In most of North Carolina, when you find yourself in a hole, you stop digging. However, Orange County isn’t like the rest of the state. Here, a financial hole is simply another “Progressive valley”.
Pulpsters will remember over the past few years the Pulp reporting on the Buckhorn Village project. In 2008 Orange County Commishes selected their Developer Dream Team. They threw millions in county finances to develop infrastructure for their Dream Team. Heck, they even got the Buckhorn Flea Market in trouble using the County Manager and his “PZI police”.
Fast forward two years. Developer Dream Team member Roger Perry delivers the requiem for Buckhorn Village. “[T]he Buckhorn Village project is dead, and no major retail center is likely to replace it along Buckhorn Road at Interstates 85 and 40.” (See CHN Buckhorn Obit.) Admitting defeat to the obvious, Mr. Perry notes that the Tanger Outlet Center opening just to the west across the Alamance County line renders Buckhorn Village a moot point.
So what do the Commishes do? They get busy digging. Why stop throwing your money away? Perhaps they’re looking for the little blue pills that will cure Orange County’s flaccid ED problem. Having spent $2,000,000 installing public water and sewer lines to serve Gravelly Hill Middle School and the Eurosport Soccer Complex, these financial geniuses plan to spend another $2,300,000 expanding that infrastructure to the north side of I-85.
”Any activity with [the town of] Mebane will probably offer some economic development opportunity for the county. They're more geared toward it.” Such is the genius of Commish Barry Jacobs, This is the same person who said in April 2008 that Buckhorn Village would create living wages. This is the same person who for two decades has overseen the looming ED disaster in Orange County. Of course, neither he nor any of the other Commishes have any responsibility for the problem. They simply offer more Progressive platitudes.
If you build it in the middle of the Great Recession, they will come. Everybody loves a good wake.
In most of North Carolina, the presence of a national retailer in a large storefront is not a cause for alarm. However, Orange County is not like the rest of North Carolina. Here a big box store is anathema.
Why? Let’s look at the reasons given to the Chapel Hill News by Mr. Jason Baker in response to recent attempts by State Senator Ellie Kinnaird to get a Costco in Chapelboro:
1) Big retailers result in a net outflow of money from the region.
2) Marketing, merchandising, IT, finance, human resources, and other business support and executive jobs would largely be somewhere else.
3) Locally owned business provide the full gamut of job opportunities to bring just as many high-skilled as low-skilled positions to the area.
4) Locally-owned retailers struggle and go out of business because of competition from national retailers.
5) The progressive nature of Chapelboro should support local businesses because of their unique character, the jobs they bring to our community, the preference for high-quality and locally produced products over cheaply made and morally questionable foreign imports.
Unfortunately, the truth lies elsewhere.
1) Local retailers also result quite often in a net outflow of money from the region. The goods they offer are made elsewhere.
2) Marketing, merchandising, IT, finance, human resources, and other business support and executive jobs are jobs not dependent upon any particular geographic site. Costco IT jobs can be performed in Chapelboro, assuming that the smalll business was competitive in quality service and pricing.
3) Locally owned businesses do not necessarily use local high paying wage service providers. There are no studies showing this assertion. Is using a Raleigh based law firm considered progressive?
4) Small business failure occurs for many reasons. Seven out of ten new employer firms last at least two years, and about half survive five years. More specifically, according to new Census data, 69% of new employer establishments born to new firms in 2000 survived at least two years, and 51% survived five or more years. Firms born in 1990 had very similar survival rates. With most firms starting small, 99.8% of the new employer establishments were started by small firms. Survival rates were similar across states and major industries. More particularly to the Progressive doomsday arguments, in some cases, small businesses suffer the same termination rate as larger businesses. According to a research report from the Office of Advocacy in the US Small Business Administration “larger eating and drinking retailers (most likely multistore chains) are no more likely to shut establishments than are other retail firms of that size. Clothing and shoe retailers have a relatively high rate of establishment exit across all size categories (the highest for the 20-99 employee and 100-499 employee firms, second or third highest for the two smallest size categories).”
5) Notice how Progressives don’t talk about creating a successful business that creates a net inflow of money into Chapelboro by selling goods and services desired outside Chapelboro. If unique business character is a societal value to be prized, then successful Chapelboro small businesses that penetrate other non-Chapelboro markets are not to be prized. In essence, Progressives are advocating for a late 19th century economic model.
The argument of what to do about “cheaply made and morally questionable foreign imports” is one for a national discussion. Imports stop at the national borders, as much as Progressives wish to eliminate those national borders.
The more interesting fact ignored by Progressives is what a good job local municipal governments have done building a regulatory maze for big box retailers. According to Chapel Hill’s ED specialist, Mr. Dwight Bassett, the Chapelboro roadblock takes about four years to navigate before a store can open its doors. Of course, the reaction by business is “thanks, but no thanks”.
Thankfully, being a Progressive community, no one is to blame for the detour.
The irrepressible, flaccid ED “geniousity” that is Alderman Dan Coleman comes to the fore yet again. Mr. Jesse Kalisher, President of the Carrboro Merchants Association (CMA), resigned in response. Mr. Kalisher founded the CMA in 2008 to promote the historic Carrboro business district.
Apparently, it all started with an online post by Mr. Danny Miller, a co-founder of Mini Cassette Tees in Chapel Hill and member of the Drinking Liberally Carrboro Chapter. He started the cerebral Progressive ED discussion by calling the CMA “Walk Carrboro” map a “joke”. “To say that this is the map of what is available in Carrboro is a crying shame. It's a map of businesses that can afford to have a bad drawing of their business on a poster that is a vapid version of Universal Studios map or Disney Land map.”
Unable to resist from exhibiting his geniousity, as if wearing a thong on a Outer Banks beach, AlderDan wrote, “I've heard much appreciation for your email over the past few days. Your comments on Jesse's map reminded me of an old running gag in Mad Magazine in the 1980s: 'What advertising genius thought of this one?'”.
Mr. Kalisher openly resigned in response.
AlderDan went into damage control mode, just as he did after committing vehicular assault on a women in 2007. Of course, the truth went out the window. He claimed that his comments were directed at Mr. Miller and not at the “Walk Carrboro” map. ”I'd heard a number of people say that they appreciated Danny's e-mail, not necessarily the tone, but the points he made. I wanted to let him know that. My e-mail says nothing about my own opinion of Danny's e-mail, or the points he made, or of the tone of his e-mail.” (See CHN CMA Story.)
You read. You decide.
In most of North Carolina, if a problem in public policy is recognized, then the authors of that policy are also recognized. After all, why would you ask those who created the problem to fix the problem? Why would you trust people with bad judgment in creating the problem to display good judgment in fixing the problem?
However, Orange County isn’t like most of North Carolina. When a public policy program is so disastrous that even the local Progressive media has to report on it, you can be sure that the Progressive media cheerleaders won’t name names and won’t hold anyone responsible. Moreover, they won’t actually present a viable solution to the problem.
The News & Observer recently published an article bemoaning businesses that could have located and stayed in Chapelboro, but chose to leave Orange County. The reporting comes decades late, but at least the problem has been reported by them. Why? It’s so bad, even Progressive cheerleaders can’t hide the truth any more.
But you can sugarcoat it. According to the N&O reporting, the problem in Orange County is that UNC is tax exempt. “Low sales tax revenues force the county and its town governments to rely on property taxes to fund services, and with few high-priced commercial properties to tax, the burden falls to homeowners. As a result, 87 percent of Orange County property tax revenue comes from homes, pushing up an already high cost-of-living driven by high quality-of-life, anti-sprawl development rules and high-performing, well-funded public schools. Wake County, by comparison, collects 72 percent of its property taxes from residential property owners.”
What? What is the connection between sales taxes and the tax exempt status of UNC? Isn’t the problem that Orange County Progressive retail snobbery has sent all of the retail centers first into Durham County and now also into Alamance County? What does that have to do with UNC?
Moreover, doesn’t UNC function as a giant economic pump siphoning money from 99 other North Carolina counties into Orange County? Doesn’t that non-local economic base then provide jobs for those living in Orange County? Shouldn’t those jobs support retail purchasing in Orange County that should be not the equal of Durham County, but greater than Durham County? The answer to all of the above questions is yes, unless you’re trying to sell the Progressive agenda.
So what’s the solution put forward by the N&O? The article cites Mr. Dwight Bassett, Chapel Hill’s ED director. According to Mr. Bassett, it’s about misperceptions regarding available space for businesses to locate. ”We have space available. It's the first time that we've ever had this much available office space in our history.”
