Economic Development Strategic Plan for Chatham County - Research

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					                    UNC Center for
               Competitive Economies (C3E)

                     Chatham County:
            Economic Development Strategic Plan
                          Jason Jolley,
                    Senior Research Director
                   Adjunct Assistant Professor



The Carolina Center for Competitive Economies (C3E)   Kenan Institute for Private Enterprise
     Project Background
   Three incoming Chatham County commissioners approached
    C3E to gain a better understanding of the local economy.
   A part of our public service mission, C3E conducted four
    workshops with incoming commissioners and community
    leaders, concluding with a SWOT analysis.
   On April 1, 2007 the Chatham County Board of
    Commissioner contracted with the UNC Center for
    Competitive Economies to create an economic development
    strategic plan for Chatham County.
   The Chatham County Economic Development Corporation
    was charged with facilitating the planning effort.
1.   Task One: Community Engagement
2.   Task Two: Economic Development Scan
3.   Task Three: Comprehensive Workforce Inventory
4.   Task Four: Targeted Industry Cluster
     Characterization
5.   Task Five: Existing Industry Needs/Opportunities
     Assessment
6.   Task Six: Comparable Communities Assessment
7.   Task Seven: Economic Development Vision Plan
8.   Task Eight: Economic Development Organization
     Optimization
                        Our Objectives:
                To construct a community supported economic
                 development plan.
                To redefine Chatham’s competitive position within
                 the RTP/Triad regions
                To identify existing industry/business needs and
                 opportunities.
                To accurately inventory Chatham’s labor force.
                To refocus industrial development on high value
                 companies paying higher wages

The Carolina Center for Competitive Economies (C3E)   Kenan Institute for Private Enterprise
               Economic Development
                   Deliverables
                Expansion prospects from among existing Chatham
                 County companies;
                RTP area growth companies targeted for location of
                 production activities and company-level descriptions of the
                 Piedmont Triad and RTRP industry clusters most
                 appropriate for Chatham County;
                Specific company prospects outside of North Carolina for
                 targeting;
                Market-articulated infrastructure needs and priorities list;
                Entrepreneurial economy assessment;
                Workforce asset inventory; and
                Recommendation of strategic economic development
                 organization and management restructuring.

The Carolina Center for Competitive Economies (C3E)   Kenan Institute for Private Enterprise
Community Engagement

     Blending the diverse community
 preferences of Chatham County citizens
   with an objective assessment of the
 County’s economic development options
    Community Engagement
   Blending economic analysis with community values:
      Five community meetings were held to kick-start
       the planning effort.
      Two-day economic summit was held at the
       planning mid-point.
      Five person working group of the EDC Board.

      20 person Economic Development Strategic
       Planning Task Force.
      Two final community meetings to present plan

      Presentation to joint meeting of County, Towns,
       and EDC Boards.
    Community Engagement

   Over 1600 volunteer hours from the citizens of
    Chatham County formed the backbone of this
    project and provided community oriented
    context to our research in developing this
    strategic plan.
           Chatham County’s
              Challenges
Chatham County…
 is becoming a bedroom community of the Triangle region and
  residents commute outside the county to work.
 jobs are concentrated in low skilled, low wage industries.

 is experiencing a growing wage gap between the wages of
  Chatham County jobs and the NC average.
 leaks a large percentage of its retail sales and sales tax to
  neighboring counties.
 has geographic, cultural, and economic divide between eastern
  (Pittsboro) and western (Siler City) Chatham.

  The County’s historic ad hoc economic development and
  planning approaches were insufficient to address these
  challenges.
                               Weekly Wage 2006 1st Quarter

       $1,200.00                          $1,136

       $1,000.00
                                                                                              $830
         $800.00                                                        $767                             $744
                                                      $722
                                                              $683
                                 $627
         $600.00      $556                                                          $557


         $400.00

         $200.00

           $0.00




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The Carolina Center for Competitive Economies (C3E)                    Kenan Institute for Private Enterprise
-$60,000
           -$40,000
                         -$20,000
                                                $20,000



                                           $0
                         Total Private
                           Industry
                             Agriculture
                              Forestry

