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February 2006
One for All and All for One!
By John Paul Galles

     News stories in recent months have identified several issues that have heightened friction and hindered the cooperation and collaboration among individuals and organizations participating in regional economic development efforts:

•Cabarrus County’s cities, Concord and Kannapolis, want to take up to 38 million gallons of water a day from the Catawba River.

•Lancaster County has attracted business operations from Mecklenburg County including HSBC Mortgage and Citigroup, Inc and has indicated that it has been contacted by a major mortgage finance company. Speculation is that Charlotte-based LendingTree is considering a relocation into South Carolina.

•A pending South Carolina sales tax increase in order to reduce property taxes may work as a disincentive to business attraction along the North Carolina border.

Competition between states and/or counties to attract new businesses has often created substantial conflicts. Our region’s recent loss of jobs from the textile and furniture industry has only exacerbated the situation, spurring even more aggressive tactics in an environment of already heightened sensitivity. Addressing such internecine struggles, although necessary, is time-consuming and counter-productive. It is a far more valuable use of our economic development resources to stay focused on the larger ambition of attracting new business to the region at-large and competing more effective as a region globally.

The sum total of all our collective assets and advantages makes the Charlotte region a most desirable location for business relocation and expansion. For the purpose of emphasizing those assets and advantages and encouraging cooperation and collaboration, seven regional economic development organizations were formed by the North Carolina Department of Commerce. The Charlotte Regional Partnership (CRP) represents the greater Charlotte region consisting of 12 counties in North Carolina and four counties in South Carolina, enabling groups of counties to compete more effectively for new investment and devising strategies for development based on the inherent opportunities and advantages of the region as a whole.

In an effort to quell increasing animosity and acrimony across both county and state lines engendered by these recent news stories, and to improve collaboration between its member counties, the CRP has created a task force to examine the relocation of existing businesses within the region and to make recommendations regarding best practices as well as an industry retention and expansion model. It may even create a “code of conduct” with principles for recruiting businesses.

While a code of conduct may be helpful, it is always possible to undercut “the other guy” and provide individualized special incentive packages to attract business to another location within this region. And that may generate more in taxable revenues for that particular locale. But overall it does not add to the wealth of the region – it only takes from one and gives to another – there is no net gain, there is no new business creation, and truly, no one is better off. And whether it’s property taxes, sales taxes, tax deferrals, etc., ultimately, each business will make its own determination about its location based upon the total mix of relevant factors, not just one.

It’s time to look at the larger picture and reach outside of our region to draw in new commerce and industry. CRP’s mission emphasizes the concept strongly:

“Embracing the core belief that there is strength in unity, the community and business leaders of Charlotte USA continue to work together to reinforce the powerful concept of ‘regionalism.’ Without a doubt, regionalism is the most effective strategy for global ‘city-regions’ like ours to grow and prosper in the 21st century world economy. As a result, it has become the driving force behind everything we do.”

Economic developers cannot and should not ignore corporate movements within the region; they must support the retention and growth of existing enterprises. But this should not detract from their substantial focus on attracting new business growth to the region at the same time.

Supporting business and business growth is a complex business that gets tougher every year!


John Paul Galles is the publisher of Greater Charlotte Biz.
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