Really? Space? What about the perception that Chapelboro and Orange County are not friendly to for-profit businesses? News flash for Mr. Bassett, other counties have space too. Business executives aren’t primarily driven by available space. Which executive in their right mind would pick Orange County over its neighboring counties given a choice? Witness the Tanger Outlet Center being built in Alamance County, right across the Orange County line.
Mr. Bassett is closer to the mark when he says, ”Chapel Hill has an image of being business-unfriendly. We accept that's our baseline. We have to begin telling success stories of how we're working to change that.” How? What precisely are you, Mr. Bassett, the town manager, and the town council doing, other than blathering on about the problem you all created?
When an interview of 16 small-business owners in 2007 found they had ”few, if any, positive things to say about the town government's role in private efforts to open and operate a business in Chapel Hill”, what has been your response these past three years? What have you done?
What’s the solution for Orange County Commishes? You guessed it. (You’re so good.) Taxes! Let’s increase taxes! This fall, they want a referendum on a new 1/4% local sales tax. Earth to Commissioners, high taxes for low services is not a convincing economic development argument for for-profit business executives.
Relying on the people who rode the pony until it was lame to rehabilitate the pony, how Progressive!
An 80-store, 317,000-square-foot Tanger Outlet Center is being built along the I-40/I-85 corridor near Mebane. It's scheduled to open just in time for Christmas shopping. Tanger is almost on the line between Orange County and Alamance County. You guessed it. It’s on the Alamance County side. (If it was on the Orange County side of the line, then it would be called “holiday” shopping.)
Yes, it’s another ED success story for the Progressives of Orange County. It was close, but Progressive elected officials just managed to keep those nasty chain stores out of the county. The local living economy may be anemic, but at least it’s safe from chain store contamination.
Ms. Kathleen Ferguson, chairwoman of the Orange County Economic Development Advisory Board clings to the Progressive belief that UNC can provide business taxes through future business spin-offs. She doesn't mention past failures to secure UNC spinoff businesses because it’s not pleasant to recall. Thankfully, Orange County ED officials continue to be free from the burdens of facts. (See Pulp ED UNC Spinoff Story.)
The local media continues to spin the yarn that Orange County residents want services that require high taxes. Retail snobbery is supported with statements such as “/Not that an outlet shopping center is necessarily what Orange County wants or needs…/”. Alamance County will receive about $7,200,000 a year in property and sales tax revenue from Tanger, apparently not what Orange County wants or needs. (See Herald Sun Tanger Out Story.)
Be careful of what you ask of whom. You just might find someone who’ll tell you the truth you don't want to hear.
Orange County’s crack ED team found out the hard way. The Orange County Economic Development Commission asked Ms. Mennu Tewari, associate professor at UNC's Department of City and Regional Planning in September 2009 about the flaccidness of local ED efforts. Ms. Tewari is an expert in the field of economic development and regional planning.
Last month, Ms. Tewari and her UNC graduate students released a detailed report.
ED challenges listed for Orange County include most UNC business spin-offs leaving the county, high tax rates, no local incentives, a limited real estate product to offer for business development, and the county's reputation for a long regulatory process relative to surrounding counties. (See Herald Sun UNC ED Report Story.) Incredibly, not a single geniousity of either Alderman Dan Coleman or Alderman Sammy Slade (self-proclaimed ED experts advocating a "local living economy") was put in the report.
It just so happens that all of the above challenges stem from deliberate Progressive policies consistently implemented by Progressive elected officials over the past two decades. Snobbery in all forms (retail, commercial, manufacturing) led to a politically Progressive “if we don't build it they won't come…or stay” attitude. Who needed sales taxes and non-governmental jobs as long as you had a residential growth Ponzi scheme and UNC “bondomania”? All led to flaccid ED.
The UNC students, not having an institutional memory of these acts, neglected to connect the dots and recount who's responsible for how Orange County got into its ED predicament, a fact the Orange County ED people depended upon in picking UNC to prepare the report. Pals don't hang the tag of “responsibility” around pals' necks. Palocracy is a wonderfully Progessive thing! Problems just happen. The buck doesn't have to stop anywhere for it doesn't even get passed around.
Too bad the babes don’t realize that understanding how a problem arises is often key to fixing the problem for good. But again, that's why they were picked to write the report. Thankfully, Pulpsters have tasted this juice before.
In most of North Carolina, Kentucky Fried Chicken (KFC) is looked upon as a sumptious bucket of greasy good times.
However, Orange County isn’t like the rest of North Carolina. Here, KFC is an evil, transnational, fowl agri-giant bent on poisoning the populous, destroying the local economy, and torturing chickens. Their franchisees are greedy minions spreading the KFC stranglehold over would-be urban chicken farmers.
So it should come as no surprise to Pulpsters to learn that the local PETA members (who never met a chicken they didn't give a good chickens@#$ about) are declaring a great victory in the closing of the Carrboro KFC store on Main Street. (See DTH KFC Story.)
PETA “transfowlvestites” decry the methods used by KFC contractors to kill chickens as being cruel and unjust. (Of course, it's not just “unjust”, but “socially unjust”.) Instead, they would support that KFC play endless tapes of Carrboro town governance board meetings to the chickens as an alternative form of ethical euthanasia.
The owner of the store (Luihn Food Systems) begs to differ on the downtown demise. (Can you say poor floor traffic in an area lacking parking meant poor revenues? Can you say Greenbridge gentrification?) Ms. Ginny Phillips, Luihn human resources coordinator, says “These [PETA] demonstrators have been out there for years. They have their own opinions.” Luihn has 84 other stores scattered across North Carolina and Virginia.
Normally, the closing of such a KFC store would be seen as an ED setback. However, Luihn, is a regional North Carolina company. Its headquarters are 30 miles or so away in Raleigh. Thus, Carrboro town government doesn’t view Luihn as a “local business”. (In Carrboro, if Alderman Dan Coleman can’t chicken walk to your site within two hours, then you’re not local.)
As such, the closing of the Luihn store is seen as an ED success story. Yet again, a “non-local” business is driven out of Carrboro.
No word on whether or not the BOA will raise tax rates again in celebration of the KFC success story.
In most of North Carolina, a town would be glad to have a Costco store set up shop. Costco is seen as a responsible big box retailer by most people who don’t believe that local government should pick economic winners and losers.
However Carrboro, the blind beacon of absurdist anarchism, most definitely is not like the rest of North Carolina. In Carrboro, local government is based on rewarding your friends, enabling them to pursue new boundaries in business efficiency and customer service.
None other than Orange County State Senator Ellie Kinnaird has given up on trying to bring a Costco to Carrboro. Revealing a moment of lucidity, Ms. Kinnaird declared that “[Costco is] very well suited to the county. Bringing a big-box store like Costco would have created jobs for low-income community members.” In a capricious moment, Ms. Kinnaird showed concern for building the commercial tax base in a town copmaratively devoid of competitive commercial businesses that aren't tied into local government.
Never fear, the Carrboro rulers, the competition-strangling BOA asphyxiated any further efforts by Ms. Kinnaird. In her words, “I’m giving up. It’s a lost cause.”
Alderman Jacquie Gist, armed with two decades of blathering experience, but zero years of business experience, declared that Costco would hurt the small businesses in Carrboro. According to Ms. Gist, big box retailers like Costco “only have loyalty to themselves”. Ms. Gist failed to explain how Costco is different from local retailer Weaver Street Market (WSM). Apparently, the abandonment of Carrboro for administrative and production facilities in Hillsborough are the acts of a more loyal local business to Ms. Gist. But then Ms. Gist during the fall elections used big box retailer Staples for some of her campaign supplies, a dreaded big box retailer not located in Carrboro, but conveniently located for Carrboro hypocrites.
Ms. Gist further demonstrated her financial perspicacity by saying that Carrboro is doing better financially thant many places that have a Costco. The reason? “Big corporations are a part of the reason the economy is the way it is”.
Not to be left out of any bad decision, vehicular assault expert Alderman Dan Coleman publicly told Ms. Kinnaird to ”take her ideas about Costco to Chapel Hill”, as Ms. Kinnaird is moving to Chapel Hill. Such respect for the woman who launched Mr. Coleman's political career in Carrboro is to be expected from Carrboro's most infamous misogynist.
Ms. Gist was backed up in her peculiar wisdom of government-business nepotism by one of her pals. Mr. Jason Baker, WSM owner services and events coordinator, argues that Costco, with a far greater logistics efficiency than WSM, somehow leaves a larger carbon footprint per delivered good than WSM. Ever the visionary, albeit one freed from empirical confirmation, Mr. Baker says that money from local businesses is better for the community as a whole.
It all boils down to controlling people’s behavior. In Mr. Baker’s words, “We don’t need to tempt people with bad choices”. (See the DTH Costco Catastrophe Story.)
