Business North Carolina August 2020 by Business North Carolina

TOP 50 N.C. PUBLIC COMPANIES CREE SHINES BRIGHT • LOCALS THAT OUTLASTED WALMART • COMPANIES CONQUER CRISIS

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His mother’s push engineered Willy Stewart’s immigration to North Carolina, launching a sterling corporate and civic career.

AUGUST 2020 Price: $3.95 businessnc.com

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+ DEPARTMENTS

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4 UP FRONT 8 GUEST COLUMN

Four business leaders share thoughts on the downturn and recent calls for racial justice.

12 NC TREND

Wadesboro waves goodbye to Walmart; Eddie Vannoy’s antique car collection rolls away; CEO quickly makes Lowe’s more diverse; N.C. State grad refurbs recycled clothing; Plan for pipeline bursts; Sock manufacturer pivots to masks.

+ SPONSO RED SECTIONS 26 CORPORATE TRAVEL & MEETING UPDATE

The meeting and convention industry looks for ways to rebound after taking hits from COVID-19.

36 ENERGY ROUND TABLE

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CO V E R P H O TO B Y C R I S T E R B E R G

State leaders met virtually to discuss the biggest changes and trends in the state’s energy sector.

63 COASTAL N.C.

Coastal communities continue to welcome tourists despite the unprecedented challenges of coronavirus. August 2020, Vol. 40, No. 8 (ISSN 0279-4276). Business North Carolina is published monthly by Business North Carolina at 1230 West Morehead Street, Suite 308 Charlotte, NC 28208. Telephone: 704-523-6987. Fax: 704-523-4211. All contents copyright © by Old North State Magazines LLC. Subscription rate: 1 year, $30. For change of address, send mailing label and allow six to eight weeks. Periodicals postage paid at Charlotte, NC, and additional offices. POSTMASTER: Send address changes to Business North Carolina, 1230 West Morehead Street, Suite 308 Charlotte, NC 28208 or email circulation@businessnc.com.

STEADY STEWART

Attracted here by golf, engineer Willy Stewart has built a thriving firm while serving the community. BY TAYLOR WANBAUGH

WINNING FORMULAS

In extraordinarily stormy times, these companies are proving to be in the right place at the right time. BY HARRISON MILLER

ELECTRIC AVENUE

Making parts used in hot new cars and cutting-edge mobile phones provides Cree’s glitter. BY MIKE MACMILLAN

TOP 5O PUBLIC COMPANIES

The year of the coronavirus was a battle for many N.C. public companies.

Start your day with business news from across the state, direct to your inbox. SIGN UP AT BUSINESSNC.COM/DAILY-DIGEST. A U G U S T

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UPFRONT

David Mildenberg

ENOUGH FIGHTING LET’S PUT ASIDE THE ANGER AND FOCUS ON THE KIDS AND THE JOBLESS.

ill the center hold? That’s my hope as our state and nation enter the intense campaign season. Sadly, this year’s final three months until the Nov. 3 election promise to be the nastiest of all time. How else could it be, given the tensions sparked by Twitter storms, the coronavirus, record unemployment and the most intense street protests in generations? My colleague, Ben Kinney, recently vented in our Daily Digest newsletter about the use of the word “fight” in political commercials. He cited ads claiming politicians were “fighting against the special interests in Washington” or “fighting for North Carolina” or “fighting for N.C. families.” Ben added, “Who the heck are they fighting? Each other? Based on what they’re fighting for, that doesn’t make sense. Let me tell you something: I’m sick of fighting. I’m spent, baby! I’ve had enough of it on cable news, commercials and in discussions with people over a beer. … I have no need for any person fighting ‘evil corporate lobbyists’ or ‘crazy left-wing radicals’ on my behalf. “How about some nice compromise and civility as you get a balanced budget passed in a timely manner, help keep me and my family safe and healthy, and stop blaming each other if those simple things don’t come to fruition? Figure it out, and solve the problem. … With a pandemic and economic and social challenges staring us square in the eye, functioning government is not a bad thing, good people.” Of course, it’s more complicated than this. Calls for civility often mask compla-

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VOLUME 40, NO. 8 PUBLISHER

Ben Kinney

bkinney@businessnc.com EDITOR

David Mildenberg

dmildenberg@businessnc.com MANAGING EDITOR

cency with the status quo. Being silent in the face of wrongdoing is justly considered complicity, in many instances. Many CEOs are using this moment to speak out on racial justice issues. Failure to do so invites criticism. Against all odds, I hope that North Carolina leaders limit the fighting and focus on a few key issues over the next few months in a bipartisan way. Here are three key areas where a centrist consensus should prevail: State lawmakers should bolster the state unemployment insurance system so our weekly payment average of $277 is closer to the national level of $378. Yes, businesses pay the bill, but it’s the right thing to do. Business and political leaders should insist that public schools enable students from low-income families to receive safe in-school classroom teaching in September. The alternative is accelerating a horrible academic skills gap. Let’s insist that the N.C. Association of Educators lead this effort, not block it. It helps that our governor is joined at the hip with the teachers’ group. Gov. Roy Cooper should show urgency in fixing the N.C. Department of Transportation so that lawmakers regain confidence in funding the agency, probably with a big bond issue. Improving our infrastructure is a no-brainer way to stimulate the sluggish economy. Ben is right. Let’s tone down the rhetoric and leave the fighting in the hockey rinks and UFC octagons.

Taylor Wanbaugh

twanbaugh@businessnc.com ASSOCIATE EDITOR

Cathy Martin

cmartin@businessnc.com ASSISTANT EDITOR

Harrison Miller

hmiller@businessnc.com SENIOR CONTRIBUTING EDITOR

Edward Martin

emartin@businessnc.com SPECIAL PROJECTS EDITOR

Alyssa Pressler

apressler@businessnc.com CONTRIBUTING WRITERS

Dan Barkin, Megan Bird, Mike MacMillan CREATIVE MANAGER

Peggy Knaack

pknaack@businessnc.com ART DIRECTOR

Ralph Voltz

CONTRIBUTING PHOTOGRAPHERS

Christer Berg, John Gessner MARKETING COORDINATOR

Jennifer Ware

jware@businessnc.com AUDIENCE DEVELOPMENT SPECIALIST

Scott Leonard

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ADVERTISING SALES ACCOUNT MANAGERS

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BNC ONLINE

Viscardi

We love getting feedback from our readers. Here’s a sampling of what you had to say about Business North Carolina on social media last month.

@FamilyForwardNC “Maybe this working-at-home stuff is not such a big deal” @BusinessNC The work-at-home revolution has staying power

Boone Area Chamber of Commerce

Martin Pittman Eric, this is great! I remember the first time we met and you joined the team. You were my ‘first hire’ right after I moved from F&B back to Rooms. Proud to know you!

Visit the Heart of North Carolina @TheHeartofNC

Fantastic write up (featuring Boone and the Keep Boone Healthy initiative) from Business North Carolina on the pandemic repercussions in Western North Carolina!

We are thrilled to share this podcast with @TaylorWanbaugh and @BusinessNC about @awscarlett79’s new role as executive director and the future of #TheHeartOfNC tourism as we reopen and welcome visitors safely. Podcast with Amber Scarlett

Allison Adams Tom Ross is a treaure to this state.

Podcast with Eric Kuester of Pinehurst Resort

Community close-up: Western North Carolina

Pat Kahle @ptkahle

Great article on this wonderful manufacturer making fabulous drums right here in @UnionCountyNC! Our community is proud of the craftsmanship and innovation. @UnionCountyCOC @MakeItInUC

Read these stories and more at Pillars of North Carolina: Thomas Ross

Town of Rutherford College Burke County is recognized not once, but twice in this article. Unix Packaging and Synergy Labs provided 463 new job opportunities for Burke.

businessnc.com.

North Carolina’s 25 biggest corporate job creators

Policygenius Inc. Ludwig Drums striking craftsmanship

Asheville Chamber

@AVLChamber

The pandemic has been difficult for all of us, and especially for small businesses. We love stories like this, that showcase the resilience of our members in the face of adversity.

Some really good stuff from our CEO Jennifer Fitzgerald over on Business North Carolina. Perhaps most importantly, an answer to the question: “Eastern or western barbecue?” #bbq #barbecue #grillingseason 5 questions for Jennifer Fitzgerald

Carl Turner Winston-Salem has changed a lot since I came here to study at Wake Forest University 7 years ago. It’s exciting being part of such a growing and dynamic economic area. Thanks for the special SWIPEBY highlight Business North Carolina. Winston Starts Flywheel Coworking Greater Winston-Salem, Inc. The Carolina Core comes together to win big

Check out Business North Carolina’s weekly podcast at

businessnc.com/ podcast/.

Podcast with Leah Wong Ashburn

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C O M M E N TA R Y

CRISIS COMMUNICATIONS A SELECTION OF RECENT COMMENTS FROM N.C. BUSINESS LEADERS ABOUT THE DOWNTURN AND RECENT CALLS FOR RACIAL JUSTICE. Mike Hawkins is chairman of the Transylvania County Board of Commissioners. A developer and restaurant owner, he was named N.C. Rural Advocate of the Year by the N.C. Rural Center in 2019. He wrote the following for Business North Carolina.

his pandemic has highlighted the importance of small business to communities around the state. This is pronounced in rural areas but is true everywhere, urban and rural. These businesses are Main Street backbones, and while they don’t generate great wealth — the really good, really smart smalltown small-business owner might take home $50,000 per year — they do provide a vital source of local jobs and social stability. So in this context, “small business” really means “jobs,” “social stability,” and “social mobility” for rural North Carolinians. This category includes small retail, small personal services, restaurants, agriculture (single-family farm), solo entrepreneur, skilled trade, rural media, etc. They are truly small, most are 10 employees or less. But these businesses are the backbone of rural life, they really are. And have been for generations. Many of these businesses are being crushed by the pandemic. Many in the East are having this hit after the succession of hurricane disasters. But even those that weren’t hit by the hurricanes have current operating conditions which are threatening their survival. The short-term solution has been a quilt work of disaster loans, from Golden LEAF/Rural Center, from the Paycheck Protection Program, from SBA Disaster. While these are vital with the immediate concern of surviving the next six months, they are less helpful beyond that. We could see a spate of defaults and bankruptcies in the fall and winter. In fact, based on what I see in my rural experience, I’m pretty sure that is exactly what is going to happen. Traditionally, this business sector has received relatively little attention or support from our traditional economic development organizations, who focus on manufacturing and other higher

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profile and return targets. We should expand that focus. We need to examine the precarious position of small business in North Carolina. We should look at it across a spectrum of aspects, including financial, structural and operational, strategic understanding of the new marketplace dynamics in North Carolina, legal, and lessons learned. An initiative specifically targeting small business issues would be innovative and demonstrate our commitment to economic security for all North Carolinians. If done well, it could provide really important ideas to use in the upcoming years. Kelly King, Truist Financial CEO, spoke to analysts on July 16.

e’ve been really focused on addressing racial and social inequity. We are expanding our efforts to advance equity, economic empowerment and education for our clients, our communities and our teammates. I’m very proud to say we observed the Juneteenth holiday by giving our people time off. We had a virtual town hall with 3,000 of our teammates that I was able to co-host along with [Florida civil-rights lawyer] Ben Crump, and it was a really, really good dialogue, good discussion. We’ve had over 200 Days of Understanding, where we bring together our teammates and give them an opportunity to just dialog and talk about what’s going on, challenges that they face. (Crump, a Lumberton native, represents the families of Ahmaud Arbery, Breonna Taylor and George Floyd.) Those have been really, really great sessions. I participated in some and found them to be very, very informative and helpful. We’re in the process of doing even more town halls. We conducted unconscious bias training. So, we’re doing a lot to try to help our communities and our teammates weather through the storm and get better through the storm. And I feel really good about that.

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Brian Moynihan, Bank of America CEO, spoke to analysts on July 16.

s states began to reopen over the past couple of months, we saw an improvement in spending levels as customers became more active buying fuel and spending on home projects and eating out. Much of that improvement isn’t paid through debit usage as customers saw the stimulus payments and other assistance in their checking accounts. On a monthly basis, comparing spending to the prior year’s month, April 2020 was down 26% from April 2019. May was down 13% from May 2019. And as I said earlier, June returned to basically flat. Well, you have seen some spending leveling off on a weekly basis as COVID-19 cases rose recently in hot spots around the country causing municipalities or states to pause on further phases of reopening or impose more restrictions. But even with that, July is actually running ahead of last year and is much higher during the shutdown periods of early April and May.

Charles Scharf, CEO of Wells Fargo, spoke to analysts on July 15.

n my conversations with different groups over the past months, the pain and frustration with the lack of progress within both our country and Wells Fargo’s clear inequality and discrimination has been clearly exposed and must not continue. Wells Fargo has not been effective in creating enough diversity or a consistently inclusive environment. I’ve outlined a number of actions we’re taking around race to change the outcomes, including creating a new role which will have a broad mandate of driving diversity and inclusion in both the workplace and also our business. We’ll be evaluating operating committee members based upon their progress and improving diverse representation and inclusion in their area of responsibility, and it will have a direct impact on year-end compensation decisions. And we’ve announced the donation of these gross processing fees for PPP estimated to be approximately $400 million. This is just the beginning of the work needed to address this crisis and to meaningfully contribute to the change that is necessary. But I believe that this is a watershed moment, and we will be part of making sure this time is different.

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Avoid Cash Crunches with Your Revolving Line of Credit A revolving line of credit can help you build a financial buffer against short term challenges while leaving the door open to new opportunities. This is the fifth in a series of informative monthly articles for North Carolina businesses from PNC in partnership with BUSINESS NORTH CAROLINA magazine.

Highlights • • • •

Acting fast Maintaining control Improving your standing with vendors Boosting cash flow

Creating opportunities to protect and grow your business takes a combination of preparation, timing, and a little luck. When you are faced with unexpected challenges -- or a chance to take a big step -- you don't want to be caught financially unprepared. Instead of looking under the proverbial couch cushions for change to help meet a shortterm risk, build a financial buffer that helps you assess a new opportunity from a position of strength. Establishing and consistently using a revolving line of credit for short-term or unpredictable needs can help your business react both quickly and responsibly when threats appear or opportunity knocks. Imagine a situation that upends international commerce and could result in loss of business or liquidity. On the other hand, what if a competitor leaves one of your suppliers in the lurch with an unpaid order, available at a discount if you can act fast? Or you see a partnership opportunity that could give your business a lift in stature and prominence but needs a sponsorship fee. These expenses might fall outside the normal boundaries of your day-to-day cash flow, but that doesn't mean they should be overlooked. Having a revolver means being able to say "yes" to both challenges and opportunities. Consider these other benefits of maintaining an open revolver in good standing.

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The Ability to Act Fast An open revolving line of credit allows you to address short-term needs quickly. Although financial innovations have reduced delays in recent years, applying for a traditional business loan still takes time. By the time the application is complete and an underwriting decision comes back from a lender, a surprise opportunity might pass you by.

Avoid the “Founder's Dilemma"" If the outlook is daunting, or an opportunity looks too good to pass up, money is tight, and the window is closing, it can be too easy to raise funds in a very costly way. Without an open revolver, a push to raise money fast could mean giving up equity in your company, and that could later lead to a loss of control. A Harvard Business Review analysis concluded that at least half of entrepreneurs "are forced to step down from the CEO's post," and that most lose their perch due to investor pressure.[1]

Respond to Vendor Pressure for Faster Payment Especially when the economy is uncertain, suppliers looking after their own cash flow and credit instruments are actively interested in working with buyers who can help reduce the often lengthy gap between delivery and payment.[2] Using a revolving line of credit for short-term purchases can improve your standing with vendors and provide tangible rewards as well. According to a Zogby Research/WEX survey, 82% of business buyers benefit from some form of early payment discounts.[3]

Instill Financial Discipline Evidence suggests that lines of credit provide long-term benefits to a company's financial health. As researchers Cem Demiroglu and Christopher James write, "lines of

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credit entail commitments to provide firms with liquidity only when valuable investment projects arise, which helps overcome managerial agency problems associated with holding cash[...] in most cases, cash earns less than the debt used to fund it." [4] Establishing a revolver with a sweep provision can also help keep short-term cash balances in check by automatically sending free cash flow to pay down the revolver's debt. According to the Corporate Finance Institute, this feature "minimizes the credit risk and liability that comes from a company burning through its cash reserves for other purposes, such as making large, excessive expenses." [5] Banks are ready and willing to extend revolving lines of credit to meet short-term needs. Every business has both known and unforeseeable short-term funding needs. A revolver is a powerful yet simple way to meet that demand while strengthening your relationship with a bank. A study of 620 lines of credit over a 20-year period concluded "connected borrowers can obtain larger amount of credit lines with lower drawdown rates than unconnected firms." [6]

Ready to Help Want to avoid the cash crunch? Improve your short-term capital availability? Get some fresh perspectives on the types of funding gaps a revolving line of credit can close? PNC can help. Visit pnc.com/cib or contact your relationship manager.

[1] https://hbr.org/2008/02/the-founders-dilemma (also PDF included because HBR paywall) [2] https://www.pymnts.com/news/b2b-payments/2019/informita-unsustainable-supplier-payment-terms/ [3] https://www.wexinc.com/payments-pulse/ http://www3.wexinc.com/l/29622/2018-07-11/87v64q/29622/ 181537/CFOInsights_WEX.pdf? [4] http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.603.2326&rep=rep1&type=pdf [5] https://corporatefinanceinstitute.com/resources/knowledge/finance/revolving-credit-facility/ [6] https://etd.ohiolink.edu/!etd.send_file?accession=kent1525891031065629&disposition=inline

Regional Presidents: Weston Andress, Western Carolinas: (704) 643-5581 Jim Hansen, Eastern Carolinas: (919) 835-0135 Or visit pnc.com/en/corporate-and-institutional.html

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NC TREND

First take: Retailing

■ HOT RODS ■ ENERGY ■ ENTREPRENEURSHIP ■ MANUFACTURING ■ DIVERSITY ■ STATEWIDE Page 16

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SURVIVAL OF THE FITTEST TWO LOCAL RETAILERS IN WADESBORO OUTLASTED KINGPIN WALMART, WHICH DEPARTED ANSON COUNTY AFTER A 32-YEAR RUN.

