Privatization of NC Commerce gets under way

by Ken Elkins, The Charlotte Business Journal, July 31, 2013.

The machinery to convert the N.C. Department of Commerce into a public-private partnership is already under way, a week after the 2013-14 state budget was approved.

Here’s what happened in the last two weeks:

•A new N.C. Economic Development Board, which is headed by former Charlotte City Council member John Lassiter, is working on a strategic plan.

•Funds to reorganize the N.C. Department of Commerce into a public-private partnership were included in the new budget. The department can use up to $1 million in savings from changes during the 2013-14 budget year to establish its new structure including the private entity.

•Budget legislation also created a “rural economic development division,” which will be led by an assistant commerce secretary. A staff for that organization is pending.

Lassiter told me in an interview this morning that existing state economic-development efforts have failed.

“You can’t get everybody at the table when you try to close a deal,” he says. As a result, North Carolina missed out on two important projects that went to South Carolina: the $500 million Continental Tire plant that went to Sumter, S.C., and The Boeing Co. plant that’s producing the Boeing 787 Dreamliner.

“States that act together get the prizes,” says Lassiter, who is president of Carolina Legal Staffing in Charlotte. “We couldn’t speak in a clear, consistent voice.” Currently in North Carolina, “all your grant money is broken up into silos” that prevent coordination of economic development, he says.

The new 39-member N.C. Economic Development Board met two weeks ago in Raleigh. It heard from Gov. McCrory and Sharon Decker, N.C. commerce secretary.

The commerce department has until April 1, 2014, to report its progress to two legislative committees and a state office: the House appropriations subcommittee on natural and economic resources, the Senate Appropriations Committee on Natural and Economic Resources and the fiscal research division of the state.

The Charlotte Regional Partnership and other area economic development agencies will either be disbanded or continue to function “on a case-by-case review,” says Lassiter, who once served on the partnership’s board of directors.

He says he doesn’t know the Charlotte Regional Partnership’s fate. “There will be a decision made on whether there is a reason to keep that vehicle in operation,” he says.

Lassiter says the July 16 meeting of the economic development board was the first session in over a year. That group also hasn’t devised a strategic economic-development plan in “almost a decade.”

Now subcommittees of the state economic development board are hard at work on a strategic plan. During the meeting, members broke into eight subcommittees to consider such things as target industries, work-force development, entrepreneurship, community development and others.

Other area members of the eco-devo board are Bill Shumaker, chief executive at Kewaunee Scientific Corp.; Tom Skains, chief executive of Piedmont Natural Gas Co. Inc.; Bill Graham, a partner in the law firm Wallace & Graham P.A. in Salisbury, and State Rep. Craig Horn of Union County.

The board meets next on Sept. 5.

Eventually, Lassiter’s board will be dissolved and replaced by a 15-member board. That will likely happen at year end, Lassiter says.