is the second highest level of production in the state.
Wake County ranks sixth in the state, Harnett tenth, and Granville fifteenth. RTRPs
rural counties also have some large tobacco products manufacturing establishments,
namely, in Johnston, Lee, and Vance (where one facility has 580 workers).
Increasingly, North Carolina has tied the amount and type of state economic
development assistance to counties to the level of their distress, as indicated by their
tier designation. The centerpiece of the states industrial incentive effort is the William
S. Lee Quality Jobs and Expansion Act. First ratified in 1996 as Chapter 105, Subchapter I, Article 3A of the N.C. General Statutes, the Act has been amended in subsequent
years. The income tax credits it provides for investment in machinery and equipment,
central administrative offices, employment, and worker training all vary according to
the businesss tier.

12

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

Luger (2001) provides an analysis of the Act. He concludes that:


In general, most of the Lee Act tax credits go to higher tier (better off)
counties. Taking all Lee Act credits together . . . the share of credit dollars
generated by businesses in Tiers 4 and 5 was 65.8 percent in 1998, and 79.8
percent in 1999, compared to 17.7 percent and 8.8 percent for businesses in
Tiers 1 and 2. The story is even more pronounced for credits claimed.
The distribution of credit dollars toward Tiers 4 and 5 in large measure reflects the larger population of businesses and workers in those more
urban counties. When we look at the distribution of credit dollars generated per
capita and per dollar of personal income in each of the tiers, the distribution
skews back toward the higher tier counties for the M&E, jobs, and worker
training credits, because businesses in lower tier counties generally are smaller
and less profitable than businesses in higher tier counties, so that they can use
less of the credits they generate (from Executive Summary, p. 1).
The Job Development Investment Grant program, ratified at the end of the 2002
legislative session (H.B. 1734), also makes provision for activity in lower vs. higher tier
counties. So does the states special Utility Account, whose funds may be used only
for construction of or improvements to new or existing water, sewer, gas, telecommunications, high-speed broadband, or electrical utility distribution lines or equipment
for existing or new or proposed industrial buildings to be used for eligible industrial
operations. The Department of Commerce also calibrates its funding for the seven
regional partnerships based on the tier designations of constituent counties. We suspect these other need-based programs have the same limited effect on regional disparities, as does the Lee Act.
That is not to say that the states efforts to help the most distressed counties are
misplaced. The programs mentioned above, and others with a rural focus, such as the
Rural Internet Access Authority and the 21st Century Community program (to name a
few) are critical for the viability of rural, less-developed parts of the state. But the
problems those places have in terms of infrastructure availability and quality, K12
education, worker preparedness, and access make economic development a particular challenge.

Too Little Inter-county Cooperation, Too Many Industrial Parks


As a general matter, counties tend to regard industrial recruitment as a competitive
activity. After all, a plant locating in County X pays property taxes there only. And
County X receives the local portion of any sales taxes generated. Certainly the county
developers talk to one another, and sometimes share prospects of those they cannot
accommodate. In any case, the counties in the running for a project are determined by
which of them can meet the clients needs. Counties also coordinate some activities
and share information through regional organizations such as the RTRP and COGs.
An indication of the competition for industrial prospects is the proliferation of
county owned, sponsored, or sanctioned industrial parks. Figure 5 shows the location
of many of them. It also shows that there are still considerable amounts of available
land in those parks. In addition, many parks have developable land adjacent to them.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

13

FIGURE 5: Regional Industrial Parks and Available Acreage

14

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

The problem with this approach is that, arguably, there are too many parks competing for a limited number of tenants, and as a result, land prices are kept down by
competition and persistently low vacancy rates in the parks. To illustrate: based on
land sales information in the RTRP database for February 2003, the price of an average
acre of industrial land in Person, Vance, and Warren Counties was between $7,000 and
$12,000. The next close-in counties outside the core are Franklin and Granville, with
averages of $16,000 and $29,000 (and Franklin having over 10 times as much acreage
available). Similarly, the averages per acre in the southern tier rural counties range
from $11,000 to $20,000 per acre. Not surprisingly, land in the core counties is more
expensive: $47,000 to $59,000 per acre in Durham, Orange, and Wake. Of course, land
prices conform to a gradient as densities fall. Our point is that the relative oversupply
of land in the non-core counties, relative to industrial demand, is keeping that gradient steeper than it might otherwise be.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

15

16

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

SECTION THREE

The Mini-Hub Concept


In this section we explain what we mean by the term mini-hub and explain how it
can help address the problems identified in the preceding section.

Mini-hubs Defined
A mini-hub is an enhanced industrial park intended to serve as a growth pole outside of the urban center of a region. The growth pole idea is not new. It has been the
guiding principle for many of the research parks established outside major metropolitan areas in the past fifty years (see Luger and Goldstein, 1991). A park in less-dense
places can substitute for the urbanization and localization economies that otherwise
would exist, and help create a critical mass of economic activity that can be selfsustaining.
When Research Triangle Park was established in 1959, the core counties of the
RTRP region were not as populous or developed as they are now, and indeed, the
park was responsible for much of the economic growth that has occurred since. Luger
and Goldstein (1991) estimated that one of every four new jobs in the region created
between 1959 and 1991 were directly or indirectly attributable to the park. So, one of
the best examples of a successful growth pole is right here.
Today, the Research Triangle Park can be characterized as a major (or maxi-) hub.
With about 40,000 employees in the park, direct links with the areas research universities, the existence within the park of such facilities as the NIEHS, EPA, MCNC, and
the N.C. Biotech Center, the park is a major center of gravity not just for the region
and state, but also for the U.S. Indeed, the success of the park is a primary factor in
North Carolina being cited as one of the nations top biotech centers (Brookings, 2002),
and for the Research Triangle region being a perennial member of the countrys hightech elite.
The designation of a new type of more rural park as a mini-hub recognizes the
existence of that center of gravity. The proposed enhanced industrial parks would not
be stand-alone developments, but would link in some way with the maxi-hub (RTP)
and to each other.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

17

In the remainder of this section, we explain more about what mini-hubs are and
are not, and discuss the types of linkages they can have with RTP and each other.

What Mini-hubs Are, and Are Not


Mini-hubs are meant to be sizable real estate developments suitable for targeted businesses, but they are not intended to be typical industrial park. s. Mini-hubs would be
developed on plots of contiguous land, most likely on several hundred acres. But,
whereas the typical industrial park provides basic hard infrastructure (access roads,
water, sewer, electricity, gas) and, in many cases, shell buildings, mini-hubs would
have special enhancements as well. And, whereas the typical industrial park is happy
to accept a wide range of tenants, including warehousing and distribution, and production of a wide variety of goods, mini-hubs would be developed around target industrial clusters, and would prefer businesses requiring semi-skilled and skilled labor.
The narrowing of industrial focus would enable the enhancements to be tailored
to the targeted businesses. The average skill level of workers in mini-hubs would be
higher than those in typical industrial parks. The enhancements to which we refer could include:
meeting/conference facilities
advanced information technology (IT) to make sure companies on the park
can communicate in real time with their buyers and suppliers, and other branch
facilities around the world
special facilities appropriate for the parks focus, including, for example
a lab with specialized research equipment for use in bio-processing or composite materials (or other selected cluster focus)
incubators or accelerators to house start-up and entrepreneurial businesses
testing facilities to help resident businesses comply with ISO 14000 and
other international specifications needed as an exporter
specialized services appropriate for hubs focus, including
training facilities8
marketing and export promotion assistance
one-stop regulatory review/adherence assistance
technical assistance from organizations such as SBTDC, DOC, and the Industrial Extension Service
special location incentives
This region already has conducted cluster analyses to identify existing and emerging industrial sectors that are appropriate recruitment and expansion targets. Table 6
summarizes four sets of results from the Clusters of Innovation project (2002), In-

8. This Office worked with President Lancaster of the N.C. Community College System on a
concept to develop a series of Industrial Cluster Resource Centers that would train workers in
skills appropriate for clusters, not specific industries (as do the Focused Industry Training (FIT)
and New and Expanding Industry Training (NEIT) programs). See Gorham, Luger, Stewart,
Rosenfeld, and Jacobs (2000).