BY EDWARD MARTIN

arson’s Rexall Drugs, a fixture in Wadesboro since not long after the Civil War, seemed as indomitable as its historic building on Greene Street when Tom Taylor and his partner, John Isenberg, bought it in early 1987. For one thing, they were in good company. Across the street, H.W. Little & Co. Hardware’s building was almost as timeless, its tan brick facade proclaiming it “The Little Building, A.D. 1906.” They had no way of knowing they would soon be battling with the world’s most ferocious retailer. Less than a year after Taylor and Isenberg closed the deal, Walmart came to town, including a pharmacy that could undercut their prices by selling in enormous volume. At the hardware store, sales of garden seeds, fertilizer and galvanized buckets and sprinkling

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▲ Carly Little's great-grandfather started H.W. Little & Co. Hardware in 1895. It's Anson County's oldest retail business. pots slumped immediately, says owner Carly Little, great-granddaughter of the founder. “Walmart was one-stop,” she says. “You could pick up your medicine, lawn and garden supplies, or a white, button-down shirt if you needed to go to a funeral, wedding or a job interview.” Grit and hard work have kept the two businesses afloat, while many locally owned peers buckled under pressure from the giant discounter. Now, more than three decades later, the tables have turned. In March, Walmart announced it was closing its Wadesboro store and a smaller one in Lumberton, idling 300 people. More than 200 worked at the Wadesboro store, formerly one of Anson County’s largest employers. At corporate headquarters in Bentonville, Ark., spokesman Phillip Keene

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PHOTOS BY JOHN GESSNER, RICK IBSEN

▲ H.W. Little survives, but Walmart's closing could cost Wadesboro's sales tax revenue to decline by 25%. says most were offered jobs in neighboring Walmarts, such as in Monroe in Union County 30 miles to the west. It was unclear by early July how many had taken the offer. Keene says the retailer has 216 stores and nearly 57,000 employees in North Carolina, making it among the state’s biggest employers. It collected nearly $700 million in sales taxes last year. Retail experts and others say the Wadesboro and Lumberton closings represent a changing strategy by Walmart, whose arrival in communities once triggered wholesale closings of mom-and-pop retailers. Since Walmart’s departure in late March, business at H.W. Little has rebounded 10% to 20%. Less interested in dominating every U.S. hamlet with brick-and-mortar sites, Walmart is more focused on building its online offerings and delivery services to compete with e-commerce leader Amazon. The revised strategy is working, with online sales surging 74% in the first quarter, aided by demand from customers unwilling to leave their homes because of coronavirus fears. In mid-July, Walmart shares traded near the all-time high of $133. “Walmart opened 10 months after we bought this business,” Taylor says. “They discounted heavily when they first opened, and it really made it difficult. We had to struggle for a while, but then a lot of our customers realized that we might cost a little more, but there were other benefits in the long run.” Views about Walmart have changed, with statewide unemployment soaring because of the COVID-19 impact. Keene says the company’s average wage in North Carolina is $13.91 an hour, which equates to an average annual salary of about $27,000, based on full-time employment. That’s below the state average of $34,125, and few Walmart employees qualify as full time. However, those jobs have become valuable in the pandemic era. While closing in Wadesboro and Lumberton, Walmart has hired about 7,000 workers elsewhere in the state and awarded $13.8 million in bonuses this year. Food Lion, Lowe’s and other big retailers also ramped up hiring as they added delivery services, online shopping and other features demanded

by new laws and virus-wary customers. The loss of the 120,000-square-foot store is a paradox for Wadesboro. While Walmart squeezed out many stores, now that it’s gone, local residents have few shopping choices. Some miss the giant. “It’s hard to say they filled a void, but they did,” Little says. “They’ve been a double-edged sword,” adds Taylor, who shopped there out of necessity. “When local stores closed, that left Walmart as the only option.” Wadesboro underscores retailing trends that reach far beyond its city limits, adds John Marek, executive director of the Anson Economic Development Partnership in Wadesboro. “The retail environment now and even before the virus is changing,” says Marek, who is the author of several books on marketing. “Walmart is changing strategy. Once, they positioned every store so they dominated the market and didn’t allow competitors to come in even if it cannibalized sales from their other stores. Now, their main competitor is my computer, my cellphone, my laptop. Trying to saturate the market isn’t as effective when you’re up against Amazon.” His point is at work in Wadesboro, where a smaller Roses discount department store, a Tractor Supply hardware shop, and grocer Food Lion share a modern strip shopping center. The Roses location, though only one-third as large, opened April 1, just as Walmart was closing. All are thriving, say Taylor, Little and others. “Used to be, on a good day, that parking lot was half full,” Marek says. “Now, you can’t find a parking spot.” Other factors are helping Wadesboro and Anson weather the Walmart loss. Through the end of 2019, state figures show its unemployment rate was about 3.8%, barely above the state average. By May of this year, spiked by the pandemic, the rate had soared to well above 10%. Manufacturing, once the county’s prime employer before fading in the 1990s, is showing a resurgence.

▲ Local pharmacies are busier after Walmart's departure. A quarter of Anson County residents live under the poverty line, compared with 9% in neighboring Union County. Hornwood Inc. in Lilesville makes fabric for medical gowns and protective masks, in huge demand in the pandemic, and employs more than 500, Marek says. The coming Interstate 74 should enhance the county’s hospitality industry, battered by virus shutdowns. The biggest takeaway may be a subtle one, though — an appreciation of local businesses. “I had a gentleman say, ‘I’d rather come here and spend a little more and know if I called you in the middle of the night you’d take care of it,’” Taylor says. ■ A U G U S T

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POWER TO THE PEOPLE The public power picture

It’s hard to picture—literally envision—electricity. Much the way we answer a child who asks “Why is the sky blue?”, it’s tempting to use simplified metaphors or symbols. A lightning bolt, perhaps, or an electrical outlet. Electricity courses through our lives like oxygen, yet generally only comes up when it’s, well, down. Many towns and cities can picture electricity just fine: Their power is woven into the texture and spirit of their community. Big burbs like Los Angeles, Nashville, and Seattle and also charming havens like Hobgood, North Carolina (population: 317) light up their houses, their businesses, their lives with public power. And it’s made a transformative difference in where and what they call home. What is public power? Basically, it’s electricity that comes from a community-owned and community-operated utility. Community is the crux—to public power users, the utility is akin to public schools and libraries: a division of local government, run by a board of their neighbors, and owned by each of them. The goal is to provide a safe and reliable source of electricity at a reasonable price. And the value goes beyond quantifiable dollars and cents. It’s a pretty nice picture. Public power utilities maintain affordable rates by being not-forprofit, regardless of whether they’re owned by a city, a district, a county, or even a state. The bottom line isn’t net gains or shareholder bonuses; the bottom line is customer satisfaction and a healthy hometown culture. This is local people working together to meet local needs, and it’s happening in 49 states, keeping the lights on for 49 million people, including 1.2 million here in North Carolina. Community remains paramount in public power decisions because they’re handled out in the open, discussed between the board of neighbors and citizens. Often, this means surplus dollars are invested into local small businesses or capital improvements are funded by tax-exempt bonds. There are increased efficiencies, reduced costs, and lower taxes for all. Public power leaders create local jobs, utility positions for community members who in turn contribute to the local fabric of life through both their spending dollars and their human capital— participating in civic organizations, schools, church activities, and sports teams. It’s a win-win cycle for the local culture and the local

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economy: many public power utilities partner with and support other local government divisions. They might donate labor to install holiday lights in a small downtown; they might help set-up and breakdown stationary service hookups for annual festivals; they might imbue charming ambiance by purchasing decorative street lighting. All because it’s their community, too. Transparent, local operations clearly pay off. Public power utilities are statistically more reliable than for-profit models. In these communities, the power is on more consistently—and restored more quickly when it goes out. After all, when the lights go out during a summer thunderstorm or the heat falters midblizzard, public power utility workers are right there with you. They’re working on behalf of their neighbors, their friends, their own families. Remember, it’s their community, too. Plus, they’re right down the road. Local utility personnel often reside within the customer base, resulting in improved outage and storm response, decreased outage duration, and overall improved reliability. To put a number to it, increased reliability has been valued over $75 million per year in public power communities in North Carolina. To go beyond numbers, customer service is just as reliable: public power utility workers—fellow community members —listen to customer concerns and discuss questions, all from the local business office located right in town. What’s more, these individual utilities can tap into a larger community, working together through joint action agencies comprised of their own member representatives. This increased leverage and purchasing strength helps, say, when buying power for their cities or towns. It also helps when seeking economic developSPONSORED SECTION

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ment grants and resources; and then each individual community is positioned to communicate directly with prospective businesses for negotiations. There are many nimble hand-offs, finding strength in numbers without compromising local spirit. Take, as two instances, workforce development and emergency assistance. Through public power joint action agencies, individual utilities enjoy benefits including safety and technical training, emergency assistance, educational seminars, networking events, and legislative and regulatory assistance, among others. They enjoy peer recognition, sharing in each other’s successes. They’re bolstered by support during challenges. If a major storm causes widespread power outages, these communities are standing by and ready to lend a hand immediately. It’s local spirit amplified. Together, we can achieve so much more. Public power models a clear-eyed focus on each and every customer. It’s that simple and that profound: a focus on people and not profit. Each public power utility is different, of course, reflecting its hometown characteristics and values. And that’s the beauty of it; that’s why it works. In public power communities, decision-makers are community members, they are citizens, they are government leaders. They are usually their own customers, too. They utilize various power sources, as suits their customer

base—across the country, 35% of public power is generated from coal, 24.3% from natural gas, 22.5% from hydro power, 15.9% from nuclear, 2.2% from non-hydro renewables, and 0.1% from oil. The true value of public power is nuanced, just like individual communities. Consider the bigger picture. There’s proven greater reliability. There’s local control and local service (and therefore local jobs). There are economic development advantages— operating its own electric system affords cities and towns extra agility in negotiating prospective new entities. There’s the wider network, connecting communities for emergency assistance, workforce development, and administrative resources. There’s the not-for-profit model. This is a remarkable, tremendous, and most certainly valuable approach. So, back to that literal picture of electricity. In public power communities, electricity looks like the familiar faces of reliable citizen lineworkers; friendly local leaders; engaged customers. Electricity is part of—dare we say, it lights up—a community’s identity. In fact, electricity strengthens the community’s identity. Public power utilities project the unique values and concerns of each town or city, and ultimately shine as people—friends and neighbors—working together to provide reliable and affordable electricity. Public power is people power.

WHO ARE WE? ElectriCities is the energy behind public power. For more than 50 years, ElectriCities has helped North Carolina public power communities provide safe, reliable, and affordable power to their customers. ElectriCities members serve more than 1.2 million people in North Carolina public power communities, including 32 members of the N.C. Eastern Municipal Power Agency (NCEMPA) and 19 members of N.C. Municipal Power Agency 1 (NCMPA1).

Look deeper into the benefits of public power at www.electricities.com A U G U S T

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Hot rods

MUSCLE MANIA DECADES IN THE MAKING, A CONTRACTOR’S REMARKABLE COLLECTION OF CARS AND ROAD ART WAS AUCTIONED OFF IN A JIFFY.

▲ After nearly half a century, Jefferson construction company exec Eddie Vannoy accumulated dozens of investment-grade muscle cars and thousands of pieces of road art.

olished brass and ahooga horns are not Jefferson construction company executive Eddie Vannoy’s idea of collector cars. Think instead of a 755-horsepower, black 2019 Chevrolet Corvette ZR1 with 140 miles on the odometer. When it crossed the auction block during the sale of Vannoy’s massive collection in late June, an anonymous bidder forked over $187,000, about $60,000 more than list price just a year ago. This is the world of investment-grade muscle cars and automotive memorabilia. Amid a worldwide pandemic, civil unrest and a recession, the five-day auction of more than 80 mint-condition automobiles, trucks and motorcycles and thousands of antique gas pumps, bicycles, car-dealership signs and other items brought in more than $15 million. Prices soared as much as a third above estimates of experts at Walworth, Wis.-based Mecum Auctions, which oversaw the sale. More than 300 bidders showed up at Jefferson, a tiny Ashe County mountain town, while hundreds more made offers via phones and the internet.

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An antique gas pump with two glass globes brought nearly $60,000. A rare 1969 Dodge Charger Daytona, the winged supercar developed for NASCAR racing, brought $231,000, well above estimates. A mundane 1995 Ford Bronco that would look at home in supermarket parking lots today brought $79,000, about double what Mecum expected. It had only 450 miles on it. “Shocking,” says John Kraman, Mecum’s longtime consignment director and analyst. “Some of our customers were disappointed because they were priced out of the bidding.” That was good news for Vannoy, who admitted to “the worst case of seller’s remorse there’s even been.” But it also sends a message to investors who might want to add horsepower to their portfolios of stocks and bonds. “These are strange times," Kraman adds. “We know nostalgia is powerful, and most people into collector cars and memorabilia are not in it as a primary investor strategy. It’s just part of their being, and now there’s a heightened sense of just how important things

PHOTO BY DAVID MILDENBERG

BY EDWARD MARTIN

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are in an individual’s life.” He calls it passion. Buyers beware, however: Collector cars require a knowledge of the field that rivals that of bidders for Picassos and Pollocks. Wrong guesses are common, such as those who bought early 1990s final-generation Ford Thunderbirds expecting values to soar. Instead, they’re selling for half the initial outlay. Vannoy has had a passion for cars since he bought a 1948 Chevy for about $100 while working at a Jefferson filling station in his teens. “In the 40 years I’ve done this, I’ve met a lot of good people,” he says, traveling thousands of miles to buy every car, pump, neon sign and other piece in person rather than through brokers or on the internet. When he wasn’t collecting, Vannoy and his brother, Mark, constructed one of North Carolina’s largest general-contracting businesses. “You don’t put something like this together overnight,” David Mecum, the auction company’s road-art manager, said before the sale, referring to the collection that filled an immaculate 40,000-square-foot warehouse. “His eye for detail is amazing.” Unlike many Mecum sales, Vannoy’s wasn't televised by the NBCSN network because of COVID-19. “They insisted we keep this one under the radar,” Kraman says. Still, even remote bidders figured if Vannoy invested in the cars, they were solid values. “He’s a high-profile collector with a good reputation, so the credit goes to Eddie,” he says. “Buyers came out of the woodwork because they figured the quality would be so good, they wouldn’t have to be there.”

▲ The Eddie Vannoy Collection auction included vintage ’50s diner memorabilia, gas pump islands, pedal cars, an entire arcade of pinball machines and more. Vannoy says he sold the collection because none of his family shares his passion for preserving or adding to it. “When you’re 71, you might live another 20 years or another 20 minutes,” he says. Either way, he’ll keep a half-dozen or so muscle cars. “Got to have something,” he says, “to drive around on weekends.” ■

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INNOVATIVE APPRENTICESHIPS BUILD YOUR BUSINESS Many people who hear the word apprenticeship automatically associate it with the building trades. But today, this time-tested training method is used by companies in multiple industries across North Carolina and the world to build talent pipelines and ensure employees have the skills they need to help the business thrive. Industries that can benefit from apprenticeships include both traditional and non-traditional operations, such as: • • • • • • • • • •

Information technology and cybersecurity Healthcare Advanced manufacturing Energy Logistics Public safety Finance Insurance Hospitality Building trades/construction

WHAT IS APPRENTICESHIP? Apprenticeship is an employer-driven training model that combines paid on-the-job learning with related classroom or technical instruction, some of which may be provided through industry-specific classes or certifications offered through the 58 community colleges in the North Carolina Community College System. In simple terms, apprentices can earn while they learn. Apprenticeship is growing in the United States and in North Carolina.

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APPRENTICESHIP IS NOT AN INTERNSHIP Internships are typically short-term, project-based jobs that offer the intern limited exposure to the industry or career. Apprenticeships have a longer-term focus, with the goal of developing the apprentice into a full-time, permanent employee. The apprentice is typically trained on all aspects of the occupation, eventually earning a nationally recognized credential when they complete the apprenticeship program. Pre-apprenticeships are also an option for employers to hire and train those still in high school as well as adult apprentices. Formal apprenticeship programs are structured to meet minimum standards and are recognized by the US Department of Labor.

BENEFITS OF APPRENTICESHIP FOR EMPLOYERS ApprenticeshipNC is a system put in place to help North Carolina businesses and workers succeed. ApprenticeshipNC consultants work with each business to develop a custom registered apprenticeship program that meets the organization’s specific needs. Services are offered to North Carolina businesses at no charge. Some of the benefits include: • • • • •

Reduced turnover & heightened loyalty Increased productivity & employee engagement Apprenticeships work for businesses of all sizes Training supported by your local community college Reduced search and recruitment costs

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“One of the things about apprenticeship that most people don’t realize is the level of dedication that you get from apprentices is just incredible,” says Tony Marshall, President and CEO of Innovative Systems Group (ISG). “Many of us go to trade fairs and we try to find the talent and hope we get what we need. With apprenticeship, you know you’re going to need people, you invest some time and energy in them, and train them. The level of dedication you get from these people is tremendous. When you invest in people and treat them well, they will treat you well.”

BENEFITS FOR APPRENTICES Programs are structured so the employee works and attends classroom or technical training either during or after working hours. They are paid for time spent training, making the program very attractive for the employee. After completing the apprenticeship, which may last anywhere from a year to four or more years, depending on the complexity of the job, the apprentice earns nationally recognized credentials. This includes a journey worker’s certificate; they may also earn other technical certifications, or even a two or four-year college degree, depending on the program. “Instead of racking up a whole bunch of financial debt, I get to have my associate’s degree,” says Mikhael Brëault, an Apprentice with Caterpillar Inc., ApprenticeshipNC’s 2020 Outstanding Registered Apprenticeship Partner. “I saved up enough money to keep going on my bachelor’s degree while working at Cat. Having just this different experience at Caterpillar doing hands on work with more mechanical stuff, it’s actually been really fun, and I’ve learned so much that I don’t think I would have learned otherwise.”

your regional Apprenticeship Consultant and contact them by phone or email to learn more. Once you have decided a program is right for you, the Apprenticeship Consultant will work with you to define the program and ensure it meets the required standards. The program will then be registered with ApprenticeshipNC, who is recognized as a State Apprenticeship Agency for the Department of Labor. Once that is done, the employer can launch the program by assigning current employees or hiring new ones. “We enjoy being a part of the ApprenticeshipNC program because it gives an opportunity to have a different avenue to recruit new employees than what we’ve had in the past,” says Chris Angel, Business Development Director at Mountain Credit Union, headquartered in Waynesville, NC. “It’s about having access to an employment pool that other financial institutions may not be taking advantage of.” “ApprenticeshipNC is absolutely awesome to work with,” adds Roger Collins of Siemens Energy in Charlotte. “My advice for other businesses considering an apprenticeship? Don’t think too long! It’s real easy to think yourself out of it. There’s no hurdle that cannot be overcome by your company with the assistance of ApprenticeshipNC.”

TO LEARN MORE, VISIT WWW.APPRENTICESHIPNC.COM

READY TO START A REGISTERED APPRENTICESHIP? If you believe your business might benefit from starting a registered apprenticeship program, the first step is to visit www. ApprenticeshipNC.com. You can start the process online or locate

919-807-7176 | 200 West Jones Street, Raleigh, NC 27603 | apprenticeshipnc@nccommunitycolleges.edu A U G U S T

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NC TREND

Energy

END OF THE LINE POWER PLAYERS DUKE AND DOMINION SCRUB A GROUNDBREAKING PROJECT ATTACKED BY ENVIRONMENTALISTS AND CHAMPIONED BY EASTERN N.C. BUSINESS RECRUITERS.