Furthermore, Mr. Baker, a UNC political science major and erstwhile political pollster, neglects to explain how Costco is a “bad choice”, considering that WSM employees don’t receive the same suite of benefits as Costco employees. The average WSM employee doesn’t receive:
1) a solid health care plan;
2) a dental care plan;
3) a pharmacy program;
4) a vision program;
5) a 401(k) plan;
6) a dependent care assistance plan;
7) a personal/family/work care program;
8) a voluntary short-term disability program;
9) a life insurance plan;
10) an employee stock purchase plan;
11) a health care reimbursement account;
12) a long term care insurance; and
13) a long term disability program.
The average Costco employee does receive each of these benefits.
Did Mr. Baker also forget to mention that Costco pays a higher average wage than WSM?
Officially, the Durham-Chapel Hill Metro Area has a December 2009 unemployment rate of 7.7%. Unfortunately, the official rate from the state government is not broadly based to capture the real world unemployment.
What’s that? Real world unemployment covers not only the unemployed from larger private employers, but also the unemployed from smaller businesses and the unemployed self-employed. These latter categories are not fully captured in official government statistics. Real unemployment should also include forced part-time workers and so-called “discouraged” workers.
So what happens if you include all of these other unemployment factors into the mix? How high is the real world Chapelboro metro unemployment rate?
The answer is about 17%.
Here’s a chart showing the official unemployment rate (red), the broader (short term “discouraged”) Bureau of Labor Statistics U-6 rate (gray), and a fully inclusive national shadow unemployment rate (blue) for the nation. The inclusive blue rate is 2.2 times the official red rate. That means a national unemployment rate of about 22%.
No, this graph is not borrowed from Al Gore as a bogus, hockey stick climate change graph.
Shading unemployment statistics, sheltering us from the truth, how progressive of our national, state, and local leaders.
In most of North Carolina, successful small business people understand that having a vibrant local non-residential tax base is a critical component to a healthy local and regional economy.
However, Orange County isn’t like most of North Carolina, here small business people who question the wisdom of a commercial tax base (heavens you wouldn’t even consider industry) are rewarded by their political pals with low interest loans.
Recently Orange County Senator Ellie Kinnaird declared that she has given up trying to expand the southern Orange tax base by persuading a Costco to locate there. Having been told “no thanks” by the financial-understanding-challenged Carrboro governance board (“BOA), she accedes to their higher fiscal wisdom of shackling over ninety percent of the local property tax burden onto town residences.
After her announcement, one of the Carrboro small business geniuses challenged Ms. Kinnaird’s efforts. Mr. Brian Russell, owner of the Carrboro Creative Co-working empire uttered the following “geniousity”. “Senator Kinnaird,
Can you provide research that shows residential taxes would be reduced or remain the same if the commercial tax base is increased? As a member of the local business community I’ve asked this question of several local elected officials. One commissioner pointed me to a study that says additional commercial taxes to the County would NOT significantly decrease residential taxes.
I share your concern that many people are priced out of our Towns. Plus I agree that a diverse group of businesses of all sizes helps our community. But until I see more data to back up the assertion that commercial taxes will lower our residential taxes I will remain skeptical.”
Can Mr. Russell be serious? Unfortunately, in his vernacular, “yesh”!
Mr. Russell apparently doesn’t comprehend that one of the dreaded big box stores (like Costco) is worth about $17,000,000 in assessed value. Such a property will pay the same amount of town property tax money (which goes solely into town coffers) as about 60 average Carrboro residences. Let’s not forget that, unlike 60 homes, the retailer doesn’t burden the county with school needs. Thus, the almost additional $300,000 that the retailer will pay the county in county taxes reduces the burden on existing Carrboro taxpayers. (Wait, doesn’t Mr. Russell live outside high-tax Carrboro?)
If Carrboro had but five big box retailers within its borders, then the town would receive about $500,000 in town taxes. That’s equivalent to 300 homes, or to about 3% of the town budget. Just five stores.
How does Carrboro reward Mr. Russell for his enlightened financial state? Why he is a special high-risk town debtor. He has received an only partially secured Carrboro low interest loan.
As the state of North Carolina grapples with the worst loss of employment since recordkeeping started over 30 years ago, in most of North Carolina elected officials are trying to hold on to diminishing state revenues from the taxation of employment. But then most of North Carolina does not believe in socialistic anarchism that reduces government to line-of–sight tribalism.
Leave it to Chapelboro to promote the latest socialistic anarchistic fad – crop mobbing. What’s that?
According to the crop mobbers, it’s “a group of young, landless, and wannabe farmers who come together to build and empower communities by working side by side. Crop mob is also a group of experienced farmers and gardeners willing to share their knowledge with their peers and the next generation of agrarians. The membership is dynamic, changing and growing with each new mob event.”
Crop mobbers lament the passing of endless hours of backbreaking, menial work on farms that virtually enslaved small farmers to the soil. They believe that farmers were not independent producers. They believe that farming was a community-wide activity in which families rotated working for their neighbors for free. They obviously have not studied the famous literary works of rural American writers from a century ago.
In the words of the farm owner, Mr. Bobby Tucker, heir apparent and co-manager of Tucker Family Farm LLC headquartered in a brick McMansion in suburban Charlotte, he could spend decades trying to perfect a sustainable farm. ”It's a lifestyle. It's a political statement. It's trying to reconnect with your food.” (See N&O Food Touching Story.)
Crop mobbers believe that because no money changes hands that they are exempt from state and federal law regarding employment and the taxation of labor services. They are wrong.
It should come as no surprise to Pulpsters that Carrboro Alderman Sammy Slade is in the middle of the crop mobbers. The N&O featured an article on crop mobbing with a photograph of none other than Mr. Slade working on the Okfuskee farm in Chatham County. Mr. Slade, a self-described carpenter with no visible business, doesn’t explain how the failure to pay taxes on the crop mobbing labor will help the state in its current economic crisis. Neither does “the Obama of Carrboro” explain why he supports tax evasion practices.
Juxtapose Mr. Slade’s crop mobbing with the announcement that the state owes $1,400,000,000 from the current high unemployment rate of almost 12%, the highest ever recorded. The state has been borrowing as much as $20,000,000 from the federal government. That’s per day.
According to Mr. David Clegg, deputy chairman and chief operating officer of the N.C. Employment Security Commission, the total will rise to at least $2,000,000,000 by the end of 2010. For purposes of comparison, the state budget for the current fiscal year is $19,000,000,000. ”It's way beyond precedent”. During the last recession, the state borrowed less than $300,000,000 for its unemployment insurance trust fund. Only five states have borrowed more than North Carolina. (See N&O Unemployment Cost Story.)
Perhaps Mr. Slade doesn’t know that the only source of money for the unemployment insurance fund, other than federal government loans, is the unemployment insurance tax paid by private employers in the state. Farmers don’t pay such taxes for crop mobber labor. Crop mobbers are as oblivous of these taxes as they are of their displacement of immigrant agricultural labor, Mr. Slade's “people”.
One of the pride and joys of the local living economy movement is the Carrboro revolving loan fund (CRLF). Created by a grant of non-local state funds, the CRLF lends money at less than market interest rates to businesses that supposedly can’t get loans from private capital lenders.
Recently one CRLF recipient (Original Ornaments) went belly up in the hotly competitive Carrboro glass bead business. The town of Carrboro invested $70,000 in a small retail beading business in the midst of the worse financial downturn since the Great Depression.
Mr. James Harris, Carrboro’s ED director, foresaw no problem in issuing the owner, Ms. Schlatter, a loan of $70,000 from town coffers. He even foresaw no problem with Ms. Schlatter only putting up $25,000 in assets. (Try getting that debt-to-collateral ratio in the real business world.) The term was six years. The interest rate was 3%.
Turns out, that the Schlatter loan wasn’t the only undercollateralized loan approved by Mr. Harris in his rush to empty the CRLF coffers. Around the same time, Mr. Harris sent another CRLF loan to the Boa for approval. The business plan was to rent cubicle space in a common office in Carrboro. So many great businesses have been launched from coworking space. The loan was for $90,000 at 2% interest (a rate one–third better than even Ms. Schlatter got) over six years. The payment plan was interest only for the first six months, then interest and principal payments.
So what was the collateral for the $90,000 loan? It was $40,000 in home equity. The collateral was a second mortgage position on the business owners’ home.
Why would the town of Carrboro accept less than 50% collateral on a business that, unlike Original Ornaments, didn’t even have an inventory to help secure the loan?
The answer is simple if you recognize the time-honored tradition of Carrboro politics, reward your pals. Turns out that the requesting business, Yesh Thirty Seven LLC dba Carrboro Coworking, is owned by a married couple. Mr. Brian Russell is one partner. Ms. Ruby Sinreich is the other. Yes, it’s the same Ms. Sinreich who is a longtime friend of Mayor Mark Chilton.