18

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

dustrial Cluster Resource Center report (2000), Vision 2030 project (2000), and RTRP
Competitive Marketing Action Plan (1997).
The different studies refer to clusters using somewhat different language, but
there are some similarities: in telecommunications and information technology, including services and software; in life science-related, including pharmaceuticals and
biotech, labs, and hospitals; and in chemicals and plastics and related products. The
RTRP study also considers warehousing and distribution and sports-related businesses.
Further work needs to be done to update these lists and specify which are most appropriate for the various subregions of the greater RTRP service area.
Just as mini-hubs are not intended as traditional industrial parks, neither are
they intended to be high-end research parks, like the RTP or Centennial Campus. It
would be unrealistic to expect the kind of companies that are in RTP and Centennial
Campus, and eventually in UNC-Chapel Hills Carolina North project, to locate even
40 miles to the north or south of the core counties. Location surveys indicate that
those companies value immediate proximity to the universities and airport, as well as
to each other, as well as highly educated labor and the prestigious address of the RTP
or research campuses.
Positioned between traditional industrial parks and research parks, the mini-hubs
could be viewed as mid-tech parks, accommodating businesses that use skilled labor to make advanced products, rather than on R&D. Appropriate functions would
include:
Processing, manufacturing, and some back-office activities (sophisticated call
centers, data processing and storage/retrieval) might be appropriate tenants.
Spin-offs from RTP and Centennial campus (and elsewhere), seeking less expensive space and access to appropriate labor.

TABLE 6: Recent Cluster Studies for the Region

Clusters of Innovation
Communications
equipment

Industrial Cluster
Resource Centers
Telecommunications
equipment

Vision 2030
Information technology
and instruments

RTRP Competitive
Marketing Action Plan
Information technology
and telecommunications
business

Communications
services and software
Pharmaceutical/
biotechnology

Pharmaceutical/
biotechnology

Pharmaceutical and
medical technologies

Health-related businesses,
including pharmaceutical/
biotechnology

Chemicals and plastics

Manufacturing, including
automotive supply,
metalworking, and plastics

Medical services, labs and


hospitals
Chemicals, textiles, and
plastics

Warehousing and
distribution
Sports-related businesses

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

19

As discussed in section two, the outer counties already have examples of these
types of businesses, but they are too few and too scattered to spawn significant additional economic growth.
Central to the mini-hub concept is the existence of meaningful linkages between
the mini-hubs and the maxi-hub, and among each other. The connection to Research
Triangle Park could take several forms. The Research Triangle Foundation, which governs and manages RTP, could govern and manage the mini-hubs, as well. But that
would require the mini-hubs to have additional characteristics, including a not-forprofit private organizational structure, an explicit connection to the regions universities, and the types of land use restrictions, such as small footprint, minimum lot size,
and design and landscaping standards, that have made RTP such an attractive physical location.9
Alternatively, the mini-hubs could undergo a qualification process to be certified by the RTF, as an official affiliate. That would allow those marketing the minihubs to use the Research Triangle brand, which has global appeal. It would also distinguish the mini-hubs from the hundreds of other public and private industrial parks in
the region.
In any case, it is essential for the mini-hub and RTF staffs to work cooperatively,
to maximize the likelihood that RTP companies doing R&D would consider the minihubs as sites for their back office, production, distribution/warehousing, or spin-off
facilities.
Similarly, it is essential for the mini-hubs within the RTRP region (at this stage,
two are conceived) to coordinate efforts. The overall strategy is for the mini-hubs to
have different cluster foci, so that they are not competing with each other, and can
develop differentiable products. They then could realize economies of scale in marketing and other management functions. They could cross-refer tenants that better fit
the other mini-hub.
The overall scheme would be marketed to site selection consultants, businesses,
and others as an articulated regional system, or what the economic development literature refers to as a technopolis.10 The RTP, airport, universities, community colleges, mini-hubs, other industrial parks, governmental resources, all constitute parts
of that system that are coordinated and synergistic. This concept is shown schematically in Figure 6.
The dotted lines show the connections among the mini-hubs. The blue lines signify the connections with RTP. Each mini-hub itself over time would establish connections with resources in its own region, as shown for the mini-hub in the upper left
hand corner. The small green dots might be existing traditional industrial parks that
would get referrals from the mini-hub staff, of companies not appropriate for the minihub.

9. Based on an interview with James Roberson , Gary Shope, and Elizabeth Rooks, of the RTF
staff, on August 12, 2002.
10. See, for example, Luger, Gibson and Oh, eds. (1998).

20

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

Finally, mini-hubs must be regarded as a regional resource, not as an economic


development project of a single county. Because of the necessary enhancements, the
cost of developing mini-hubs will be higher than for a traditional industrial park. No
single county especially those outside the core is likely to have the resources to
proceed alone. Alternatively, several counties could create a consortium that jointly
finances and governs the mini-hub, and shares in the benefits that are eventually generated.

How Mini-hubs Can Pay Off for the Sponsoring Counties


For several reasons, the number of business locations and expansions should be higher
in a region with a mini-hub and scattered industrial parks than in a region with only
scattered industrial parks. The mini-hub is likely to be an easier product to market
than are smaller, less enhanced industrial parks. And there would be more entities
marketing the mini-hub. (Some skeptics worry that a narrow focus on cluster-related
businesses will shorten the list of prospects too much.) Moreover, when counties with
different tier designations form a consortium, such as what we have proposed, the
lowest tier designation of all consortium members applies to businesses locating in
the consortiums project. For example, now a business locating in Granville County
gets Tier 5 incentives. If Warren or Vance were part of the mini-hub consortium for a
park located in Granville County, the business would qualify for Tier 1 incentives.
The larger number of businesses attracted to a region because of the mini-hub
would lead to higher property and local sales tax revenues. In addition, the enhancements discussed above would add value to each site, driving property tax receipts up
further. A mechanism needs to be created to facilitate joint financing and joint revenue sharing by participating counties. (We discuss that further in section four.)
Mini-hubs can pay off in one other way: by attracting to the project more federal
and foundation money, and earmarked state resources, than otherwise would have
FIGURE 6: Linkages Among Mini-Hubs and RTP

Figure 7:

Linkages Among Mini-Hubs and RTP

mini
mini

Central
hub
mini

mini

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

21

been forthcoming. The mini-hub concept is particularly consistent with principles espoused by the Bush administrations Economic Development Administration. Assistant Secretary David Sampson has identified projects that apply regionalism and a
cluster focus as higher priority for infrastructure funding from his agency.11 A focus
on biotech, for example, would tie into a state priority to solidify North Carolinas
advantage, and could capitalize on the Golden LEAF decision to invest $42 million in
bioscience companies developing products or manufacturing in North Carolina. The
networking emphasis might be attractive to the Rural Internet Access Authority,
through the e-communities initiative. These and other possibilities would need to be
explored in further work.
It is important to stress that mini-hubs would not necessarily compete with existing industrial parks for tenants. Their pool of prospects would be different, just as the
companies RTP recruits are not typically prospects for traditional industrial parks. In
fact, it is more likely that mini-hubs would stimulate business locations in industrial
parks. In short, a rising tide floats all ships. Other, lower-tech companies that trade
with the mid-tech tenants targeted for the mini-hubs would seek locations nearby.
That is beginning to occur in northeast North Carolina around the NuCor steel plant.
It is expected to happen in Greensboro around the Federal Express facility. And it has
occurred around Research Triangle Park.