BY DAVID MILDENBERG

ix years after it was announced and more than $4 billion was invested, the 600-mile Atlantic Coast Pipeline was cancelled in early July, ending dreams of proponents who said its natural gas delivery would bolster the economic prospects of eastern North Carolina. Environmental groups and activists including former Vice President Al Gore and the Rev. William Barber hailed the decision by utility giants Duke Energy and Dominion Energy as a victory for alternative energy and a greener future. Project opponents credited the cancellation to increasing public hostility toward the effects of fossil fuels on climate change amid increasing wildfires, rising sea levels and higher average temperatures. Duke officials and business groups said environmental activism and continued legal challenges make it difficult for U.S. companies to build infrastructure projects, even in underserved areas. They say the result is likely to be more expensive — and potentially less reliable — energy. It was a stunning rebuke of Duke and Richmond, Va.-based Dominion, which The Washington Post called its state’s “most powerful corporation.” The decision was an obvious blow for eastern North Carolina’s ability to attract new businesses, says Christopher Chung, CEO of the Economic Development Partnership of North Carolina. The pipeline was expected to deliver natural gas from northeast U.S. wells to areas of Virginia and North Carolina lacking service. Nearly one-third of the 600-mile pipeline would have run through eight N.C. counties, many of which have lost population and jobs over the last decade. Chung says his team routinely struggles to convince businesses looking for expansion sites to consider the eastern region. “The ACP would have allowed more industrial parks in the region to offer natural gas service where it is now prohibitively out of reach.” N.C. Chamber CEO Gary Salamido blamed the decision on an “activist environmental legal strategy [that] is hurting working people. Businesses and the people who work for them want a clean environment as much as anyone.” But Michael Regan, secretary of the N.C. Department of Environmental Quality and an appointee of Gov. Roy Cooper, praised the decision. “Now, we should focus on clean energy solutions that protect the environment and all North Carolinians, while creating thousands of jobs and boosting economies statewide.”

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The decision was a financial hit for the utilities, which had forecasted the project would ultimately cost $8 billion, double original estimates. Dominion Energy lost 11% of its market value in the week following the decision. It had a 53% ownership in the ACP, with the balance controlled by Duke and subsidiary Piedmont Natural Gas. Duke expects to write down its investment by as much as $2.5 billion in the second quarter. It marks another difficult chapter for CEO Lynn Good, who is battling to force N.C. customers to pay part of the $8 billion or more costs of coal-ash removal, following a large 2014 Dan River spill.

Asked about eastern North Carolina’s prospects, Duke spokesman Neil Nissan noted: “The lack of additional natural gas infrastructure in the region hinders the ability of existing businesses to grow and is an impediment to new businesses locating in the region. We believe eastern North Carolina deserves the same opportunities for job growth and economic development as the rest of the state.” In September, Duke will file an “Integrated Resource Plan” to provide multiple approaches to offer “clean, reliable [and] affordable” energy over the next few decades after working with state leaders, customers and others, Nissan says. ■

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Home of the Carolinas Index The Carolinas Index is an Equal Weighted Index composed of the 75 largest companies in the Carolinas based on market value.

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Entrepreneurship

NO TIME TO WASTE A 22-YEAR-OLD CEO TURNS OUTDATED APPAREL AND TEXTILES INTO FRESH PRODUCTS.

BY MEGAN BIRD

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Emily Neville to the needs of the customer or marketplace has been why Reborn continues to succeed.” Nearly two years later, Neville has raised a total of $500,000. She is now seeking more money, with a target of $1 million from angel investors. “Ours is a better solution than recycling because a lot of the partners we work with might already be landfill free,” Neville says, meaning they shred their textile waste to be used for pillows and other items. That still wastes resources that could be repurposed into something more lucrative. Discarded clothing and other textiles have major negative environmental impacts. According to the U.S. Environmental Protection Agency, 3.2 million tons of textile waste was combusted in 2017, and 11.2 million tons ended up in landfills. Only 2.6 million tons was recycled. Textile waste “shows up at every point in the supply chain,” Neville says. “No matter the way you lay out a roll of fabric, you’re going to have parts that aren’t touched.” That’s where Reborn comes in, helping companies “upcycle,” as Neville calls it. Neville has had difficulty finding investors in the wake of COVID-19, although she says the company has continued to add business and attract new vendors. “We're working with five to six manufacturers to make sure we have backup if a vendor can't get us what we need. We also diversified our revenue stream, adding high school and prep schools and hospital gift shops.” Challenges don’t dispirit the 22-year-old. “More than anything, my age has been going against me, especially when it comes to raising investment capital because people want to see experience,” Neville says. “However, I can say, ‘Look what we’ve done with limited resources and such a young team.’ Imagine what we could do with more.” ■

PHOTO COURTESY OF ALLIE MULLIN PHOTOGRAPHY, REBORN CLOTHING

any collegians agree that sophomore year tends to be the least stressful following the stupor of the freshman experience, with graduate school admissions and job applications far on the horizon. But Emily Neville, then 19, saw her second year at N.C. State University as an opportune time to launch her own company. Three years later, her Raleigh-based Reborn Clothing has grown into a 15-employee enterprise, including four full-time staffers, with expected annual revenue of about $500,000. Reborn has licensing agreements with more than 50 universities and partners with some major companies — including Burlington-based outdoor-fabric manufacturer Sunbrella — to repurpose surplus or outdated jerseys, banners and other fabric into sweatshirts, duffel bags, teddy bears, dog beds and other products. Just a year ago, the company was working with three universities. The idea stems from Neville’s interest in updating her own closet and shopping at sustainable-clothing companies such as Everlane and Eileen Fisher. “I noticed this gap in the clothing industry where it was very wasteful, but sustainable fashion options were expensive,” she says. “I thought a business solution could solve it. Naively, I started Reborn, not realizing how much [work] a business was. As soon as I started, I realized there was no end date, and this was really a career now.” A native of Linden, a town of about 130 in Cumberland County, Neville worked as a restaurant hostess, swim instructor and secretary to raise her initial capital. She hasn’t relied on close friends or family for financing. Her first investor and longtime mentor was Steve Mangano, founder of CurEat, a Raleighbased app that promotes the restaurant industry. The two met while Neville was working the front desk at The Loading Dock, a coworking space in Raleigh. Mangano led Neville’s initial fundraising of $60,000 in the fall of 2018. Marcus Hall, an N.C. State grad who owns The Cowfish Sushi Burger Bar restaurants, also invested. “What set Emily and Reborn apart was her willingness to adapt her vision to the suggestions of others,” Mangano says. “She understood from the first day that to succeed, you need many people around the table and [you] can create the most sustainable company by actively seeking input from others. While this may seem simple, it is rare, and her ability to consume information and adapt C A R O L I N A

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NC TREND

Manufacturing

SOCK IT TO ’EM WITH SLUMPING SALES OF THEIR CORE PRODUCTS, NIMBLE MANUFACTURERS LEARN TO IMPROVISE AT LIGHTNING SPEED.

Thorlo

BY EDWARD MARTIN

PHOTO COURTESY OF THORLO

he new year dawned hopefully at Thorlo in Statesville. For more than 200 employees, an expanding repertoire of specialized, cushioned socks that began during the running boom of the 1980s had grown to nearly three dozen and promised steady paychecks. Then came the COVID-19 pandemic — the layoffs began in April, and soon the plant closed. The employees are back now, and the knitting machines are running again. Thorlo still makes socks, and a promotion in which it donates a pair of its “12-hour-shift” socks to health care workers when online buyers tick a box has exceeded 1,300 pairs, worth $20,000 or so. But Thorlo is turning out more than socks. After an early-April scramble, its engineers devised a nylon and polyester blend with antimicrobial copper, coming up with Face Tek coronavirus protective masks. By early July, 104,000 had sold at $12.99 each, or more than $1.3 million. “We didn’t know what to expect,” says Marketing Director Jeff Lawson. “We were hopeful it would keep the ship above water, and it certainly has.” In Raleigh, officials of the N.C. Manufacturing Extension Partnership, NC Chamber and N.C. Department of Commerce say the coronavirus is prompting businesses to adapt at an unprecedented pace. Companies such as Thorlo are being forced to innovate or perish in a crucial period for the state’s 470,000 industrial workers and $100 billion-plus annual manufacturing economy. Examples abound. In western North Carolina, outdoor-gear makers have switched to producing face masks, ventilators and other personal protective equipment. In Clemmons, Battery Watering Technologies’ 50 employees quickly changed course and are grinding out about 6,000, $10 retail face shields daily. Few can equal the textile maker that is Anson County’s largest private employer. Hornwood, founded in Lilesville in 1946, faced a dire future, says President Chuck Horne. The company’s tricot warp knitting technology is different from circular knitting used in products such as T-shirts. “We sell the finished fabrics, and the

markets we serve are varied, such as the athletic market for onfield stuff like football uniforms, fabrics that go into water-filtration systems, fabrics for interiors of cars and some apparel fabric for the military.” Overnight, those sales dried up, except for water filtration. But Hornwood was deemed an essential industry because of its military and water fabrics. “Our business just tanked, but we had to stay open and running,” Horne says. “We didn’t have enough business to keep the doors open. Early on, we’d gotten into fabrics for face masks, but a little bit goes a long way when it comes to those.” Another market was looming: protective isolation gowns for health care workers. Hornwood researchers focused on its tricot warp knitting specialty. “A number of other folks were trying to do things using circular knitted fabrics but just couldn’t make them pass the water-resistance test. So we engineered a fabric using our existing equipment that gave you all the properties you were looking for — a very soft hand to the touch, yet water resistant.” Hornwood typically produces about 300,000 yards of material a week. While the medical fabric might make up a relatively small part of that, demand for the medical-gown material, sold to cutand-sew industries, has allowed it to rehire most of the 22 employees it had laid off. “We’re busy as bees making that particular fabric,” Horne says. “To be honest, it has been a lifesaver for us.” COVID-19 is also sparking innovation. Though still using its time-tested technology, Horne’s new application works so well that the company has applied for a patent. In Statesville, Thorlo’s Lawson says his company was uncertain how to market its newly minted face mask. “It had never been done before. So, we tried satellite radio” such as Sirius XM. “We have found it very effective. The response has been very strong.” Those sales underscore possibly the base lesson of COVID-19. “That market didn’t exist three months ago,” he says. ■ A U G U S T

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Diversity

LOWE’S’ FRESH LOOK AN OUTSPOKEN CEO CHANGES THE RETAILER’S LEADERSHIP TEAM IN THE NAME OF DIVERSITY AND GROWTH.

BY HARRISON MILLER

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Marvin Ellison

Ellison started in retail earning $4.35 an hour as a part-time associate at Target and worked his way up the corporate ladder at the Minneapolis-based chain and later Atlanta-based Home Depot, where he was passed over for the top job in 2014. He became CEO of J.C. Penney in 2015, but enjoyed little success in turning around the struggling department store chain. He jumped to Lowe’s in July 2018. “Sometimes you have to decide to talk less and do more,” Ellison said. “I’m very appreciative that there is all of this dialogue happening out there. But I didn’t have to see the horrific murder of George Floyd to understand that there was racial injustice in America. I live it every day.” He said it’s important to force candid dialogue about equality within companies. Lowe’s has developed a leadership guide to help facilitate those conversations. “The only way we’re going to start to move in the right direction is if we create safe environments to have uncomfortable conversations,” Ellison said. “I’ll challenge all my CEOs and senior leaders out there who make hiring decisions: Stop talking and start doing, because at the end of the day, that’s what matters.” ■

PHOTO COURTESY OF MARVIN ELLISON

s one of only four Black Fortune 500 CEOs in the U.S., Lowe’s’ Marvin Ellison is drawing significant attention as the nation grapples with racial tensions. He’s also gaining high marks for helping close the gap in technology and performance with its chief rival, and his former employer, Home Depot. In June, Barron’s named Ellison one of the nation’s top 25 CEOs, citing moves to narrow its focus, close its Mexican stores and a regional subsidiary called Orchard Supply Hardware, and restructure Canadian operations. During his two years running the Mooresville-based retailer, Ellison has also shaken up the company’s senior executive ranks with a couple of dozen departures and arrivals. The changes were partly motivated by Ellison’s conviction that the Lowe’s management team lacked women and people of color in key slots, he said at a virtual conversation broadcast by the National Retail Federation in early July. When he arrived at Lowe’s, there were eight Black employees with titles of vice president or higher. “I didn’t need social unrest as a CEO for me to understand that was an issue. We just decided to fix the issue,” he said on the broadcast. Now, Lowe’s has two Black executive vice presidents, two Black senior vice presidents and 11 Black vice presidents, as well as women serving as chief information officer, chief brand and marketing officer, and executive vice president of human resources. “I’d love to tell you I’m this brilliant recruiter, and I can assess talent that doesn’t exist,” Ellison said. “The reality is these people were out there. They were either within Lowe’s being ignored or they were in the marketplace.” It’s vital to use this position to promote diversity and to challenge other corporate leaders to do more in the fight against racism, he said. “As a Black man in America, this is mentally exhausting that in 2020, we’re still discussing racial injustice. I mean, it’s something that I’ve lived with my entire life.” Ellison was born in 1965 in rural western Tennessee. His parents worked as sharecroppers to provide for their six children. He recalled what it was like growing up in a segregated community. “There were parts of the town that the Blacks lived in and parts of the town where the whites lived in,” he said. “There were places I knew I couldn’t go as a young Black man. It’s just the way it was.” C A R O L I N A

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CORPORATE TRAVEL & MEETING UPDATE

CONVENTION COMEBACK

THE MEETING AND CONVENTION INDUSTRY LOOKS FOR WAYS TO REBOUND AFTER TAKING A HIT FROM COVID-19. North Carolina boasts a rich array of enticing meeting and convention venue options for out-of-state visitors. In 2018, tourism-related jobs increased to a record 230,000, according to the N.C. Department of Commerce. Visitors spent $73 million per day last year and contributed $5.9 million per day in state and local tax revenue, according to tourism group Visit N.C. The coronavirus pandemic is expected to drastically affect these numbers in 2020. “North Carolina does have a unique niche in the country in that we are an incredible tourist destination for things like corporate gatherings, association conferences, sporting events and concerts,” says Rich Phaneuf, CEO and executive director of Association Executives of North Carolina. “North Carolina is a place

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that people want to go whether it’s to work, retire, visit or play — they want to be here.” AENC works with executives, particularly in the association, hotel and hospitality industries, to provide guidance as well as a network of other individuals to connect with. The organization has been checking in with its members since the beginning of the stay-at-home order to see how it can help members succeed despite the unprecedented circumstances. Though AENC has a small team that already worked remotely before the pandemic, the group is also feeling the effects of the virus. Phaneuf says it’s possible AENC’s annual convention, set for Durham later this month, may be canceled. Summer and fall are popular times in North Carolina for corporate

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retreats on the coast or in the mountains, but with restrictions on gatherings, few will take place this year. This will likely cause a trickle-down effect in the state’s most popular destinations, Richard Geiger, president of Visit Winston-Salem, says. “We are here to try to bring people together — the larger the gathering the better,” he says. “The reality is because of the pandemic, that’s exactly what we don’t want to be doing from a health perspective. That’s why you’re seeing the numbers you’re seeing with unemployment at restaurants, hotels, attractions and the vendors they do business with.” In 2017, Winston-Salem’s Benton Convention Center underwent a $20 million renovation, and there are 5,000 hotel rooms in the Winston-Salem area to support travel and tourism SPONSORED SECTION

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each year. In addition to the Millennium Center, the Milton Rhodes Center for the Arts, the Stevens Center and the Wake Forest Biotech Place Conference Center, Geiger estimates 35% of business in Winston-Salem comes from meetings and conventions, with another 35% from corporate transient business. The majority of large gatherings this year have been postponed or canceled, he says, aside from some smaller group meetings and weddings. Visit Winston-Salem is working with local hotels and convention centers to reevaluate all processes and determine an individualized approach forward. This might include creating a plan for them once they can host large groups, or working with the event venue to come up with a hybrid meeting model that utilizes technology, according to Christian Schroeder, Visit Winston-Salem’s director of sales and services.

Schroeder says many venues have changed their policies to make it easier for folks to postpone meetings because of COVID-19. “If you had something planned this summer, don’t cancel it, but look at postponing it,” he says. “Work with your bureaus, partners and convention center partners to rebook rather than cancel.” Chetola Resort in Blowing Rock is experiencing many postponements of gatherings to 2021. Director of Sales and Marketing PJ Wirchansky says the mountain resort has seen a smattering of small group meetings with four to 12 people, but it isn’t offering buffet options and won’t accept larger gatherings until it’s safe to do so. He estimates Chetola hosted 100 meetings and conventions last year but will see only a fraction of that this year. One avenue Chetola and other resorts are exploring is outdoor

gatherings. At press time, groups of as many as 25 people could gather outside. With Chetola’s 78 acres, Wirchansky says some meetings and events have switched to an outdoor option. The resort reopened the hotel and are seeing more individuals and families come stay in Blowing Rock. “We do have policies in place currently for all guests and staff in public areas to wear masks, and we are taking temperatures at our entrance gate for everybody,” he says. “And we have a minimum of 24 hours inbe-

Count On Me NC is a public health initiative that empowers guests and businesses to help keep everyone safe from COVID-19.

WHERE ARTS & INNOVATION MEET Visit Winston-Salem is the official sales and marketing agency for the Winston-Salem and Forsyth County tourism industry. A sophisticated meeting destination, Winston-Salem is conveniently and strategically located at the epicenter of North Carolina’s Piedmont Triad region. Chetola Resort, which hosted about 100 meetings and conventions last year alone, has seen a major spike in event postponements because of pandemic gathering restrictions.

