Warren Smith Addresses Belated Beaufort County EDC's Annual Report | Eastern North Carolina Now

   Publisher's note: We address the much belated Beaufort County EDC annual report, now finally submitted, through contributor Warren Smith's correspondence to Beaufort County Commissioner Al Klemm. Warren's succinct demonstrative narrative to Mr. Klemm, one of the county commissioners in the majority of the Beaufort County Commissioners that have long thought it wise to prop up Beaufort County's failing approach to economic development, describes the problem at its nexus.

   County Commissioner Al Klemm has long been Beaufort County Economic Development's staunchest advocate, and cheerleader, so this Warren Smith correspondence / missive, addressed to him, is most appropriate.

   Here below is the Warren Smith correspondence to Al Klemm, and then just a bit lower is the Beaufort County EDC's annual report, with an associated link to the EDC's financial report.

Mr. Al Klemm
Economic Development Commission
Beaufort County Board of Commissioners
C/o Beaufort County Manager's Office
121. W. Third Street
Washington, NC 27889


Mr. Klemm,

    I have read the Economic Development Commission's (EDC) annual report for 2011.

    The fact that, after months of delay, Mr. Thompson was able to draw this together in the short time since finishing his Craven County jury duty, but only under threat of personal financial hardship, speaks volumes about the low regard in which Mr. Thompson continues holds Beaufort County taxpayers.

    The submitted financial statement is nothing more than a parroting of the county budget insert for "EDC." It is old news and useless as a tool for oversight or evaluation.

    As to the activity list, it is nothing more than one-sided puffery. The key to evaluating this report's integrity is in what is NOT mentioned:

    Industrial Parks:

   • Chocowinity Industrial Park is in its sixth year and remains empty.

   • Washington Industrial Park has more buildings for sale than in 2010, while less people are employed there than in 2010.

   • Brooks Boat Works is for sale at a substantial per square foot discount to the QSII construction cost.

   • XS Smith is now up for sale at a steep discount to the Quick Start II building's construction cost.

   • Skills Center tenant left town and the building is now unoccupied.

   • Quick Start II is in its 5th year and remains unsold with its price reduced by its comparison to neighboring properties and it has required costly design flaw corrections, upgrades and repairs.

   • P&G required an unexpected upgrade to its land grant before they could close on the mishandled and jeopardized agreement. This now leaves county with less valuable and more difficult to develop property remnants at Washington Industrial Park.

    The real estate market for publicly owned buildings east of I-95 is glutted and neighboring counties have proven more than competitive in offering property to prospective tenants. In particular, Martin and Pender Counties have attracted prospects that Mr. Thompson spent months assuring commissioners would come to Beaufort County.

    The Carver/River Rd project has failed to achieve job goal and will require the county to fund "claw back" provisions that accompany the grant.

    Although, Mr. Thompson has pre-included the 2012 Weir, Spinrite and P&G grants in this report for 2011, he has failed to mention that Flanders has been sold to a vulture capital firm or that PCS has laid off 150 employees in 2012 or that Weir's jobs are being forced into use to bolster the troubled River Road grant.

    There is no documented jobs sheet. Nor are there any corrections to past jobs counts. It appears that Mr. Thompson has given up any effort at finding support for his earlier unverified claims of jobs created.

    I am sure more could be added to the tally; however, even this short list of excluded and overlooked items gives voice to the ongoing failure of the "EDC" to candidly deal with taxpayers. This has been the trademark of Mr. Thompson's tenure at the EDC. The report is another one-sided public relations gambit struggling to window dress another pathetic year of "EDC" efforts and Mr. Thompson’s failures.

Regards,

Warren Smith
  Beaufort County

EDC ANNUAL REPORT

EDC Bylaws, Chapter 8, Section I

    The preparation and presentation to the Commission of an Annual Report of the Economic Development Commission that enumerates the activity and efforts of the Commission for the previous fiscal year, activities currently in progress, and initiatives that will be undertaken in the upcoming year. This report will relate the expenditures of staff time and the Commission budget to major areas of activity.