11. Sampson discusses four rules for competitiveness in the 21st century: Think regionally to
compete globally; Industry clusters drive regional performance; Economic input-advantage fuels
cluster competition; and Collaboration achieves economic advantage. See www.commerce.gov/
eda.

22

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

SECTION FOUR

What Needs to be Done


to Create Mini-Hubs
A number of steps need to be taken to move from the conceptual/feasibility to implementation stage. Each will be discussed, in turn, in this section. The first action is for
each sub-area designated for a mini-hub to form a regional steering committee. That
committee will decide on a management approach, select the site, and serve as the
client for further study of the appropriate cluster focus, necessary enhancements and
incentives, and available resources.

Areas Currently Designated for Mini-hub Sites


We narrowed down the general locations for mini-hubs to those areas shown in Figure 7: one in the Person-Granville-Vance-Warren-Franklin Counties area, and one in
the Chatham-Moore-Lee-Harnett Counties area. The criteria we used to draw the ovals
in the figure were: (1) whatever site is chosen must be within 45 minutes of RDU and
RTP, (2) the site should be in as close proximity to distressed populations (lower-income and displaced from work) as possible, and (3) the site be accessible by a major
state or interstate highway. The most likely sites would be along the I-85 or US 1 corridors in the north and the US 1, US 15-501, or US 421 corridors in the south.

Sub-regional Steering Committees


Each designated area should assemble a steering committee to ensure that each minihub is developed as a regional resource, and to make decisions regarding strategy and
operations of the mini-hub. The committee should consist of representatives of the
counties considering membership in the consortium. The designated individuals might
include city and county managers, economic development directors, county commissioners, and local members of the General Assembly. The steering committee should
include representation from the RTRP and Department of Commerce, if only as nonvoting members.
The steering committees would be interim decision-making bodies until a more
permanent structure was put in place. They would serve as a client for any further

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

23

contracting. And they would be instrumental in garnering political support for the
initiatives.

Decisions to be Made
The steering committees will have to make decisions regarding ownership and management, specific sites, appropriate cluster focus, necessary enhancements and incentives, and financing.

Ownership/management options
Industrial and research parks employ a variety of ownership and management models. Ownership and management may or may not be by the same entity. For example,
states or local governments that own parks may manage them themselves or contract
out management to a private company that specializes in that activity. But parks are
not owned just by states and local governments (including public institutions of higher
learning), but also by private developers, private universities, and not-for-profit organizations (such as the Research Triangle Foundation).
Public ownership has some benefits, including the possible use of eminent domain to assemble the land. Parks are often built on land that had been in public use for

FIGURE 7: General Siting of Two Mini-Hubs

24

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

other purposes, such as a military base or state hospital, so that a significant monetary
transfer is not required.
To the extent that public funds are used to help develop mini-hubs, on the grounds
that the parks have economic development benefits for the region, some public accountability is desirable. That can be achieved by creating a governing board whose
members are appointed by the governor, speaker of the house, and president pro-tem
of the state senate, for example, and/or who represent local governments in the region. That approach characterizes the governing boards of several of the regional economic development partnerships (the Eastern region, for example). A more local version of that characterizes such public authorities as the Triangle Transit Authority.
The participating counties must agree on the constitution of the public governing board, their by-laws and procedures. State law will affect the entitys authority to
issue bonds, condemn land, and other legal actions.

Choice of sites
We visited a number of potential sites, meeting such criteria as: (1) within 45 minutes
of RDU and the research universities in the core counties, (2) near concentrations of
underemployed and lower-income workers in the peripheral counties, (3) near major
highways, (4) served by common utilities/infrastructure, (5) large enough with sufficient unbuilt space to accommodate a major new project. We provide the protocol we
used to collect information on potential sites, as Appendix A.
Figures 8 and 9 show the most likely sites in the northern and southern parts of
the RTRP area, respectively. We narrowed the list to these possibilities with the help of
local economic development professionals.

FIGURE 8: Candidate Sites in the Northern Counties

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

25

We provide details about these sites in Appendix B. Summary information is


provided in Tables 7 and 8, which show the number of residents, by age, education,
and employment, within 5, 10, and 25 miles of each site.
The steering committees will have to recommend a single site for development
in each sub-region. Obviously, that site will fall in only one of the participating counties. We recommend strongly that the decision rule about how to prioritize siting criteria be established up front. All parties should agree about the criteria, then use the
criteria to drive the selection of the site. That will help ensure a rational choice that all
can defend and support, rather than one determined solely by politics.

Choose appropriate cluster focus


Table 6 in the previous section summarized recent studies that identified existing and
potential clusters for the RTRP region. The mini-hub steering committees will have to
engage consultants to step-down the cluster analysis to each sub-region.
One element of that process is to identify existing concentrations of businesses
in the northern and southern parts of the region. Table 9 indicates those concentrations for the northern section.
Recruiters could focus on these types of businesses, recognizing that each broad
industry contains many different sub-industries, as shown in Appendix C.
But clusters are more than the central industry. They include other types of industries that are linked through trade selling inputs (good and services) to the
businesses or receiving goods and services from them.
Necessary enhancements and incentives
The steering committee also must identify the appropriate enhancements and incentives for its mini-hub. Those can be instrumental in attracting the kinds of businesses
that are targeted. In general, the enhancements to which we refer include special faFIGURE 9: Candidate Sites in the Southern Counties

26

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

cilities and services appropriate for the mini-hubs focus. Among the facilities might
be incubators or accelerators, testing and research labs, advanced information and
communications technology centers, and meeting and conference space. Those are
the types of facilities commonly found in research parks (see Luger, 2003). The services to be provided might include special training, marketing and export promotion,
expedited regulatory review and approval, and technical and managerial assistance
(as provided by such organizations as the small business and technology development center, the Department of Commerce, and the industrial extension service).
Businesses on the mini-hub site would benefit from the co-location of these facilities and services. Having regulatory agencies in one place enables one-stop shopping. Similarly, businesses would have easy access to two different kinds of technical
assistance. The service providers would also benefit from co-location, which would
provide opportunities to coordinate and collaborate.
An important financial incentive already is provided businesses that would move
to or expand in a mini-hub. If an industrial park spans or is owned by several counties
with different tier designations, the designation of the lowest of those counties applies to businesses seeking William S. Lee act credits, regardless of the designation of
the county in which the park is located.

