City, Red Hat tout Raleigh as open-source leader

mgarfield@newsobserver.comJanuary 6, 2012 

— Mayor Nancy McFarlane this morning officially welcomed Red Hat to downtown, saying the software company’s presence will help Raleigh become a national hub for open-source technology.

With its planned move to the Progress Energy tower, Red Hat will act as a “cornerstone that attracts and fosters other companies and small businesses,” McFarlane said at a news conference in her City Hall office.

City Council members, Chamber of Commerce executives and downtown advocates cheered when Red Hat CEO Jim Whitehurst made official what he admitted was the worst-kept secret in Raleigh.

The company, which currently is headquartered at N.C. State University’s Centennial campus, plans to transfer more than 750 employees downtown and is eligible to receive more than $15 million in state incentives if it adds 540 workers over nine years.

Red Hat will move into a 19-story office tower at 100 E. Davie Street vacated by Progress as part of the utility’s proposed merger with Charlotte-based Duke Energy.

“I’m thrilled that we finally reached this day,” said Whitehurst, adding that the company this week began renovations to one floor of its new building.

On hand for the announcement was former Mayor Charles Meeker, who helped recruit Red Hat to downtown and brokered an incentives package offered by the city.

Raleigh officials agreed to kick in $1 million toward parking fees, with the money spread over the next 10 years if job targets are met.

A hub for open source

The city is working on several initiatives to bolster its credentials as an open-source community.

Open-source means that customers have access to the computer code behind the software and can tweak it as needed. Facebook, Google and Twitter rely on the technology.

The Convention & Visitors Bureau will promote the city as a host for open-source meetings and conferences. The Greater Raleigh Chamber of Commerce will target companies that use open-source technology.

As the recruiting effort unfolds, City Hall would consider more incentives to help close potential deals, Meeker said.

“The city is certainly willing to talk to any company…as long as they’re realistic based on the investment and the contribution the city would be making,” Meeker said.

For McFarlane, who donned a red sweater and jacket in honor of the occasion, the announcement was a chance to tout Raleigh’s emergence as a tech hub.

The city has done little to promote itself as a place where innovation can flourish, some local government and business leaders have said.

A Jan. 18 summit will let entrepreneurs share ideas on how to change that perception - and talk about what types of startup industries to pursue.

The timing coincides with plans for an innovation and entrepreneurial center, a space where startups could make pitches to potential investors and brainstorm ways to expand.

The site, envisioned in downtown, would run as a partnership between the city, N.C. State and corporate partners, though details have not been disclosed.

Wake County Commission Chairman Paul Coble noted that during the summer, Red Hat announced it would stay in Wake County on the same day that Progress and Duke formally announced their proposed merger.

“That was a wonderful opportunity to send a message and say, ‘we’re not in decline, we’re in the midst of change,’” Coble said.

Coble said he is not typically a proponent of incentives.

“But this makes perfect sense,” he said of the Red Hat agreement. “Our program is available to any company in Wake County…. as long as they make the investment we ask them to.”

Staff writer David Ranii contributed to this story.

Garfield: 919-836-4952

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