200 Brookstown Avenue, Winston-Salem 336.728.4200 | visitwinstonsalem.com SEE OUR AD ON PAGE 7

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CORPORATE TRAVEL & MEETING UPDATE

tween guests when the room remains vacant, and then the housekeeping goes in and cleans with hospital-grade supplies.” Chetola has always had stringent

cleaning policies, but Wirchansky says the lodge has increased these efforts with the help of Count On Me NC, a statewide program led by N.C. State University, Visit N.C., the N.C. Depart-

BUSINESS OR PLEASURE, THE CHOICE IS YOURS Discover Grandover Resort’s 244 renovated guest rooms, 45,000 sq feet of refreshed meeting space, 36 holes of world-class golf, luxurious day Spa and more. The Getaway that’s Minutes Away Greensboro, NC 336-294-1800 | grandover.com SEE OUR AD ON PAGE 25

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SEE OUR AD ON PAGE 9

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PHOTO ON THIS PAGE AND PREVIOUS PAGE: PROVIDED BY CHETOLA LODGE

With 78 acres, Chetola Resort in Blowing Rock has plenty of outdoor activities and venue options for guests to explore.

ment of Health and Human Services, and the N.C. Restaurant & Lodging Association. However, these extra measures cost hotels and restaurants at a time when they’re making less than normal in a peak season, NCRLA President and CEO Lynn Minges says. The NCRLA is working closely with government leadership to create policies and grant and loan opportunities that will help hospitality-focused businesses survive this difficult economic period. Count On Me NC was designed to prepare the state’s restaurants, hotels and hospitality businesses for reopening with safety and sanitary precautions in place while also giving potential customers peace of mind, Minges explains. The program consists of five training modules businesses can

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participate in with their employees. Once completed, businesses get a certificate they can hang in their building and are listed on the Count On Me NC website. Guests can also take a pledge stating they will practice social distancing, be kind to employees and wear a mask when necessary. “We understood there would be some reluctance among consumers to come back into restaurants,” Minges says. If the future sounds bleak or uncertain, it hasn’t affected the spirit of those working in the meeting and convention industry. Wirchansky is encouraged to see so many visiting the resort to check out local nature. Phaneuf says all of AENC’s members have been damaged, but none have been defeated. Minges echoed these sentiments. “We have to get through this together,” she says.

PHOTO: PROVIDED BY PINEHURST RESORT

— Alyssa Pressler

Spacious outdoor venue options at Pinehurst Resort can accommodate unique social-distancing gathering spaces.

A SPACE TO GATHER SAFELY Whether you are looking for flexible meeting space, a facility with helpful and attentive staff or a destination that encourages team building inside and outside of the conference – Hickory offers all of those things and more.

1960 13th Avenue Drive SE, Hickory 828.322.1335 | visithickorymetro.com SEE OUR AD ON PAGE 31

SEE OUR AD ON PAGE 1

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NC TREND

Statewide

A TRANSFORMER’S ARRIVAL A GIANT INSURER THAT MANAGES MEDICAL BILLING FOR LOW-INCOME PATIENTS PLACES A HUGE BET ON CHARLOTTE.

BY DAVID MILDENBERG

ealth insurer Centene promises as many as 6,000 jobs at its new East Coast headquarters in Charlotte, delivering the “transformative” project that North Carolina has been seeking for years. The fact the development is occurring in one of the state’s hottest regions instead of a slower-growing area shouldn’t deter from one of the biggest jobs announcements in state history, says Tony Copeland, secretary of the N.C. Department of Commerce. To attract the Clayton, Mo.-based company, state and local governments offered about $450 million in incentives, mostly tied to adding about 2,600 jobs and investing an estimated $1 billion. Centene now employs 500 in the state.

Centene's stellar growth Revenue (billion)

Net profit (million)

Membership (million)

2019

$74.6

$1,321

15.2

2018

60.1

900

13.5

2017

48.4

828

10.1

2016

40.6

562

9.1

2015

22.8

355

source: company

“The company clearly has confidence in North Carolina’s current and future economy and workforce despite the worst pandemic in memory,” Copeland says. “Don’t miss that they will have an annual payroll of $324 million [within five to 10 years] that will ripple through all socioeconomic levels of our state.” Centene (pronounced “sen-teen”) said construction at the 80-acre undeveloped site near UNC Charlotte will begin in August. The first phase of construction is expected to be completed in the second half of 2022 and will accommodate about 3,200 employees. The next

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phase of construction will begin in 2024, and enable an additional 3,000 employees. Centene projects $110 billion in revenue in 2020, much of it from managing Medicaid insurance claims for state governments. North Carolina beat York County, S.C., and Tampa, Fla., for the project. Even with the pandemic causing unemployment to surge, the state’s tally of new corporate job promises and investments is ahead of last year’s pace, Copeland says. CEO Michael Neidorff has led Centene for 23 years as it became the fourth-largest U.S. health insurer and No. 42 on the Fortune 500. Shares have jumped 30-fold since a 2001 IPO. He praised North Carolina’s business environment in announcing the expansion, then blasted his company’s headquarters market of St. Louis. He told a local publication that the Missouri city needs to improve its business climate and curb national media perceptions of excessive crime. At 77, Neidorff is one of the oldest CEOs at a big U.S. public company. His employment contract runs through 2023, when he turns 80. N.C. lawmakers approved a change in economic development policy two years ago to allow for larger incentive grants that were competitive with rival states. The oft-stated purpose was to attract a major auto plant to the state, mostly likely near the Triad area. North Carolina remains the sole Southern state without such a facility. Along with IT, finance and other jobs, Centene will hire a significant number of customer service and claims-processing positions, says Frank Emory Jr., chairman of the Economic Development Partnership of North Carolina. “Some of those will be entry-level positions with opportunities for upskilling. So their hiring impact will have a broad reach.” Those jobs are likely to average more than $60,000 a year, while the overall average will be about $100,000, Centene says. Charlotte has the nation’s fastest-growing pool of technology talent, according to the latest Scoring Tech Talent Report from CBRE, a global real estate services firm, according to the partnership. The city grew its tech talent pool by 48.4% from 2013-18, topping 50 U.S. and Canadian markets included in the study, notes Christopher Chung, CEO of the partnership.

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TRIANGLE K4Connect, which creates technology solutions for seniors and individuals living with disabilities, closed a $21 million funding round. The company has raised a total of $31 million.

Global Data Consortium, which runs an identity-verification program used for financial transactions, raised $3.5 million from investors including Refinitiv and Village Capital. The company plans to operate in 80 countries within the next 18 months.

Bryn Pharma, which is developing an epinephrine nasal spray for patients with life-threatening allergic reactions, raised $11 million, bringing the total haul from investors to $26 million. The treatment is undergoing human trials.

Briggs Hardware is looking for another spot in downtown Raleigh because its lease is up on its Hargett Street store. Briggs started in 1865 and moved from its original location in 1995.

RALEIGH

Chatham Asset Management, the New Jersey hedge fund that is McClatchy’s largest creditor, won an auction to buy the bankrupt company. A court must still approve a plan for Chatham to buy the second-largest U.S. newspaper company, which owns The Charlotte Observer and Raleigh's News & Observer.

Historically Black university St. Augustine named Irving Pressley McPhail as its 12th president. He is the former president of LeMoyne-Owen College in Memphis, Tenn.

DURHAM

Kristine Sloan executive director. Sloan, who previously served as CEO of leadership development nonprofit StartingBloc, succeeds Jesica Averhart. Duke University bought the 148-room Cambria Hotel Durham for $8.95 million. The seller is a partnership led by Raleighbased Concord Hospitality Enterprises and Florida-based Robert Finvarb Cos., which bought the hotel for $10.2 million in 2015 and later invested $8 million on improvements.

Nonprofit Leadership Triangle named

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Minor League Baseball canceled its 2020 season because of the COVID-19 pandemic. There are 12 minor league teams in North Carolina, including the Winston-Salem Dash, Greensboro Grasshoppers, Burlington Royals, Charlotte Knights, Asheville Tourists, Hickory Crawdads, Fayetteville Woodpeckers, Zebulon’s Carolina Mudcats, Kinston’s Down East Wood Ducks and Durham Bulls.

CARY Epic Games added $250 million after electronics giant Sony purchased a minority interest in the Cary-based video-game developer. Epic is valued at more than $17 billion after a separate $750 million funding round in June.

to purchase 10 new HondaJet aircraft and hire 10 employees. Jet It has six HondaJet Elite aircraft in service.

WINSTON-SALEM F5 Sports, a sports-technology company, raised $2.1 million and hired David Rose as chief executive officer. F5 Sports’ pitchLogic baseball and mobile app is used by the 30 Major League Baseball teams.

Forestry Consultants. Financial details were not disclosed. Truist Financial named Kimberly Moore-Wright chief human resources officer. She has worked for BB&T for 25 years. Truist, which had $515 billion in assets in June, is the sixth-largest U.S. bank.

CHARLOTTE CONCORD Amazon Logistics signed a lease to open a delivery station, which will create hundreds of full-time and part-time jobs that pay $15 an hour or more. The distribution center will be used to prepare orders for last-mile delivery and joins three similar sites in North Carolina. GoldenHome International, a China-based cabinetry manufacturer, paid $7.7 million for a 60-acre site at the former Philip Morris cigarette plant. It expects to invest $86 million and create 257 jobs over the next five years.

Wells Fargo, which employs 27,000 here, reported a second-quarter loss of $2.38 billion, its first since 2010. Revenue fell by 18%. CEO Charles Scharf says big cost cuts are needed at the bank. Honeywell International, which is based here, is closing its Coon Rapids, Minn., aerospace facility, cutting 212 jobs. About 150 employees are expected to be laid off after transfers to other plants.

HUNTERSVILLE KANNAPOLIS

The Hyatt-operated Carolina Inn on the UNC campus is laying off 217 employees. An undisclosed number of the layoffs will be permanent.

TRIAD

CHARLOTTE

GREENSBORO N.C. Agricultural and Technical State University secured $3.25 million in federal funding over five years to bolster its minority nursing program. The Department of Health and Human Services money will provide 25 scholarships. Business jet fractional ownership company Jet It is investing $60 million

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Global investment firm KKR purchased the Amazon CLT3 fulfillment center for $84 million. The 1.1 million-square-foot facility opened in 2018 and employs about 1,000 workers.

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Greensboro-based commercial HVAC company Hoffman & Hoffman purchased a 123,200-square-foot building here for $9.7 million with plans to renovate the space into offices and a warehouse. The company will add 30 jobs in Charlotte. Construction is expected to be complete by 2021. Timber and land-management company American Forest Management acquired Virginia-based South Rivers

Playground-equipment manufacturer PlayPower is moving its corporate office to Irving, Texas, near the Dallas/ Fort Worth International Airport. The new facility will employ about 200, and 15 corporate positions will work out of the office including COO, CFO, general counsel and chief human resources officer.

WEST ENKA The Buncombe County Board of Adjustment approved plans for 687 homes and residential units. The Farm at Pond Road housing development will be on an 83-acre site and constructed in two stages over the next few years.

PHOTO COURTESY OF EPIC GAMES, TRUIST

CHAPEL HILL

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BOONE Appalachian State University’s athletics department will lose a guaranteed $1.25 million after its Sept. 19 matchup against University of Wisconsin was cancelled. The Big Ten Conference is only allowing conference competition for fall sports.

Apiture, a fintech joint venture owned by Live Oak Bank and Atlanta’s First Data, closed on a $20 million fundraising round. Hugh Queener, co-founder and chief administrative officer of Nashville, Tenn.-based Pinnacle Financial Partners, will join Apiture’s board of directors. Asheville’s Hi-Wire Brewing is planning its fifth taproom here in November in a 1950s-era car dealership. Hi-Wire has locations in Asheville, Durham and Knoxville, Tenn.

NAVASSA Pacon Manufacturing added 40 jobs to its plant here. The company announced in April 2019 that it would add 299 jobs in Brunswick County and make a $37.6 million investment over several years.

GREENVILLE East Carolina University furloughed more than 200 employees and is planning more to trim about $1 million from a pending $20 million deficit. Appalachian State University is the only other UNC System school to announce furloughs as of late July.

ASHEVILLE Electronics manufacturer Charles Edward Industries is investing $1.5 million over three years to relocate its headquarters from Knoxville, Tenn. The move will create 60 jobs with average salaries of $46,925 per year.

PHOTO COURTESY OF MARIE FREEMAN, ECU UNIVERSITY COMMUNICATIONS

Pennsylvania-based F.N.B. received regulatory approval to open a First National Bank branch here, making it the company’s westernmost location in the state. The bank has more than 90 N.C. branches.

YOUNGSVILLE Majestic Kitchen & Bath Creation, a 30-year-old family business that manufactures kitchen and bath products, was sold to CEO Scott Byers and its executive team. Financial details were not disclosed.

EAST WILMINGTON Vantaca, a cloud-based software platform for the community-association management industry, named Ben Currin CEO. Currin previously served as the company’s executive vice president and COO. Vantaca has 50 employees and plans to add 75 this year.

Fintech company nCino’s shares nearly tripled at its initial public offering on July 14 after opening at $31. The company’s valuation topped $9 billion before declining after the first day’s trading. The company was started by the founders of Live Oak Bancshares, also based here. Leaders of New Hanover County and its regional medical center agreed to enter negotiations to sell the county-owned hospital system to Novant Health, which has offered nearly $2 billion that would be distributed to local government and create a $1.25 billion community foundation. Novant also pledges to invest $2.5 billion in capital projects and partner with UNC Health on medical training at New Hanover Regional Medical Center. A final decision is expected in October.

WILSON Solar installation company East Carolina Commercial Services filed for bankruptcy reorganization. The company, which was established in 2015, listed assets and debts ranging between $1 million and $10 million.

Yacht wholesaler Off The Hook Yacht Sales NC acquired Bennett Brothers Yachts and Boatyard, which specializes in boat and yacht repair. Off The Hook says the purchase will allow it to consolidate several existing locations in southeastern North Carolina. Financial details were not disclosed.

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FOR EMPLOYERS: UNDERSTANDING THE SUPREME COURT’S TITLE VII RULING By Xavier Lightfoot and Devon Williams

UNDERSTANDING THE SUPREME COURT’S NARROW TITLE VII/LGBTQ RULING On June 15, 2020, the Supreme Court of the United States (“SCOTUS” or the “Court”) ruled in Bostock v. Clayton County, Georgia that the protections of Title VII of the Civil Rights Act of 1964 (“Title VII”) extend to individuals who are discriminated against in the workplace based on their sexual orientation or gender identity. The landmark decision originated from three separate cases in the federal appellate courts where an individual was terminated after revealing that he or she was gay or transgender. Justice Neil M. Gorsuch, who authored the Court’s majority opinion, made clear that employment discrimination on the basis of sexual orientation or gender identity violates Title VII. While most agree that SCOTUS’s decision in Bostock represents a significant win for the LGBTQ+ community, further examination of the opinion reveals that it is not as broad-sweeping as initially thought. To the contrary, SCOTUS, as it often does, rendered a narrow ruling in Bostock based on the legal issues presented before the Court, without reaching the myriad of potential challenges that are sure to come in the future. For example, the Court did not address whether an employer’s sincerely held religious beliefs or another religious exemption could shield an employer from having to comply with the mandates of Bostock. Though, this very issue was addressed in one of the underlying cases in Bostock (R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC) by the United States Court of Appeals for the 6th Judicial Circuit (“6th Circuit”).

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IS RELIGIOUS FREEDOM A DEFENSE? Aimee Stephens worked for R.G. & G.R. Harris Funeral Homes in Garden City, Michigan as a funeral director. Initially, Ms. Stephens presented as a man when she was hired, however, she later communicated to her employer that she wanted to live and work as a woman prior to having sex-reassignment surgery. Ms. Stephens, thereafter, was fired because she was no longer going to present as a man. On appeal to the 6th Circuit, Ms. Stephens’ employer (who identified as Christian for over 65 years) argued that if the government, by way of the Equal Employment Opportunity Commission (“EEOC”), forced him to continue to employ Ms. Stephens, then it would result in a substantial burden on his exercise of religion in violation of the Religious Freedom Restoration Act of 1993 (“RFRA”). To be successful on this defense, an employer must first demonstrate that compliance with a generally applicable law would result in a substantial burden on the employer’s religious exercise. Upon such a showing, the burden then shifts to the government to establish that applying the neutral law to the employer is the least restrictive means of furthering a compelling government interest. In Ms. Stephens’ case, the 6th Circuit held that requiring the employer to comply with Title VII’s prohibition against discrimination on the basis of sexual orientation and gender identity would not result in a substantial burden on the funeral home owner’s religious exercise. Furthermore, the 6th Circuit ruled that even if the employer’s exercise of religion would be substantially burdened by the enforcement of Title VII, the EEOC established that applying Title VII to the employer’s case represented “the least restrictive means of furthering the government’s compelling interest in eradicating discrimination SPONSORED SECTION

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against Stephens on the basis of sex.” The employer in Ms. Stephens’ case abandoned his RFRA defense on appeal to SCOTUS and thus, SCOTUS refrained from entering the fray on the interplay of Title VII and the RFRA in this context. Nevertheless, the 6th Circuit’s handling of the employer’s RFRA defense in Ms. Stephens’ case represents the law of the land on that narrow issue for Kentucky, Michigan, Ohio, and Tennessee (states where the 6th Circuit has jurisdiction).

WHAT ELSE IS NOT COVERED IN BOSTOCK ? As discussed above, the Court’s opinion in Bostock does not address the viability of an employer’s RFRA defense in response to an employment discrimination claim based on an individual’s sexuality or gender identity. Likewise, the majority’s decision in Bostock does not discuss the “religious organization exemption” provision that is included in Title VII, 42 U.S.C. § 2000e–1(a), which allows religious organizations to give employment preference to individuals of the same religion. Additionally, the Court’s opinion in Bostock does not address other related legal challenges under Title VII such as sexsegregated bathrooms, locker rooms, and dress codes. Instead, the Court restrained from opining on or providing guidance on what practices or policies would qualify as unlawful discrimination under Title VII. Specifically, Justice Gorsuch, on behalf of the majority, states that “[u]nder Title VII, too, we do not purport to address bathrooms, locker rooms, or anything else of the kind,” leaving those questions for future cases. In the meantime (and to avoid being the next test case), employers are strongly encouraged to permit employees to use the bathroom/locker room with which they identify and make gender neutral or singleoccupancy options available for both transgender employees and other employees who may express privacy concerns with sharing a bathroom/locker room with a transgender individual. Employers should also ensure that their policies and practices clearly include sexual orientation, gender identity, and transgender status in the protections from discrimination on the basis of sex.

CONCLUSION SCOTUS’s ruling in Bostock makes clear that Title VII’s prohibition against sex discrimination encompasses discrimination on the basis of sexual orientation or gender identity. That ruling, however, has a narrow application, and lower courts across the country will soon be faced with even tougher, more nuanced questions on how to navigate the multitude of legal challenges that will arise as proponents and objectors of Bostock look to test the bounds of the Court’s reach.