TABLE 7: Radius data for Northern Sites, 2000


Northern Subregion

Radius

(A)
Butner
Business Park

(B)
Oxford
Business Park

(C)
Triangle North
Industrial Park

(D)
Daniel
Site

(F)
Capital Blvd
Site

(I)
US-1 (Soul
City) Sites

Total Population

5 Miles
10 Miles
25 Miles

7,866
59,918
511,271

2,529
28,962
398,745

5,563
50,917
156,909

4,200
50,917
156,909

9,754
44,786
175,146

6,121
36,824
137,114

Population 1824

5 Miles
10 Miles
25 Miles

357
3,369
53,834

233
2,317
32,886

405
3,922
12,093

329
3,922
12,093

609
3,394
13,504

433
2,912
10,418

Population 5564

5 Miles
10 Miles
25 Miles

500
4,908
37,537

313
2,853
31,105

413
4,846
14,635

315
4,846
14,635

1,073
4,208
16,320

552
3,301
13,729

Median Household
Income

5 Miles
10 Miles
25 Miles

$55,214
$53,267
$42,780

$32,251
$39,559
$40,212

$44,391
$31,669
$32,903

$41,211
$31,669
$32,903

$33,388
$32,417
$33,318

$27,657
$25,742
$30,549

High School Education

5 Miles
10 Miles
25 Miles

1,757
13,419
89,449

614
7,852
81,373

1,332
12,271
40,554

1,037
12,271
40,554

2,023
10,594
45,589

1,694
9,321
34,211

College Education, 25+

5 Miles
10 Miles
25 Miles

906
8,198
75,687

177
1,531
49,823

390
3,836
10,519

228
3,836
10,519

1,014
3,588
11,717

397
2,082
9,730

Graduate Degree
Education, 25+

5 Miles
10 Miles
25 Miles

452
3,854
46,567

0
783
24,799

125
1,176
3,499

53
1,176
3,499

342
1,165
4,149

131
577
2,945

Total Employed by
Place of Residence, 16+

5 Miles
10 Miles
25 Miles

4,760
33,594
260,854

1,239
11,879
204,963

2,971
27,057
74,932

2,192
27,057
74,932

5,551
23,986
85,154

2,478
16,849
65,218

Total Employed by
Place of Work, 16+

5 Miles
10 Miles
25 Miles

835
13,285
183,377

344
5,991
157,101

1,457
18,566
43,649

1,222
18,566
43,649

3,466
14,869
49,188

445
12,228
38,109

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

27

Financing
The cost of developing mini-hubs will be considerably more than for standard industrial parks. Certainly, roads, water, sewer, gas, telecommunications, and electricity need
to be in place. But to make the mini-hub a first-class development attractive to very
selective, footloose, mid-tech companies, all wires and cables will need to be buried
and the site will have to be prepared for high-speed broadband and/or wireless communications. In addition, the park will have to be developed at a relatively low density, possibly including minimum lot size and maximum footprint requirements, to
ensure the appropriate physical appearance. Finally, additional resources will have to
be devoted to landscaping and signage.
The cost of these land use and development add-ons would fall on the counties
undertaking the project, with possible help from the U.S. Economic Development
Administration. In addition, there will be costs associated with what we referred to
above as enhancements specialized facilities and programs. The steering committee will have to work with federal and state organizations and agencies to identify
funds for them.
The high cost of site development would make mini-hubs infeasible for any one
of the non-core counties in our study region. However, because the mini-hub is to be
TABLE 8: Radius data for Southern Sites, 2000
Southern Subregion
(A)

(B)

(C)

Radius

New Hope
Farms Site

Samarcan Site

Catawba
Site

Total Population

5 Miles
10 Miles
25 Miles

6,673
29,733
424,976

7,150
19,728
144,131

7,528
26,505
196,805

8,271
41,930
304,320

12,460
50,135
525,773

28,801
64,405
545,490

Population 1824

5 Miles
10 Miles
25 Miles

573
2,090
40,988

503
1,338
10,523

481
1,739
15,559

632
3,027
29,116

2,072
4,856
53,727

2,246
5,159
51,548

Population 5564

5 Miles
10 Miles
25 Miles

845
3,187
39,324

683
2,252
14,974

770
2,442
19,461

712
3,854
23,710

1,053
4,656
38,586

2,495
5,365
43,597

Median Household
Income

5 Miles
10 Miles
25 Miles

$38,225
$35,999
$37,093

$29,072
$36,273
$36,424

$32,069
$38,091
$36,246

$42,185
$36,124
$42,820

$33,090
$32,977
$41,268

$34,579
$38,851
$39,783

High School Education

5 Miles
10 Miles
25 Miles

2,246
8,842
104,105

1,773
4,811
35,100

2,106
6,892
47,848

2,236
10,552
62,307

2,305
12,968
110,202

6,726
15,630
120,492

College Education, 25+

5 Miles
10 Miles
25 Miles

341
1,842
43,498

293
1,598
14,527

361
2,336
18,681

647
3,872
39,427

1,136
3,161
58,682

2,730
5,870
65,131

Graduate Degree
Education, 25+

5 Miles
10 Miles
25 Miles

154
583
16,716

167
783
5,433

152
741
6,446

249
1,198
18,252

784
1,528
21,708

885
1,977
20,761

Total Employed by
Place of Residence, 16+

5 Miles
10 Miles
25 Miles

3,676
16,242
236,468

2,752
8,199
67,330

3,670
13,034
88,055

4,601
22,242
134,915

5,845
22,114
235,127

15,381
35,036
293,117

Total Employed by
Place of Work, 16+

5 Miles
10 Miles
25 Miles

1,602
8,930
172,760

1,738
5,396
48,649

630
4,604
65,542

5,639
20,684
77,378

5,070
12,486
150,995

10,702
18,903
198,508

28

(D)
Lee County
Industrial
Park

(F)

(I)

Layton
Property Site

Talton
Property Site

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

developed by a consortium of counties, the costs would be shared. The steering committee will need to develop a formula to allocate the costs. Because the selected site is
not likely to be a green field, the formula might take into consideration investments
already made on the site by the county in which the site is located.
The allocation of costs would most likely relate to the sharing of benefits. Those
benefits would include at least property and sales tax (local portion) revenues generated on the site. If the assumption that the mini-hub will induce other economic activity nearby, but not on the site is correct, there would be a basis for sharing other tax
revenues, as well.
A number of institutional mechanisms could be put in place to facilitate the sharing of costs. The participating counties could enter into inter-local agreements, whereby
the counties execute a contract regarding the services and costs for a specific parcel.
The sharing of revenues also could be arranged through the use of a revenue sharing
agreement. The simplest version would cover the benefits generated on-site only. More
sophisticated approaches would include off-site induced benefits.
Multi-county projects are a stated priority of the Economic Development Strategic Plan for North Carolina completed by the Governor s Economic Development
Board in October 2002. There is currently nothing in the North Carolina General Statutes to preclude the inter-local agreements required for revenue sharing, but Ernie
Pearson of the Sanford Holshauser law firm recently submitted an opinion to the North
Carolina Economic Development Board that state legislation would nonetheless be
desirable for encouraging such agreements.
Appendix D provides further comments about the legal environment for interlocal agreements, and examples.