    Activity and Efforts

    In the previous year, the EDC Director and the EDC Administrative Assistant engaged in expansion of planning for several local companies as follows:

    Weir Valves
    The EDC monitors local industries to encourage the expansion of jobs in Beaufort County. Weir Valves informed us that they had been given a new assignment that would mean doubling their employment and totally retrofitting their plant to allow for the manufacture of fracking equipment. We arranged meetings with the appropriate State grant officials to secure upfit grants as well as training grants provided by Beaufort County Community College. Employment in that plant will double.

    P&G Manufacturing
    P&G Manufacturing informed EDC of plans to expand and considered the Quick Start II building. Because of the requirement of ceiling height, they decided to build a facility in the Industrial Park rather than acquire the Quick Start II. A One NC grant was applied for and received with contributions by both the City of Washington and Beaufort County. When completed, the company will double employment to approximately 60 jobs.

    Spinrite
    Spinrite Corporation acquired the assets from Caron from National Spinning and announced the intentions to relocate that facility to Canada. The EDC met with the corporation President and Mr. Chesnutt. National Spinning President, Jim Chesnutt, convinced the company to remain here provided certain grants are obtained. A One NC grant was obtained with matches from the City and County and the company elected to retain the company here. They did reduce employment from 90 to 60 initially, but promised to increase to 90 within three years.

    During the course of the year, the EDC worked with a number of industrial prospects summarized as follows:

    Wood Pellet Plant
    The wood pellet plant was one of several that have considered the Chocowinity Industrial Park within several years. This particular plant would have multiple locations and indicated that the Chocowinity Industrial Park was ideal, but that it would be putting the first of six plants in another county due to the presence of an excising facility and a railroad spur.

    Wood Torrification Plant
    Wood torrification is the transformation of wood into a coal-like substance through heat and pressure in an anaerobic chamber. The company is considered to be active and at least one local business man has made investments in the company and has confirmed that Beaufort County is on the list of potential proposed sites.

    A plasma generation company has also considered the Chocowinity Industrial Park and would utilize municipal solid waste from an adjoining county to generate steam for one or both of the plants mentioned above. The company has an existing plasma generator in operation in another state and the combination investment with the plasma generation in one of the two other plants listed above would be somewhere in the vicinity of $200-$300 million.

    Quick Start II
    The EDC entertained several clients for the Quick Start II facility in the previous year including two companies from France, one from Germany, and an American company that is engaged in the manufacture of commercial cabinetry which is not a direct competitor of Impressions Marketing.

    Non-Manufacturing Economic Development Activity

    Aurora
    The EDC worked very closely with the Town of Aurora to find a grant to hire a part-time City Manager for the first time in Aurora. The EDC also acquired a grant to allow an engineering company to produce a master plan for the revitalization of the town. Rivers and Associates was awarded that contract and has produced a very impressive urban design plan showing a significant use of the waterfront in Aurora and a rebuilding of the town. A major nonprofit corporation located in Baton Rouge, Louisiana, visited the town and was extremely impressed by the plan. They have promised to work with the town by making direct investments in infrastructure elements such as hotels, marinas, and housing development. The company has a long track record of success and has placed Aurora in the queue for development in the near future. They have indicated that the Economic Development Commission Director and the Mayor of Aurora would be flown at their expense to Baton Rouge for planning when the Aurora project emerges at the top of the queue.

    Belhaven
    The EDC worked with a major seafood processing company with operations both nationally and in the Caribbean and in South America. The company is considering the acquisition of a previous seafood processing plant and negotiations have been underway for some time. The plant is in a legal situation regarding financing which has precluded any immediate action, but both parties are extremely interested and appear to be getting closer to a fix of the problem. The EDC also worked with the owner of River Forest Manor to procure a buyer for River Forest Manor and there are negotiations underway now that should satisfy that objective. The River Forest Manor has been a major economic element in the community of Belhaven for decades and the fact that it's no longer operational has caused severe disruption to the commercial activities in the town.