Xavier Lightfoot

Xavier is a Labor and Employment attorney who has spent much of his time advising employers on workforce education, safety, reduction, leave, and liability during the COVID-19 pandemic. xdlightfoot@wardandsmith.com

Devon Williams

Devon’s practice focuses on various Labor and Employment issues, such as wage and hour matters, workplace discrimination and harassment, and employee discipline and termination. In early 2021, Devon will begin her new role as Co-Managing Director, while maintaining her legal practice. ddwilliams@wardandsmith.com

wardandsmith.com

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ENERGY ROUND TABLE

STAYING POWER

North Carolina is one of the leading states when it comes to the energy industry. Experts say collaboration is key in maintaining the state’s strong sector. State leaders met virtually to discuss the biggest changes they are seeing in the industry, the key to gather stakeholders and innovations taking place. PANELISTS

David Doctor

Ivan Urlaub

Gus Simmons

President and CEO, e4 Carolinas (moderator)

Chief of strategy and innovation, North Carolina Sustainable Energy Association

Director of bioenergy, Cavanaugh

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DOCTOR: WHAT DEVELOPMENTS ARE YOU DELVING INTO, AND WHAT BENEFITS ARE YOU SEEING? URLAUB: I think North Carolina is directionally consistent with the national and global trends toward the power mix of our economy being increasingly clean, people and policymakers asking or requiring it to be increasingly clean, as well as utilities, innovating and accelerating their movement in that direction. So all arrows seem to be aligning toward clean. Clarifying what is clean is certainly a discussion going on in North Carolina right now. While utility-scale solar has certainly slowed down with negotiations and settlements not panning out the way everyone thought, and with competitive procurement really limiting it, what we are seeing is electric vehicles and energy storage poised to take off and see significant growth. I think there’s a lot of goal alignment around beneficial electrification, emissions, and energy efficiency, bringing in energy equity

matters and innovative solutions that utilities like our electric cooperatives have been on the forefront of, such as inclusive financing. We’ve learned quite a bit and a number of those solutions are getting ready for full scale. Rooftop solar is in demand and continues to dramatically outstrip consumer access to it. We’re moving into a period where technology and integrated planning can start to bring in distribution. I think we can start to produce the pathways to market value for utilities and industry and consumers for efficiency, distributed renewables, electric vehicles and storage. HOTCHKISS: In talking to our members, they want reliable electricity and affordable electricity, but they also want sustainable energy. In doing so, we are committed to reducing our 2005 carbon emissions levels by 50% by 2030 and by 100%, to net zero, by 2050. So we are joining that conversation and have made that commitment as electric cooperatives here in North Carolina. The electric cooperatives actually dove in on sev-

eral projects almost five years ago. We began with a microgrid on Ocracoke to look at resiliency opportunities with battery storage and solar as well as more traditional electricity generation on the island since it is in hurricane alley, and certainly we have to ensure reliability and resiliency for outage recovery. We also worked on the innovative Butler Farms microgrid [in Harnett County]. This is especially appropriate for North Carolina. It is on a pig farm in central North Carolina. It provides an opportunity for solar, for battery storage, for a biodigester, as well as providing not only resources for the farm itself, but also electricity for surrounding homes. It’s another innovative project that delivers reliability and resiliency in a cost-effective way that provides additional value in this new environment. FUSCO: We’re remaining focused on our customers and our customers are adopting these technologies as the costs come down. We’re seeing more distributed renewable resources at various customer classes and

Andy Fusco

Nelle Hotchkiss

Dave Kaiser

Vice president of member services and corporate planning, ElectriCities

COO and senior vice president of association services, North Carolina’s Electric Cooperatives

Deputy director of office of science, technology & innovation, North Carolina Department of Commerce

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ENERGY ROUND TABLE

the adoption of electric vehicles is definitely growing. What does that mean to us? How do we need to innovate, to make that happen? That brings us to a long-standing technical problem to overcome: Each hour of electricity that is produced does not cost the same as the next. For instance, at 1 a.m., a kilowatt-hour is significantly less costly to produce than a kilowatt-hour at 5 p.m. on a hot afternoon in the summer. The good news is we’re seeing a lot of innovation with digital technologies. I think we’re very fortunate to be where we are geographically because we have a host of great suppliers locally who can help us tackle those problems. We’re focusing on deploying digital technologies, primarily in the

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form of smart meters, and trying to extract as much value out of those smart meters as we can. As an example, with COVID-19, we’re facing a lot of customers who can’t pay their bills. One thing that is helping more cities and our customers is a prepay option (which requires smart meters to implement) that we offer so customers don’t get behind. We’re also collaborating with N.C. State University on data analytics, and what we’re doing there is looking at the impact of some of our energy efficiency measures, as well as assessing the performance of various components on our distribution system so we can optimize the distribution systems and make them work more efficiently.

DOCTOR: WHAT DO YOU SEE IN THE EVOLUTION OF WASTE ENERGY? SIMMONS: That portion of our energy sector is growing at an explosive rate across the country. North Carolina is well positioned to not only participate in the growth of the waste-energy sector but to be a national leader. North Carolina is recognized by the National Renewable Energy Laboratory as well as USDA and some other organizations as having the third-richest bio-energy resources in the country. We have only yet begun to utilize those resources for our energy needs. We are seeing commitments across the board to reduce our carbon footprint associated with our use of energy, not just electricity, but also in the transportation sector

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and in the manufacturing sector. The waste-to-energy industry, particularly as it relates to biogas, is not only a zero-emission source, it actually reverses the impact of existing emissions. Many of the organic materials that are currently underutilized are things that we may consider waste and naturally create a carbon emission as methane and carbon dioxide as they decompose in their current form. When we repurpose those organics and capture that methane and use it to displace our current uses of geologic derived, conventional natural gas, you’re not only displacing the carbon emissions from the use of a fossil gas, but you’re also capturing an existing source. That’s why some states such as California through their California Air Resources Board consider the use

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of wasted organic derived biogas as having the most significant positive impact on the carbon emissions that come from the energy sector. Renewable natural gas and biogases derived from waste organics have an incredibly high value in the marketplace. We also see commitments in the private sector. The customer and consumer demand for those energy materials is growing at a very explosive rate. Some very large manufacturers in the United States have realized that their needs for energy can’t be solely satisfied by our current clean electricity technologies and systems, but they must expand their effort to further displace their use of liquid and gaseous fossil fuels. One of the reasons that that is creating such an explosive opportunity for the North

Carolina economy is by having such rich resources here. It positions us well to be an energy exporter. Currently, we consume the natural gas produced in many other states. We don’t produce our own fossil-derived natural gas. Interestingly, North Carolina produced its own natural gas on March 23. That is the first time that renewable natural gas went into the pipeline grid system in North Carolina. It came from a system that converts manure to biogas from five pig farms down in eastern North Carolina. It’s very exciting times that have precipitated some commitments from a lot of folks to develop additional renewable natural gas resources in North Carolina. We currently have two facilities that are interconnected with the nat-

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ural gas grid that are flowing renewable natural gas. There are at least six or seven that have been proposed and approved to continue to move forward. A couple of those are landfill gas systems and some additional facilities for the swine and poultry farms in North Carolina. You’ve seen some commitments both from utilities in the state as well as some of the large organics producers in the state and in the industry. They recognize these rich resources, they recognize consumer demands, and are making commitments for large investments to continue to propel that part of our energy industry forward. DOCTOR: WHAT DO YOU SEE EVOLVING WITH THIS ENERGY ECONOMY LANDSCAPE? KAISER. Clean energy is clearly an area of innovation that’s taking place in the state. An example of that is Gov. Roy Cooper’s Executive Order 80, issued in October 2018, which was the effort to put North Carolina on the path toward reducing greenhouse gases and helps solidify the state’s interest in innovative activities within the industry. My office at the Department of Commerce recently issued a request for proposals in an effort to understand the economic development opportunities around offshore wind energy in North Carolina. This is essentially a first step to assess the state’s offshore wind-energy supply chain, the ports and other key infrastructure that would be required for undertaking innovative activities within this facet of the energy industry. Not only is this assessment going to provide insights into the state’s opportunities and inventory of businesses that can do it but also innovative opportunities for the state and for businesses to best

Image presented during the Energy Round Table showing North Carolina’s power production.

align with and partner on to make sure that this is an area of growth for the state. DOCTOR: WHAT IS YOUR OUTLOOK ON GETTING STAKEHOLDERS TOGETHER ON SOME OF THE BIGGER ISSUES? WHAT ARE SOME OF THE CHALLENGES? URLAUB: I am optimistic. I think we have a ton of learned experience and are becoming increasingly inclusive in our dialogue and ideas and solutions each year. We certainly have our challenges ahead of us. Often politics can interrupt and whipsaw the economy, business and economic opportunity. Most stakeholders have done a really good job keeping the politics out of energy as much as possible over the last 10 plus years. We now have a lot of bipartisan interest and ways that people from various value systems and political beliefs and practices can come to energy and see that it is a critical backbone of our economic

future, a resilient society and economy. It keeps the ball in the stakeholders’ court to collaborate and problem solve together, which is exactly what needs to happen so that we can get down to good solutions we can align around. HOTCHKISS: I’m also optimistic about where we’re going as a state. North Carolina historically has been very forward thinking. That’s why we’re in the position that we’re in today. I think that’s important to recognize, but I also think it’s important to recognize that pacing is critical. We want to make sure that as we manage the new frontier for the energy landscape, we’re doing it in a thoughtful and deliberate way. It’s very important that we recognize the obligation of the utilities and the state. I think we’ve done very well over the last 25 years since the [Clean Smokestacks Bill] of managing and moving forward in a thoughtful conversation about innovation, manA U G U S T

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ENERGY ROUND TABLE

Slides presented during the Energy Round Table showing statistics on North Carolina’s wind energy and nuclear power.

aging carbon, and other activities, [such as] accelerating renewables, etc. We have to maintain the opportunity to do this in a way that the utilities can still work to keep the balance and efficiency of the grid so that everyone can benefit. However, with great opportunity also comes the opportunity for [groups] to try to leapfrog others. And the electric cooperatives, serving rural areas that have their own specific challenges, are very focused on making sure that we’re balancing all aspects, which includes pushing forward for innovation and unlocking those opportunities in rural North Carolina, but also

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keeping an eye on the cost and the pace and ensuring the alignment is right. DOCTOR: HOW DO WE MOVE FORWARD WITH TECHNOLOGY AND INNOVATION? KAISER: I think we’ve got a lot to be optimistic about moving forward. Collaboration with all partners of the energy industry is critical. It’s been critical for the success we have today, and it will be critical to the success we have in innovations and change moving forward. My office has partnered with E4 Carolinas. We’ve done research

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through interviews and surveys of energy sector business leaders, government leaders, researchers, and nonprofit institutions to collectively obtain their thoughts on the status of the energy industry. They’ve all basically said we need to continue to collaborate together collectively. A solution that we are trying to push for in order to continue these collaborations is the development of an energy innovation assets inventory. It would be a comprehensive, publicly available inventory that would catalog all of our energy assets across the state and even across the region so that all of the partners within our state can have this information at their fingertips, find what partners they may need to help foster those collaborations and increase communication. The overall goal is having greater information at everybody’s fingertips. It would help foster additional change and greater economic growth. We could also have a forum for energy leadership that can help create a sustained and shared vision among all partners and players because the industry is so big, and we don’t want to leave anybody out of the picture. Having a forum that would help provide leadership to the overall industry would be critical to continue to sustain the success of the industry and make sure that our state remains a leader within the U.S. energy sector. DOCTOR: WHEN YOU LOOK AT PUBLIC POWER AUTHORITIES, WHAT IS NEEDED RIGHT NOW FOR INNOVATION AND ENERGY ECONOMIC ADVANCEMENT? FUSCO: Municipalities and electric

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cooperatives have a very similar business model in how we self-regulate. I think we have a really good direction in terms of where we’re moving toward in the future. We obviously get that through our collaborative efforts across the state. We — municipal electric systems — try to maintain a people-focus in what we do. Our customers live in our communities and our utilities are part of the communities. We regulate ourselves through this connection with the community, which ties us directly to our customers. We would much prefer to have a discussion directly with our customers and understand what exactly they’re looking for in their utility. To answer your question, what we would need is a continued focus on

our workforce. It hits us at a number of levels. For the past few years, there’s been a focus across the state on the line workers and the trades. There was investment in the transmission and distribution systems, which has caused growth and a need for those skills. We work very closely with the community colleges to grow programs to give us a good population pool of those workers as job candidates. It’s a great opportunity for kids coming right out of high school to earn a decent salary and be in an exciting industry. That’s not the only area of the workforce needed. We also need the traditional engineering technical skills. We have the university system to provide us with those candidates. I think, though, there are other needs in

terms of our workforce that are just beginning to grow or develop. Our technical skill set is really expanding in scope. We need data scientists, systems engineers, and communications engineers much more than we’ve ever had in the past. There’s also some business and customer-focused skill sets that I think the utility industry has traditionally not employed enough of. Those are the marketing people and business people, who can really interpret what customers are looking for and translate those needs into offerings that their utility can provide. ■

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A determined mother and a love of golf attracted Colombia native Willy Stewart to North Carolina, launching a career marked by a growing business and community leadership.

BY TAYLOR WANBAUGH PHOTO BY CHRISTER BERG

t all started with a billboard. Growing up in Barranquilla, Colombia, a seaport city of about 1.2 million people, Willy Stewart remembers the massive highway sign plastered with a handsome, grinning face proclaiming “ingeniero” — Spanish for engineer. “You know, I would love to have my name up on the big billboard sign,” he thought. “I guess I need to be an engineer.” Stewart, now CEO of his own 200-employee Raleigh-based engineering, design and planning firm, grins thinking about that moment. He’s sitting in his office atop The Dillon, the 18-story mixed-use building he helped engineer, overlooking the heart of downtown Raleigh. “I actually found out 25 years later that the guy who had his name up there wasn’t even an engineer — he was a developer,” he says. “My dad said, ‘I guess you became an engineer by mistake.’ But I love math and numbers, so it actually worked out really well.”

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Stewart’s handiwork can be seen throughout the state and beyond: the East Carolina University’s Coastal Studies Institute, Carolina Panthers practice fields in Charlotte, Durham Innovation District, Raleigh-Durham International Airport’s new terminal, the infrastructure and overlay planning of several Professional Golfers’ Association of America tournaments and more. It was named one of Engineering News-Record’s 500 largest design firms in the U.S. in 2019, with revenue of $32.5 million. “[Willy] is passionate about his work and enjoys life to the fullest,” says John Kane, chairman and CEO of Raleigh-based Kane Realty, which developed The Dillon. “He and the entire firm are a pleasure to deal with. Their ethical standards are unapproachable.” Asked how he grew the small company focused on structural engineering to 200 employees in eight engineering disciplines since 1994, the normally exuberant extrovert pauses and sighs, shifting in his seat. He adjusts his glasses before explaining he feels uncomfortable in the spotlight. He “loves to lead,” but wants to “lead from behind. I don’t want to be the face. I don’t want to be the guy on the cover. ... Stewart is not Willy Stewart. It’s an incredible group of leaders that are committed, humble and respectful and live the culture that we are promoting here.”

DRIVING AMBITION

Stewart, who attended a private American school in Barranquilla, was a scratch golfer, playing for a national junior team in a South American tournament at 17. His father managed a cargo airline company. Three of his high school teachers were Western Carolina University alumni. Through those connections, he scored a golf scholarship to the Cullowhee college, where he played on the team for two years before transferring to N.C. State for the engineering program. In Raleigh, he earned a master’s degree with a structural engineering concentration. A big adjustment was the weather: He wore a winter coat when the weather got down to 65 degrees. “It is 90 degrees year-round in Barranquilla.” Attending college in the U.S. was inevitable, he says, because of a determined mother who had a vision for his future. She had attended high school in Virginia. “She said, ‘You go to the U.S. to go to college, whatever it takes.’ And by that time, frankly, my parents couldn’t afford for me to come. So I was able to get a golf scholarship, and then after my second year, I paid my own way.” Though he grew up in Colombia attending an affluent school and enjoying golf at a nice country club, his experience in the U.S. as a young college student was totally different. “Once I got here, I was on my own. I couldn’t make my monthly payment in my rental apartment. But it’s a mindset, right? It was all temporary. As my mom said, I had to.” Stewart worked throughout his college career in a

variety of jobs. He was a laborer with a construction company during the day and worked at Kmart at night and on weekends. While in Raleigh, he worked for the J.M. Thompson construction company. “I ground the bottom of the Optimist Pool in North Raleigh!” During two summers in graduate school, he worked for structural-engineering firm W.H. Gardner Jr. & Associates. His plan to return to Colombia after graduation changed because of the country’s bloody civil conflict in the early 2000s among the Colombian Armed Forces, paramilitary groups and rebels. The violence left thousands dead or missing. “Everybody was leaving Colombia because of the security [issues] that were going on that started with the drug trading and all that.” His siblings also immigrated to the U.S. One brother also went into civil engineering, the other ran a Shelbybased metal-fabrication company, and his sister served as a Colombian consulate in San Francisco before becoming a Gastonia real estate agent. After graduation, Stewart got married and moved to Miami to be closer to his parents in Colombia. He laughs, describing his experience as straight out of a scene of the 1980s TV series Miami Vice. “It sounds farfetched, but everything about that show was really true. … It appeared that there was a lot of money flowing into the city.”

BACK TRACK

Stewart, who has since remarried, ended up back in Durham in 1988, working as a partner for W.H. Gardner. Six years later, he opened his company. The idea was to have a small, 10- to 12-person structural-engineering company that would focus on the creative process of integrating architecture with building structure, breaking down the goals and objectives of a building’s project design and formulating engineering solutions. But in 1996, a Rocky Mount architectural company asked Stewart to add a civil engineer to their joint-project team to facilitate a better integration of the overall engineering design. “I said, ‘Sure.’ … In fact, he’s still here with us. At the same time, I had a guy who had been certified by the N.C. Department of Transportation to do bridge engineering. And he said, ‘You need to hire another bridge engineer, and we can go chase work at NCDOT.’ So I said, ‘Sure, why not?’” All of a sudden, the small structural firm was also a civil and transportation engineering company, “whether it’s through luck or just necessity.” Since then, Stewart has added geomatics (land surveying), geotechnical (subsurface materials investigation and testing) and construction services, landscape architecture, municipal planning, and sports and events practice areas to its repertoire. The company now has eight offices in Raleigh, Wilmington, Durham, Charlotte and Columbia, S.C.