TABLE 9: Business Concentrations in Select Cluster Areas in the Northern


and Southern Counties
Northern tier counties

Wages

Southern tier counties


Number
of establishments

Employment

Wages

Number
of establishments

Clusters

Employment

Biotech

35

$673,638

2,834

$45,735,549

14

Plastics and
chemicals

59

$473,173

4,736

$48,813,629

26

Information
technology
and comm.
equipment

596

$5,137,291

57

4,790

$45,714,161

199

Medicalrelated

146

$933,698

89

$1,226,074

Source: N.C. Employment Security Commission, ES-202 files. See Appendix B for groupings of industries within
clusters.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

29

30

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

SECTION FIVE

Some Examples
We know of no developments elsewhere called mini-hubs that have all the features
proposed here. However, there are many examples of what their developers refer to
as research or technology parks, which, because of their location in rural places
and lack of adjacency to major universities, are really mid-tech parks, such as we
propose.
In this section we review a few examples of such mid-tech parks that appear
from their literature to be interesting illustrations. Of course, success is a normative
judgment, and absent detailed analysis of longitudinal data, we cannot say unequivocally that the parks we summarize have, indeed, succeeded.
Our examples are drawn from the membership list of the Association of UniversityRelated Research Parks (AURRP) and from articles in Site Selection magazine.

Missouri Research Park


The park, opened in 1985, contains approximately 130 acres of land zoned for hightech and research. When it was started, the surrounding communitys population
was approximately 40,000. Now it is just over 60,000.
The park is located in southern St. Charles County, Missouri. Two major highways connect it to St. Louis. It is 35 minutes from downtown, 30 minutes to the airport, and 25 minutes from the University of Missouri-St. Louis and Washington University. It is adjacent to St. Charles Community College. Companies in the park include:
A.G. Edwards
AppIntell, Inc.
Central Rolled Thread Die Company
Consultant Lubricants, Inc.
Diagraph, Inc.
Distribution Management Inc.
Federal Aviation Administration
Linco Research, Inc.
McLeod USA

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

31

National Weather Service


Natoli Engineering, Inc.
NIKE IHM, Inc.
Novus International Research Center
Westar Corporation
Zoltek Corporation

These include mid-tech companies (for example, Central Rolled Thread Die Co.,
Diagraph which makes automated metering, coding, and labeling equipment
and Zoltek Corporation a producer of carbon fiber), some research, and several
government facilities, including the FAA and National Weather Service.
Consistent with the mini-hub model, the park also includes special amenities,
including an award-winning 235-acre golf course, wooded recreational trails, fullylighted concrete streets, strict protective covenants to ensure first-class, low-density
development, and all underground utilities (12.5KV electric, broadband fiber, natural
gas, water, sewer). The park is owned and managed by the University of Missouri
system. That enables the park to advertise affiliations with University of Missouri
faculty and research personnel.

The Milwaukee County Research Park


This park is located on 175 acres in Wauwatosa, Wisconsin, which has a population of
47,471. The site is convenient to two major expressways, 10 minutes from downtown
Milwaukee and 15 minutes to the airport
The parks objective to develop high-tech businesses is being accomplished
by bringing together the substantial academic, intellectual, business and entrepreneurial resources of the metropolitan Milwaukee area in a physical environment conducive to such activities.
The park lies within a larger, 1100-acre natural expanse called the Milwaukee
County Grounds. The setting features permanent green space buffers, extensive
wooded areas, activity trails, sidewalks, ponds, and a natural waterway. The master
plan calls for a campus like environment that will differentiate the park from other
real estate developments.
The Milwaukee County Research Park is not adjacent to a university but is affiliated with Marquette University, the Medical College of Wisconsin, the Milwaukee
School of Engineering, the University of Wisconsin-Milwaukee, and Milwaukee Area
Technical College, all of which are in the greater metropolitan region. Tenants in the
parks incubator (Technology Innovation Center) have commercialized innovative technology developed in university laboratories.
Currently over 2,300 people work in the Research Park in high paying positions
with over 70 companies. There is a cluster focus around software. Tenants include:
Advanced Cabling Solutions Cabling solutions for information technology
applications
ArgiNOx, Inc. Researching and development of nitric oxide (NO) inhibiting drugs.

32

Office of Economic Development, Kenan Institute, UNC-Chapel Hill

Argus Technologies, Inc. Vertical market software.


Attalus Communications, LLC Design, installation, and support for all-in

one communications systems.


Brand Thirty-Three, Inc. Computer graphics for web sites and commercial
applications.
Cogent Corporation Computer software for the healthcare industry.
Collins Communications Technologies Designs, implements, and supplies
hardware for data networks.
Desktop Engineering, Inc. Consulting, service, and support for Apple
Macintosh.
Developer One, Inc. Software products for handheld, mobile computing,
and PDA devices.
Digital Technology Services Visual based products used in quality control
and training applications.
Guild Software, Inc. On-line simulation software and multi-player games.
HInnovation, Inc. Teleradiology and web-based 3D image processing software and systems.
Heartland Software Development, Inc Custom computer software for business, including mission critical applications, software integration, infrastructure support, project management, and e-business solutions.
IGC-Medical Advances, Inc. RF coils and gradient systems for the MRI and
spectorscopy market.
I.Net Solutions, L.L.C. Intranet, extranet, database design, and high-end
web development.
Inphinet Interactive Solutions, Inc. Internet content design and the development of web communities.
Institute for Viral Pathogenesis, Inc. Research relating to characterization of
human viral pathogens.
Leader Controls & Software, LLC
MC Services Company Cross platform integration, database design, and
Internet services.
Micro Resource, Inc. Microcomputer software support
Miller Computer Group, Inc
Molecular Specialties, LLC Development and marketing of microwave
probes for electron paramagnetic resonance (EPR) applications.
Niceware International, LLC Development, sales and marketing, and technical support for NiceLabel barcode label production and printing software
for mobile and enterprise environments.
PhysioGenix, Inc. Pharmacogenetics and physiological genetics products
and services.
PointOne Systems, LLC Bioinfomatics consulting and software
Productive Data Corporation ASP, web hosting, electronic publishing,
eCommerce, and data conversion.

The Feasibility of Mini-Hub Development in the Research Triangle Regional Partnership Region

33

ProtoPROBE, Inc. Biomedical research, research support services, and anti

bodies.
Resilient Networks, Inc. Telecommunications provider of data, voice,
Internet, and video services to local and metro area enterprises and institutions.
Serlio Software Corporation.
SPS Productions, LLC 3d multimedia animation, web content and hosting,
and e-commerce.
Tailored Solutions, Inc. Job tracking software for the printing industry.
TechWorks, LLC Managed technology services (MTS) business with operations that monitor and manage, both onsite and remotely, information technology systems for small to medium sized companies.
Time Warner Telecom - IDD High speed Internet service for business and
institutions.
Tobin Solutions, Inc. Providing a full range of information technology services for business.
Topical Networks, LLC Internet software and web design with a focus on
digital music distribution.
TPI Technologies Industrial and prototype design using composite materials.
Uni-Comm Corporation Engineers and designs PBX, wireless, and other
telecommunications.
Wisconsin Internet Solutions Company, LLC Wisconsin Viral Research Group,
Inc. Medical diagnostics laboratory focusing on virologic research.

