February 08, 2005

Kerr-Tar Region, N.C. – Two major milestones were announced Feb. 8 in the development of the Kerr-Tar Hub project, a multi-county collaboration to create a technology center to serve as a magnet for business investment in the Region K area of Franklin, Granville, Person, Vance and Warren counties of North Carolina.

Hub officials announced:

• They will recommend for approval by participating county governments that two large adjacent sites in Vance and Granville counties be combined and developed as the first Hub site for the five-county region, and that sites in Franklin and Warren counties be developed concurrently, targeting distinct but complementary markets.
• Participating counties will move forward on creating a multi-jurisdictional nonprofit entity to develop and manage the Hub site. Attorneys have drafted a letter of intent for review and approval by county officials. The letter of intent spells out the terms by which the nonprofit will operate and how counties will share in both costs and revenues.

With the initial planning complete, the region will proceed with developing the nonprofit governing entity, identify specific target markets and cost projections for the site, and raise the funds needed to develop the site.

"The Kerr-Tar Hub is an innovative and pioneering rural development," said N.C. Commerce Secretary Jim Fain. "I salute the leaders of this promising effort who will help develop a new approach to economic development in the state."

“We see this project as a catalyst for economic growth that can replace the jobs and businesses lost in recent years in our traditional industries,” said Neil Mallory, executive director of the Kerr-Tar Regional Council of Governments, which is coordinating the Hub project. “By working together, we have the opportunity to transform the economic climate of the entire region, and restore jobs and opportunity for our citizens.”

Site Recommendations
Each of the five Kerr-Tar Region counties submitted sites to be considered for the first regional Hub. The Sanford Holshouser Business Development Group led the team that evaluated the sites to determine which would have the greatest potential for success in attracting investment and jobs to the five-county region. The selection process used criteria developed by representatives of all five counties.

The firm recommended combining the sites submitted by Vance and Granville counties to develop as the first Hub site. The Vance site, about 500 acres, extends east on the southern side of Interstate 85 near exit 209. The Granville site, also about 500 acres, extends along the northern side of Interstate 85 from exit 209 south to 206. Vance-Granville Community College, located at Exit 209, is located in the center of the two sites.

The combined Vance-Granville site offers:

• Infrastructure – water, sewer, electric and natural gas utilities already in place.
• Transportation – easy access to East Coast markets via I-85.
  Workforce – the area has significant workforce commuter traffic, both in and out of the region.
• Flexibility – the site can accommodate a mix of building types, from small to large.
• Training resources – Vance-Granville Community College’s close proximity offers tremendous opportunities for on-site and customized training and facilities that can enhance the competitiveness of Hub companies.

• Warren County ’s site, 860 acres off I-85 and US 1/158 in Manson, offers large tracts of land suitable for larger buildings, such as distribution and logistics companies.
• Franklin County ’s site, about 500 acres on US 1 west of Youngsville, can accommodate a mix of building sizes. Its close proximity to the Research Triangle Park allows it to draw technology workers from the area to support the growth of technology companies.

“Our research and analysis resulted in three different types of parks with great potential for attracting investment, each drawing from different types of companies and workers,” says Crystal Morphis, managing partner for The Sanford Holshouser Business Development Group. “By developing each site based on its strengths, the region can diversify its business base with a wider range of complementary, not competing, sites.”

The Kerr-Tar Region sites, all in excess of 500 acres, will double the state’s portfolio of large (500-plus acres) certified sites. The state’s certification process is a key marketing tool that lets potential investors know that sites have been qualified for industrial development.

Hub Governance
The Kerr-Tar Region counties will be the first in North Carolina to share costs and revenues across county lines to develop an industrial/business park. The Sanford Holshouser Law Firm is leading the process of developing the multi-jurisdictional nonprofit entity that will develop and manage the Hub site.

Each of the four Kerr-Tar Region counties that proposed Hub sites is reviewing draft letters of intent to participate in the multi-jurisdictional project. Hub officials expect to incorporate the nonprofit in February.

Targeted Industries
With the Hub site recommendations in place, officials plan to contract with the Center for Competitive Economies to analyze which targeted industries are most suited for the Hub and to develop financial models for its development. The Center (formerly The University of North Carolina at Chapel Hill’s Office of Economic Development) conducted the 2003 feasibility study that led to the Hub project. It also participated in research conducted by the Research Triangle Region Partnership (RTRP) for the 13-county region, which includes the Kerr-Tar counties, to identify 10 most promising industry and technology clusters on which the broader region is focusing its economic development efforts.

Building on that work, the Center will analyze the range of potential businesses most suited to the region and the Hub site, develop a list of prospects, and conduct focus groups to determine the type of enhancements that would attract them. The Center also will develop financial models to estimate the costs of Hub development and phasing under various scenarios.

Funding
The Kerr-Tar Regional Council of Governments is seeking funding to move forward on master planning and development of the Hub project. That work includes securing (through purchase or other means) the Hub site property, expanding some infrastructure, preparing the sites and recruiting new and expanding businesses. Costs will depend on the findings of the target market research, the manner in which the Hub secures the property for use, and the phasing of the development. Hub officials plan to raise money for the Hub’s initial development, then use revenues from the sale of property to new businesses to fund further development.

The innovative nature of the Hub project and its regional approach helped officials attract more than $650,000 from regional, state and federal agencies over the last three years to fund the initial planning of the project. The Golden LEAF’s grant of $40,000 to the RTRP funded the feasibility study that conceived the Hub project. Additional investments were made by the U.S. Economic Development Administration ($250,000), North Carolina Department of Commerce Community Development Block Grant program ($180,000), Kerr-Tar Workforce Development Board ($100,000), North Carolina Rural Economic Development Center ($60,000) and Z. Smith Reynolds Foundation ($20,000).

Hub Project Background
The feasibility of the Hub concept was established in the February 2003 study conducted by the Center for Competitive Economies for the RTRP. It determined that creating a series of “mini-hubs” could stimulate investment in rural areas of the Research Triangle Region. Researchers recommended the creation of two or three “mid-tech parks” in the region to encourage spin-off development from the Research Triangle Region’s most successful industrial clusters.

Community leaders in the Kerr-Tar Region recognized the significant growth opportunity a Hub would offer the region. Local government leaders formed a five-county Exploratory Committee of county commissioners, county managers, economic development commissioners, economic development directors, workforce development board members and community college presidents to develop an implementation plan for the Hub.

The Kerr-Tar Regional Council of Governments (COG) stepped forward to facilitate the process. During the fall of 2004, the COG oversaw the team of consultants that certified each proposed site and recommended the first Hub site. Consultants for the site evaluation process were:

• The Sanford Holshouser Business Development Group – managed the site selection and certification process.
• Engineering Consulting Services Ltd. -- conducted all technical work for site certification, including soil analysis, Phase 1 Environmental, and reviews for endangered species, archeologically significant areas and wetlands.
• O’Brien/Atkins Associates PA – created site development plans.
• Koontz-Bryant PC – developed boundary, flood plain and other maps of the sites.
• Aerial Dimensions – produced aerial photographs for the site certification process.