Pulpsters will remember that as a college-educated, private secondary school educated, single female she received a low–interest loan from Empowerment, Inc. courtesy of Mr. Chilton. Ms. Sinreich denied that the loan was in return for her supporting Mr. Chilton in his run for Carrboro office. Ms. Sinreich also operates the local censored political blog known as Orange Politics. Despite, Ms. Sinreich never having lived in Carrboro, she's avidly supports Mr. Chilton in all of his developer/mayor schemes.
Pulpsters should note that as of June 2008, the town of Carrboro was sitting on over $400,000 in CRLF cash. Within the next year, the town had exhausted the fund. Here’s a table showing the wise dispersals creating dozens of well paying jobs and oodles of boodle in sales taxes, at least if you're Mr. Harris.
| Business Name || Business Type || Loan Amount || Loan Date
| Yesh Thirty Seven LLC || co-working office space rental || $90,000 || June 2008
| The Fringe dba Beehive || hair salon || $50,000 || February 2009
| Cycle 9 || bicycle shop || $68,500 || February 2009
| Original Ornament || glass beads || $70,000 || February 2009
| Carrboro Citizen || newspaper || $50,000 || May 2009
| Kind Coffee LLC || coffee shop || $57,000 || May 2009
| Carrboro Raw LLC || juice bar || $40,000 || June 2009
Note the Carrboro Raw “juice bar in a van” is so dedicated to repaying your loan money that it closed for business over the Christmas break.
No word on when the Boa will require Mr. Harris to produce an actual accounting that shows how much money has been given over the past decade to create exactly how much in additional tax revenue for the town.
In most of North Carolina, business owners look at Orange County and see a business community that feeds off the table scraps of UNC, the economic engine of Orange County. UNC extracts financial resources from the other 99 counties in North Carolina to the tune of over half a billion dollars annually. Much of that money is fed into the local Orange County economy, some directly, some indirectly through the salaries of thousands of UNC employees and contractors living in Orange County. Yes, in most of North Carolina, Orange County is the last place one would point to as an example of a “local living economy”
Orange County is so not like the rest of North Carolina. Here, overly narcissistic dilettantes dabbling as “business owners” can talk of the need to support a local living economy while ignoring the hypocrisy and sheer nonsense of their position. Yes, Orange Progressive values include simply ignoring inconvenient truths. Simply ignore the fact that the vast bulk of moneys flowing through the Orange County economy are NOT local in origin. They aren’t even voluntarily spent here. They come through that most socialistic mechanism of all, taxation.
Pulpsters can only laugh at the latest feel good pronouncement from the land of the loons. A merry band of local business owners, community leaders, and citizens are working together to build and sustain Carrboro’s local living economy. They call themselves “LocalMotive”. LocalMotive is becoming a network member of the neo-Luddite school of economic development called The Business Alliance for Local Living Economies (BALLE).
If you have a real business that can survive without government support or a voluntary form of local mercantilism/tariffs, then you needn’t apply. No, LocalMotive is for businesses that require customers who want to pay more for goods or services than they have to in a regional or national economy. According to LocalMotive, “the success of your [Carrboro] business is almost certainly tied to the community thriving. Up to now, you have had to operate independently when addressing all issues big and small, sometimes to the detriment of spending time building and maintaining your business.” Shudder the thought that Carrboro would want to attract a business that doesn’t depend on the immediate community surrounding its facility.
The LocalMotive roster of economic roundhouses already includes: Carrboro Creative Coworking, a professional shared workspace with a community atmosphere; Carrboro Raw, a smoothie juice bar; Happy Human, a spice rub purveyor; Protea Digital, a web based marketing company; the good old Weave, Weaver Street Market; and Wootini, an art gallery. All businesses, which for the most part, couldn’t survive in a town or city with a vibrant, successful regional economy.
LocalMotive is supported by the great green anarchist, Alderman Dan Coleman, another local Carrboro “businessman” with no known source of revenues, other than a non-locally working spouse. Mr. Coleman introduced a resolution to “BUY CARRBORO WEEK 2009” (December 5 to 12) during the latest BOA meeting. As usual, Mr. Coleman dispenses with the facts. According to AlderDan, Carrboro's locally-owned businesses create more high-paying jobs in our community. Yes, AlderDan wants you to give up shopping on the Internet, which may come as a surprise to LocalMotive member Protea Digital, a business which makes money from businesses that use web marketing. Gee, this planned economy thing is complicated.
One thing is for certain, no one will provide any metrics to measure the success of the campaign. Carrboro’s ED guru, Mr. James Harris, is just too busy doing whatever it is he does to occupy his time.
No word on whether or not Alderman Coleman will break into the line with LocalMotive, as he did for his son to ride on the Little Blue Choo.
In most of North Carolina, a town wouldn’t invest $70,000 in a small retail beading business in the midst of the worse financial downturn since the Great Depression. The reluctance to invest would be enhanced if another bead retailer moved into town just prior to the first bead retailer asking the town for money. At the very least, town officials would require hard assets for collateral, assets such as real estate.
However, Carrboro loves to “keep it weird” in all things. It’s not like most of North Carolina. Flaccid ED is the norm in Carrboro, not the exception. It’s what the town has paid out over $1,000,000 for in the last decade, over $1,000,000 for an unaccountably flaccid ED office.
It should come as no surprise to Pulpsters to learn that the Original Ornament, a bead retailer located in Carr Mill Mall, has closed its doors after sixteen years in business. What may be of interest are the particulars behind the closing.
A last ditch Carrboro revolving loan given without hard collateral has made Carrboro the proud owner of a pile of glass beads.
Blue Skys - Happier Days
The original ornament was started by Ms. Casey Schlatter in 1992. According to Ms. Schlatter, for almost ten years there was no competition to this full service bead store. Business was fine.
Then the Internet exploded onto the retail scene. The Original Ornament started moving to upscale customers and custom jewelry, items suitable for those with disposable income, items that don’t sell well in economic downturns.
Dark Clouds - Retail Competition Arrives
With the 19 September 2008 opening of Rare Earth Beads but a few blocks away on West Main Street in Carrboro, the business pressure on Original Ornaments ratcheted considerably higher. Why would anyone believe that Carrboro could support two retail bead outlets?
The owner of the new store David Sterling, was quoted as being unconcerned. “We have a very different business and a very different clientele. I personally wish [Original Ornament] every success. I’m not doing this business to be competitive to anybody.”
Ms. Schlatter didn’t see things in the same light. “They are competition – especially, when we’re in the same town.” (See Carrboro Commons Bead Story).
Reaching For The Revolver - The $70,000 Bead Loan
Ms. Schlatter was apparently concerned enough to go over and seek out money from the infamous Carrboro revolving economic loan fund. It's the first and last stop for Carrboro creative entrepreneurs who can’t get real business loans.
Mr. James Harris, Carrboro’s ED director, foresaw no problem in issuing Ms. Schlatter a loan of $70,000 from town coffers. He even foresaw no problem with Ms. Schlatter only putting up $25,000 in assets. (Try getting that debt-to-collateral ratio in the real business world.) The term was six years. The interest rate was 3%.
Mr. Harris never saw any problem with the increased competition Ms. Schlatter openly admitted existed with the opening of the Rare Earth Bead store. Ms. Schlatter had been turned down by Wells Fargo, Wachovia, and even the Self Help Credit Union in Durham. That’s par for the course for Mr. Harris' clientele.
The Official Warning – Danger, Economic Folly Ahead
At least one party saw red flags ahead with regards to The Original Ornament loan. The UNC group that advises on the revolving loan applications (UNC-SBTDC) noted that Ms. Schlatter was using the $70,000 to buy inventory, more beads.
Moreover, that was the collateral for the loan, just beads and retail cases. There was no real estate collateral offered.
Finally, Ms. Schlatter was said to be personally unavailable to offer collateral because she had significant debt (credit card and long term) related to the business.
Mr. Harris needn't worry. He'll be paid regardless. He's a municipal employee.
The Economic Storm Blows In
Earlier this month (August 2009) Ms. Schlatter could no longer weather the economic storm. She turned in her keys and shuttered her doors.
According to Carr Mill Mall manager, Nathan Milian, “She turned in her keys and indicated she was filing bankruptcy, although we have not been notified as such. Apparently, one of her lenders called her line of credit and she couldn’t pay it off and that was the straw that broke the camel’s back. Beyond that, I do not know anything else.”
When asked it Carrboro would get its money back, Mr. Harris said, “We have to wait and see.” (See Carrboro Citizen Revolver Story.)
