October 2015 business journal by The Business Journal of Tri-Cities TN/VA

Sultans of Salve:

Crown Laboratories on a revenue growth roll Plus:

TCRA moving dirt for aesthetics and economic development

and

Buying local in the IT suite Crown Laboratories CEO Jeff Bedard, right, with Director of Finance Nick Crowe, center, and General Counsel James R. Lawrence III. Photo by Adam Campbell

OCTOBER 2015

$3.00 Volume 28 Number 2

bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

Having the heart of a 60-year-old is good.

Unless you’re 40.

Learn your heart’s age at MountainStatesHeartAge com You and your heart may not be the same age. Depending on your lifestyle, your heart could be older or younger than the rest of you. To get an idea of your heart’s health—and its age— visit MountainStatesHeartAge.com and answer some basic questions. Will your heart’s age be the same as your age? Will your heart be younger? Or will it be older? And what then?

The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

People. Trust. Experience.

We are making a difference in education.

Educate. Create. Innovate. Eastman believes in creating quality educational opportunities that help prepare and inspire the next generation to reach their potential. By leveraging our resources and partnerships, we are committed to innovative educational initiatives focused around science, technology, engineering, arts and math (STEAM) for today’s youth to enhance tomorrow’s workforce. We want to communicate business and industry needs to educators so they can translate those requirements to students. “This kind of information helps students become career and workforce ready,” says Tanya Foreman, Eastman’s education manager. “When business and education partner together, remarkable progress can occur.”

GEM4STEAM GEM4STEAM is a program that allows Eastman employees to serve as mentors for students in Eastman in Education partnership schools through numerous educational activities, including tutoring, counseling, classroom presentations, laboratory demonstrations, academic competitions and more.

MathElites + ScienceElites Eastman’s MathElites and ScienceElites programs partner with East Tennessee State University to provide local math and science teachers with professional development workshops and other educational tools geared towards creating and sustaining an innovative learning environment for students in the community.

Surplus equipment Since 1992, Eastman has donated computers, equipment, and supplies that it no longer needs to schools as part of the company’s ongoing effort to advance STEAM education. Recycling unused equipment that is still in good working condition helps the company further advance our environmental initiatives by reducing unnecessary waste.

www.Eastman.com.com/education EMN-GR-211 | 09/15

bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

INSIDE THIS EDITION

Business Journal The

of Tri-Cities Tennessee/Virgina

| COVER STORY

423.854.0140

12 Crown’s continuing rise

William R. Derby bderby@bjournal.com 423.979.1300

This Johnson City pharmaceutical company has a bumpy, if colorful, history. But a four-year upward trajectory looks set to continue.

Jeff Derby jderby@bjournal.com 423.306.0104

Crown Laboratories CEO Jeff Bedard, right, with Director of Finance Nick Crowe, center, and General Counsel James R. Lawrence III. Photo by Adam Campbell

Scott Robertson srobertson@bjournal.com 423.767.4904

| FEATURES

Jeff Keeling jkeeling@bjournal.com 423.773.6438

JA Street & Associates turns 30

Sarah Colson news@bjournal.com 423.854.0140

but the reasons for doing so are excellent.

Aesthetics, economic development driving TCRA’s latest moves Tri-Cities Airport focused as much on the ground as the skies these days

24 The right voice on the line

Industry veterans’ roadside assistance center, Allied Dispatch, tripling workforce as it begins its second year.

Jeff Williams jwilliams@bjournal.com 423.202.2240 Robin Williams rwilliams@bjournal.com 423.794.6938 Derby Publishing, LLC Graphics Director / Judd Shaw jshaw@bjournal.com 423.833.2726

“Buy local” needn’t exclude the IT suite you’d have to go national to get.

30 Mike Eddy joining BCS fold

CPA to lead Blackburn Childers & Steagall’s small business segment

| DEPARTMENTS

Periodicals postage paid at Johnson City, Tenn. and additional offices.

7 From the Editor

On the Move

8 Residential Real Estate

33 Awards & Achievements

9 FYI

36 Med Briefs

39 The Last Word

ISSN#10406360

POSTMASTER:

Please send addresses to

Business Journal of Tri-Cities, TN/VA 1114 Sunset Drive, Suite 2 Johnson City, TN 37604 Subscription per year $35.

The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

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bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

2014

Photos by Adam Campbell at Carnegie Hotel

Plus:

Celebrating a “Good” Long Run at Frontier Health

November 2014

$3.00 Volume 27 Number 3

and

bjournal.com

The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

Eastman Tops It Off The Business Journal of Tri-Cities TN/VA | November 2014

| FROM THE EDITOR

Business should back the gas tax I

t’s not set in stone yet that the Tennessee State Legislature will be asked to approve a hike in the gasoline tax in the coming year, but it should be. While we see most taxes as generally detrimental to business, the Tennessee gas tax is actually in need of being raised or replaced with something betterment of business in the volunteer state. And despite the fact that toll roads are more just (only direct users pay the fee for service, while those who don’t use the road are under no obligation to pay for it), the odds of Tennesseans approving a toll road model statewide are slightly lower than the odds that Donald Trump publicly admits he’s a democrat sent to sabotage the Jeb Bush campaign. So the gas tax hike is the simple, sound solution. Solution to what, you may ask? What it’s always been a solution to: paying for roads and bridges – both repair of existing infrastructure and construction of new byways. To date, the gas tax has served its purpose. Tennessee and bridges in America without incurring debt to do so. The problem isn’t that the gas tax is a bad system. It’s just that road prices have gone up while the amount of money wwcollected has gone down. We just need to tweak the rate. The current Tennessee gas tax rate is 21.4 cents per gallon. Each penny of that generates a little shy of $31 million in revenue. Let’s look at it in business terms. Imagine a key materials supplier to your manufacturing business had been raising its prices incrementally over the last 25 years while you held your prices steady, eating the cost increase rather than passing it on to your customers. In fact, let’s say that supplier has increased the price you pay for raw materials by 20 percent over the last 10 years alone. Most of us run on margins that wouldn’t allow us to eat that kind of increase for 10 quarters or 10 months, much less 10-25 years. Now let’s say that while you’ve held the line on price per unit, your sales volume has declined over the same period in which your materials cost has been rising. Eventually, you will be squeezed out of business unless you

another revenue stream. There comes a day of reckoning. This is exactly what has been happening to the state of Tennessee in regards to the gas tax. The Department of Transportation has had to do more with less every year as its costs have risen and revenues declined. Now, the day of reckoning is upon us. Barring a miracle, one of three things will happen: Tennessee will begin passing its costs on to the taxpayers of tomorrow by using debt to pay for road and bridge projects, Tennessee will raise the gas tax to pass its costs on to taxpayers of today, or Tennessee will begin losing jobs by telling roads to where they want to put a new factory – and by telling which their trucks carry product. Moving into a debt position just as interest rates are about to start rising is folly. Discouraging private investment and new jobs by failing to provide the services business depends on pushes the economy in exactly the wrong direction. A gas tax hike, however, would barely be felt by the vast majority of those paying it. The average price per gallon of regular 87 octane gas in the state of Tennessee the week of Sept. 27, 2015 was $2.00, according to AAA, which keeps a running tally of gas prices state-by-state on a weekly basis. 52 weeks prior to that the price per gallon for the same gas in the same state was $3.13. Some would argue that the price of gas could easily rise to that level again, leaving taxpayers with higher prices and higher taxes. That’s true. But we still would be paying less per gallon than we were 18 months ago, when the price per gallon was more than $3.50. By raising the gas tax the same amount that happens naturally in week-to-week market price swings, Tennessee could raise half a billion dollars and virtually no one would notice the change. Twice in the last six months (once in February, then again in April) the price of gas has risen more than 15 cents per gallon over a two-week period. The economy did not screech to a halt. Yet with each penny of gas tax generating about $31 million in revenue, a 16-cent increase would net $500 million. A gas tax hike would not be a big government shakedown of the taxpayers. It would merely be Nashville showing it understands the cost of doing business, and is willing to ask taxpayers to do their part in helping the state incentivize the creation of new jobs and private investment in Tennessee.

bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

| FEATURES August another double-digit growth month for Tri-Cities home sales The Tri-Cities housing market began a seasonal downshifting in August, but home sales were still firmly in record-setting territory. According to the Northeast Tennessee Association of Realtors’ August Trends Report, closings on previously owned, single-family homes posted their third straight month of double digit gains and fourth straight month of seven-year highs. 516 sales closed last month. The year-overyear sales pace rocketed to record levels in May with a 9.9 percent increase, followed by a 22.1 percent increase in June, 16.8 percent in July and 13.2 percent in August.