Stout Technology Park


This park was opened in 1990 in Menomonie, a northwestern Wisconsin town of 15,000
residents in a county with a population of only 40,315. Minneapolis-St. Paul is 60 miles
west and Eau Claire, Wisconsin, is 25 miles east.
The park is close to the University of Wisconsin-Stout, with an enrollment of
8,000 students, mostly at the undergraduate level. It contains a satellite campus of
Chappawa Valley Community College
Currently, there are 20 tenants in the park, employing 450. The assessed valuation of property in the park is approximately $30 million. Companies include:
Andersen Corporation, a window manufacturer
Aurora Community Health, Inc.
Access, Inc. providing licensed outpatient mental health
Dunn County Job Center a one-stop center for information and services
related to employment and workforce development. The facility is a collaborative effort that houses the following agencies
the Workforce Development Board
Dunn County Human Services W2 program
the Dunn County Economic Development Corporation

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the Dunn County Job Center, including representatives of the Department


of Vocational Rehabilitation and Job Service.
DBD International, Ltd a design and marketing firm
Phillips Origen Center The Phillips Origen Corporations training facility
and incubation center. It includes:
Phillips Origen Clean Room Molding
Phillips Origen Magnesium Injection Molding
Phillips Origen Medical Device and Manufacturing
Phillips Origen Metal Injection Molding
West Wind Graphics

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References
Cortwright, Joseph and Heike Mayer (2002). Signs of Life: The Growth of Biotechnology Centers in the
U.S. Washington, DC: Brookings Institution, Center on Urban and Metropolitan Policy.
Goldstein, Harvey A. and Michael I. Luger (1992). Carolina Impact: UNC-Chapel Hill and the States
Economy. University of North Carolina Bicentennial.
Gorham, Lucy, Michael Luger, Leslie Stewart, Stuart Rosenfeld and James Jacobs (2000). Maintaining Competitiveness in the New Millennium: A Plan to Establish Industry Cluster Resource Centers in
North Carolina. For the North Carolina Community College System.
Link, Albert N. (2002). From Seed to Harvest: The History of the Growth of the Research Triangle Park.
Research Triangle Park, NC: Research Triangle Foundation.
Luger, Michael I. (2001). Assessment of the William S. Lee Tax Act. For the North Carolina Department of Commerce. Available at www.oed.unc.edu.
Luger, Michael I. (2003). Research Parks and the Economic Development Trajectory: Countries
Ambition and Capacity. Ms. Chapel Hill, NC: Office of Economic Development
Luger, Michael I., David Gibson and D. S. Oh, editors (1998). Technopolis as Regional Development
Policy. World Technopolis Association.
Luger, Michael I. and Harvey Goldstein (1991). Technology in the Garden: Research Parks and Regional
Economic Development. Chapel Hill, NC: University of North Carolina Press.
Monitor Group, in affiliation with Dr. Michael E. Porter (2002). Clusters of Innovation in the Research
Triangle Region. Council on Competitiveness.
North Carolina Rural Prosperity Task Force (2000). Recommendations Summary. Available at http://
ruraltaskforce.state.nc.us.
Office of Economic Development (2000). High-Tech Clusters in North Carolina. For the North
Carolina Board of Science and Technology, Vision 2030 project. By Edward J. Feser, Henry
Renski, and Aaron Cain.
Stewart, Leslie S., Barnett, Camille, Leaman, Sam (1997). Competitive Marketing Action Plan for the
Research Triangle Region. Research Triangle Institute.

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APPENDIX A

Office of Economic Development


Site Survey Instrument
[IDENTIFICATION] Industrial Park
General ranking meanings: (1) available; (2) adequate; and (3) problematic
Transportation Resources
Interstate(s):
Miles/minutes to nearest exchange: ____________
Highway(s):
Classification from NC DOT (A,B,C,D): ____________
Railroad(s):
Short line [nearest loading point/exchange]: ____________
Long haul [nearest loading point/exchange]: ____________
Airport(s):
Minutes to RDU: ____________
Minutes to general aviation nearby: ____________
ICT Resources
High speed Internet access: ____________
DSL provider: ____________
Estimation of monthly costs: ____________
Telephone access:
Local telephone provider: ____________
Fiber or analog classification: ____________
Estimation of monthly costs: ____________
Cellular service:
Served by:
(1) AT&T _______ (2) Verizon _______ (3) Sprint _______
(4) US Cellular _______ (5) _______________ (6) ________________
Estimation of monthly costs:
(1) ____________
(2) ____________
(3) ____________
(4) ____________
(5) ____________
(6) ____________
Cable Service:
Cable (Modem) provider: ____________
Estimation of monthly costs: ____________

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Community Resources
Cities/Towns [w/ population]:
Distance to town w >5000 population (town center): ____________
Minutes to downtown Raleigh: ____________
Hospital(s):
Minutes to nearest hospital:
Designation of facility: ____________
Available Housing (rental, spec, etc.,):
Median housing price (3 bedroom single family house) in the nearest town:
____________

Infrastructure Resources
Water/Sewer access:
Rates at site (cost) in per gallon terms: ____________
Availability: ____________
Designated water provider:
Capacity (average use):
Sanitation (waste disposal):
Rate per ton/month: ____________
Designated provider: ____________
Electric Utility:
Rate per hour: ____________
Designated provider: ____________
Natural Gas:
Availability: ____________
Rates: ____________
Designated provider: ____________
Educational Infrastructure Resources
Universities: ____________
Miles/minutes to nearest UNC campus: ____________
Miles/minutes to nearest other college: ____________
Community College(s): ____________
Miles/minutes to nearest facility: ____________
Classification of site (satellite, main campus, etc.,): ____________
Availability of special industry targeted or other programs: ____________
Secondary School(s): ____________
What secondary school serves the nearest town (name): ____________
Quality of educational facility (Dept of Public Instruction rating): ____________
County level percentage of children in public vs. private schools: ____________
Economic Resources
Tier Designation: ____________
Nearby manufacturing industry: ____________
Nearby service industry: ____________
Countys largest employers:
Population:
Population density: ____________
County property tax rate(s): ____________

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Human Resources
Unemployment Rate (current): ____________
Nature of Workforce: ____________
Unemployed:
Under-employed: ____________
Migrant worker population: ____________
Skill characteristics: ____________
Other workforce characteristics: ____________
ESC monthly unemployment rates:
Selected last four month rates: ____________
Unemployment rate from previous year: ____________
General education level (county):
Percentage with HS degree: ________ Percentage with 4-year degree: __________
Commentary on workforce and measures:
Economic Developer [is unemployment rate a good measure, etc.,]:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
ESC representative [who walks in the door, what do they look like]:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

SITE IDENTIFICATION and BACKGROUND INFO:


Size and Configuration:__________________
Ownership:______________________
Adjacent Land Use: ________________________
Site - Specific Tax Incentives:______________________
Date of Evaluation: __________________
Person Assisting with Evaluation (Affiliation): ________________
Position/Title: ____________________
Telephone #: _______________
Email Address: __________________________
Name of Industrial Development: ________________________
Facilities ready for move in: _____________________
Number of current Tenants: ________________
Number of Initial Tenants within the first year: ________________

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APPENDIX B

Notes on Potential Sites in


Northern and Southern Counties
North
We visited the following sites during the months of July, August, and September 2002.
In nearly all cases the respective countys economic developer accompanied us.