The Missing Collateral
Ms. Schlatter is the owner of a house in Hillsborough, the county seat. Her residence at 114 Tuscarora Drive has an assessed value of $162,180. It’s not part of the revolving loan collateral. Mr. Harris didn’t require it.
There’s no official explanation as to why Ms. Schlatter's house isn’t serving as collateral for the Carrboro revolving loan of $70,000 to Original Ornament.
No word on whether or not Mr. Harris will take a bead on funding another bead store if it comes to town.
No word on how the Boa will swallow Carrboro’s newest treasure, a pile of glass beads worth tens of thousands of lost ED dollars.
Another art gallery leaves Chapelboro. Bill Hester Fine Art has closed its doors after three years. ”My business plan was based on the possibility of creating an arts and cultural complex downtown. I no longer think that's possible. My collectors don't come to downtown Chapel Hill any more.” In a stunning rebuke to those in denial over lost mojo, Mr. Hester charges that the town lacks the vision to incorporate visual arts as part of a vibrating downtown.
The recently hired Chapel Hill public arts administrator, Mr. Jeffrey York, who oversees the whereabouts of about 100 pieces of public art at the cost of $63,000 per year counterdenies. ”Categorically, no. The town doesn't lack vision.
Do we have that big iconic piece that's a draw for downtown? Not yet. Do we have artists working downtown? Not yet. But the idea that the arts are important to downtown Chapel Hill is very much alive.” After all the town hired Mr. York.
Mr. York is backed up by ED guru and fellow town employee Mr. Dwight Bassett. Allegedly he's currently recruiting a nationally renowned, ”incredibly unique” artist to relocate to Chapel Hill. Exactly why such an artist would locate here remains a mystery.
Mr. Hester, who actually works in the for-profit fine arts business arena disagrees with the town experts. ”Someone asked me what is the problem with downtown Chapel Hill when it comes to the arts. I said … denial.”
(See Chapel Hill New Arts ED Leakage Story.)
Chapelboro progressives are all a twitter about a recent pronouncement on Chapel Hill’s municipal brand. The “lost mojo” blow occurred at a Community Leadership Council (CLC) meeting. It’s no longer cooler to be in Chapel Hill than Durham or Raleigh. (The CLC is a group of pro-growth, pro-UNC “business, university, civic and community leaders [who meet] to discuss and address current cross-cutting community issues and anticipate future needs, trends and challenges”. The CLC membership selection process is not transparent to the public. Even some of the local media aren’t invited to these heady meetings.)
According to ED guru Mr. Ted Abernathy, Chapelboro is barely growing and exclusive. “You used to be the coolest place.” Worse, its residents are “rich and white”. What a recipe for a “coolness” brand disaster.
After making these pronouncements neither Mr. Abernathy nor any of the CLC attendees provided an explanation as to who has been responsible for the crumbling of the Chapelboro brand. Apparently, local municipal ED offices shouldn’t take any responsibility. Apparently, local elected officials shouldn’t take any responsibility. Apparently, no one should have taken the leadership role to head off this “branding disaster”.
So who is Mr. Abernathy? Why should his pronouncement send shivers down local progressive spines?
According to his bio, Mr. Abernathy has spent a distinguished 28 year economic development career focused on strategic competitiveness and economic positioning. He has worked in the Research Triangle region of North Carolina since 1990. In fact he returned to North Carolina as the head of economic development in Orange County for about six years in the early 1990s.
Having achieved great ED enhancement for Orange County, he moved over to work ED “mojo” magic for the city of Durham. While at Durham, a city-sponsored small business loan program was bilked of tens of thousands of dollars by a local tax-exempt company (the Triangle Economic Development Corp) that was engaged to run the ED program for the city. According to
published reports, “All of the city employees directly involved with the small business loan program have resigned or been dismissed – including the city's manager of property and facilities management, Kendall Abernathy, and her husband, former city economic development director Ted Abernathy. Kendall Abernathy received an e-mail message warning of Bennett's problems in Raleigh before Bennett was hired in Durham.”
Tax exempt, government funding-dependent organizations continued to play a role in the focusing of ED. In 2001, Mr. Abernathy was hired as a vice president & COO of the Research Triangle Regional Partnership (RTRP). This organization is “a business-driven, public-private partnership dedicated to keeping the 13-county Research Triangle Region economically competitive through business, government and educational collaboration. RTRP comprises economic development agencies across the region who works with the N.C. Department of Commerce and a wide range of partners to market the 13-county region for inward investment [and to] direct strategic efforts to ensure the region remains economically competitive.”
In 2008, Mr. Abernathy moved to bigger ED problems, moving from focusing on the Raleigh metro region to work his ED mojo magic on a consortium of thirteen Southern US states. He became executive director of yet another, tax-exempt, government funding-dependent organization called the Southern Growth Policies Board. This organization is a “public policy think tank that develops economic development policies for 13 Southern states. It specializes in the areas of technology and innovation, globalization, workforce development, community development, civic engagement, and leadership.”
What’s truly sad is how skin color and ethnicity are interjected into a discussion of a town’s economic development. Was Chapelboro that much less “white” twenty years ago when it was cooler? The census facts speak otherwise, i.e., there were more Euro-Caucasians in Chapel Hill when it had its mojo than now. In fact, Chapelboro’s “open sanctuary” policy has led to an influx of Hispanic immigrants reducing the Euro-Caucasian population. The Pulp just posted a story on the almost minority status of Euro-Caucasian students in Chapelboro.
Over forty years ago, Dr. Martin Luther King Jr. said “I have a dream, that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” Apparently, municipal “coolness” is still judged within the field of economic development, at least in part, by color.
Or perhaps Pulpsters should keep in mind another saying by Dr. King. “Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity.”
In most of North Carolina, if a group of well-meaning, but incompetent, financial advisors were way off target and rewarded you with woefully below average returns on your retirement fund, then you would fire those advisors.
Not so in Orange County! Here poor performance is rewarded with continued support. It’s about electing your pals, no matter what.
The even more amazing aspect about local progressivism is the lack of responsibility for past actions. Poor performance is ignored until it can’t be hidden any more. At that juncture, local progressives announce that, lucky for you, they have “discovered” the problem in the nick of time. Of course, only they can fix it.
A prime example of such behavior is the pervasive institutional bias over the past two decades that has deprived Orange County of its fair share of sales tax moneys from the state of North Carolina, a clear case of “retail snobbery”.
Orange County receives two percent of the money spent in Orange County on items that bear the state sales tax. The more money spent on such good or services in Orange County, the more taxes available to pay for the county budget. If county citizens shop outside the county, then there’s a sales tax drain. Typical reasons for such actions are better pricing elsewhere, better selection elsewhere, or better convenience elsewhere.
Over the past twenty years, southern Orange politicians have gloried in their refusal to let “big box” or national chain stores into their neighborhoods. They have smiled maternally while telling shopping mall owners to look elsewhere. The loss of local sales tax dollars has been of little concern. Instead, local property taxes are raised to make up for the deficit. After twenty years of “knowing better”, Orange County taxes are among the highest in state, far surpassing its neighboring counties.
Being competent, for-profit business people, the snubbed store and mall owners (looked down upon here by the powers that be) have gone to Durham County and set up shop in places like New Hope Commons, South Square Mall, and the Streets at Southpoint Mall. Human nature being what it is and not what it is believed to be, a carbon-loading trail of southern Orange eco-consumers has followed these retailers outside Orange County, rutting the tarmac along I-40 and US 15-501.
The retail sales tax drain has become too large to hide or ignore (thanks in part to the wry wit of Squeeze the Pulp). In Durham County, where the median family income ($47,186 - U.S. Census Bureau 2007) is significantly lower (16%) than that of Orange County ($54,741 - U.S. Census Bureau 2007), the per capita sales tax return is 25% higher than in Orange County ($224 for Durham County versus $179 for Orange County).
The reason for this conundrum is obvious to any ordinary southern Orange consumer. All of the retail outlets that should be in Orange County are just a few miles away in Durham County. Why? The responsibility is squarely upon the shoulders of the palocracy that has ruled Orange County for the past two decades. It used to be fashionable among local leaders to look down one’s nose here at those neighboring counties that “allowed” national chain retailers and shopping malls to “invade” their local economies. It only became unfashionable after political challengers who are not part of the palocracy started running for office. Suddenly, the decades-building sales tax drain was announced to be a problem. Of course, who created that problem was not announced.
As Carrboro Alderman Dan Coleman has espoused in his anarchistic writings for years, maintaining multiple layers of inefficiencies through local businesses is the key to a “healthy economy”. If citizens aren’t smart enough to realize the evils of a national chain store like Target, then it’s up to local government to exclude such enterprises. The hallmark of local progressivism is having a “smarter elite” dictate policy to protect the well-meaning, but dim-witted local citizenry.