HOME SALES

AUGUST 2015 HOME SALES

- 10 EXISTING HOMES

JULY 2015 HOME SALES

JOHNSON CITY 60 / Average Price $209,633 74 / Average Price $215,401 62 / Average Price $202,891

KINGSPORT 56 / Average Price $169,942 63 / Average Price $184,401 41 / Average Price $151,930

BRISTOL, TN 27 / Average Price $148,556 32 / Average Price $119,824 24 / Average Price $140,878

BRISTOL, VA 14 / Average Price $134,493 16 / Average Price $97,292 13 / Average Price $117,477

ELIZABETHTON 16 / Average Price $110,194 8 / Average Price $183,019 13 / Average Price $107,754

GREENEVILLE 13 / Average Price $98,267 14 / Average Price $153,250 9 / Average Price $92,994

ERWIN/UNICOI 11 / Average Price $136,709 11 / Average Price $136,230 NOTE: NETAR city salesPrice as those made in a city’s high school zone. 11counts / Average $121,127

The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

AUGUST 2014 HOME SALES

| FYI

&Downs

Ups

A quick check of the conventional wisdom on who’s going what direction in Tri-Cities business

name

University of Tennessee - So the Vols still can’t hold a lead in the fourth quarter. That doesn’t mean there’s no good news coming from Knoxville. UT Chancellor Jimmy Cheek was in Kingsport last month to talk about a different kind of Top 25. Cheek has made it a goal for the university to help the state’s economy by becoming one of the top 25 research universities in America. Said Cheek, “We’re already in the top 25 in several areas, including our freshman class. We’re significantly improving our graduation and retention rates so that 45 percent of our students now graduate in four years and we graduate 70 percent of our students in six years.” The goals are to push those rates to 60 and 80 percent, respectively. And to do better on fourth down defense. Fans of quality - If you’re interested in getting free training to help your business create better products and services more efficiently, the Toy F. Reid Eastman Employee Center might be a good place for you to spend the morning Oct. 20. The Tri-Cities Quality Forum program will include sessions on business analytics, tools and techniques; practical strategic planning; and getting rid of non-value added activities (read “waste”). You know, if you’re into that sort of thing. The King Institute for Regional Economic Studies - There’s been a lot of talk about the true value of retail as a sector of economic development since Tennessee first put in place the legislation that opened the door for The Pinnacle a few years back. Now the King University institute has put a dollar value on the economic impact of sales to non-residents. Since sales by local businesses to local residents don’t bring revenue into the market, they don’t generate economic improvement. But KIRES recently released a report estimating 15.5 percent of local retail sales are to out-of-market buyers. With a total retail sales figure of $6,186 million in 2014, that makes the economic impact $959 million. Americans for Prosperity - And apparently against business. The Koch brothers’ lobbying effort against a potential hike in Tennessee’s gas tax has already begun. An AFP spokesman told The Tennessean his organization would fight against “any tax increases in the state.” That kind of absolutism isn’t real world business thinking. Businesses need a state that can build safe roads and bridges over which to transport their goods, customers and employees. If Tennessee’s legislators reflexively follow AFP’s logic, the state stands to lose jobs in the long haul.

bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

A Hokie at Heart

J.A. Street starts tailgating a year early to celebrate 30 years in business

Jim Street poses in front of the suites his firm built at Bristol Motor Speedway. Photos by Scott Robertson

By Scott Robertson

hirty years ago, Jim Street left the company where he’d worked for the previous 13 years and went into business for himself. On Sept. 18 of this year, to commemorate three decades of success, Street wanted to do something fun, not just for himself, but for around 300 of his family, friends and employees. So the Virginia Tech grad looked at one of the most visible Bristol Motor Speedway, and decided to

have a party there a year in advance of the speedway’s most ambitious undertaking to date, the 2016 Battle at Bristol between the football teams from the University of Tennessee and Street’s alma mater. Street went all out, catering a lunch surrounded by football, basketball, golf putting and cornhole competitions. Street encouraged guests to arrive in their Tenhour on the hour, he gave away a football signed by the head coach of whichever

The management team of JA Street & Co. (L-R): Don Osborne, LaDonna Street, Brian Poe, Jim Street, Mark Winninger, Marcus Wilcox, Mike Street and Tim Kuykendall. 10 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

school the drawing winner chose. Street shared his gratitude with the crowd for their support, and promised the company will continue to do business the way it has every day since he and his sister LaDonna founded it 30 years ago. “The next step I have is to make sure I train the next generation so they can keep the company moving forward with the same ethics and values I have,” Street said. “My goal is to teach the next generation of company leadership.”

Despite his loyalty to Virginia Tech, Street made Tennessee fans equally welcome, right down to giving the Vols equal billing on the cake.

Ron Oliver airs out a pass on the patch of gridiron brought in just for the party.

Eric Humphrey was the proud winner of a football signed by University of Tennessee Head Football Coach Butch Jones.

Jeremy Fields tries his hand at cornhole.

Otis Cantwell and Linda Bridges proved that Tennessee and Virginia Tech fans can get along.

Claudia Byrd of Speedway Childrenâ&#x20AC;&#x2122;s Charities enjoyed spending time with Ann Rhem of Second Harvest.

Jim Street converses at the lunch table while Jason Tallent listens.

bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

| COVER STORY

Leapin’ lizard: Crown Laboratories revenue jumping By Jeff Keeling

rown Laboratories is on a roll. The Johnson City-based pharmaceutical manufacturer, best known for its Blue Lizard sunscreen, secured a $20 million Bedard bullish on the future of a company that’s seen its peaks and valleys since its founding 15 years ago. Blue Lizard’s revenues are growing strongly, up 24

building on Lafe Cox Drive, Bedard takes visitors past 30-foot-high racks of invenas a contract manufacturer of dermatologi- tory. It’s almost all topical dermatology cal creams. Bedard expects recent forays product, testament to Bedard’s three into branded topical prescription drugs, decades in the dermatological space. which have helped fuel growth at the management and R and D level, to keep creams until just the right moment, when overall revenue growth robust. lab-jacketed, hair- and beard-netted Inside Crown’s 188,000-square-foot technicians turn a few dials to add active ingredients. Since 2011, Crown’s revenues have risen roughly seven-fold, Bedard says, to $28 million in the year that ended last Nov. 30, “and we’re doing $36 million this year.” Crown ranked 19th nationally among manufacturers in Inc. Magazine’s Inc. 5000 rankings of private companies (based on 411 percent three-year growth through 2014). The growth, accompanied by more than 100 new jobs, put Crown at No. 1050 nationally, No. 11 in Tennessee, and No. 1 in East Tennessee. “Our projections for ’16, because of some new drugs and this debt facility, is somewhere between $47 and $50 million,” Bedard says. “We think we can really build something that’s sustainable here… I’d like nothing better than to add on and create opportunities and expand our reach.” Bedard thinks $100 million revenues are Crown has within the past year recruited to the Tri-Cities seven new management-level employees, including two who are helping drive R and D: an experienced pharmaceutical researcher who worked for GlaxoSmithKline, Walter Thompson, and Dustin Cooper, pharmaceutical development doctoral program developed by East Tennessee State University’s medical and pharmacy schools. Cooper, Bedard says, “did his PhD work on nanoparticles and drug delivery.” Seven new high-level employees. Nanoparticles. It stands out even more