(A) Butner Business Park and Morgan Site


These two combined sites are located adjacent to Interstate 85. Butner Business Park is
shovel-ready with its own graded entrance road. At 325 acres, it has its own water and
sewer allocation and is expandable to over 500 acres. The Morgan site adds 160 acres
to the total available, and also has its own water and sewer allocation (1,000 gallons a day).
Figure B.1: Butner Business Park, I-85

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(B) Oxford Business Park and Montague Site


Oxford Industrial Park is Granville Countys certified site, with 125 acres available.
This is an established park with several current tenants nearby. The Montague site
adds an additional 160 acres, and also has water and sewer access currently.
Figure B.2: Oxford Industrial Park

(C) Triangle North Industrial Park


The Triangle North Industrial Park is located adjacent to Interstate 85, at the same exit
as the main campus of Vance-Granville Community College. This site is over 100 acres
of shovel-ready land, certified by the Commerce Department. There are 90 acres left
to sell in the complex.

Figure B.3: Triangle North Industrial Park

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(D) Daniel Site


The Daniel Site is a 500 to 600 acre site located along the US-1 corridor south of the
Interstate 85 split. CSX maintains a spur adjacent to the site, and water and sewer are
accessible. The main drawback to the site is that no service roads have been built to
provide access.
(E) Henderson Vance Industrial Park
Henderson Vance Industrial Park is a 200+ acre facility also located on the US-1 corridor. Currently all available parcels are filled.
Figure B.4: Henderson Vance Industrial Park

(F) Capital Boulevard Site


The Capital Boulevard site is located along the US-1 corridor across the highway from
the Youngsville Commerce Center. An undeveloped site, the Capital Blvd site is a rectangular 500-1000 acre site bounded by two two-lane roads. There is no current development on the site, though a major auto auction site is adjacent to the property.
(G) Youngsville Commerce Center
The Youngsville Commerce Center is an established business park, with around 105
acres currently available. The Youngsville Commerce Center has several established
tenants who also have plans to expand their operations within the site.
(H) Youngsville Commerce Center South
Youngsville Commerce Center South is also an established industrial park with two
tenants, located adjacent to a rail line. There is not much space to expand here, as the
two current tenants are occupying much of the available land.

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(I) US-1 (Soul City) Sites


Warren County offers several sites. OED has combined them into the Soul City sites
conglomeration. There is rail access along several of these sites, with CSX running an
average of one train a day delivering box cars to the nearby chip mill. Along with the
nearby community of Soul City, there is a poultry processing plant, an International
Paper Mill, an assisted living facility, and a health care provider.
Figure B.5 Warren County Soul City Sites

(J) Oine Sites


The Oine site is a newly certified site, the only one in Warren County. The property is
over 50 acres, and has an elevated water storage tank adjacent. All utilities are available on the road frontage. The Oine site is located on Exit 229 on Interstate 85, just six
miles north of the Soul City sites.

South
We visited the sites in Lee, Harnett, and Chatham Counties in August and September
2002. We contacted the economic developer in each county for information on each
site, and in most cases a developer accompanied the OED representative to the site.

(A) New Hope Farms Site


OED interviewed Tony Tucker about the sites available in Chatham County. The premier site he showed us and discussed in detail was New Hope Farms. This site is
located at the corner of US-64 and US-421. This site has been in competition (along
with the current facility in Butner) for the new consolidated Dorthea Dix mental hospital facility. As of the latest information available, it appears that Raleigh has decided
to consolidate the mental health facilities in the current location in Butner. This site is

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owned by one property owner who is interested in development projects that would
benefit the county.

(B) Samarcan Site


The Moore County sites we have listed on the map of the region are just three of the
many listed for the county by the local economic developer. The economic development office there (represented currently by Robin Spinks of Greenfield Development
Company) just had a study done of the available industrial sites in the county and
completed its own system of rankings based on several criteria. That report created a
site selection decision matrix for seventeen sites based on several characteristics the
county is interested in evaluating. Several of those criteria are listed in the site evaluation database included in this report. Our report incorporates the individual site data
from that report, as well as data available from the Commerce Department (and comments from Robin in her interview). Their report included the following listed
characteristics:
(1) Availability

(2) 4-lane access

(3) Surrounding land use

(4) Environmental issues (5) Sewer access

(6) Water access

(7) Taxation

(8) Natural gas

(9) Telecommunications

(10) Size

(11) Rail access

(12) Proximity to labor

(13) Proximity to airport (14) Aggregate weighted score


The Samarcan property is a site near industrial use property east of Candor (Montgomery County) on both sides of NC-211 at Samarcan Road. The property is almost
1,300 acres and owned by an individual willing to discuss development ideas further.
Nearby uses include turf farm, grape orchard, rural residential, and heavy industrial.
The county property tax is the only current levied tax on the parcels. Water and sewer
lines are adjacent on Samarcan Road, available from Montgomery County and the
town of Candor, respectively. Natural gas is not reasonably available (the closest lines
are more than ten miles away). The site does have the Aberdeen railroad line running
through the property, and is approximately twenty miles from the nearest airport.

(C) Ransdell Site


The 620-acre Ransdell site is located south of Aberdeen on the west side of US-15/501.
The site is located about a mile from US-1 and nearby uses include residential and
industrial. The site is subject to county property taxes only. The town of Aberdeen
supplies water via a line adjacent to US-15/501, and sewer is also supplied by Aberdeen, though a line approximately 2,500 feet away. Natural gas is close, with a line
approximately a half-mile to the north on US-15/501. Alltel provides telecommunications, with a fiber line about a mile away. CSX maintains a rail line along the rear of
the site, and the nearest airport is about 9 miles away.

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(D) Catawba Site


The Catawba site is about 1,200 acres on the south side of US-15/501 at NC-24/27 east
of Carthage. The property is in the midst of a sale, and the new owner is interested in
development. The site is approximately eight miles from US-1, and nearby uses include highway commercial and rural residential. Water and sewer access are 4,000
and 6,000 feet away, respectively, both supplied by the town of Carthage. Natural gas
is not reasonably available (with the closest line almost twelve miles away). Telecommunications is provided by Sprint, with a fiber line almost a quarter mile away. Rail
does not go through the site, and the nearest airport is nearly twelve miles away.
(E) Lee County Industrial Park
OED met with Robert Heuts, economic developer of Lee County, to discuss the several properties available there. The Lee County Industrial Park is the largest site in the
county, with an area of 450 acres currently expandable to over one thousand acres.
There are current plans for the Industrial Park to house the new Central Carolina
Community College Telecommunications Center, which is replacing the old facility.
The park currently has access to natural gas, and sewer access should open up the
additional acreage. The site also has rail access, with a Norfolk Southern line running
through.
(F) Southpark Site
Southpark (Lee County) is a smaller site than the Lee County Industrial Park. No
tenants are now operating, but one business has committed to the site. The site has no
rail access, but natural gas is available. There is a bypass targeted for a nearby road exit
from US-421 that is planned for five years out that crosses at a nearby intersection.
(G) Western Harnett Industrial Park
According to Jerry Hartgrove in Harnett County, the western part of county has experienced lots of spillover growth from the Fayetteville area, including Fort Bragg. New
elementary and middle schools have been built recently, and a new high school is also
planned for the area, and around 2,500 home sites in the area are scheduled to be
developed. Located on Highway 87, the Park is about 250 acres in size, zoned industrial. The site is about 25 miles away from Interstate 95, 50 miles from RDU, and 25
miles from the Fayetteville airport. Harnett County also has had a recent study commissioned on their economic development efforts, prepared by the Leak Goforth Company, LLC.
(H) Layton Property Site
The Layton property is more centrally located in the county, along Highway 421 in
Lillington. The entire property is owned by one family, and is available on an all-ornothing basis.