In most of “dumber” North Carolina, Target stores are seen as desirable corporate citizens. For example, the local Target stores in Durham County contribute money to southern Orange schools voluntarily. Target gives about 1% of sales by self-associated, southern Orange school parents to the southern Orange city school district. In just the first three quarters of CY 2008, Target gifts have been over $29,000 based on purchases from about 264 school households. That means that city district school parents purchased about $3,000,000 in goods or services from Target.
Thanks to the exclusionary actions over the past two decades of the Orange County Commissioners, the Chapel Hill Councilors and Mayors, and the Carrboro Aldermen and Mayors, you have lost about $90,000 in annualized taxes just from a couple of hundred families shopping at Target, and that's just this year.
Pulpsters know that the full implication is much greater. Orange County is home to about 120,133 people. There are 18,743 non-family households in Orange County, and 30,190 family households. If one projects just 25% of the non-family households and 60% of the family households spending in an equivalent fashion to these Target families, then the sales tax drain becomes about $8,000,000. That’s almost half of the $20,000,000 collected last year for Orange County as a whole.
What is the local progressive party line in response? First, if only we educate county citizens, then they will shop here. Why shop for price, selection, or convenience when local shopping can give your politicians more money to spend, and you can be inconvenienced in the bargain? Second, we need more inconvenient retail outlets in Orange County, so let’s have local developer pals build one (Buckhorn Village) further away from the southern Orange populous than the existing Durham outlets.
In the last election cycle did any local media group or any local politically endorsing organization speak out against those incumbents responsible for the sales tax drain disaster? No. Instead they heartily endorsed failure and incompetence.
As with all governments based on one party, “education is a weapon whose effects depend on who holds it in his hands and at whom it is aimed” - (Joseph Stalin).
Here are the details of Target store CY 2008 contributions to the city school district:
| School Name || Contributions || Contributors || Sales || Local Sales Tax
|Carrboro ES || $3,066.44 || 24 || $306,644 || $7,666
|Carrboro HS || $214.42 || 9 || $21,442 || $536
|Chapel Hill HS || $5,759.67 || 45 || $575,967 || $14,399
|Culbreth MS || $1,153.99 || 8 || $115,399 || $2,885
|East Chapel Hill HS || $2,661.59 || 34 || $266,159 || $6,654
|Estes ES || $2,900.95 || 15 || $290,095 || $7,252
|FPG ES || $2,605.73 || 17 || $260,573 || $6,514
|McDougle ES || $1,357.23 || 15 || $135,723 || $3,393
|McDougle MS || $2,048.35 || 16 || $204,835 || $5,121
|Morris Grove ES || $0.85 || 1|| $85 || $2
|Phillips MS || $1,257.66 || 10 || $125,766 || $3,144
|Seawell ES || $926.13 || 11 || $92,613 || $2,315
|Scroggs ES || $117.14 || 23 || $11,714 || $293
|St. Thomas More (pvt) || $5,158.28 || 36 || $515,828 || $12,896
|Totals || $29,228.43 || 264 || $2,922,843 || $73,071
If you build an ED infrastructure, your taxes will be spent. If you approve a lot of office space to be built, will they come to fill it?
Building the Bureaucratic Field of Dreams
Over the past five years Pulp readers may have noticed an awful lot of activity on the economic development (ED) front in Orange County. No, there’s not been a lot of activity actually recruiting for profit businesses to Orange County. The activity has been to build ED bureaucratic infrastructure. First Carrboro had an ED official and a revolving loan fund. Then Orange County got a new ED official. Now Chapel Hill has an ED office too. Instead of a unified, regional governmental approach, southern Orange is spending over $500,000 a year in your taxes just to maintain a tripartite, divisive, and flaccid ED infrastructure.
Once you have a bureaucratic function, it must seek to justify its cost and expand. So now the latest buzz in Chapel Hill is to lament how the town failed to capture the latest ED prize catch in the Raleigh metro area, a company called Optimal Technologies. In the words of former Chapel Hill mayor, Developer Dream Team member, and real estate profiteer Rosemary Waldorf, “How are we going to fill all the space [recently approved by the Chapel Hill politicians]”. (See Chapel Hill News ED Story.)
In southern Orange there are few business conflicts of interest that aren’t tolerated. So it’s not surprising that Ms. Waldorf, involved in the mega retail project Buckhorn Village, is asking about government money possibly for her future tenants in Buckhorn Village as well as the spate of office buildings being built.
The One That Got Away
Optimal Technologies US Inc. (OT) is a software and technology provider for electrical utilities and consumers. It is moving its headquarters (18 jobs) from Canada to downtown Raleigh. It will invest $2.4 million over the next three years. It plans to create at least 325 jobs. The new jobs will include highly specialized circuit (ASIC) designers, software programmers, engineers and management and marketing positions. While wages will vary according to job function, the overall average annual wage for the 325 new jobs will be $71,250 not including benefits, which is higher than the Wake County average of $40,092.
The grant to OT is $325,000 from the One North Carolina Fund (Fund). The City of Raleigh matches that grant with another $325,000. OT must have at least 325 employees within three years in order to receive the full grant.
OT can spend the money on: 1) installation or purchase of equipment, structural repairs, 2) improvements, or renovations of existing buildings to be used for expansion, construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines; or 3) equipment for existing buildings.
Readers should note that Fund grants are also available to existing businesses for adding jobs.
The Local Solution to Flaccid ED
Why use a more proven technique with bureaucratic controls to eliminate favoritism if you can create a more expensive and ineffective way that rewards those in the palocracy?
Instead of joining in Fund grant programs, Chapel Hill ED leaders (with an awesome track record of sub-par ED job growth) are taking the southern Orange Progressive approach. For example, according to Chapel Hill ED guru Dwight Bassett, Chapel Hill is discussing paying a percentage of a lease for downtown businesses, helping to inflate already high lease rates. Or town taxes might go to pay for merchant marketing programs as a matching grant, aiding the bottom line of local media businesses, the staunchest supporters of town politicians. Finally, Councilor Mark Kleinschmidt is eyeing the Carrboro loan revolver as a cure for stiffening local ED successes, despite the fact that Carrboro subsidized a business that moved to Chapel Hill when it got on its feet, Phydeaux Pulp Story.
No word on why Orange County ED leaders thought that a computer circuit hardware/software company associated with electrical power generation should prefer Chapel Hill's UNC over North Carolina State University, a renowned computer engineering school, located in… Raleigh.
In most North Carolina counties, if a local state legislator ensured that the economic development engine of a new local airport was located in their county, the local governance boards would hail a job well done. But the Pulp focuses on Orange County, where the concept of taxable economic development is more shadow than substance, and where paybacks for personal affronts trump sound governance.
Some wounds never heal.
State House District 50 (covering northern Orange County and Caswell County) was created by local Democrats earlier in the decade in order to give part-time sports journalist, developer dream team promoter, and Commish Barry Jacobs a shoe-in promotion, rewarding a long time politico who has been a stalwart promoter of local land development interests over local taxpayers. Unfortunately, the southern Orange palocracy doesn’t extend far beyond I-40. A local Democrat personal injury lawyer, Bill Faison, filed for the position along with Mr. Jacobs, without asking permission from the palocracy. Adding injury to insult, Mr. Faison won the election and has done so since that first election. His reward has been constant enmity from local media sources, except the News of Orange. If Mr. Faison says “night”, then the local politicos and their lap dogs (aka local media) say “day”.
Since Mr. Faison’s election, what to do with the Horace Williams UNC airport in Chapel Hill has been bandied about by self-proclaimed, local ED experts like a shuttlecock at a teenage garden party. Will it be closed? Will it move to RDU? Will there be a replacement airport built?
A 2005 report by the airport engineering firm Talbert & Bright indicates that a general aviation airport in Orange County (as opposed to a commercial aviation airport like RDU) could generate from $40,000,000 to $53,000,000 into the local economy. However, it’s not an economic engine that can be dominated or tapped by land developers and their political minions. Moreover, Talbert & Bright report Chatham and Alamance county sites within 25 minutes of UNC Hospitals and 30 minutes or more from other airports, as well as sites in Orange County.
Costs versus rewards
What’s the airport cost Orange County? About 90% of the cost can be covered by federal grants.
To capture an ED engine, Mr. Faison amended a local airport authority bill (which created a board having eminent domain powers) to limit the authority's jurisdiction to Orange County. (Not widely reportd in the local media is the fact that Rep. Insko also sponsored the airport authority bill.) In Mr. Faison’s words, “I was really concerned if we didn't get [the airport] tied down to the county that they would subtly sabotage the whole process. The university's been trying to figure out how to close Horace Williams for 15 years or more. What I would have hoped is that our county commission would have been advocating for the economic impact in Orange County. This is an economic engine. The county should be taking the lead, rather than sitting around grousing about it. If you can invest $50 million and get that much back on an annual basis, you'd be crazy not to do it.” (See Chapel Hill News Faison Airport Story.)