Crown Laboratories co-founders Greg Holmes, left, and Jeff Bedard in Crown’s warehouse area. Photos by Adam Campbell

12 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

Bedard barely had $7 to spare. The cream being mixed up in Crown’s gleaming vats is triamcinolone – “TA,” as the Crown folks call it. An oft-prescribed

mid-level potency steroid cream, TA spurred Crown’s 2011 turnaround, which came when Bedard was in danger of losing the company. “Last year we produced about 1.5 million 15-gram tubes of it, which accounted for about $8 million of revenue,” Bedard says. Bedard is by Crown’s recent run of success, it helps to rewind further than TA’s arrival on the scene.

The base of the Crown – 1999-2000 By the late 1990s, Bedard, a University of Iowa graduate, had more than cut his teeth in the pharmaceutical business. grown with a successful entrepreneurial company (Stiefel Laboratories), and helped turn around another business. He wanted to create his own version of Stiefel. “I had been in entrepreneurial companies before, but never with a controlling interest, so though I was involved I was always beholden to the majority shareholders,” Bedard says. “I really wanted to start something I could

Crown Laboratories CEO Jeff Bedard, top left, with corporate leadership including (back) Gaylord Van Guilder, Jack Songster, 3BOEZ /PPODIFTUFS James Lawrence, David Arapakos, Nick Crowe, Blue LIzard; front, Candace Kaufman, Eileen Daloia, Jill McGonigle and Dustin Cooper.

Premium Pharmaceuticals and had given him the Blue Lizard line to oversee. The son had come up with one of the brand’s still-famous draws – a bottle that changes color when exposed to UV rays. Seeing another potential piece of a diverse revenue stream, Bedard worked out a three-year Bedard had also made some good deal to distribute Blue Lizard stateside. contacts. One was the late Don Kilday, At roughly the same time, a small a doctor of pharmacy with whom he dermatology manufacturing company had worked at a company called Herald outside Birmingham, Ala., Del-Ray Labs, Pharmacal in the early 1990s. Kilday came up on Bedard’s radar. Greg Holmes, was running his own small business, a pharmaceutical researcher, was running Med-Derm Pharmaceuticals, in Gray, and the company with just a few employees. having success with Ulcer-Ease, a product Del-Ray was doing a couple hundred to treat mouth/ulcers and canker sores thousand annually selling around the that’s still in Crown’s portfolio today. “Late Southeast, but had three things going in 1999, we decided we were going to for it that intrigued Bedard: a small but look at doing something together again,” successful product line; four abbreviated Bedard says. new drug applications (ANDAs) the FDA Bedard, meanwhile, who was living had approved (generics, basically) that in San Diego, came across what would were yielding revenue; and manufacturing become the other two jewels in the capability, albeit small. Holmes, who’s company’s proverbial crown. One was Blue with Crown to this day, didn’t want the Lizard, a zinc oxide-based product being pressure of trying to grow his company. “He knew he couldn’t sustain that manufactured and sold in Australia. A friend of Bedard’s had seen the sunscreen over time, and he knew he had something of value. I bought the business from him at a World Congress of Dermatology session, and he and his family had used some for $125,000, and that was the basis to what we developed into Crown, because while vacationing in Hawaii. “Mark calls me up and says, ‘this is the you had to have the manufacturing piece before you could really do much of anything else if you’re going to vertically recalls. “You need to talk to this guy and integrate.” see if you can get access to it.” “This guy” was the son of an Australian pharmaceutical magnate. His dad ran Finding Johnson City, and the roller

coaster decade Shortly after the Del-Ray acquisition Tennessee at Kilday’s urging and began facturing facility, visiting Tennessee to check into possibilities. After a few false starts, P.C. Snapp, then the Washington County Economic Development Board’s director, took Bedard to the old Baxter sterile glove manufacturing facility, realizing it might work. “The ceiling tiles were hanging down and it was generally kind of dilapidated, but I meet with the plant manager and he says, ‘sure, I’ll lease you some space – how much spent about $30,000 rehabbing them, and we take one lab space back there. He’s charging me $1 a square foot, so it was really an opportunity I couldn’t pass up – and they were covering my utilities.” Crown moved into the building it still occupies (and now owns) in April 2001. Bedard, with a history in sales, marketing and business development, suddenly had a new home, a new company, and a building he needed help turning into a company headquarters. Down in Birmingham, Holmes helped lead a ramp up of Del-Ray inventory, while former Baxter building superintendent Dick Zastudil helped build the machinery to start production in Johnson City. SEE CROWN, 14

bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

| COVER STORY CROWN, CONTINUED

Lizard rising and playing footsie Later in 2001, Crown bought out Blue Lizard and began producing it in Johnson City, and continued to grow the market share of Kilday’s and Holmes’s products. In 2003, with Kilday and Bedard constantly on the road selling, “we started to see some upturn,” Bedard says. Employment increased to the low 20s, and Blue Lizard sales were growing. The sunscreen line with the catchy name and color-change bottle caught the eyes of a couple entrepreneurs out of the Chattanooga area, MB Racing owner Nelson Bowers and Steve “Toby” McKenzie, who had made his fortune in the check cashing and payday private jet to check out Crown in person. “We do a pitch, they go back, we don’t hear from them for a couple weeks and then we just get a call and they say, ‘hey, we’re on our way up to the airport,’” Bedard recalls. “We sign a couple pieces of paper, they hand us a check for $1.5 million, get on the plane and go. It was very much how they did business at that time. To invest that $1.5 million and get $20 million back in three years was their expectation.” So Blue Lizard hit the national scene, and Crown, Bedard says, “was hyperfocused on a category we didn’t fully understand, because none of us had been consumer product gurus, and we didn’t fully appreciate how much money it takes to grow a consumer product. It’s one thing to get a dermatologist to say, ‘go buy this, I want you to use this sunscreen.’ It’s a whole other thing dealing with the CVS’s and Walgreens’ of the world and getting distribution so that recommendation from a doctor actually turns into something.” Blue Lizard grew quickly, pushing Crown’s employment numbers into the 30s. Yet, though “everybody said ‘that’s the sizzle,’” Bedard says, the strengths Holmes had brought to the table weren’t being cultivated. had,” he remembers. “Those assets I was so enamored with in 2000 became not even about, but fast forward and those assets are now the driving forces of this company.” Turning a corner in the vast plant, Bedard runs into Holmes, who’s helping whom Bedard calls, “a master chef when it comes to formulation work,” dutifully

Company co-founder Greg Holmes, left, works with new development scientist Dustin Cooper.

played along during the Blue Lizard go-go days, creating Blue Lizard’s baby formula in 2004, its sensitive skin formula in 2005 and legacy, though, that would lead to what event,” in 2006. Blue Lizard revenues had increased to about $4 million by 2006, when some folks from Novartis came by Crown’s booth event. Novartis was looking to compete with needed some over the counter products to pair with their signature product. “They products that are on the shelf,” Bedard remembers. Crown negotiated a deal with Novartis, complete with $14 million worth of business over 18 months and a ship date to Walmart just six months away. Crown had to buy tanks and packaging lines, install them, deal with the Novartis regulatory team and ramp up employment quickly. “It was daunting, but I knew we had to do this, because it was $14 million in 18 months, and if it works we’re in fat city. Miraculously, we get it done and ship out a week early.” So Crown pumped out Novartis products for 18 months, plowing the cash back into Blue Lizard and roughly quadrupling revenues to $16 million. Then the whims of corporate America struck and the foot products got cut in a rationalization. “It was 18 months of working like crazy, and then it all disap-

14 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

peared,” Bedard says. “We shipped our last purchase orders for Novartis in late 2007.”