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OPEN DOOR POLICY

Over its 26 years, Stewart says diversity and inclusion have remained at the forefront of the company’s values. About 38% of Stewart’s executive team and two of its three corporate directors are women. That’s a big contrast with his industry overall: Women only account for about 15.7% of architectural and engineering careers, according to the U.S. Bureau of Labor Statistics. The numbers are even lower for people of color: 6.8% Black, 13.3% Asian, and 9.2% Latino. Barriers such as hostile or unwelcoming environments, social perceptions such as limited representation of minorities in a certain profession, and interpersonal discrimination and microagressions have historically limited diversity in STEM fields, research shows. Stewart acknowledges more needs to be done to create a more diverse company. For example, the company’s practice leadership is made up entirely of men. “Great decisions are made around a table when people bring different points of view,” Stewart says. “If you have people from diverse backgrounds, diverse cultural experiences, diverse ages, diverse races, they’re going to bring to the table their background, their experiences, what that particular decision may mean to them.” Recently, the company launched a racial equity committee of 20 people focused on educating employees about the present and historical struggles of people of color, identifying organizations that are aligned with racial-equity initiatives, creating financial scholarships at historically black colleges and universities, improving the hiring process to increase diversity, increasing purchases from minority-owned companies, and influenc-

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ing policy and legislation that promote racial equality. As a Latino, Stewart has experienced his own share of discrimination. He says in the ’90s, he dreaded telling people where he was from because many people would associate him with infamous drug lord Pablo Escobar. He decided to avoid mentioning his Colombian heritage and simply tell people that he was “just an American.” “It became somewhat of an identity issue for me,” he says. “I went to a job site, and I recorded myself as I was walking around inspecting the project. … When I got home that night, I had to write the inspection report. I hit play and started to listen to myself talk. I remember calling my son, who was about 10 at the time, and said, ‘Listen to this. I have an accent!’” His son laughed. “Dad, of course, duh, you have an accent. You’ve always had an accent.” “It was like, oh my God, I’ve deceived myself for two years,” Stewart says. “It’s sort of in that moment I realize, you know what, I’m from Colombia, and I’ve got to be proud to be from Colombia. … I’m not going to be ashamed. I think my whole level of confidence as an individual, when I recognized and embraced my identity, gave me confidence.” He feels his identity issues and discrimination he’s faced as a Colombian are insignificant when looking at what’s going on in the U.S. “[My experiences] are hardly worth discussing. ... I’m not a Black man waking up every morning knowing I’m a Black man. … Diversity is being invited to the party. Inclusivity is being asked to dance. Belonging is dancing like nobody’s watching. Belonging is having a voice. You enable belonging by saying, ‘I need your

PHOTO BY TZU CHEN PHOTOGRAPHY, ECU UNIVERSITY COMMUNICATIONS

▲ Stewart has worked on projects across the state and beyond including the Durham Innovation District’s Southern Gateway, left, and East Carolina University’s student center in Greenville, right.

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opinion. I want your opinion.’ That’s what would really truly make a difference in business. … We’re taking this pretty seriously.” Stewart’s eyes light up when he talks about the firm’s 2-year-old company culture program, THREAD, which stands for trust, humility, respect, excellence, accountability and discipline. Each employee attends a two-day class at the beginning of the year to learn how to “integrate culture with business intelligence.” “We have declared and embraced a culture where trust, humility and respect guide how we treat each other, our clients and our partners, and excellence, accountability, and discipline guide how we approach the work that has been entrusted to us,” explains Chief Operating Officer Lee Ann Nance. “We try to live this every day.” Vulnerability-based trust is “the foundation for creating high performing organizations where people are humble and empathetic,” Stewart says. “They treat each other with the utmost respect which creates a safe haven where people can bring their authentic self to work every day.”

HOMETOWN HERO

Stewart is an active civic leader, spending about 20 hours a month chairing the board of WakeMed Health & Hospitals, the state’s 10th-largest hospital system with about $1.4 billion in annual revenue. He also joined the N.C. Museum of Art Foundation board and previously served on the N.C. Governor’s Advisory Council on Hispanic/Latino Affairs, the N.C. Small Business Development Fund board of directors, and the North Carolina Board of Examiners for Engineers and Surveyors. In addition to his volunteer work, he says it’s rewarding to see how his company’s work is impacting the community. “For example, The Dillon building is this iconic project right here in the warehouse district in Raleigh that’s getting ready to completely change what’s happening all around us,” he says. “There are projects already planned for buildings and restaurants and residential in one great place.” Kane approached the engineering company with The Dillon project after several successful previous partnerships, including the $80 million, six-story Stanhope Student Apartments, which opened on Hillsborough Street near N.C. State’s campus in 2015. “Stewart has and will be a positive force and contributor to all they touch in our market and the other markets they serve,” Kane says. Nance says that the company’s work helps strengthen the communities and create “places where people live, love, worship, pray, learn and heal,” which she says is Stewart’s brand promise. The fellow N.C. State grad had her own economic-development and marketing-consulting practice and worked as a local and regional economic developer for 16 years before joining the company in 2016. “[Willy] reminds us often that our work is bigger than

FAST FACTS ► Stewart wrote a book in 2016 about self-discovery and leadership called Fire Yourself. ► He has three kids and two stepchildren. His daughter, Erika, swam for Colombia in the Beijing Olympics in 2008 and went on to compete at the University of Virginia. ► The former scratch golfer doesn’t play anymore, but he bikes 50 to 100 miles every week and competed in an Iron Man competition in 2004. ► He is CEO of EventOPS, a Raleigh-based web-based software company used by managers, vendors and designers to coordinate and plan events. ► He previously led management-consulting firm i2 Integrated Intelligence, advising CEOs and senior leaders on how to create healthy organizations by developing a trusting culture and optimizing growth. ► In the ’60s, his maternal grandfather, a former mayor of Barranquilla, was governor of Colombia’s Atlántico region. “I have a picture of him on my desk with the famous architect Le Corbusier when he visited Barranquilla.”

a beam, survey or bridge,” she says. “He truly cares about the people, the business and the community. He is smart as heck — he has a seriously amazing photographic memory with regards to numbers, he’s ethical — I don’t say this lightly [because] I’ve seen this exhibited multiple times, and he’s kind. ... He’s a great teacher; I learn from him every day.”

INTO THE UNKNOWN

As with most businesses, the pandemic has shaken Stewart’s enterprise. While much of its work with the financially plagued N.C. DOT is on hold, business in other practices has remained steady over the last few months with a strong backlog of projects. The company laid off about 4% of its workforce in March, cut expenses, and temporarily cut salaries by 10%. “You have to be very careful,” Stewart says. “It’s not like there are people waiting there for you to knock on their door, and they’re gonna say, ‘Where have you been all my life?’ You’ve got to figure out ways to either acquire a company or merge with someone that already has relationships and has work, and you can build from that. So I think we’ll continue to grow. I think we’ll look at the opportunities as they come.” ■ A U G U S T

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IN EXTRAORDINARILY STORMY TIMES, THESE N.C. COMPANIES ARE SHOWING SOLID GAINS.

BY HARRISON MILLER

ake no mistake about it. The COVID-19 pandemic has been a disaster of epic proportions, a health crisis that caused an economic crisis. In June, there were 15 milllion fewer jobs than before the virus started spreading, while U.S. economic output may have declined by an alarming 30% annualized clip in the second quarter, according to Tom Barkin, president of the Federal Reserve Bank of Richmond. Perhaps the hardest-hit sector was the leisure and hospitality industry, where employment fell by 28% even as government relief kept many workers on the job longer than would have been possible otherwise, the Fed official said. Still, there’s something nearly magical about how some business leaders manage through the gloom and thrive in the midst of disaster. That has happened in this terrible pandemic, which caught much of the world by surprise. The following pages spotlight six North Carolina companies that have performed well in this challenging period. Some success involves simply being in the right place at the right time. Stuck at home and unable to travel, some families have invested in swimming pools and boats and spent more time on the internet and playing video games, creating upticks for Pool Builders Supply, Albemarle

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Boats, Bandwidth and Epic Games. Demand for cleanliness has spurred growth at Enviro-Master. Some large, stable businesses are skilled at seizing opportunities when the chips are down. Parkdale Mills, which has a century-old textile manufacturing history, landed some huge federal contracts to help the health care industry fight the coronavirus. Dozens of other N.C. companies made similar pivots (see Sock It To ‘Em, Page 23). At midsummer, the economic impact of the coronavirus appeared dependent on how long it takes pharmaceutical researchers to develop effective vaccines or therapeutic treatments, Barkin told the Charlotte Rotary Club on July 14. “The health of the economy is all about confidence,” he said, citing a national survey of chief financial officers at large companies that showed declining optimism. The CFOs doubt that U.S. employment will reach pre-crisis levels until the end of 2021, he said. Unprecedented federal stimulus programs and a reluctance to venture out and spend helped push the U.S. savings rate to a remarkable 23% in May, versus a typical level of 7% or 8%, Barkin said. “There’s a lot of money in people’s pockets once confidence returns.” Meanwhile, these six companies aren’t waiting around for good times to restart.

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BANDWIDTH

Te l e c o m m u n i c a t i o n s s o f t w a r e Raleigh Ye a r f o r m e d : 1 9 9 6 CEO: David Morken

orking from home has caused a boon in business for Bandwidth. The telecommunications and internet services provider grew its new customer base by 34% during the first quarter from a year earlier, and its computer platform as a service (CPaSS) revenue spiked 31% during the period, fueled by the transition to remote working. Bandwidth’s software powers application interfaces for video-conferencing services, including Zoom and Skype, which have become vital resources for many telecommuters. The company’s top five telemeeting clients saw a 66% increase in usage during March, compared with the average in the first two months of the quarter. But Bandwidth was

doing well even prior to the outbreak. The company reported gross profit of $32.2 million in the first quarter, compared with $24.6 million a year earlier, and revenue jumped 29% to $68.5 million. The company’s shares have more than doubled since Jan. 1 to about $122, placing the company’s market value at $2.9 billion. Founder and CEO David Morken has Bandwidth playing an active community role. In June, it partnered with K4Connect, a Raleigh company that develops technology for older adults and individuals with disabilities, to create a COVID-19 helpline providing community information for senior-living centers. Bandwidth is planning a $100 million expansion that will add 1,165 jobs.

ENVIRO-MASTER Sanitation services Charlotte Ye a r f o r m e d : 2 0 0 9 CEO: Pat Swisher

ith a spotlight on sanitation, commercial cleaning-service franchiser Enviro-Master is seeing its business soar. The company, founded by CEO Pat Swisher, franchises hygiene and disinfection services for restaurants, rest stops, airports and other businesses. Its restaurant customers took a big hit during the start of the pandemic, causing a 30% to 40% decrease in revenue, Swisher said in an April interview with Yahoo Finance . But the company quickly rebounded with growing demand from grocery stores, pharmacies, doctor’s offices, hospitals, nursing homes and other essential businesses. As of mid-April, Enviro-Master says it added 5,000 essential-services businesses to its customer base. A key to the growth is the company’s electrostatic sprayer that adds a

positive charge to disinfectant as it is dispelled, causing the chemical to stick to surfaces more effectively. Enviro-Master says its “Virus Vaporizer” has proven effective on norovirus, hepatitis, influenza and other airborne diseases. The company is buying 20,000 gallons of disinfectant and sanitation liquid monthly to keep up with demand. “I believe we’re perfectly positioned to take advantage of this situation,” Swisher told Yahoo. “We’ve earned the trust of a lot of blue chip companies in America.” EnviroMaster is among the largest cleaning services in the U.S., booking more than $60 million in revenue annually across its roughly 80 franchises, which serve more than 30,000 businesses weekly.

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EPIC GAMES

Video gaming, software developer Cary Ye a r f o r m e d : 1 9 9 1 CEO: Tim Sweeney

pic Games has made social distancing seem not so distant. The creator of the popular Fortnite video game has been busy hosting virtual-meetups, concerts and movie nights for its 350 million registered players. Rapper Travis Scott and EDM artists Dillon Francis, Steve Aoki and deadmau5 have been some of the headliners for Fortnite’s live concerts. In June, Epic started Fortnite Movie Nites, screening popular films such as Inception, Batman Begins and The Prestige. But Epic’s biggest leaps go beyond online parties and players racking up 3.2 billion hours of Fortnite gameplay in April alone. The Epic Games Store, its online marketplace to buy and download PC games, reached 108 million users and has generated $680 million in revenue since its release in December 2018, ranking it among the most popular marketplaces for computer gamers. Epic is also involved in the next generation of consoles, unveiling Unreal Engine 5 in June. The company’s 3D animation software is being used to develop games for Playstation and Xbox, and the company is working with dozens of develop-

ers using the technology for games to be released over the next few years. Hollywood pros are also increasingly using Unreal to produce real-time visual effects, after its success during filming of Disney’s The Mandalorian. The product’s ability for multiple people to collaborate on a project remotely has been a major tool during the film industry’s shutdown. All this is making CEO Tim Sweeney and his investors very valuable: Epic’s enterprise value was estimated at nearly $17 billion after a $750 million funding round in June.

Art from Epic’s Unreal Engine demo

PARKDALE MILLS Ya r n s p i n n i n g , co t t o n s wa b s Gastonia Ye a r f o r m e d : 1 9 1 6 C E O : A n d e r s o n Wa r l i c k

s the nation’s largest yarn spinner and cotton-swab maker, Parkdale is helping the nation’s first responders stay safe amid the coronavirus pandemic with a big boost from the government. The company has received more than $1.1 billion in federal contracts, making it North Carolina’s biggest contractor for emergency coronavirus supplies, and one of the nation’s largest. In April, Parkdale Mills signed a $531.9 million contract with the Federal Emergency Management Agency to produce 60 million reusable medical gowns. The company, led by CEO Andy Warlick, signed more contracts in May and June totaling about $66 million to make millions of masks. The company also spearheaded an effort in March to build a coalition of nine textile manufacturers, including Winston-Salem-based Hanesbrands, to ramp up supply chain production to

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churn out 10 million medical masks per week. Additionally, Parkdale’s Ohio-based subsidiary U.S. Cotton partnered with the Food and Drug Administration and the Gates Foundation to develop and mass-produce synthetic swabs for front-line coronavirus tests. U.S. Cotton has received about $579 million in contracts for swabs and similar supplies for test kits, which are produced at a Cleveland plant. The government work helped Parkdale limit layoffs at its 25-plus U.S. factories, Executive Vice President David Warlick told the Charlotte Business Journal. “This has been a great opportunity for our company and our great employees but also for the American textile industry,” he said. Andy Warlick is a director of the Coalition for a Prosperous America, a Washington, D.C., nonprofit that advocates for reforming U.S. trade policy to better support U.S. businesses.

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ALBEMARLE BOATS Boat manufacturer Edenton Ye a r f o r m e d : 1 9 7 8

President: Dell Murphy

t’s a good time to be making and selling boats. With travel restricted by fear of the spreading virus, many families “are electing to redirect these dollars into a boat that can be enjoyed closer to home and throughout the season,” says Burch Perry, general manager of Albemarle Boats. Low interest rates have also made it a good time to sell higherpriced products, he adds. The company owned by Wallace-based Murphy Family Ventures sells custom-made boats that retail from $200,000 to $1.2 million, with an average sale of about $400,000. While Albemarle’s business is benefiting, the biggest impact during the pandemic has involved lower-priced boats. “My understanding from some dealers is that they are out of inventory of boats in the $100,000 price range,” Perry says. At Albemarle, the typical buyer is a 54-year-old business owner or professional who is an experienced boater and lives between New Jersey and South Carolina. Perry has led sales at the company since 1995. The Murphy family’s purchase in 2015 solidified Albemarle’s finances and prompted new product de-

velopment and a long-term mindset, he says. “We have more than doubled our workforce [to 65] in the five years to meet this increased demand.” As for the impact of the coronavirus, “it’s absolutely been a good thing for the industry overall.”

Custom Carolina Edition of the 41

POOL BUILDERS SUPPLY Swimming pool equipment Charlotte Ye a r f o r m e d : 1 9 7 6

Owners: Taryn Springsteed, Matt Morgan

ven during a pandemic, people in the South need ways to beat the summer heat. Pool Builders Supply says a solid economy prior to coronavirus combined with a lack of open beaches and other options has translated to major demand for the familyowned equipment distributor. “As we all know, many people feel safe at home,” says Tayrn Springsteed, second-generation vice president of the company. Olen and Betty Morgan founded the business in 1976 and it’s now led by Springsteed and her brother, Matt Morgan.

“With children out of school in early spring, swimming pools were great entertainment,” Springsteed says. Pool Builders has seen an increase in orders across its product line, from above-ground to high-end, in-ground backyard pools, but declined to provide revenue details. The company has invested in new technology and opened several new distribution centers because of increased demand, she says. It has about 160,000 square feet of manufacturing space across nine locations in five states across the Southeast.

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innovative lighting was the shining star of cree for decades. now, making parts used in hot new cars and cutting-edge mobile phones provides the durham company’s glitter.

t Durham-based Cree, a light went on with the arrival of new CEO Gregg Lowe in September 2017. More accurately, a light went off when the veteran semiconductor-industry executive succeeded Chuck Swoboda, who helped Cree grow from $6 million in sales to about $1.5 billion during a 24-year run, including the last 16 as CEO. Lowe immediately began a strategic review that would prompt a sale of its LED lightbulb business 18 months later. Lowe put his chips elsewhere, on nascent but promising markets for electric vehicles and the 5G technology standard for mobile phones. Lowe landed at a Triangle company known as a technology pioneer whose achievements included commercializing the world’s first blue light-emitting diode (LED) in 1989. That advance led to creation of LED-based electronic displays that could employ the full color spectrum and light up hotels, convention centers, gas stations and many other venues. Perhaps Cree’s most promising application for LEDs also carried the potential to turn its relatively obscure name into a major international brand: Replacing the centuries-old incandescent lightbulb. Blue LEDs made it possible to deliver a brighter, whiter light while significantly reducing power demand. They were expensive but long-lasting, and a steadily declining price prompted more uses, both industrial and residential.

B U S I N E S S

Cree_August 2020.indd 52

N O R T H

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7/20/20 3:15 PM

PHOTOS COURTESY OF CREE, CHUCKSWOBODA.COM

In May 2015, after years of growth, research and development, and a bumpy financial performance, Cree and Swoboda were ready to redouble the emphasis on lighting and LEDs. To fund the plan, Swoboda announced a spinoff of Cree’s semiconductor-manufacturing unit called Wolfspeed. The business then had annual revenue of $124 million primarily from making semiconductors for managing power systems and radio-frequency devices. The more mature lighting and LED units were much larger, with yearly turnover of $770 million and $550 million, respectively. Shortly after making its spinoff plans, Cree received several offers to buy Wolfspeed outright, a hint of the unit’s value. Swoboda canceled the spinoff plan and put the unit up for sale. In July 2016, the company inked an $850 million sale to German semiconductor maker Infineon Technologies, a spinoff of Siemens that specializes in the automotive industry. But regulators at the Committee on Foreign Investment in the U.S., a federal agency empowered to veto the sale of U.S. technology companies to foreign entities, had different ideas. CIFUS nixed the transaction, and it was terminated in February 2017 for reasons that haven’t been disclosed. Three months later, Swoboda said he was leaving Cree by the end of the year. “My decision to change my work-life balance follows a recent medical issue, which was resolved, and which caused me to reevaluate my priorities,” according to a press release. Cree’s board was ready for a change. In a statement, lead director Robert Ingram said Swoboda and directors “agree that now is the right time to accelerate the process to identify a new CEO to lead Cree and further grow our businesses.” Ingram, 77, is a former CEO of pharmaceutical giant Glaxo Wellcome who has served as a director, investor and adviser to many Triangle companies. He is no longer on Cree’s board. Swoboda’s departure thrilled investors, who had grown disenchanted with Cree’s sluggish stock performance and were skeptical of plans to go head-to-head against bigger competitors including Asian-based companies with government backing selling relatively low-margin lightbulbs. In the two days after Swoboda’s move was announced in May 2017, Cree’s stock jumped 12% to about $24.50. It’s not that the veteran Cree CEO hadn’t created a successful business. “Cree monetized the core technology around the LED the best that they could,” says Jed Dorsheimer, an analyst with Vancouver, British Columbia-based Canaccord Genuity. But, he adds, “The decision to vertically integrate was a risky one in

Ex- CEO Chuck Swoboda led Cree for 16 years as it became a leader in light-emitting diode (LED) lighting and products.

a market dominated by state-owned enterprises and companies like GE.” To give Cree a fresh start, the board recruited Lowe, who had worked at Dallas-based Texas Instruments for 28 years through 2012. He had been considered a potential CEO of the electronics giant until he got the top job at Freescale Semiconductor that year. The Austin, Texas-based company was spun off by Motorola a decade earlier, then was acquired by Blackstone Group in 2006. It went public a year before Lowe’s arrival. A Cleveland native and electrical engineering graduate of Rose-Hulman Institute of Technology in Terre Haute, Ind., Lowe was the top exec for three years at Freescale. The company had about $5 billion in annual revenue when it was acquired by Netherlands-based NXP Semiconductors for about $12 billion in December 2015.