However, Mr. Faison isn’t talking about your average county. Property taxes in Orange County contribute the overwhelming majority of moneys (69%) towards general fund for county expenditures. In addition, in the land of the non-profit, over 50% of county land is either tax exempt or taxed at a reduced rate for agriculture or timber production. Here ED is a concept for enriching your pals. The past fifteen years have been spent largely debating the evils of allowing national chains into Orange County.
Focus on the little picture
Commish Jacobs would rather complain about how UNC officials aren’t showing enough respect to the Commishes than explain why geographically disadvantaged neighboring Alamance County has a tax rate of about 58 cents per $100 of assessed value on lower median value residences while Orange County has a tax rate of about 95 cents per $100 on higher median value residences. Typically, the higher median value county should have a lower tax rate, not a higher one.
Mr. Jacobs is upset at ”already fighting a rear guard action” on the airport location. He wants respect for local zoning regulations. Translation, with no land currently zoned for an airport outside of Horace Williams, the Commishes can control whether or not an airport gets built.
As to his election nemesis, Mr. Jacobs kindly states, ”Mr. Faison speaks for himself”.
No word on whether or not Mr. Jacobs realizes that he also speaks for himself.
Orange County tourism woes will be solved by political junketeering. County Commish Mike Nelson is coming to the rescue with another junket, this time to hunky Vancouver, British Columbia. Pulp readers may remember previous Commish Nelson junkets, such as his visit to South Beach in Miami to free Elian Gonzales from the reaches of his father.
Although tourist spending was up 7% in CY 2007 ($147,550,000), it’s down in Orange County for CY 2008. For the first time in five years, southern Orange lodgings weren’t booked at graduation time, according to Ms. Laurie Paolicelli, executive director of the Chapel Hill/Orange County Visitors Bureau.
For Pulp readers familiar with the economic theorems of supply and demand, the growth in available rooms may be part of the reason. But that hasn’t seemed to occur to Ms. Paolicelli. She and Commish Nelson are eyeing the gay and lesbian tourism market to save local tourism. They will attend at taxpayer expense the International Conference on Gay and Lesbian Tourism in Vancouver to promote the Chapel Hill/Orange County area as a place to visit and hold meetings. In Ms. Paolicelli’s words, who worked for the Palm Springs Visitor's Bureau, ”It saved Palm Springs' tourism industry, and Sonny Bono was very supportive of it”. (See Chapel Hill Nelson Junket Story.)
Neither Ms. Paolicelli nor Commish Nelson has provided any look at a thought out program for Chapel Hill successfully promoting itself as a “gayborhood“ worth visiting. Chapel Hill must compete with the likes of the Florida gayborhood powerhouses of Key West, Ft. Lauderdale, and South Beach as well as the California powerhouses of Santa Monica, Palm Springs, and San Francisco. Apparently they are unaware of the three steps to successful GLBT marketing, namely, getting in depth knowledge, positioning and preparing oneself, and finally reaching out. (GLBT Marketing Advice.) The bottom line is that GLBT marketing doesn’t come cheap and requires a constant pumping and flow of public tourism funds.
Chapel Hill has a long way to go in order to become a destination gayborhood. It’s not even on the gay college town “B” list where it might have a chance to reach around onto the gay “A” list. According to OutTraveler, the top ten college towns for gay travel are: Austin, Texas; Columbus, Ohio; Madison, Wisconsin; Iowa City, Iowa; Ann Arbor, Michigan; Bloomington Indiana; Lawrence, Kansas; Columbia, Missouri; Champaign Urbana, Illinois; and Lincoln, Nebraska. (See Top Ten Gay Travel College Towns.)
No word on whether or not another Gay Pride parade will be sponsored by the town of Carrboro akin to the 1995 butt cheeks and chaps sashay display.
For twenty years Orange County Commishes have actively promoted practices leading to “Retail Leakage” (see Phictionary). More than 50 percent of retail dollars are spent outside the county by people who live in Orange. Sales tax revenue in Orange County is far below the level in adjacent counties, such as Durham and Alamance. Now, the Commish cause du jour is none other than repairing the retail leakage they created. (What a country. Get paid to make an economic mess. Get paid to clean up the economic mess that you got paid to make!)
In response to the Commishes, the Orange County Economic Development Commission came up with a partial solution to OC retail leakage, ask local businesses to give Orange County employees goods or service price discounts as part of the area's longtime “Buy Local” campaign. Ms. Yvonne Scarlett, administrative assistant for the commission, mailed hundreds of letters last month urging local businesses to take part in the program. Ms. Scarlett said ”We thought it would be a great way to use our own work force to actually promote shopping locally and increase local businesses' business”.
Orange County will spend your tax dollars on promotional material for local businesses. They will be ”featured” as a participating merchant in material given to all existing employees and all new employees regardless as to whether or not they livei n Orange County. Again, in the words of Ms. Scarlett, ”We want to ensure people spend their dollars locally so that money being spent is retained in the local economy. I think it's a fantastic program, because it gives me the opportunity to offer my fellow employees a discount. But more than anything, it offers the local businesses a chance to increase their sales – and that's more important to the economic development commission than anything.”
Unfortunately, having spent your tax dollars on advertising discounts to county employees, you will neither be part of that discount program nor privy to the pricing information being offered to county employees.
Having raised public employee pay to the point where it exceeds local private employee pay to most county taxpayers, having extended compensation benefits to county employees that far exceed local private compensation benefits, Commishes now use local taxes to extend goods and services discounts to county employees, but not county taxpayers.
See Herald Sun Employee Discount ED Fix.
Unfortunately, small business owners who rent space can forget to negotiate with the landlord on a lease extension before the lease is close to running out and they have few options. After 18 years in Eastgate Shopping Center, Joe Rowand learned in February 2008 that his Somerhill Gallery's lease wouldn’t be renewed with 45 days to vacate.
Trying to stay in Chapel Hill, Mr. Rowand needed 9,000 square feet, a lower rent pricing, a vehicular traffic location, and accessible. Finding that combination in Chapel Hill is like finding a shrine to Jesse Helms in Chapel Hill. See N&O Somerhill Gallery Story 1.
So, the gallery is moving to Durham in the old American Tobacco complex. See N&O Somerhill Gallery Story 2.
In the words of the crackerjack Chapel Hill municipal tax paid ED manager Dwight Bassett (who works in close coordination with the crackerjack Orange County municipal tax paid ED manager, who works in close coordination with the crackerjack Carrboro municipal tax paid ED manager, who works in close coordination with… well, you get the picture) “there wasn’t enough property selection for Somerhill to consider in relocating in Chapel Hill and that there were specific needs that could not be accommodated with our existing inventory”.
Having lost this premier art gallery, Chapel Hill compensated by hiring a Public Arts administrator for the 50 pieces of Chapel Hill public art, yet another full time employee added onto the swelling public job rolls, with a salary of $63,000 annually.
On 21 April 2008, the Orange County Commishes had their annual legislative breakfast with local state representatives to talk about issues of interest. One of the big topics was economic development, or rather the record of a lack of economic development by the commishes over the past two decades. State Senate candidate, retired tax-exempt publicly funded organization executive, real estate investor, solid waste site expert, school merger advocate, and Commish Moses Carey is quoted as saying, ” ”People seem to think we don't want the money that [economic development] brings in”. Commish Carey apparently doesn’t understand how this “misperception” came about.
The commishes have looked into the political looking glass and don’t see themselves and their record of underachievement and imbalanced growth as the source of the “misperception”. Rather, they look forward as to how they can spin a new “reality”. In the words of Commish Valerie Foushee, ”The new message needs to be that [being against economic development]] is not what we should be characterized as”.
Again in the words of Commish Carey, the taxpayer subsidized Buckhorn Village project is all he wants to talk about, ”People like the Buckhorn idea”. Of course, he doesn’t seem eager to talk about the role of county officials in forcing the Buckhorn Village deal on a landowner and the property into the hands of a selected developer Dream Team. (See Hot Orange Buckhorn Village Story.)
While chowing down, the commishes didn’t miss the opportunity to propagandize about the local home equity/land transfer tax. Ignoring the neutral position of education required by law, Commish Foushee says, ”It's important for us to get the message from our side out there. I'm not sure that the message is balanced at this point.”
Commish Alice Gordon feels that the woefully under-informing commish campaign that cost you $100,000 is a neutral campaign that ”erase[s] the confusion”. Ms. Gordon doesn’t see any reason to mention facts that would persuade you not to support the tax. (See Hot Orange Chilton Transfer Tax Story.)