Post-Novartis: Guido, personal challenges, and a run on the company To fund a rapid production ramp up, Crown ended up in the arms of Southeastern Commercial Finance, an institution out of Birmingham. The credit deal involved “factoring,” Bedard says. If Crown received a $1 million purchase order, Southeastern would take ownership of that, then turn around and fund 85 percent of it. The company would charge an additional interest rate in the neighborhood of 15 percent. “We did this because otherwise we didn’t have the cash to deal with the Novartis arrangement,” Bedard says, adding Crown had been working on a better credit arrangement when the Novartis deal broke. “So we went to Guido.” Even after the Novartis deal dried up, the verge of a new credit facility, $7.5 million of mezzanine debt with CIT, at an 11 percent interest rate. That would allow Crown to pay grow the business as a revolver.” Then the economy started collapsing, and CIT ran into trouble of its own – just as Crown was poised to get Blue Lizard into the CVS, Rite Aid and Walgreens drugstore chains to the tune of about $10 million in additional annual revenue for 2008. “We had worked hard to hit that distribution Holy Grail, but when the credit facility

Employment shrank to the low 20s and revenue to the $3.8 to $4.2 million range, Kilday and Bedard quit taking salaries, and to beat it all, Bedard endured a divorce and his father’s death in 2008. Minority owners McKenzie and Bowers pressed for a takeover. was the reality I woke up to and faced every day, because I’m juggling paythe banking industry was gone, basically.” In early 2011 McKenzie and Bowers came forward with a plan to buy the company for $400,000, keep the employees and put cash in to grow again – retaining Southeastern as creditor. Another group wanted to pay $200,000 for Crown and move its operations to Southwest Virginia. And Bedard wanted to keep his company.

It’s Not Just Your Business... it’s Your Life.

A link to the future “As the largest individual shareholder and somebody that had had

If you’re like most business owners, your business is more than just a business…it’s your life. And, oftentimes managing the

and discussed one of the old Del-Ray generics, a version of triamcinolone, a week away, and he wanted to come back with something substantive. “I sit down with him and say, ‘look, I’ve got this drug, I’m going through an FDA approval to become a new supplier of the triamcinolone, I’ll have it ready for you to sell in about nine months, but here’s what I need: You need to give me a purchase order for $2 million for this, and I need $1 company until we get this up and launched. He agreed to it.” Bedard returned to Johnson City with a $1 million check and a supply agreement and presented to shareholders. “I said, ‘this company’s far more valuable than $200,000 or $400,000. Here’s a way out, and I’ve got a and we think we can get 20 or 25 percent market share in the generic space Bedard’s argument won the day, and since then, when luck’s been -

retention strategies. After all, owning your own business is an more than hard work. Your business IS our business: Call Cary Street Partners

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worth of silver revenue that came out of nowhere from a LinkedIn connection.”

Onward to nine figures? Contract manufacturing and continued growth of Blue Lizard, largely

four ANDAs currently submitted to FDA – and proprietary drugs. Crown sent

Johnson City, TN Office (423) 328-1970

Abingdon, VA Office (276) 628-2814

CaryStreetPartners.com

through the FDA,” Bedard says. He says Crown’s highest potential comes in SEE CROWN, 16 bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

| COVER STORY CROWN, CONTINUED

and now has cash available for potential acquisition targets as well. In January,

Brad Thornburg checks some levels in quality assurance.

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TCRA projects offer shortand long-term benefits Aerospace Park is a 160-acre site being developed with aviation and defense-related businesses in mind. Inset, Patrick Wilson. Photos courtesy Tri-Cities Regional Airport and by Scott Robertson.

The Business Journal Q&A

Patrick Wilson, Executive Director, Tri-Cities Regional Airport When one goes to an airport, oneâ&#x20AC;&#x2122;s mind is generally on the skies.

The Business Journal:

Patrick Wilson:

18 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

having to build another retaining wall that would have to be rebuilt again in another 3040 years, we decided to do this grading work, which gives us the opportunity to improve the aesthetics by putting in some hardscapes and landscaping. Part of that will be designed wherever you get there” approach. TBJ: The signs out front say the parking lot work out front will be done in Fall 2015, so that gives you less than three months. Are you on track? PW: We hope that our short-term lot will be back open prior to Thanksgiving holiday travel. So up to now we have been blessed with good weather and that’s kept us moving. Next week we hope to be able to move some key underground systems – utilities, FAA cabling, things like that – that if those get moved on schedule, then yes, we will still be on schedule. That will get all the obstacles out of the way to do the rest of the grading back to the long-term lot that’s going to stay at existing grade. So we should have

the long-term lot available by Thanksgiving and then somewhere in that process the landscaping installation will take place and we’ll do some of the sidewalk work, pushing out the bollards to give more curb frontage.

site customs, and create for businesses the

potential site for aerospace businesses to locate literally right next to a runway.

TBJ: So you are already actively marketing the 21 acres that’s already graded?

PW:

PW: I’ll share with you some things from presentations we’ve made to aerospacerelated companies. Since 1999, we have invested about $23 million into the site and infrastructure. That

If you look at the image (ed.note: top of page), the green-highlighted area, the part that has been graded out on the right, next work will be complete by that November time to the cargo center, there’s about 21 acres frame. We may still be wrapping up some everything is ready for access. Obviously we’d rather get the landscaping in Our goal will be to continue to grade this now versus in spring, but I’m not much of a highlighted area out, either in phases, or if horticulturalist, so I’ll trust them to plant it the development fairy brings us about $15 when they should. site graded and ready. And we are looking for TBJ: So turning our attention to the other that development fairy anywhere we can, as side of the property, to Aerospace Park, far as grants or other site development funds.

out, but yes, the idea of Aerospace Park is to take land on the far side of the runway and take advantage of the fact that we have a higher education institute next door, superior infrastructure here, a foreign-trade zone, on-

SEE Q&A, 20

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| FEATURES cutline

Q&A, CONTINUED

TBJ: grade? TBJ: PW:

PW: TBJ:

PW:

20 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

TBJ:

PW: Well, you have an existing aerospace cluster in the region. Bell Helicopter is the

very closely. has several categories. There are completion -

tion centers.

TBJ: SEE Q&A, 22

TBJ: PW:

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has similar programs in aviation technologies Susan Johnston, Owner/CEO, Innovate Medical, Johnson City Harvey Mitchell, Market President, HomeTrust Bank, Tri-Cities

Relationships. That’s what Harvey Mitchell believes in when it comes to serving our HomeTrust Commercial Banking clients.

TBJ

PW: -

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| FEATURES Q&A, CONTINUED

manufacturing that much because there are so few major commercial manufacturers.

engineer makes $103,000. We’re going after noise issues or environmental issues. We’re to it today.