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(I) Talton Property Site


The Commerce Departments SiteSearch service listed several available sites in Johnston
County. However, Michael Desherbinin of the Economic Development Office in
Johnston County focused our attention on the Talton property. The site is listed as 900
acres, with rail access, all utilities (including natural gas), and located right beside the
US-70 Bypass.

Figure B.6: Talton Property Site

(J) Clayton Property Site


The Clayton property is owned by the Norfolk Southern railroad, and Jim Bowman is
their representative. The property was described as over 400 acres, located along the
US-70 corridor. This site was the second choice mentioned by the economic developer
as fitting the suggested acreage.

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APPENDIX C

Industry groupings within sample clusters


Kerr-Tar counties (north)

Southern counties

SIC Code

Industry Classification

SIC Code

Industry Classification

2824
2834
2844
2851
2875
3579
3634
3643
3644
3674
3821
3843
7371
7372
7375
7379
8711
8712
8713
8731
8734

Plastics/Chems
Biotech
Plastics/Chems
Plastics/Chems
Plastics/Chems
Info/Comm
Medical
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Plastics/Chems
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Biotech
Info/Comm

2821
2824
2834
2836
2841
2844
2869
2875
2879
2891
2899
3559
3577
3624
3625
3643
3661
3663
3669
3672
3676
3679
3812
3825
3826
3829
3841
3842
7371
7372
7373
7374
7375
7379
8071
8092
8093
8099
8711
8712
8713
8731
8732
8734

Plastics/Chems
Plastics/Chems
Biotech
Biotech
Plastics/Chems
Plastics/Chems
Plastics/Chems
Plastics/Chems
Plastics/Chems
Plastics/Chems
Plastics/Chems
Plastics/Chems
Info/Comm
Plastics/Chems
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Medical
Medical
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Info/Comm
Plastics/Chems
Plastics/Chems
Plastics/Chems
Plastics/Chems
Info/Comm
Info/Comm
Info/Comm
Biotech
Info/Comm
Info/Comm

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APPENDIX D

Legal Considerations and


Examples of Revenue/Cost Sharing
Our first question was whether North Carolina law specifically created difficulties for
inter-local cooperation; more specifically, we wanted to know how counties and municipalities could share revenues generated from joint activity located in one of several participating counties. Can local governments in North Carolina engage in economic development activity that includes such devices as revenue-sharing agreements
to support joint projects? North Carolina law provides many opportunities for such
inter-local activity between and among local polities. There are many current example
of this type of joint activity in North Carolina and other states.

North Carolina Enabling Language


There are two main legal approaches to implementing inter-local agreements between
municipal and/or county entities: (1) direct authorization granted via some sort of
explicit state constitutional Joint Exercise of Authority enabling statute (examples
being the State of Minnesotas Chapter 469, South Carolinas Title 4 Chapter 1-140,
both authorizing joint municipal action); and (2) general assertions of power delegated to municipalities as implied powers of their corporate nature (an example being our own North Carolina General Statutes). Some of the typical relevant enabling
language from the North Carolina General Statutes appears below:
Chapter 153A [Counties] Article 1 153A-4 (Broad construction) . . .counties of
this State should have adequate authority to exercise the powers, rights, duties,
functions, privileges, and immunities conferred upon them by law. To this end,
the provisions of this Chapter and of local acts shall be broadly construed.
153A-11 [Corporate powers] The inhabitants of each county are a body politic
and corporate . . . they are vested with all the property and rights of property
belonging to the corporation . . . [and] may contract and be contracted with. . . .
The Randleman Dam constitutes a nearby example of inter-local agreements in
action. Six local governments got together (Randolph County and five cities) to construct and maintain a dam. Citing several of the relevant statutes (N.C. Gen. Stat. 160A

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460, N.C. Gen. Stat. 160A 17, N.C. Gen. Stat. 160A 274, and N.C. Gen. Stat. 162A 14
which relates specifically to water issues) the six entities drafted a twelve-page agreement that contemplated sharing costs for the dam by a pro rata metering out of the
water supply. Based on interviews concerning this and other inter-local attempts at
cooperation, the most immediate obstacle to success cited was the presence of local
politics as a barrier to initial cooperation among the entities involved.
A second example of cost and revenue sharing in North Carolina is in Burke and
Caldwell Counties. The towns of Morganton and Lenoir, in cooperation with the counties, proposed the creation of the Foothills Airport Authority, a joint entity, to operate
the Morgan-Lenoir airport. The North Carolina General Assembly ratified a bill to
create the Authority in its 2001 session (in Session Law 2001-306, Senate Bill 653).
The new Authority is using 300 of the 1,100 acres for the airport, and reserving
800 acres for future development. By inter-local agreements, the taxes collected from
users of the property are to be submitted to the Authority and then divided equally
among the four participating political subdivisions, each receiving a quarter share.
Costs for development also are to split among the participating entities.

Other State/Municipal Experience with Cooperation


The Kennebec Valley Council of Governments (a regional economic development organization), through the Kennebec Regional Development Authority, opened a 285acre park near Oakland, Maine, in March 2002. FirstPark is an example of an interlocal agreement among twenty-four rural counties and municipalities. The largest
member is the town of Waterton, with a population of around 20,000. Oakland, as the
geographic sponsor of the park, levies the property taxes on the tenants. These tax
proceeds are then split pro rata among the participating counties and municipalities
based on their contribution to the overall real estate valuation for the participating
region. For example, the city of Waterville, which contributes 16 percent of the participants collective value, is given 16 percent of the taxes from the park.
Based on a telephone conversation with the CEO of the park, Paul Levesque, we
gleaned several general recommendations. His experience and comments with actual
implementation issues echoed the comments given by those involved in the Randleman
Dam venture, and appear below.
(1) Participating entities were particularly concerned about rising costs, for example, school and educational costs, that would occur with the implementation of the project (which they would subsequently have to fund themselves);
(2) Questions over the equitable reimbursement of the participating entities was
a matter that was important to address and make explicit;
(3) Looking back, one of the more important do-overs would have been to
make the initial contracting device for the park more explicit in its details.
After the fact, the legal costs incurred in the formation of the entity, the
ramifications of the TIF (Tax Incremental Financing) zone classification, and
ownership and maintenance responsibilities of the roads and utilities were
all details better made explicit;

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(4) In general, a desire for growth without pain on the part of the participating
entities was troublesome to overcome, even with the understanding that
this particular economic development vehicle was one of the few available
for such projects in rural settings.
In a February 11, 2003, address to the Emerging Issues Forum, former Michigan
Governor Engler talked about the use of tax sharing arrangements in the Grand Rapids metro area as a way to spur economic development. He credited those arrangements for much of the new vitality in that area. At the same forum, Tim Franklin of
Virginia Tech discussed a successful revenue sharing agreement between the city of
Danville and Pittsylvania County, Virginia.

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