See Daily Tar Heel Commish Story.
The good news, Orange County gained 10,000 jobs in the last decade. The bad news, 70% of them where dependent upon tax exempt, non-profit, public sector workplaces such as UNC-Chapel Hill and UNC Hospitals.
The good news, Orange County tax-exempt public sector jobs averaged $6,000 more a year in wages than similar workers in the Triangle region. The bad news, Orange County private sector for-profit jobs averaged $10,000 a year less in wages than their regional counterparts.
In the words of Mr. Charles Hayes, president and CEO of the Research Triangle Regional Partnership, a well paying tax exempt, non-profit group representing economic development interests in the Triangle, ”The question is, how long is this [economic development] model we have in Orange County sustainable?”
According to the N&O, local leaders attending a luncheon presentation by Mr. Hayes (paid for by your taxes) displayed their deep understanding of economic development. In an amazing first exhibition of economic acumen, they conceded Orange County's small private sector is heavy on the retail and service industries. Then they quickly followed that revelation with another. They conceded that people who make pizzas earn less than those who make vaccines or drugs (the legal kind).
Commish Barry Jacobs is going after higher-paying jobs for Orange County. How? By driving away the Buckhorn Flea Market, assembling the Developer Dream Team, and providing water & sewer to his developer friends! (See Hot Orange Developer Dream Team Story.) Yes, Commish Jacobs is looking to a megaretail center near Mebane to create higher paying private sector for-profit jobs. According to Mr. Jacobs, the commissioners will “press the developers” to have retail tenants sign a living wage and health benefits document.
No word on how proud Mr. Jacobs is of the record of Orange County retail sales tax collections growing 2.3% over the past six years, one third the growth rate of the population (7.1%).
No word on how proud Mr. Jacobs is of the record of Orange County retail sales per capita, about 70% of Durham County and well below the state average.
No word on how proud Mr. Jacobs is of the record of Orange County tax base which over the past six years remains at 86% residential and 14% non-residential.
See N&O Job Growth Story.
In yet another display of palocracy (see Phictionary) at work, the Carrboro Boa is about to spend town money on rent for another coffee bar cum playpen cum office hangout.
Freelance web designer and Chapel Hill resident, Brian Russell, is in the process of applying for a Carrboro town revolving loan. Mr. Russell is husband to media darling, former Chapel Hill Planning Board member, Orange Politics blog censor, “dances with bricks” anarchist, Mayor Chilton backer, wannabe affordable housing bourgeoisie rentier, trustafarian disciple, and now real estate advertiser political analyst, Ruby Sinriech. He wants Carrboro to pay for the rent and furnishings for a “shared workplace for freelancers and other creative types”.
Carrboro’s crack ED guru, James Harris, is dying to lend him the money, public money for creating a private franchise empire. Mr. Harris, busy ignoring the closing of the Track & Field business (see Hot Orange Anemic Carrboro ED Story) spends his time getting this important not-yet-even-an–applied–loan story into the local media.
Mr. Russell sees no reason why the town shouldn’t enrich Carrboro historic business district landlords further, anticipating the new digs being built at 300 Main and Roberson Square.
No word on why Mr. Russell doesn’t get a real office, like most for-profit businesses, assuming Mr. Russell doesn't file for tax-exempt status for his business.
No word on why Mr. Russell can’t meet other creative types in the existing coffee bars in Carrboro.
No word on why Mr. Harris hasn’t contacted a well-capitalized business that already operates a network of coffee bars with internet access, “Starbucks”.
See Carrboro Citizen Anemic Carrboro ED Story.
Broad spectrum Chapelboro landlord Thomas Tucker, political friend of Carrboro dense developer mayor Mayor Chilton, pulls plug on favored Carrboro musician’s recording outlet. Carrboro loses creative class musicians to increasing historic business district rental costs. Crack Carrboro ED guru, Mr. James Harris, sure to ignore loss in his annual ”State of the Carrboro Economy” address.
The “Track & Field” music business ends a three-and-a-half year gig off Brewer’s Lane in Carrboro, near ground zero for Boa enhanced development. Mr. Tucker triples the rent to $2500 per month for 1800 square feet of getting ready for prime time space.
As reported in the local party guide, the Independent, one musician mused ”Maybe the town that loves us and uses us as a beacon could also have our backs. I feel a little let down that that hasn't happened. They want people to come here for all the things that we built, but now we can't be a part of it.” Obviously, Carrboro’s creative class musicians haven’t been singing sweet songs to soothe the Boa, which dispenses lyrical favors to pals only.
No word on what it will take for party guiders to figure out that they should be careful for what they have asked in endorsing current Boa “political wisdom”.
No word on whether or not Mr. Tucker will wait until the dust clears from the 300 Main Street project and the Roberson Square project until asking for his developer gifts from Mayor Chilton.
No word on whether or not Mr. Harris will offer to rent his Mercedes to Track & Field as a mobile dense recording studio.
See Independent Carrboro ED Story
Former Green Party member, little blue choo line cutter, vehicular weapons expert, tax-exempt business profiteer, and Carrboro alderman Dan Coleman makes a call in the local real estate advertiser for an Orange County future of “economic localization”. Mr. Coleman introduces a new code phrase (see Phictionary) into the Orange Progressive lexicon, one espousing the economic and social anarchism so near and dear to Mr. Coleman’s beliefs for decades. According to Mr. Coleman, “economic localization is an approach to economic development rooted in supporting local businesses, fostering local entrepreneurship and creating opportunities for the local work force.” Astute observers note that Mr. Coleman makes a call for rural villages surrouding Buckhorn Village for his rural village, local developer friends aka “locomotives” (see Phictionary) have been excluded from the latest cool junior high type “palopartnership” - the Buckhorn Village Developer Dream Team. (See Hot Orange Dream Team Story.)
Mr. Coleman cites a report put out by the Center for Sustainable Economy, yet another tax-exempt organization, this time from Santa Fe, New Mexico. (See Bay Local Report.) This group of university intellectuals “… works with non-profit, business, and government leaders to transform our economic system into one based on renewable energy supplies, protected natural capital, empowered communities, and growth in the quality of our lives rather than the quantity of goods we consume. We accomplish this by: 1.) Exposing the true costs and benefits of public and private sector decisions; 2) Developing plans and programs based on principles of economic, social, and environmental sustainability; 3) Providing expert support for public interest litigation; and. 4.) Educating decision makers, voters, and students about the real state of our economy and society.”
In sum, it’s a group of people living in lovely New Mexico telling people living in the crowded San Francisco bay area how to live their lives, on a locally controlled basis. (See Center Leaders.)
According to Mr. Coleman, ”economic localization offers a tremendous opportunity to disengage from the zero-sum game of unbridled competition with other communities for the attention of global corporations.” For Mr. Coleman, Buckhorn Village is “a mammoth 20th-century style development, auto-dependent and anchored by big-box retail. Supporters of this project overlook the long track record of chain stores sucking money out of the local economy. Nor do they recognize the uncertain prospects for auto-centric development patterns as we move past the point of peak oil production in an increasingly oil-hungry global economy. ”
What’s to be put in the place of the Buckhorn Village dinosaur? What is “economic localization” really? What is Mr. Coleman embracing?
Mr. Coleman believes in a report that lauds the following scenario.
Local municipal government ensures “food security” as a public good on par with education and health. Local government should establish a department of food access. That department should promote and fund local farm-to-institution marketing programs, establish a program for urban gardens, establish farmers' markets, fund and manage local low-cost food programs, build city-run cafeterias offering subsidized meals, and direct an urban orchard program that plants fruit trees in low-income neighborhoods for all to harvest.
Local municipal government embraces a web of tax-exempt local institutions, elected by no one and responsible only to their funders should be created. That web should include economic, food , energy, housing, and health care cooperatives, credit unions, independent business alliances, community development banks, community choice energy aggregation, community supported agriculture associations, farmers’ markets, and community supported manufacturing. That web of tax-exempts can be funded by local municipal revolving loan funds.
For Mr. Coleman, “economic localization” truly is a code phrase for economic and social anarchism that hits the Marx. You shouldn't be able to prosper without his benign, vastly important, paternalistic control (as an alderman) over your financial well-being.
No word on whether or not Mr. Coleman gets the ironic humor in his remarks. Southern Orange is a community absolutely dependent upon non-local income from people around the state funding the southern Orange economic engine (UNC). Non-local funding makes possible his source of income, a penumbra of university associated tax-exempt organizations.
No word on whether or not Mr. Coleman will go silent once his rural village people get a piece of the Buckhorn Village money pie. (See Hot Orange Carnahan Village Project Story.)
See Chapel Hill News Anarchism Soap Box.