PW: Well, on the commercial side you have Boeing, Airbus, Bombarier and Embraer. Those are the four major airline-sized commercial aircraft manufacturers. When you start looking at the business jet sector, though, you have Cessna, Beechcraft, Dassault Falcon, Hawker, Gulfstream, Honda,

big aircraft and a lot of growth. Our facilities

TBJ: When you are out searching for the $15 million fairy, or even the Enough-money-to-

same trend as automobile manufacturing.

of my head I would say there are 10 in that them had located here in the last 10 years and PW: -

right to work states with good labor markets and low costs of living.

federal or state sources, so that’s where we focus. Unfortunately with some changes in

to move from Wichita is kind of a long shot. before they went to Greensboro, Honda Jet

TBJ: If you can’t get the $15 million in one chunk, what’s a goal that can still make a real

which still bring a large number of good

PW: to a task force that will start looking at that

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Patrick Wilson

in October. It’s called the Tennessee Aviation Funding Task Force. What happened was there were some tax caps put in place on aviation fuel that ended up capping the amount of revenue that comes into the general aviation airports in that it will reduce by maybe a little more than half the amount of funding that can go into airport infrastructure. a year out of that program. With those state dollars we do a lot of things. We do part of our match for our federal dollars. Then we do

then be able to put a couple of million dollars into the grading each year. This has really taken that option away from us. about how we can still do this. So we are reaching out to other grant ment funding. TBJ:

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| FEATURES

Allied Dispatch supervisor Paul Scalzo helps Brook Holtsclaw with a dispatch issue.

Start me up: Roadside assistance call center tripling in size By Jeff Keeling

nthony Royer walked past rows of cubicles at the Borla Enterprises building south of Johnson City, where head-setted employees talked quietly with stranded motorists, technicians, tow operators and other players in the world of roadside assistance. Workers looked up and gave him quick smiles before hunkering back down to the momentary task at hand, and eventually Royer – the CEO of Allied Dispatch Solutions – made his way to his own mini-revolution in the roadside assistance call center business, and it’s helped Allied grow from a hopeful startup with 60 employees a year ago to a respected player in the industry that’s in the process of hiring nearly 200 new “I want to know every single employee that works here,” said Royer, who spent years helping build All State’s roadside assistance business, explaining the startup company’s management decision to put its executives in the same work environment as everyone else. The approach is one of several setting Allied apart from its competitors in the $7 billion roadside assistance call center business, Royer says. Another is the company’s use of recent technology, which has allowed it to host its

operations in the cloud rather than on servers, which are expensive not only to purchase but to maintain. In addition to being cheaper, the technology allows Allied’s clients – who are really roadside assistance businesses that motorists are calling for service – to listen in on calls. “Our client can turn a phone on and tap into any one of these calls and listen to them,” Royer says. “No one else in the industry has that capability. hat take the phrase “this call may be monitored for quality assurance” to a whole new level. “It’s being fearless about the transparency, and that’s really something we embrace as opposed to the traditional model, which is a client knows about it when their customer complains, then they reach out to us, I pull back to them. “We’re not perfect, no one is, but we’re fearless about giving them that opportunity to see it, and then we work on it together,” Royer said. So far, it all seems to be working for Royer and two other founders who split from All State, Wayne Abadie and Steve Jones, to give entrepreneurship a go. They knew what

24 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

worked, what didn’t, and how a startup might also had a believer with capital, Scott Libertore, who invested and provided them with FIMC, as the client. Libertore chairs the company’s board of directors. As October arrived, Royer knew he was about to learn a lot of new faces and names. The advantages the company’s bringing to the market helped it grow from 60 employees when it opened last fall to 120 by late this summer. That was down largely to growth in FIMC work, but recently, Allied won a contract with AT&T. On a sunny day in late September, crews were assembling enough cubicle space for an additional 170 workers in a naturally lit part of the Borla facility. Royer said Alex Borla, owner of Borla Performance Industries and the company’s landlord, has been a great help in the startup. “He’s a kind of secret gem in this community, with what he’s been able to do with the former Siemens building and the manufacturing he’s brought to town, but at heart he’s an entrepreneur,” Royer said. “He’s really become a mentor and helped us to avoid a lot of mistakes. He’s been a big supporter of

how we can make things happen, and how he can support making those things happen.” It took being willing to look away from another community for Royer and company to even reach the point of meeting Borla, though. “We were pretty sure we were going to wind up in Birmingham (Ala.) with some Royer said. “But we got involved with Alicia (Washington County Economic Development Council’s Alicia Summers), and Wayne (Abadie) has lived here for 15 years. When we looked closer we saw an amazing work force with people that really care.” As far as other incentives, Allied applied for standard Tennessee Economic and Community Development tax credits and worker training grants when it Allied Dispatch COO Wayne Abadie and CEO Anthony Royer. opened, but received no local incentives. Summers said Tennessee’s Department of Labor and Workforce Development also stepped in. experience in the market, are all possibilities “They went above and beyond to help them “You want to take Callie Kennedy and that leave Royer bullish on future growth. say, ‘you don’t have to be at this level, you can “I think we could easily triple in size Royer said previous experience is not the make two, three, four times that here.’ We just (from 300) in the next 12-18 months.” key. “It’s about having caring people. They need to build this business together, and that’s That might leave Royer coming up short don’t have to have worked in the call industry extremely rewarding.” before, and most of ours haven’t. It’s about Bringing what Royer called a Fortune 100 said “about 500” is probably his top end for work ethic and empathy – you’ve got to want workspace to a small business, and leveraging that – but such an eventuality would be just to help people.” the new technology and the founders’ long That’s been the draw for Callie Kennedy. She’s among a small cadre who’ve risen through the ranks since before Allied even 29, 2014. She had worked at a couple of local call centers. “I heard of a new company coming to Johnson City and I wanted to be part of that start up,” she said. Now, she’s a department director and will play a key role in scaling up the AT&T contract. Kennedy’s comments about the work seem to buttress Royer’s opinion regarding the local workforce. “It really makes you feel good if someone’s struggling on the side of the road their life.” It doesn’t hurt that the pay is competitive, time the AT&T contract went live at 11 p.m. included – he said he and his partners are trying to build. “Every employee, you see me saying hi to them and talking to them as they walk by. I know their story, the job they had before they came here, I know what they were getting paid. Then I see what a one, two, three, four dollar an hour raise within a year can make as

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| FEATURES

Buy Local: It applies to the IT suite too By Scott Robertson

y now you must be familiar with the “Buy Local” campaign. It started with food and has more recently (at least in this area) branched out to craft beer. But there’s a segment of the marketplace that makes just as much sense to buy local that would surprise many consumers: information technology. Chase Boles, coowner of Bailey Computing Technologies in Gray has watched the local IT scene grow in depth and breadth since the 1980s. Today the company specializes in highly available networks (in which, if a single point in the network fails, the network doesn’t go down because the power to other access points is increased to cover the gap), including servers, storage systems, voice Jeff Eaves and data. “We’re probably known more for training,” Boles says, “because we started doing training back in the 1980s. But training only makes up about 15 percent of our business now. The balance is in solutions.” BCTI has now deployed networks literally coast to coast, from North Carolina to California and from Canada to Mexico to Puerto Rico. “Cisco recently named us as the No.1 Premier Partner David Temple Elite in Tennessee and No. 6 in the nation,” Boles says. “Companies like CDW come beneath us in the rankings.” Traditionally, only large businesses and institutions like hospitals and colleges could justify the use of the so-called 26 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

“highly available” systems. But that’s changing rapidly. “In the 1990s, we did this in a TRW manufacturing facility with three shifts running,” Boles says. “Today the price has

K. D. Bowen

a highly available solution. This is all business. It’s not technology for the glory of technology.” David Temple, founder and president of Saratoga Technologies, which operates in Johnson City, Abingdon and Knoxville, says today businesses can work with local companies to do things that in the past they’d have to go through huge telecommunica-

because of the price drops Boles mentioned. “Look at voice,” Temple says. “Price and access to bandwidth are driving customers away from traditional voice service providers. Bandwidth prices have come way down in the last two years, and it’s less money now to put a full Voice over IP phone on your network than Chase Boles it is to get a copper line from a phone company. You might pay $50 for a copper line per month and only $35 for VOIP. That’s with the latest phone system, things like making your iPhone or Droid the extension on your PBX with full support, full everything.