                                    Mining


                         Construction


                       Manufacturing

                               Wholesale
                                Trade

                          Retail Trade

                       Transportation
                            and

                             Information

                         Finance and
                          Insurance
                      Real Estate and
                        Rental and
                        Professional
                       and Technical
                      Management of
                      Companies and
                                                          Chatham/NC Wage Variance




                       Administrative
                        and Waste
                            Educational
                             Services
                      Health Care and
                           Social
                            Arts
                        Entertainment
                      Accommodation
                         and Food
                      Other Services
                        Ex. Public
                                                                                     Chatham’s Low Wage Structure




                       Unclassified
                      establishments
  Chatham wages as a percentage of US and NC average

                                                  % of NC AWW          % of US AWW

90.0%


85.0%


80.0%


75.0%


70.0%


65.0%
        1990   1991   1992   1993   1994   1995   1996   1997   1998   1999   2000   2001   2002   2003   2004   2005   2006
                    Percent of Workers Commuting Outside of County of
                                     Residence 2000

        60.0%
                 55.3%

        50.0%
                                                                   42.4%     41.3%
        40.0%

                                                          28.4%
        30.0%                                                                                   26.4%
                           25.1%      25.1%
                                                                                        19.5%
        20.0%
                                               12.2%
        10.0%


         0.0%
                 Chatham   Alamance   Durham   Guilford    Lee      Orange   Randolph    Wake     North
                                                                                                 Carolina



The Carolina Center for Competitive Economies (C3E)               Kenan Institute for Private Enterprise
      Census                                                               Commute
      Tract #           Census Tract Name                    Description     level      Destination
                                                                                       small urban
               202      N Central Chatham                Small town        low        cluster
                                                         micropolitan                  large urban
               206      S Central Chatham               area               low        cluster
                                                                                       small urban
               204      Siler metro                      Small town        internal   cluster
                                                                                       small urban
               203      Siler rural                      Small town        high       cluster
                   SW Chatham/Bear                                                     small urban
               205 Creek                                 Small town        high       cluster
                                                         metropolitan
               207      E Chatham                       area               high       urban area
                                                         metropolitan
               201      NE Chatham                      area               high       urban area
                                                         metropolitan
               208      Pittsboro                       area               high       urban area

Source: US Dept. of Agriculture, Economic Research Service
                                   Jobs of Residents (located     Labor
                  In County Jobs
                                           anywhere)            Difference
  Agriculture          431                    676                  245
    Mining             52                     13                   (39)
   Utilities            3                     118                  115
 Construction         1,016                  2,930                1,914
Manufacturing         5,367                  5,291                 (76)
Wholesale trade        454                    741                  287
 Retail trade         1,893                  2,965                1,072
Transportation         323                    729                  406
 Information           62                     615                  553
   Finance             200                   1,010                 810
  Real estate          73                     435                  362
 Science/Tech          541                   2,050                1,509
Administration         487                    721                  234
  Education           1,479                  4,059                2,580
 Health care          2,247                  4,670                2,423
     Arts              287                    375                  88
  Hospitality          929                   1,529                 600
Misc. Services         389                   1,409                1,020
 Public Admin          809                   1,038                 229
       Retail Sales Leakage
                    (2004-2005 in millions)
                                              Leaked
                                  Captured in Outside          Leakage
Chatham             Total         County      County           Rate
TOTAL                  $1,236           $448            $788      64%
Apparel                     $29           $2             $27      92%
Automotive              $146             $74             $72      49%
Food                    $222            $134             $88      40%
Furniture                   $44          $28             $16      36%
General
merchandise             $292            $110            $182      62%
Lumber and
building material       $131             $44             $86      66%
Unclassified            $329             $41            $287      87%
                                Retail Sales
                  Approximately 64 cents of every retail
                   dollar spent by Chatham County
                   residents is spent outside the county.
                  Results in about $7.7 million in lost local
                   sales tax revenue.