Semiconductors, such as this recently released Cree model, have driven the electronics industry since the 1960s.

A year and a half later, Lowe moved to North Carolina to run Cree. His first task was taking a close look at the competitive position of Cree’s three primary business

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CEO Gregg Lowe has Cree positioned as a key supplier for electronic parts used by Tesla, the electric-vehicle maker.

lines: lighting, LEDs and silicon carbide. “We spent the first six months doing analysis,” he says. “Where can we be a clear winner? We thought we had tremendous differentiation with silicon carbide and our Wolfspeed business.”

Indeed, silicon carbide is for Cree what ground beef is for McDonald’s: the essential ingredient. Founded in 1987 by engineers out of N.C. State University, the company grew to be a global leader in the obscure field of substrates, the materials used to fabricate microchips, radio-frequency processors, and other electronic components that are used in products such as cellphone base stations, the power grid and, perhaps most important, electric cars. While most substrates have been silicon based, Cree’s expertise lies in a different corner of the market, silicon carbide, where its market share tops 60%. Silicon carbide-based products offer some technical advantages but are generally more expensive to produce. This was a problem in the lightbulb business where the superior properties were often trumped by the lower costs of other materials. But cost is less of an issue with more expensive, value-added products, including electric vehicles.

B U S I N E S S

Cree_August 2020.indd 54

N O R T H

Lowe’s arrival in Durham coincided with increasing headlines about electric vehicles, aided by Tesla founder Elon Musk’s nonstop hype for his revolutionary cars. Cree’s new CEO, who gained lots of auto-sector knowledge from his time at TI and Freescale, shares the view that the industry is on the verge of a long run of dynamic growth as consumers opt for electric vehicles over traditional combustion engines. In May 2019, Lowe made a historic shift in Cree’s strategy, selling the LED lighting fixtures business to Sycamore, Ill.-based Ideal Industries for $225 million, with a potential for $85 million more if sales are strong. The move, which did not include the LED chips and components unit, left Cree “well positioned as a more focused semiconductor leader,” Lowe said at the time. “Cree’s technologies are at the forefront of the automotive industry’s transition to zero-emission electric vehicles, the telecommunications industry’s move to faster 5G networks and the continued ramp up of LEDs for specialty applications.” The transaction, Lowe said, would provide significant resources to help accelerate Wolfspeed’s growth. The bet seems to be paying off as the world shifts to electric vehicles, just as Musk predicted. About 2.1 million electric vehicles were sold in 2019, accounting for 2.8% of the global market and a 40% increase from the previous year, according to the International Energy Agency. By 2024, they are expected to make up about 5% of the global car market, then 20% by 2030, by Lowe’s estimate. “EV is the biggest opportunity we have,” he says. Analysts at Canaccord are more bullish, projecting that as many as 180 million battery electric vehicles will ship cumulatively worldwide by 2030. Globally, car companies and their suppliers have announced more than $300 billion in electric vehicle investments, Cree says. Its products also show up in fast chargers, a critical piece of the infrastructure needed to make the vehicles practical.

PHOTO COURTESY OF CREE, TESLA.COM

Tesla Roadster

C A R O L I N A

7/20/20 3:15 PM

BUMPY RIDE Cree shares waxed and waned during CEO Chuck Swoboda’s 16-year tenure as investors expected dramatic growth that didn’t pan out. ▼

Shares have gained more than 150% during CEO Gregg Lowe’s three years in Durham.▼

share price

$100

18 20

17 20

source: Yahoo Finance

Had Cree sold Wolfspeed three years ago, it would be in a much different place; Wolfspeed’s strength in silicon carbide has positioned the company to take advantage of these changes, Dorsheimer and other analysts say. The key concerns for electric vehicle customers are how far they can travel between charging sessions and their price, in that order. While silicon carbide is more expensive, it allows manufacturers to extend the range of their vehicles, which keeps customers happy. Dorsheimer cites an example from a few years ago when Tesla added $3,000 worth of components to its cars, resulting in a 20% gain in the overall mileage of the Model S, which starts at about $75,000. While silicon carbide was just one part of the advances included in Tesla’s new battery-management system, it was critical to improving performance. Tesla was able to charge as much as $15,000 more for the added range, according to Dorsheimer. “It’s a very clear value proposition.” Lowe trumpets the cost-value proposition, too, pointing to a Goldman Sachs Group study that concluded that “every incremental dollar invested in silicon carbide in an EV returns from $3.50 to $7.00.” Cree’s products typically turn up in subsystems — products like powertrains that are built by suppliers including STMicroelectronics, ZF Products and Infineon Technologies — that are in turn sold to Tesla, Volkswagen and other manufacturers that do the final vehicle assembly. While

Cree won’t name which automotive companies use its products, Dorsheimer says that ST is Cree’s biggest customer for silicon carbide wafers, and that Tesla is ST’s biggest customer. The bottom line: Cree is plugged into the automotive industry’s most innovative, fastestgrowing player, which enjoyed a market value of more than $750 billion in mid-July. That was about 10 times the combined valuation of Ford and General Motors. Cree’s products are likely to continue to take market share. A Canaccord report notes, “As technology accelerates, certain electric systems require faster, smaller and more efficient design, and [silicon-carbide]-based power electronics seem to be at the prime of development to occupy the niche, where traditionally established materials can no longer keep up.” This is true not only for cars, but for buses and trucks as well. In June, Cree announced a deal with Zhengzhou Yutong Group, a Chinese manufacturer of electric buses, to use Cree’s products. It’s the first use of silicon carbide in a bus in China.

As if hanging around Tesla isn’t enough, Cree also has big potential in the exploding market for 5G, the fifthgeneration technology standard for cellular networks. The big mobile telecoms started deploying 5G last year, and some experts predict as many as 1 billion users will

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be on the network by 2023. Here again, Cree is well positioned. Its offering — gallium nitride radio-frequency devices — has a number of technical advantages seemingly tailor-made for 5G, including wider bandwidths, greater efficiency at higher frequencies, and a smaller footprint for base stations. Unfortunately, politics have slowed Cree’s prospects to book revenue from sales in the giant, growing Chinese market. China’s Huawei, which has driven much of the growth in 5G, is a key target of President Donald Trump, who views the government-supported telecom as a threat to national security. He’s blocked U.S. companies from doing business with Huawei and pressed other nations to take similar action. With its centralized economy, China has successfully promoted the rollout of 5G and the availability of 5G phones. In the U.S., the effort has been more fragmented and slower. Analysts at Swedish telecom manufacturer Ericsson expect North America to catch up in a year

Cree’s silicon-carbide-based Wolfspeed semiconductor unit is accelerating. Except for regulators, it would have been sold in 2016.

Gross margin

2019

$538 (million)

$259 (million)

48%

2018

328

159

2017

221

104

Gross profit

Gross margin

2019

$542 (million)

$150 (million)

28%

2018

596

158

2017

550

152

B U S I N E S S

Cree_August 2020.indd 56

Gross profit

N O R T H

or two and are projecting that 75% of North American cellphone users will convert to 5G by 2025. For now, however, China is the biggest market, and the inability to sell there is hurting U.S. suppliers like Cree. As a result, Cree has scaled back its expectations for the technology. Cree still has plenty of growth opportunities in electric vehicles and, to a lesser extent, power management for the power grid through customers such as Switzerland’s ABB, which has a big joint-venture operation in Raleigh with Japan’s Hitachi. Such growth potential sparked Cree’s plans to build the world’s largest silicon carbide manufacturing facility near Utica, N.Y. It had originally been slated for Cree’s Durham campus, but the Empire State provided an astounding $500 million in incentives for the $1 billion plant, which was announced last September. Fortunately for North Carolina, the company is also adding 400 jobs at a “mega materials factory” in Durham, expanding its silicon carbide production capacity by a factor of 30. The goal is to triple Wolfspeed revenue from about $500 million to $1.5 billion over the next three years. The expansion should result in lots of job opportunities for engineers, skilled technicians and other support staff in the Durham area. Wall Street is on board with the strategy, based on Cree’s stock performance. Shares traded at about $64 in mid-July, having increased by more than 150% since Lowe arrived. The S&P 500 Index gained about 30% in the same period. There’s more to come, Lowe says. “If you believe in electric cars, if you believe range [for those cars] is important, if you believe in silicon carbide, you have to believe in us.” ■

PHOTO COURTESY OF CREE

Cree has long been a market leader in the use of silicon carbide, a compound that conducts heat better than silicon.

C A R O L I N A

7/20/20 3:16 PM

TOP 50

P U B L I C C O M PA N I E S

A few ups, a lot of downs The year of the coronavirus has been a battle for many N.C. public companies.

olatility returned with a vengeance to the stock market over the last year, and not just thinly traded small-capitalization companies, our annual look at North Carolina’s 50 biggest public companies shows. Six of the 10 biggest companies reported market value gains or declines of 20% or more over the year ending June 30, versus two in the previous year. But that’s what happens when a global pandemic strikes during what many expected to be the final innings of a long bull market. Top performers with big market value gains included Bandwidth, up 74%; Old Dominion Freight Line, up 67%; and Qorvo, 61%. They were the exceptions. Twenty-one of the Top 50 companies saw their values decline more than 20% over the last year, compared with nine a year earlier. The big decliners included CommScope, Aerie Pharmaceuticals and Tanger Fac-

tory Outlet Centers, which each experienced decreases of more than 45%. A few names have left the annual roster. Red Hat departed following its $34 billion acquisition by IBM. BB&T is now Truist Financial following its merger with SunTrust Banks. Speedway Motorsports went private last September in a deal valuing the company at $800 million. Primo Water was acquired by Tampa, Fla.-based Cott, which promptly renamed itself Primo Water. This year’s newcomers include PPD, which completed its IPO in February. Ingersoll Rand was spun off from its Ireland-based parent, Trane Technologies. Paper manufacturer Glatfelter is relocating its headquarters from York County, Pa., to Charlotte later this year. Financial data was provided by Capital Investment Cos. of Raleigh. Stock market performance is based on the June 30 market close.

Best five-year returns

Worst five-year returns

Old Dominion Freight Line

275%

CommScope

(73)%

LendingTree

268

BioCryst Pharmaceuticals

(68)

PRA Health Sciences

168

Cornerstone Building Brands

(60)

SPX

130

Hanesbrands

(58)

Cree

127

Tanger Factory Outlet Centers

(56)

Lowe’s

114

BioDelivery Sciences International

(45)

Best one-year returns

Worst one-year returns

ChannelAdvisor

80%

Aerie Pharmaceuticals

(50)%

Bandwidth

CommScope

(47)

Qorvo

Precision Biosciences

(37)

Ingles Markets

LendingTree

(31)

Lowe's

Kontoor Brands

(30)

Sonic Automotive

Curtiss-Wright

(28)

A U G U S T

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TOP 50 P U B L I C C O M PA N I E S 2020

2019

Company, Ticker, HQ

Industry

Bank of America, BAC, Charlotte

financial services

Lowe’s, LOW, Mooresville

home-improvement stores

Honeywell, HON, Charlotte

diversified holding company

Duke Energy, DUK, Charlotte

utilities

Truist Financial, TFC, Charlotte

financial services

Iqvia Holdings, IQV, Durham

pharmaceutical services

Old Dominion Freight Line, ODFL, Thomasville

trucking

Laboratory Corp. of America, LH, Burlington

medical testing

Martin Marietta Materials, MLM, Raleigh

building materials

Qorvo, QRVO, Greensboro

semiconductors

Nucor, NUE, Charlotte

steel

Ingersoll Rand, IR, Davidson

industrial goods

Advance Auto Parts, AAP, Raleigh

specialty retail

Dentsply Sirona, XRAY, Charlotte

medical supply

PPD, PPD, Wilmington

health care services

Albemarle Corp., ALB, Charlotte

chemicals

Cree, CREE, Durham

semiconductors and LED lighting

PRA Health Sciences, PRAH, Raleigh

pharmaceutical services

Syneos Health, SYNH, Raleigh

pharmaceutical services

Sealed Air, SEE, Charlotte

containers and packaging

Premier, PINC, Charlotte

health care services

First Citizens BancShares, FCNCA, Raleigh

financial services

Hanesbrands, HBI, Winston-Salem

apparel

Highwoods Properties, HIW, Raleigh

real estate

LendingTree, TREE, Charlotte

financial services

Curtiss-Wright, CW, Charlotte

aerospace and industrial equipment

Bandwidth, BAND, Raleigh

software

Brighthouse Financial, BHF, Charlotte

financial services

Coca-Coca Consolidated, COKE, Charlotte

soft drinks

Extended Stay America, STAY, Charlotte

hotels

SPX, SPXC, Charlotte

industrial equipment

BMC Stock Holdings, BMCH, Raleigh

wholesalers

CommScope Holding, COMM, Hickory

telecommunications equipment

Jeld-Wen Holding, JELD, Charlotte

building products

SPX Flow, FLOW, Charlotte

industrial equipment

Sonic Automotive, SAH, Charlotte

car dealerships

Kontoor Brands, KTB, Greensboro

apparel

EnPro Industries, NPO, Charlotte

industrial equipment

G1 Therapeutics, GTHX, Durham

pharmaceuticals

Ingles Markets, IMKTA, Asheville

grocery stores

BioCryst Pharmaceuticals, BCRX, Durham

pharmaceuticals

Cornerstone Building Brands, CNR, Cary

industrial goods

First Bancorp, FBNC, Troy

financial services

Glatfelter, GLT, Charlotte

paper/engineered products

Aerie Pharmaceuticals, AERI, Durham

pharmaceutical services

Tanger Factory Outlet Centers, SKT, Greensboro

shopping centers

Live Oak Bancshares, LOB, Wilmington

financial services

ChannelAdvisor, ECOM, Morrisville

software

BioDelivery Sciences International, BDSI, Raleigh

pharmaceutical services

Precision BioSciences, DTIL, Durham

pharmaceuticals

B U S I N E S S

N O R T H

USE THIS Top50 Public Co._lists_Aug 2020 .indd 58

C A R O L I N A

7/20/20 3:17 PM

Market value

Price and stock performance

Net income

Dividends

6/30/20 value (billion)

Change from 6/30/19

Stock price

5-year total return

1-year total return

YTD total return

Latest fiscal year (million)

Change from previous year

6/30/20 yield

$206

(25.1)%

$23.75

53.1%

(15.5)%

(34.0)%

$27,430.0

(3)%

3.0%

102

29.1

135.12

114.1

42.1

11.2

4,281.0

1.6

102

(20.1)

144.59

59.9

(7.8)

(20.8)

6,143.0

(9)

2.4

(8.5)

79.89

38.3

10.7

(13.4)

3,748.0

4.7

34.5

37.55

(34.8)

3,224.0

3.6

(14.8)

141.88

95.4

(11.8)

(9.3)

191.0

(26)

0.0

66.9

169.59

275.1

72.4

32.1

615.5

0.4

(5.5)

166.11

37.0

(3.9)

(0.8)

823.8

(7)

0.0

(10.8)

206.57

52.4

(6.2)

(25.6)

611.0

1.1

60.8

110.53

37.7

65.9

(4.7)

334.3

151

0.0

(25.6)

42.23

13.3

(20.4)

(24.5)

1,271.1

(46)

3.8

0.0

28.12

0.0

(25.9)

159.1

(41)

7.5

9.9

(10.6)

142.45

(9.6)

(6.6)

(2.8)

486.9

0.4

9.7

(29.1)

44.06

(9.8)

(20.3)

(22.9)

262.9

126

0.9

9.3

0.0

26.80

0.0

54.7

(43

0.0

8.2

10.4

77.48

52.2

19.5

5.6

533.2

(23)

1.9

6.4

8.2

59.19

127.4

5.4

27.3

(375.1)

(34)

0.0

6.2

(4.1)

97.29

167.8

(1.2)

(11.6)

243.0

0.0

6.1

14.6

58.25

45.2

14.1

(2.1)

131.3

441

0.0

5.1

(23.3)

32.85

(30.0)

(15.9)

(16.2)

263.0

1.9

4.5

(9.8)

34.28

(10.9)

(12.5)

(5.9)

284.1

724

0.0

4.1

(19.5)

405.02

56.6

(8.4)

(24.8)

457.4

0.4

3.9

(36.9)

11.29

(57.9)

(18.5)

(24.1)

600.7

5.3

3.9

(9.6)

37.33

17.1

13.3

(24.0)

136.9

(20)

5.1

3.8

(30.1)

289.53

268.3

(31.0)

(5.7)

17.8

(82)

0.0

3.7

(31.4)

89.28

27.3

(27.5)

(37.8)

307.6

0.8

3.0

73.9

127

0.0

69.3

97.8

2.5

(86)

0.0

2.6

(38.4)

27.68

0.0

(24.3)

(29.4)

(740.0)

(186)

0.0

2.1

(23.3)

229.19

55.0

(21.7)

(19.0)

11.4

157

0.4

(37.6)

11.19

(18.2)

(9.1)

(26.3)

69.7

(38)

6.3

1.8

26.6

41.15

130.4

25.8

(19.0)

65.3

(20)

0.0

1.7

19.3

25.14

28.6

18.4

(12.5)

109.8

(8)

0.0

1.6

(46.5)

8.36

(72.6)

(46.9)

(40.5)

(929.5)

(6,868)

0.0

1.6

(24.3)

16.11

0.0

(24.1)

(31.6)

63.0

(56)

0.0

1.6

(10.3)

37.44

0.0

(10.6)

(25.0)

(95.1)

(316)