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| FEATURES IT SUITE, CONTINUED

local buyers who think they have to go to Cupertino, Ca., to get what they need. Like Eaves, Bowen knows the value of accountability. “A lot of time when you think of apps, you think of big companies. Small business owners sometimes think they aren’t big enough for an app. An app is just a tool for solving problems...so we did an app for a local church that helps young people tithe directly through their phone.

Young people don’t write checks anymore, but they use apps. You know, we’re in the community. We’re at the chamber doing a Lunch & Learn. You can go online But they can get over on you. I can’t get over on you. I live here. I’m going to do everything I can to prevent problems and if there is a problem, I’m going to do can count on us. If you go to Washington state to get something done and they mess it up, that’s just on you, whereas we

are here and we want to treat you the way we’d want to be treated.” Appville is targeted primarily to small business owners who want to reach the burgeoning mobile marketplace. “I used apps in my sports retail business, Fanatics 101, to build loyalty. I’d give discounts to people who walked in the door ten times. I’d use the app to let them know I was having a buy one, get another at half price sale. When that worked so well, I thought, ‘Man, I should start a company that markets apps. If they work this well for me, other busiAnd while most small business owners still see apps as mainly a marketing tool, Bowen says one of his favorite app uses is not about advertising, it’s about competition. “We call it geofencing,” he says. “Everybody who has your app, everytime they go by your competitor’s tion. So they’ll go in and see maybe your That immediately gives the app user the opportunity to say to your competitor, puts your competitor in the position of having to make a snap decision to accept their customer’s deal or not. And you’re the one who put them in that position. Most of the time, your competitor will drop the ball in that situation.” The fact that local businesses are taking advantage of these opportunities now is not surprising to Temple, who says, “We’re all walking around now with these devices that are very powerful. We have access to bandwidth like never before. We’re able to do things now that unless you were a large corporation, you’ve never been able to do before. Now you and I on the street can do what used to take a lot of money to do. We can do things for $100 now that used to take $100,000. That’s not hyperbole. Some things that used to take hundreds of thousands of dollars to do you can do now with free apps. The improvements in productivity a small business can achieve, working with a local IT company, because of this increased tremendously important to that small business’ growth.”

28 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

Q&A, CONTINUED

TBJ:

TBJ: PW:

PW: -

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| FEATURES

Mike Eddy becoming 11th partner at Blackburn, Childers and Steagall By Jeff Keeling

ike Eddy is set to become the 11th partner at Blackburn, Childers and Steagall, the Tri-Cities’ largest regionally in Tennessee. Eddy, who joined Eddy and Eddy in 1987, will bring about $800,000 additional CPAs into the BCS fold come Dec. 1. The other CPAs are Barbara Morgan, Laura Hoover and Coleen Lyon. More importantly, fellow partner Tommy Greer says, it will give BCS someone to small business segment. Audit services fueled BCS’s growth to work its CPAs too hard or require much travel. After building the audit portion, the company grew its tax segment, but both of those, Greer says, can’t grow without a small business piece. “What we’ve always said, and espesays. “If you get those small businesses in early and give them good, quality service, BCS Managing Partner Tommy Greer, left, and Mike Eddy make a deal. Photo by Peter Nelson those companies could grow into an audit, grow into a good tax return, and it will feed he has that reputation for personal service, similar values, from conservative business and what we’ve battled even before is, practices to an eagerness to diversify. Nei‘well, they’re too large to do our small ther uses a line of credit in the early part with fewer than 50 employees, with one business work.’ We’re not, but we need to of the year when expenses are high and market and manage that so clients can see income is low, which is a common practice the biggest client never having exceeded 3 percent of the budget, Eddy says. brokerage licenses in the late 1990s when “Small business development and to invest in resources the small business CPAs were freed up to do investment personalized service is what we’ve develsegment can further tap into under Eddy’s planning and brokerage services. The management. next step is into the cloud. Two years ago, BCS bought out Paul “BCS has made it a point to invest “The day of somebody bringing you a backup of their accounting records, Kingsport, adding about $1.3 million to the segment. Eddy will take the lead in plan to make the most of that and grow Greer says. “We need to be online with of Rhoton’s group, BCS’s pre-existing company, as well as some organic growth, everything, and the beauty of that is we small business group, and his own group. can have current information while the “We need that leadership in this full client has current information and we’re all looking at the same numbers instead “He’s highly respected in the community, Eddy says both companies share 30 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

| DEPARTMENTS ON THE MOVE

STATEMENT OF OWNERSHIP MANAGEMENT AND CIRCULATION

ship Church, Kingsport. In addition, Williams Derby Publishing names two in represents the Business Journal as a member leadership positions Derby Publishing, LLC, today announced in the Johnson City, two executive appointments in the growing Kingsport and Bristol media and marketing company. Chambers of Commerce. will assume the role of vice president and The Johnson City Jeff Derby co-publisher of the Johnson City News & News & Neighbor is a Neighbor, Johnson City News (subscriber edi- multi-award winning tion) and The Business Journal of Tri-Cities community newspaper Tennessee/Virginia. has been on the national level and named director of business development and Canada having won top marketing for all three publications as well. awards for the previous Derby will be responsible for overseeing all publishing operations working closely General Excellence with Williams in developing new publishing Award winner in the Jeff Williams initiatives, growth strategies, and marketing 13-state Southeastern technology expansion to support the comAdvertising Publishpany’s focus on driving innovation. ers Association. The paper is a member of the Independent Free Papers of America, experience in taking a strategic vision and Association of Free Community Papers and executing that vision brings a fresh approach the Southeastern Advertisers Publishers to our 18-year old community newspaper and Association. The Business Journal of TriThe Business Journal’s 26-year history of Cities Tennessee/Virginia has also recently excellence in journalism,” publisher Bill Derby applied for membership in the Association of said. We have a talented team including our Area Business Publications, the top business magazine association in America. graphic artists and designers and distribution. These promotions add to our commitment Administration to our readers and advertisers to give them Asbury Place conthe best publications and products available tinuing care retirement in each market we serve. I can’t think of two communities recently people who are better suited to develop a team named to guide our company into the future.” director of nursing for its Both Williams and Derby have extensive Kingsport campus. resumes in business and publishing and Dingus has more than have played key roles in both publications’ 35 years of management, Dannie Dingus growth. Both are also committed to comcritical care and nursing home experience. He came to Asbury Place following a number of community organizations includdecades-long career with Wellmont Health ing: Chamber of Commerce Convention and System’s Holston Valley Medical Center and Visitors Bureau; Children’s Advocacy Center continues to occasionally work in cardiac care of the First Judicial District; Dawn of Hope; and rehabilitation at the hospital, recognizing and United Way. that the work positively impacts his ability to Along with his past three years with the Busi- perform his job at Asbury Place. ness Journal, Williams brings 20-plus years’ Dingus earned his nursing degree from Walters State Community College and is skills along with his ability to communicate on pursuing a master’s degree in nursing from the highest business level. Vanderbilt University. His community commitment includes A lifelong Kingsport-area resident, tenure on the ETSU Roan Scholars Regional Dingus says that being at Asbury Place is very Selection Committee; Summit Leadership rewarding because it provides the opportuniFoundation, Connections Committee; Past ty for him to contribute to the care of people President Tri-Cities Mortgage Bankers SEE ON THE MOVE, 32 Association; and Worship Team Christ Fellow-