    In the past year, by way of passing, it should be noted that the last of the condominiums in the Day Beacon 9 project were sold. The $10 million project was started with great expectation on the part of the community, the EDC, and the developers, but the recession in waterfront properties has slowed the consummation of that project for several years now.

    Bath
    The Committee of 100 has acquired the former Bath Charcoal Service facility from Flanders Filters and is in the process of installing a sewer system. A number of smaller companies have indicated a very strong interest in locating there to pursue smaller manufacturing operations. It is the intention of the Committee of 100 to use the eight buildings there as incubators for new business in the County.

    Pantego
   The Economic Development Commission and the County Manager worked with Invenergy to plan for a $160 million wind energy farm. The EDC Director appeared at numerous public hearings in Raleigh and locally supporting the project and assisting the company in negotiating the political and public relations activities which should result in a successful start-up in the not too distant future. There are other wind projects currently looking at the south side of the River as well.

    Beaufort County Skills Center
    The EDC worked with the Committee of 100 to provide incubation space for a minority-owned company which produced an environmentally friendly line of products including air fresheners, cleaning supplies, etc. The company had use of the facility for one year but was unable to get enough volume to begin a manufacturing facility. A second company has asked for access to the Skills Center and the Committee of 100 Board has tentatively approved this use contingent on a credible business plan being submitted.

    Activities of a Non-Specific Nature

    The EDC spends a considerable amount of time creating and maintaining awareness of Beaufort County's opportunities with various agencies in the State including the Department of Commerce, various power companies, and other economic development groups such as Golden Leaf Foundation, the Rural Center, etc. Officials from these statewide organizations are entertained both here and in Raleigh and other appropriate venues. Legislators are briefed regularly and are used often to support or defend the interests of the County. Past and current issues include stormwater and other regulatory issues, homeowner and dwelling insurance issues which, unfortunately, have a huge impact on the coastal economy and, most currently, the debate over sea level rise. According to the State Division of Emergency Management, Beaufort County would have added 90 square miles to the flood plain maps had coastal governments not intervened. As it now stands, only 16 square miles will be impacted by the year 2100. Beaufort County is a member of NC 20, the group of coastal counties defending their economic interests.

    Local news articles are also published regularly updating the public on economic issues, and regular briefings are held each month in Belhaven and Washington which are attended by citizens from all communities.

    The EDC staff will continue to service and support the Committee of 100, which is a very important element in the development process. Because of its charitable status, the Committee of 100 is eligible for grants and commercial financing for leases that the County cannot get. That's how Prettl (PAS), Coeur, and Camfil Farr got here. The Committee is the most successful in the east, with several million in assets, a net worth greater than $2 million, and a Skills Center that is arguably the best EDC office/incubator in the State.

    Budget Report

    The budget and expenditure report for the EDC is prepared by the County Finance Director and published monthly. The report for month ending 4/30/2012 is attached and May's report will be received within the next two weeks.

    Estimate of Expenditures of Staff Time

    It is estimated that the EDC staff spends approximately 50% of its time working directly on manufacturing prospects or projects such as Quick Start II, the Chocowinity Industrial Park, the Bath Incubator, etc. About 25% of the time was spent on personal contacts with manufacturing prospects or responding to inquiries from various prospects and/or State and private company officials. The remaining 25% of the time was spent primarily on community development efforts such as those discussed in Belhaven and Aurora, speaking with civic clubs and other groups, maintaining databases of information and ensuring that the Beaufort County Economic Development website is kept up to date.

    Future Plans and Initiatives

    The current plans for the future are to continue to market the product of Beaufort County, which includes the Quick Start II facility, the Chocowinity and Beaufort County Industrial Parks, the Bath Incubator, the Skills Center, and the various community initiatives discussed earlier.

   Click here to get the PDF of the EDC's Annual Financial Report.