0.0

1.4

36.2

31.92

39.4

42.3

0.8

144.1

179

1.3

(36.2)

17.81

0.0

(30.4)

(58.4)

96.7

(63)

9.4

(23.6)

49.19

(6.0)

(15.7)

(27.9)

38.3

2.1

(20.3)

24.26

0.0

(20.9)

(7.8)

(122.4)

(44)

0.0

38.5

43.07

(2.9)

49.1

(8.0)

81.6

(16)

1.5

0.84

102.8

4.75

(68.2)

26.3

39.7

(108.9)

(8)

0.0

0.76

3.4

6.05

(59.9)

3.4

(25.9)

(15.4)

0.0

0.72

(32.7)

25.08

62.9

(25.2)

(37.6)

92.0

2.6

0.71

(4.8)

16.05

(15.3)

10.4

(11.6)

(21.5)

3.3

0.69

(49.3)

14.76

(16.4)

(49.9)

(38.0)

(199.6)

0.0

0.67

(56.3)

7.13

(56.2)

(47.2)

(52.1)

87.9

101

19.9

0.59

(14.4)

14.50

0.0

(12.3)

(23.8)

18.0

(65)

0.8

0.45

82.8

15.84

32.6

79.6

73.5

3.5

146

0.0

0.44

(5.1)

4.38

(45.0)

(5.7)

(29.0)

(5.3)

0.0

0.43

(35.1)

8.33

0.0

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(36.6)

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GREEN AT THE TOP

Outliers aside, the state’s public company CEOs mostly earn $5 million to $11 million a year.

endingTree’s Doug Lebda, who started his business in 1996 and created a leading online lending marketplace brand, tops a ranking of North Carolina’s highest-paid CEOs based on the last three years of compensation. Lebda’s total take averaged nearly $37 million annually, mostly tied to the Charlotte-based company’s stock, which gained about 50% over the three years ending June 30. Shares shot up in 2017-18 but declined by one-third in 2019. Business North Carolina compiled a list of highest-paid public company CEOs ranked by average compensation over the last three years, which includes base salaries, stock options, bonuses and performance-based incentives, as reported in companies’ annual proxy statements. We used two-year averages for those holding their posts for fewer than three years. Eleven CEOs earned an average of more than $10 million per year, including Ari Bousbib at Iqvia Holdings, Bank of America’s Brian Moynihan, Darius Adamczyk of Honeywell and Duke Energy’s Lynn Good. Shares of Iqvia, a

clinical research and health data company, also returned about 50% over the three years, while the other three large companies underperformed the S&P 500 Index, which advanced about 30%. Old Dominion Freight Line was the best performing N.C. stock over the last three years, gaining nearly 170%. Gregg Gantt, who succeeded David Congdon as CEO in 2018, was paid $7.3 million in his first full year on the job. Coca-Cola Consolidated’s Frank Harrison III and Bandwidth founder David Morken are the longest-tenured CEOs, the only executives who have led their company since the ‘90s. Susan DeVore of Premier and Lynn Good at Duke Energy are the sole female CEOs, while Marvin Ellison of Lowe’s and Marvin Riley of EnPro are the only Black top execs. One CEO earned less than $1 million last year: James “Chip” Mahan of Wilmington-based Live Oak Bancshares. The list also includes median employee salaries and the ratio compared with CEO pay. Pharmaceutical and finance companies pay the highest median wages, according to company filings.

HIGHEST PAID CEOs Ranked by three-year average

CEO

Company

Doug Lebda LendingTree

Year became CEO

3 year average (million)

Last year's compensation (million)

Median staff pay

Ratio of CEO pay to staff pay

2008

$36.9

$96,957

22.1

118,891

186

Ari Bousbib

Iqvia Holdings

2016

25.5

Brian Moynihan

Bank of America

2010

23.5

94,256

276

Darius Adamczyk

Honeywell International

2017

18.7

20.5

69,513

295

2013

16.8

15.0

123,608

122

Lynn Good Duke Energy Marvin Ellison*

Lowe’s

2018

11.6

22,748

511

Gregg Lowe*

Cree

2017

10.5

45,940

227

Frank Harrison III

Coca-Cola Consolidated

1997

11.5

11.7

45,254

259

Donald M. Casey Jr. *

Densply Sirona

2018

11.4

50,861

223

Kelly King

Truist Financial

2009

10.9

11.5

101,421

113

Marvin “Eddie” Edwards Jr.

Commscope

2011

10.5

12,769

1096

C. Howard Nye

Martin Marietta Materials

2010

9.9

12.2

67,956

180

Edward “Ted” Doheny II*

Sealed Air

2018

9.0

55,804

161

Eric Steigerwalt

Brighthouse Financial

2016

8.7

8.5

150,678

Luther C. Kissam IV 1

Albemarle Corp.

2011

7.8

8.5

77,782

110

Thomas Greco

Advance Auto Parts

2016

7.6

7.7

19,463

395

Gerald Evans Jr. 2

Hanesbrands

2016

7.4

7,076 **

559

David Adams

Curtiss-Wright

2015

7.4

9.2

57,569

160

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Vincente Anido Jr.

Aerie Pharmaceuticals

2013

$7.4

$5.5

$178,887

Robert Bruggeworth

Qorvo

2003

7.4

44,708

179

Gary Michel*

Jeld-Wen Holding

2018

7.1

5.5

82,000

Alistair Macdonald

Syneos Health

2016

7.7

70,000

109

Colin Shannon

PRA Health Sciences

2010

7.2

66,630

107

Steven Tanger

Tanger Factory Outlet Centers

2009

6.9

6.6

12,954

507

2009

6.8

120,578

2015

5.9

7.6

62,953

121

2012

5.4

7.7

Susan DeVore Premier

7.7

Eugene Lowe II

SPX

David Simmons

PPD

Scott Baxter*

Kontoor Brands

2018

5.3

6.3

Greg Gantt

Old Dominion Freight Line

2018

5.2

7.3

81,583

Marcus Michael

SPX Flow

2016

5.1

4.9

51,651

Vicente Reynal

Ingersoll Rand

2016

4.5

5.5

61,496

David Flitman*

BMC Stock Holdings

2018

3.6

42,450

James Metcalf*

Cornerstone Building Brands

2018

3.6

46,453

John Stonehouse

BioCryst Pharmaceuticals

2007

3.5

2.3

136,642

David Smith*

Sonic Automotive

2018

3.3

4.3

57,100

Frank B. Holding Jr.

First Citizens Bancshares

2008

3.2

64,543

Herm Cukier*

Biodelivery Sciences International

2018

2.7

2.9

127,193

Mark Velleca

G1 Therapeutics

2014

2.2

213,060

Matt Kane

Precision Biosciences

2006

1.9

2.2

David Morken

Bandwidth

1999

1.7

2.3

86,926

Dana Stonestreet

HomeTrust Bancshares

2013

1.7

59,522

David Spitz

ChannelAdvisor

2015

1.7

1.5

97,305

Richard Moore

First Bancorp

2012

1.2

1.1

50,407

James Lanning

Ingles Markets

2016

1.2

17,119

2008

82,439

James “Chip” Mahan III Live Oak Bancshares *Fewer than three years in position

0.72

Kissam retired in June. Kent Masters is now CEO. Evans is retiring as CEO in August. Stephen Bratspies is his successor. 3 PPD went public in February. Data is from IPO filing. 4 Cukier was terminated in May. Jeff Bailey is interim CEO. 1 2

CEOs who have held their jobs for less than two years Year became CEO

Last year's comp (million)

Median staff pay

Multiple of CEO vs staff

Nucor

2020

$5.5

$87,573

218

Became CEO in January 2020

Adam Schechter

Laboratory Corp. of America

2019

4.6

41,834

314

Became CEO in November 2019

Bruce Haase

Extended Stay America

2019

4.0

24,483

168

Became CEO in November 2019

Marvin Riley

EnPro Industries

2019

2.6

50,645

Became CEO in July 2019

Ted Klinck

Highwoods Properties

2019

2.1

68,222

Became CEO in September 2019

CEO

Company

Leon Topolian

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GO WITH THE FLOW Coastal communities continue to welcome tourists despite the unprecedented challenges of coronavirus. The Outer Banks’ narrow and winding N.C. Highway 12 begins its Currituck County leg in Corolla and exits 18-and-ahalf miles south near Southern Shores and Wright Memorial Bridge. Most summers, the county welcomes about 500,000 tourists during the 10-week busy season. In 2018, visitor spending brought in about $234.2 million to the county, a 5.6% increase from a year earlier, ranking No. 23 in the state. With safer-at-home guidelines and an executive order requiring masks in public places, Currituck County and other officials along the N.C. shoreline anticipated a massive slump in activity this summer because of COVID-19. But coastal destinations have remained tourist hot spots despite the pandemic restrictions, and planned economic development — from multiuse neighborhoods to industrial parks — is continuing to move forward at a rapid pace. SPONSORED SECTION

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“This has turned out to be a phenomenal year, probably the best in a decade. [Tourists] did cancel their reservations back in March, but as time went on with people being stuck at home, they wanted to get out,” says Larry Lombardi, economic development director of Currituck County. “[Highway] 12 is jammed. It’s one way in and one way out, and we have a good possibility of passing last year’s numbers.” The 85 miles of shoreline that define the 11-city Crystal Coast is home to about 20 vacation rental companies and more than 100 independent restaurants that are all quickly learning to adapt, says Jim Browder, executive director of the Crystal Coast Tourism Development Authority. “I don’t think we’re ever going to see normal again. I think it’s going to be a good late summer and fall,” he says.“The bookings are strong going into August and September. Is it going to be enough to offset the losses of the [spring months]?

I can’t say that it will be. But we’re fortunate that our residents support local businesses.” Tourism brought nearly $613 million to New Hanover County in 2018. While lodging restrictions at Wrightsville, Carolina and Kure beaches were lifted by Memorial Day, inland attractions such as museums and performing-arts venues cling to virtual options. Outdoor hot spots such as Wilmington’s Battleship North Carolina and Fort Fisher State Historic Site in Kure Beach are open for outdoor exhibits, though indoor sites and museums remain closed. “Lifting lodging restrictions as summer kicked off will most certainly help to increase occupancy,” says Connie Nelson, public information director of the Wilmington and Beaches Convention & Visitors Bureau. “Another thing in our favor is that we have wide open spaces and are within driving distance of strong in-state A U G U S T

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Higher education also is adapting. The 661-acre UNC Wilmington campus is preparing for fall by implementing social distancing procedures in classrooms, labs, libraries, residence halls, dining areas and competition sites. Face coverings will be required and made available in classrooms and labs, and selective testing and contact tracing will be in place, according to Chancellor Jose Sartarelli. “The community and the university have continued to collaborate on many fronts and will continue to do so in the fall,” he says, adding that faculty and staff have gone “beyond the call of duty” to provide students with the best-possible environment. “Many functions and programs have been cancelled and will be cancelled but at the same time, new ones will be offered,” he says. “For example, an oncampus drive-in cinema. Research has been reduced significantly, and only now are we starting to authorize faculty to go back to their labs. International programs were all cancelled starting with spring and summer ones. Some plans are still in place for late fall.”

Downtown Alive in Wilmington closes local streets for four days a week to allow 11 restaurants to offer social-distanced outdoor seating. The initiative allows businesses to operate safely under pandemic conditions.

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EXPLOSIVE GROWTH

While coronavirus concerns are mandating innovation in educational needs and business operations during a rush of vacation spending, other areas — industry prospects, new housing growth — also are defining summer along the coast. Brunswick County has experienced significant growth over the last 12 years, and “this trend is not anticipated to change,” says Bill Early, executive director of Brunswick Business & Industry Development, which has two industrial parks of more than 1,000 acres ready for occupancy. “Our [proximity] to Interstate 140, I-40 and I-95 puts us in a central location on the East Coast to supply markets north-to-south and east-to-west. With continued growth and improvements taking place at the Port of Wilmington, Brunswick County is ideally situated to support international trade from both an import and export perspective. In essence, Brunswick County is the gateway to the world.” Brunswick BID promotes multiple sites, including warehouse buildings and proposed industrial lands. With Brunswick County adding nearly 32,000 residents over the last decade, “it is imperative that we strive to bring employment opportunities to our growing numbers,” Early says. “Our focus is on higher-paying manufacturing and distribution jobs. Those companies requiring heavy infrastructure will be more inclined to focus on the northern area, while companies not requiring natural gas and rail service may explore options in the central and southern sections of the county.” In the northernmost part of the state, Lombardi says coastline projects and inland activity are redesigning Currituck County. The College of the Albemarle Currituck’s Aviation Systems Technology programs appeal to students who “may want to stay or come back home to the local industries available to them,” he says. Nearby manufacturing jobs create a need for residential areas in the northern pocket of the county. Housing demand in Moyock is high, with 20 to 25 permits per

PHOTO COURTESY OF DOWNTOWN BUSINESS ALLIANCE

markets. While we are hopeful that the summer season will continue to be strong on the coast, it is too soon to predict how the summer will end up or what will be the overall COVID-era impact. For now, we have projected a 34% revenue shortfall for the CVB’s 2020-21 budget, which is funded solely by a portion of room occupancy tax collections.” To help businesses prosper, the city of Wilmington adopted Downtown Alive, a collaboration between the city of Wilmington, the Downtown Business Alliance of Wilmington, Cool Wilmington and Wilmington Downtown Inc. Streets near the waterfront will close to evening vehicle traffic Thursdays through Sundays until Labor Day to allow restaurants to expand outdoor seating, and businesses use display racks and serve food within the four-block area. In late June, 130 local small businesses were awarded $10,000 each through New Hanover County’s Small Business Economic Incentive Grant Program to help with COVID-19 adjustments to their daily operations. About 800 businesses applied for grants, including restaurants, bars, retail outlets and salons, medical offices and machine shops.

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month, and home lots near the Pamlico Sound are selling rapidly. “People are buying [home] lots, maybe in anticipation of the new bridge,” Lombardi says. “And actually, it’s a good time to build a home. Even with COVID-19, it hasn’t stopped. It’s crazy. I think it’s going to get crazier. People from the North drive through Moyock to get to the Wright Memorial Bridge, and a lot of them are looking to get away from big cities and, for the most part, we’re rural. Chesapeake, Norfolk and Virginia Beach are less than an hour away.” To accommodate the influx in new residents and tourists, planning for a mixed-use residential, commercial and entertainment destination is on the way. The phased construction of Currituck Station will be on 3,000 acres in Moyock and will include trails, open space, housing and retail. At least one Fortune 500 retailer has plans to set up shop at the development. A Unified Development Ordinance was approved in June to lay out plans for the development after land is rezoned from agricultural. “It’s planned for 30 years, but it could be fully built in 10, who knows?” Lombardi says. “People want to see some type of employment and commercial services up there instead of across the state line. We’ll be able to offer a variety of housing that attracts all ages — young, middle-aged, older.” Construction on the new MidCurrituck Bridge near Corolla has been rescheduled for summer 2021 because of N.C. Department of Transportation budget woes due to the pandemic. The $491 million, two-segment 7-mile toll road connector will provide a northern link to the mainland as well as a two-lane route over Maple Swamp. The bridge will also improve evacuation flow during hurricanes and storms. “I was speaking to a guy from Kitty Hawk, and he says anything [residential that’s] $750,000 and under is selling like crazy,” Lombardi says. “It’s mostly northerners coming down here from New Jersey, New York, Ohio, Maryland, Virginia. We have more than 1,700 housing lots, residential lots, projected over the next five to 10 years with developments SPONSORED SECTION

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already in the planning stages that have been approved and are on the books.” One of Lombardi’s key focuses is linking county manufacturing to Dominion Energy’s offshore wind project supply chain. Its wind farm, currently under construction about 27 miles off the coast of Virginia Beach, Va., is a vital economic development resource for the community.

The company has pledged 4,000 new jobs over the next decade with median pay for wind turbine technicians of $54,370. With a growing population and more than 3,200 skilled veterans living in Currituck County, “we have a trained workforce,” Lombardi says. “We have people who work in ship repair in Norfolk,

College of The Albemarle’s Aviation Systems Technology programs, available at its Currituck campus, offers training for an Aircraft Mechanic’s Certificate with airframe and powerplant maintenance diplomas.

Currituck Station is planned for 3,000 acres in Moyock and will include trails, open space, housing and retail.

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but we also have smaller companies that are second-level contractors for the shipyards. So we’re looking for our fair share.”

TOUTING TOURISM

To the south, Crystal Coast communities are seeing an influx in visitor spending from tourists around the country. “As early as mid-May, we were seeing visitors from Maine,” Browder says. “The bulk of our business comes from North Carolina, but that I-95 corridor is really strong. Rental homes are doing very well in terms of pace. On a percentage basis, we’re dominated by vacation rentals instead of hotels, because a lot of people would rather rent a house — especially if it’s a family — and have that isolation.” September’s crowd-drawing events include the Arts & Crafts Fall Show in Beaufort and the North Carolina Seafood Festival in Morehead City. City officials are taking it one day at a time, according to Browder. “Some events can be done with social distancing. I think from a tourism standpoint, people are being optimistic. I don’t think any place is going to open the floodgates and not protect themselves and their staff.” In Brunswick, Early says he is in the final stage of creating a “refresh” for Brunswick BID’s website. “Our messaging will focus on being a prime location to provide the business amenities that a company needs to be successful with talent, transportation and infrastructure while providing the lifestyle that corporate America seeks,” he says. His group’s Mid-Atlantic Industrial Rail Park and International Logistics Park, both on U.S.

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The Cape Fear River, which flows through Wilmington, is part of the Intracoastal Waterway, the East Coast passageway for recreational and small shipping boats.

Routes 74 and 76, are ready for occupancy. Mid-Atlantic is a CSX Select Site, and the International location is eligible for the N.C. Department of Commerce’s designated Tier 1 incentives because part of the land is in Columbus County. “While [they] are prime megasite locations within Brunswick County, we look at development potential throughout the entire county,” he says. “Target industries for Brunswick County include significant rail and heavy infrastructure manufacturing companies, warehousing and logistics, food processing and marine trades.” But visitor traffic is vital. And summer has brought a healthy dose of traffic to Brunswick County and its beaches. “We’re going to operate from an optimistic standpoint,” Browder says. “Looking into the fall months, I think we’ll

see more of a normal situation. We’ll be looking at protecting people, but each festival scheduled hopes to have a steady crowd. It will be nice to see more places open.” With the coast less than an eight hour drive from most northeastern states, many Northerners are opting to hop in their cars for a getaway rather than in a plane during the pandemic. “There’s no issue of social distancing on the beach, the nicer homes have pools and there’s delivery services for groceries,” Lombardi says. “People are coming out of the woodwork. And when it rains, they go to the shops and buy their knickknacks. We’re looking good. We’re very blessed, and we’re very fortunate.”

— Kathy Blake is a freelance writer from Eastern North Carolina.

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