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Tax status: has not changed during preceding 12 months 13. Publication Title: The Business Journal of Tri-Cities TN/VA 14. Issue date for circulation date below 09/14/15 15. Extent and nature of circulation Average no. copies each issue during preceding 12 months a. Total no. of copies printed (Net Press Run) 6,500 b. Paid Circulation (By mail and Outside the mail) (1) Mailed Outside-County Paid Subscriptions Stated on PS Form 3541: 2684 (2) Mailed In-County Paid Subscriptions Stated on PS Form 3541: 856 (3) Paid Distribution Outside the Mails Including Sales through dealers and carriers, street vendors, counter sales and other paid distribution outside USPS: 475 (4) Paid Distribution by Other Classes of Mail Through the USPS: 50 c. Total Paid Distribution (Sum of 15b, (1), (2), (3) and (4): 4065 d. Free or Nominal Rate Distribution (By Mail and Outside the Mail (1) Free or nominal rate outside-county copies included on PS Form 3541: 0 (2) Free or nominal rate in-county copies included on PS Form 3541: 0 (3) Free or nominal rate copies mailed at other classes through the USPS: 0 (4) Free or nominal rate distribution outside the Mail: 2335 e. Total free or Nominal Rate Distribution (Sum of 15d, (1), (2), (3) and (4): 2335 f. Total Distribution (sum of 15c and 15e): 6400 g. Copies not Distributed : 100 h. Total (sum of 15f and g): 6,500 i. Percent Paid (15c divided by 15f times 100): 63.5% 15. Extent and Nature of Circulation No. Copies of Single Issue Published Nearest To Filing Date a. Total Number of Copies: (net press run): 6,500 b. Paid Circulation ( By mail and Outside the mail) (1) Mailed Outside-County Paid Subscriptions Stated on PS Form 3541: 2644 (2) Mailed In-County Paid Subscriptions Stated on PS Form 3541: 859 (3) Paid Distribution Outside the Mails Including Sales through dealers and carriers, street vendors, counter sales and other paid distribution outside USPS: 475 (4) Paid Distribution by Other Classes of Mail Through the USPS: 50 c. Total Paid Distribution (Sum of 15b, (1), (2), (3) and (4): 4028 d. Free or Nominal Rate Distribution (By Mail and Outside the Mail (1) Free or nominal rate outside-county copies included on PS Form 3541: 0 (2) Free or nominal rate in-county copies included on PS Form 3541: 0 (3) Free or nominal rate copies mailed at other classes through the USPS: 0 (4) Free or nominal rate distribution outside the Mail (carriers or other means): 2372 e. Total free or Nominal Rate Distribution (Sum of 15d, (1), (2), (3) and (4): 2372 f. Total Distribution (sum of 15c and 15e): 6400 g. Copies not Distributed (see instructions to publishers #4 (page #3): 100 h. Total (sum of 15f and g): 6500 i. Percent Paid (15c divided by 15f times 100): 62.9% 16. Electronic Copy Circulation: Average No. Copies Each Issue During Preceding 12 Months a. Paid Electronic Copies: 0 b. Total Paid Print Copies (Line 15c) + Paid Electronic Copies (Line 16a): 4,065 c. Total Print Distribution (Line 15f) + Paid Electronic Copies (Line 16a): 6,400 d. Percent Paid (Both Print & Electronic Copies) (16b divided by 16c x 100): 63.5% 16. Electronic Copy Circulation: No. Copies of Single Issue Published Nearest to Filing Date a. Paid Electronic Copies: 0 b. Total Paid Print Copies (Line 15c) + Paid Electronic Copies (Line 16a): 4,028 c. Total Print Distribution (Line 15f) + Paid Electronic Copies (Line 16a): 6,400 d. Percent Paid (Both Print & Electronic Copies) (16b divided by 16c x 100): 62.9% 17. Publication of Statement of Ownership: I certify that 50% of all my distributed copies (electronic & print) are paid above a nominal price. If the publication is a general publication, publication of this statement is required. Will be printed in the October 2015 issue of this publication. 18. Signature and Title of Editor, Publisher, Business Manager, or Owner: William R. Derby Date: 10/01/15 I certify that all information furnished in this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties.)

bjournal.com | October 2015 | The Business Journal of Tri-Cities TN/VA

| DEPARTMENTS ON THE MOVE, CONTINUED

he has known most of his life, including former school and church teachers. Dingus is very active in the 4H program, the Arabian Horse Association and Shetland Sheep Association. He and his wife, Teresa, reside in Chuckey, Tenn., and have two children and eight grandchildren. Lori Gangewere, who has steadily risen through the ranks during her 10 years of employment at Bristol Regional Medical Center, has been promoted to serve as the hospital’s director of environmen- Lori Gangewere tal services and patient transport. Gangewere was most recently the hospital’s support services operations manager for three years, with responsibilities that included overseeing the day-to-day operations of environmental services, linen distribution, valet services and patient transport. She was also responsible for maintaining the hospital’s cleanliness to ensure compliance with infection prevention and regulatory guidelines. Beginning her Bristol Regional career in 2005 as secretary in the environmental services department, Gangewere advanced a year later to patient transport supervisor. She held that position for four years, performing various duties such as participating in process improvement activities, visiting with their care and monitoring hand hygiene trainer through the National Association of Healthcare Transport Management.

From 2010-2012, Gangewere served as training and development coordinator, with responsibilities that included departmental orientation and training of new environmental services and patient transport co-workers. She also helped and provided team-building exercises at Gangewere holds a bachelor’s degree in organizational management from Virginia Intermont College and a master’s degree in business administration with a health care concentration from King College. Teresa Hunt, a 26-year medical professional with extensive management experience in the area, has been promoted to supervise multiple leading-edge services Teresa Hunt at Bristol Regional Medical Center. Hunt has been named director of the hospital’s pulmonary, neurophysiology and wound care departments, and she will also be responsible for the sleep laboratory, vascular laboratory and post-acute care skilled respiratory program. She will oversee about 100 co-workers. Prior to assuming her additional duties, Hunt was manager of the neurophysiology and sleep labs at Bristol Regional for 11 years. Earlier in her career, Hunt was a supervisor of neurodiagnostics and a sleep lab and coordinator of split screen video electroencephalograms, which detect electrical activity in the brain. She was also a neurodiagnostics technologist and sleep

32 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

technologist. Hunt is licensed in Tennessee as a polysomnography technologist and is Board of Registered Polysomnographic a sleep educator through that organization and is nationally registered as an electroencephalographic technologist through ABRET Neurodiagnostic Credentialing and Accreditation.

Banking New Peoples Bank is pleased to announce that James W. Kiser (J. W.) has joined the senior vice president and senior commercial James W. Kiser

will be responsible for leading, recruiting, supervising and training the commercial lending and commercial banking support personnel as well as developing and implementing the bank’s business plans to ensure that key commercial banking goals are achieved. Todd Asbury, president and CEO of New Peoples Bank commented, “We are very excited to have J.W. as a member of our organization. His experience in commercial banking along with his enthusiasm and leadership will help us in our goal to take our bank to an even higher level of service and responsiveness to the communities we serve.” Kiser, who brings 12 years of commercial banking experience to New Peoples Bank, is a Magma Cum Laude graduate

Business Management & Accounting. He is also a graduate of the Virginia Banker’s Association School of Bank Management at the University of Virginia, Charlottesville. Kiser is currently working on his MBA through King University. He and his wife, Brittany, and daughter Haley, reside in Bristol, Virginia and attend Midway Baptist Church. Kiser will be working from the

has been extremely successful at building consistent production through his vast network of business relationships,” said Charlie Moore, president and owner of Interstate Graphics, Inc. “We feel very fortunate to have him as a part of our team.”