The Carolina Center for Competitive Economies (C3E)   Kenan Institute for Private Enterprise
          Organization of
         Recommendations
1.     Economic Development Focus Areas
          Attraction, Retention, Entrepreneurship
2.     Quality of Place
3.     Infrastructure
4.     Economic Development Reorganization
1) Economic Development
      Focus Areas


   Attraction                      Retention




                Entrepreneurship




        Focus areas are not mutually exclusive
                 Attraction
   21 potential clusters      1.   Architectural and
                                    engineering services
   ED Strategy Task
    Force preferences for      2.   Technical and research
    growth potential,               services
    wages, & employment        3.   Basic health services
    prospects narrowed list
    to six targeted clusters   4.   Pharmaceuticals
   Seventh cluster,           5.   Information services
    renewable energy,
                               6.   Higher education and
    emerged from citizen            hospitals
    preferences.
                               7.   Renewable energy
Triangle: Attraction Clusters
Triad: Attraction Clusters
Chatham: Attraction Clusters
  Targeted “Growth Companies”
 Many of the firms in these targeted clusters that favor Chatham
           are younger, locally-based “growth companies”
Single locations and small headquarters
 not subsidiaries/branch plants but independently owned,

   entrepreneurial firms.
Smaller but growing
 modest scale, between 25 to 50 employees, in facilities from

   25,000 to 40,000 square feet
Higher value added
 firms poised for expansion, posting high revenues per
   employee ratios, particularly given their modest facility scale
    Production Location for
     RTP/Triad Companies
   Chatham County is not receiving its share of RTP/Triad
    relocations.
   Chatham County’s manufacturing heritage and strong
    community college training programs make it an ideal
    location for production facilities.
   Chatham offers a competitive advantage in cost and
    labor relative to other “non-core” RTP counties.

    Actively market the County’s Central Carolina
    Business Campus in Siler City and other suitable
    properties for location of production facilities
    identified in the targeted industry cluster analysis.
    Mid-tech Research Park
   Prior Center studies demonstrated the potential for a mid-tech
    research park in the southern RTP region. Chatham was
    among the counties identified in this study.
   A multi-county collaborative agreement is in place for the
    Northern RTP region (Kerr-Tar Hub).
   Such companies may desire a closer proximity to the RTP
    market than the Central Carolina Business Campus in Siler
    City can provide. Northeast Chatham has the existing
    workforce to support such a park.

    Explore the development of an RTP branded mid-tech
    park to attract footloose, mid-tech companies desiring
    location in the RTP region.
Vision for the Future
Chatham County’s strategic location between
the Triad and Research Triangle regions
positions it as the preferred location for
emerging-growth companies.
     How to you get there?

   Move away from ad hoc economic development
    and planning. Adopt a policy-driven approach to
    addressing these problems.
   Recast the EDC as a credible, apolitical advocate
    for and facilitator of economic development.
   Adopt and implement the economic development
    strategic plan.
Benefits of University
    Engagement
                          C3E Research Team
                                Brent Lane, Principal Investigator
                              Jason Jolley, Co-Principal Investigator
                       Lukas Brun, Senior Research Associate/MPA Student

                                         Research Team:

                                 Sara Abdoulayi, Planning/MBA
                                 Caroline Cunningham, Planning
                                     LeRae Davis, Planning
                                       Lindsey Davis, MPA
                                       Allan Freyer, OEBD
                                     Alison Gillette, Planning
                                   Erin Gray, Undergraduate
                                      Mari Howe, Planning
                                         Will Lambe, SOG
                                    Nora Lenahan, Planning
                                        Ben Mauk, OEBD
                                  Tina Prevatte, Planning/MBA
                                     Eugene Watkins, MBA
                                     Jared Wiener, Planning


The Carolina Center for Competitive Economies (C3E)       Kenan Institute for Private Enterprise
                    Academic & Professional
                          Outcomes
          Master’s Projects:
           Lukas Brun (Public Administration ’09): “Including Stakeholders
            Preferences in Cluster Analysis”
           LeRae Davis (Planning ‘08): "Beyond Fiscal Impact: Economic
            Benefits of Residential Development"
           Mari's Howe (Planning ‘08): "A High Road Community Economic
            Development Strategy for Rural Communities: A Case Study of
            Sustainable Agriculture in Chatham County, North Carolina“

          Research Papers in Progress:
           “Economic Development Planning in Bedroom Communities”
            (revise and resubmit), Popular Government.
           “Incorporating Community Values into Industry Cluster Analysis” (in
            progress)
           “Defining a Renewable Energy Cluster” (in progress)

          Career Opportunities:
            Mari Howe (DCRP ’08) hired as new Research and Innovation
             Manager for Chatham County Economic Development Corporation


The Carolina Center for Competitive Economies (C3E)   Kenan Institute for Private Enterprise

				
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