News & Observer | newsobserver.com | States hunt N.C. companies

Published: Jan 14, 2006 12:00 AM
Modified: Jan 14, 2006 06:51 AM

States hunt N.C. companies

Tech companies especially attractive to economic developers

Cree CEO Chuck Swoboda, left, won up to $5.1 million in incentives to stay in North Carolina. Christy Shaffer, CEO of Inspire Pharmaceuticals, has also been courted to move her company out of state.

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They come here to shop. But no slacks, shoes or shirts will do.

These guests want jobs.

North Carolina is prime hunting ground for economic developers from other states seeking employers and investment. Representatives court North Carolina companies weekly, by phone, mail or in person. They ask executives to put offices in their cities, or to pull up stakes and relocate.

The Triangle especially, with a host of technology, drug and biotechnology companies, is a rich target for recruiters.

In Research Triangle Park, "whenever I see a Virginia plate or South Carolina plate or Tennessee plate, my immediate reaction to that is, 'Hmm. I wonder if these guys are buffalo hunters,' " said Gary Shope, who recruited businesses to RTP for 16 years. He's now a managing partner with Sanford Holshouser Business Development Group, a consulting firm.

"There is a significant amount of cherry-picking going on," he said.

It's a different perspective on the highly competitive businesses of economic development. Much attention is given to efforts of recruiters in this state -- and the millions of dollars in incentives they hand out -- to bring new investment and jobs.

But retaining existing employers demands equal focus. Every year, staff members from the N.C. Commerce Department hold 3,000 meetings with North Carolina executives to find out how to keep them content.

It's getting tougher.

"If people are thinking just because we've got them, we don't have to pay attention to them, they are absolutely wrong," said Gene Byrd, the Commerce Department's director of business retention and expansion.

Cree of Durham, for instance, won as much as $5.1 million in grants and tax breaks in 2004 to expand in the Triangle. That's because the semiconductor maker was offered incentives by Virginia and other locales to go elsewhere.

Chief executive Chuck Swoboda has received numerous solicitations through the years. The efforts grew more aggressive as he considered where to expand.

Officials from other states "try to create opportunities to talk with you face to face," he said.

" 'How would you like to come to our state and see this very famous event?' " Swoboda said, recounting a pitch. " 'While you're here, we'd like to talk to you about the other benefits of potentially relocating to our state.' "

Georgia has a Red Carpet Tour each spring during the Masters Tournament, inviting prospects to watch golf and hobnob with politicians. The governor makes an appearance when he can.

At other times, representatives meet one-on-one with executives from sought-after companies. The state, however, has a policy not to go after companies in Southeastern states unsolicited, said Bert Brantley, a spokesman for the Georgia Department of Economic Development in Atlanta.

Others aren't as reserved. When Sanford Holshouser studied the North Carolina motor-sports industry a year ago, Ernie Pearson remembers a flashy brochure at the offices of a NASCAR team. The sender: Virginia.

"This was a real Class A mailing," said Pearson, a partner with the business development group.

Biotech companies also are high on the lists of other states. Although they employ fewer people than manufacturing operations, they draw scientists and other workers who are paid higher salaries. And with an aging population demanding more health care, growth opportunities are multiplying.

Inspire Pharmaceuticals, a drug development company in Durham, has been approached on several occasions by officials in Florida. They've asked Inspire to move or open an office in the Sunshine State.


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Staff writer Jonathan B. Cox can be reached at 836-4948 or jcox@newsobserver.com.
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