Sales

Holston Valley’s Board Chairman named president of University of Tennessee Alumni Board of Directors Terry Begley, who serves as chairman of the board of directors at Holston Valley Medical Center and also sits on the Wellmont Health System and Wellmont Foundation boards, has now been elected president of the University of Tennessee Alumni board. “The University of Tennessee is special to me, and I am extraordinarily thankful for the outstanding education I received,” said Begley, who received a bachelor’s degree in chemical engineering and a master’s degree in engineering administration there. “When I decided to attend UT, it was not a four-year decision. It was a lifetime decision.” In his position with the alumni board, Begley represents more than 235,000 graduates of the university. Those include his son and daughter, who also received engineering degrees there. His ambition is to help UT achieve its vision of

Harold Ross, Jr. has joined Interstate Graphics, Inc. as an account executive. Ross will be calling on commercial and healthcare accounts Harold Ross, Jr. throughout East Tennessee, Southwest Virginia and Western With nearly 30 years of experience in sales, Ross most recently served as a Healthcare Major Account Executive at Ricoh USA, where he focused on hardware in East Tennessee, Southwest Virginia and Ross is very active in the community throughout his career and currently serves monthly serving food to the homeless the youth at Munsey Memorial United Methodist Church. “He has a proven track record and

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| DEPARTMENTS AWARDS & ACHIEVEMENTS, CONTINUED

becoming a top 25 public research university, and he is grateful for the opportunity to help the university board develop its strategic direction. In addition to servTerry Begley ing as president of the alumni board, Begley is a member of the UT College of Engineering board of advisors. Begley began his professional career as a chemical engineer at Eastman Chemical Company. He steadily rose through the ranks at Eastman during 42 years of dedicated service, including the last 12 years as a vice president. Begley retired as Eastman’s vice president of global supply chain and He began serving as chairman of the Holston Valley board in July and has served as a member of the system board since 2014 and the foundation’s board of governors

since 2012. Roger Leonard, chairman of Wellmont’s board of directors, said Begley’s selection as chairman of the UT alumni board, which includes several CEOs, illustrates the caliber of the Wellmont board. “Our board has focused on recruiting members who are outstanding business leaders and community servants,” Leonard said. “Terry’s career achievements, his love for his community and his exceptional leadership abilities have helped position Wellmont and Holston Valley for success.”

Carolyn Neil recognized as 2015 YWCA Tribute to Women Asbury Place’s Carolyn Pointer Neil, regional director of clinical services, was recognized as the Carolyn Neil 2015 YWCA Tribute to Women honoree in the Health & Human Services category at a ceremony in Knox-

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Randy Thomas of Kingsport honored with 2015 TAR Presidential Award Randy Thomas, owner of Appraisal Concepts in Kingsport, was honored with the 2015 Randy Thomas Presidential Award by the Tennessee Association of REALTORS (TAR) at the statewide association’s annual fall convention in Memphis. “Randy is always very enthusiastic and optimistic about the Tennessee Associaperspective to the table because he is an appraiser,” said Pat Beech, 2015 president of TAR. “I chose him for my Presidential Award because he has contributed so much

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to the association for many years, and without him I may not have been president. He actively encouraged me to run and has been very supportive and helpful throughout this year.” A 30-year veteran of the real estate industry, Thomas has held numerous leadership positions at both the local and state level, including President of TAR in 2013 and a member of the RPAC Board of Trustees.

Johnson City banker re-elected to head Areawide Development Corporation Harvey Mitchell, market president, Home Trust Bank, Johnson City, was reelected to the board of directors of Areawide Development Corporation at its annual meeting Sept. 21. Areawide Development Corporation Harvey Mitchell markets and processes U.S. Small Business Administration Section 504 loans to small businesses in partnerset ADC policy and approve loan applications. Mitchell has over 40 years of banking experience and is a graduate of East Tennessee State University and the Graduate School of Banking at LSU. He is a member of the Kiwanis Club of Johnson City and serves as an advisory board member for the ETSU School of Banking.

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| THE LAST WORD

Time for some capital flight – from local governments to the airport By Jeff Keeling

is bosses on the Johnson City Commission were discussing potential shared economic development projects with Washington County, TN last month when City Manager Pete Peterson broadened the scope of the regionalism

mulling the possibility of an interlocal agreement with Washington County, had mentioned incentivizing retail development in Boones Creek, or possibly beginning to construct a new industrial park in Gray. If you really want to make an economic development impact, Peterson told the group, you should consider doing something out at Tri-Cities Regional Airport. Peterson has previously said that despite his theoretical keep Johnson City the dominant retail market in the TriCities. Such a position makes complete sense in the short term, given Tennessee’s high sales tax rates and lack of a state income tax. Yet here Peterson was, asking city agree on how to invest in the future, and second, suggesting a good conclusion would be to invest in a completely Here’s the rub: Peterson is right. For our local governments to continue pursuing short-sighted goals such as retail recruitment just increases the odds that anytime soon. I’ve got news for you, local elected ofpublic tax dollars aren’t going to come here based on TIF, fancy presentations at the next International Conference of Shopping Centers event. They’ll listen and smile. They’ll take your incentives, don’t get me wrong. But they’ve got algorithms and demographic data and number-crunching capabilities that would make your head spin, and when it comes down to it, until your metro area reaches a certain demographic threshold, they ain’t comin’. And once it does reach that threshold, for the most part, the pittance you’re throwing their way

38 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com

is just gravy, albeit gravy they’ll gladly consume. Far better, then, that we invest our local public funds in preparing more of our youngsters with the ability to construct algorithms and conduct number-crunching and analyze demographics, among other skills. Such investments help prepare the kind of workforce that can attract new jobs, which can move our region toward the demographic thresholds those retailers are looking for, thus enlarging the pie. If more Tri-Citians have good jobs, more money cycles around the regional economy, the overall metro’s retail sales increase, and everyone wins eventually. Far better, too, that we invest in the most sensible places to grow jobs, regardless of exact location. Peterson didn’t back away from his premise when I contacted him Oct. 1, saying the individual governments within the region are going to prosper or not prosper together. Those governments co-own the airport, where right now (see story starting on page 18) TCRA has graded 21 acres of 160 total that are envisioned as a regional business/ industrial park. Peterson called that, “probably the prime project that all the local governments ought to get behind for a couple reasons.” He said it likely will bring new aerospace/ aeronautics industry into the region beyond Bell Helicopter, which already is here. It helps solidify the airport’s business model by giving TCRA a revenue stream it has never had before. And it holds the possibility of creating hundreds, maybe thousands, of jobs for local residents. The airport site, Peterson said, is as close to a readily developable megasite as there is in Northeast Tennessee, with utilities already in place. Having an airport of TCRA’s caliber is among the region’s single most important economic development tools local communities have. All the local governments have made investments within their own communities, Peterson said. Now, all of them investing public money into airport growth and job creation would be a great goal, he added. As Scott Robertson’s article on TCRA this month points out, the airport is pursuing every possible avenue for grants that would help grade the rest of the site’s acreage. It’s time for our local governments, cash-strapped as they may be, to put their heads together and look at innovative ways to prime the pump.

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40 The Business Journal of Tri-Cities TN/VA | October 2015 | bjournal.com