County dealt setback by lack of diverse industry

By Kathy Helms-Hughes
STAR STAFF
khelms@starhq.com

   Ever since the first concrete was poured for the North American Rayon plant in the 1920s, Carter County has been a community which depended on manufacturing for its lifeblood.
   Since that era, state and federal regulators have instituted costly environmental controls which have imposed financial burdens on big industry. The North Atlantic Free Trade Agreement opened the door to foreign countries where labor is cheap and environmental regulations few, thus luring American industry abroad and leaving towns which have relied heavily on manufacturing drowning in their wake.
   Carter County and City of Elizabethton leaders say one reason growth is stagnating is because they have no new land for industrial development. The public looks around, sees shells of buildings left by manufacturers, and asks, "What about those? Why aren't we filling them?"
   Haynes Elliott, Economic Development Commission director, says matching industry with vacant buildings is not that easy. For example, the Alcoa building is a single-purpose building. "That means that anyone that uses it has got to do aluminum extrusion, basically, because they've got those big furnaces and presses."
   When it comes to industrial growth, Elliott is often heard to say, "We have lots of new prospects. Unfortunately, I can't tell you about them." After hearing this over and over, one begins to wonder whether those prospects actually exist.
   As a matter of fact, they do, based on documentation Elliott showed the Star on Friday. But a combination of factors -- the latest being a downturn in the economy and the United States' war with Iraq -- also come into play.
   TRACO, a company which makes aluminum facings for windows and does some extrusions, scouted the Alcoa building. County Executive Dale Fair said Friday that TRACO was ready to set up shop. Now, it is on hold. "We did have correspondence that everything was on go, and then like two days after this war started, we got a call saying, 'We're going to have to put it on hold at least 30 days and see what's going to happen.' Everybody's scared to death to do anything right now" because of the war, he said.
   TRACO's decision is not necessarily bad news, Fair said. "I think it got out in the community that it was a dead issue, and it might end up being dead; but right now I characterize it as being on hold." According to letters Elliott showed the Star, TRACO is indeed on hold, not canceled.
   Though incentive packages are a big plus in luring industry, there are also issues with which no incentive package can compete.
   AFG of Kingsport recently looked at Watauga Industrial Park as a site to expand its business. One of AFG's issues, according to City Manager Charles Stahl, was interstate access. "He did mention proximity of the interstate as a priority. Apparently it was because I understand they located in Abingdon, Va., off I-81. The AFG example indicated there are other factors sometimes that determine whether they'll locate in our community rather than somewhere else," Stahl said.
   Carter, Sullivan, and Washington counties all aggressively pursued AFG, Fair said, "But even though all three of us put a lot of things on the table, they still picked Abingdon, Va."
   Bristol, Tenn., also courted AFG, according to Bristol City Manager Tony Massey. "We were the bridesmaid. We were just within an eyelash of getting it," he said. Abingdon, of course, would not reveal its winning card, but, Massey said, "There were things involved besides incentives, because we did put a pretty impressive incentive package on the table."
   EDC's Elliott said Carter County also had an impressive package. "I sat there and offered him free land, a 10-year tax break, we'd waive all permits to build it, and we've got Star that will build it below cost. That guy was tickled to death. But they went to Abingdon," home of the wife of AFG's president, Elliott said.
   The announced departures of Moody Aviation and Inland Paperboard & Packaging recently have magnified the county's prior losses. Yet while it may seem Carter County is being singled out by a string of bad luck, it is not alone.
   Last Wednesday, Sprint Publishing and Advertising announced its plan to close one of two production centers in Bristol in the next six to nine months. That same day Bristol also was told that CIGNA HealthCare would close May 30.
   "We got a double hit," said Massey, "But the silver lining in this cloud is that even though we've had two that have decided to close, we did in calendar year 2002 have $79 million in new investment, of which $63 million was commercial and industrial. This shows that our other existing industries -- King Pharmaceutical, Exide Battery, Glaxo Smith-Kline -- those companies have done very well and have hired."
   Massey said Bristol is not taking recent losses lying down. "The Sprint Publishing building is a brand new state-of-the-art high-tech office complex. We have already been in contact with the state of Tennessee about marketing it. We will be very aggressive to try to make up for these lost jobs."
   Elliott said Carter County also is using the state to market Frank Schaffer, Alcoa and Cendant, and once given the OK by Inland, will post its availability on the state's Web site.
   Industrial recruitment "is an extremely competitive thing," said Massey, with incentives the name of the game. Usually the first question posed is, "What is your incentive package," he said. "You can get into a very competitive thing with your neighboring cities. You don't like doing that, but we don't write the rules. If it's a big industry with a lot of investment and a lot of jobs, if you're going to be successful you have to play that game."
   Bristol's ability to weather economic loss better than other areas is due to its diversity of industry, according to Massey. Another ace in the hole is a strong drawing card for tourists. "Bristol Motor Speedway is a phenomenon all to itself," Massey said. "We just recently had another $30 million worth of expansion down there."
   According to Bristol Chamber of Commerce, last weekend's Food City 500 had a direct economic impact of $143,500,000 for the region, with 130,000 people attending the Busch race on Saturday and 160,000 on hand Sunday. "That investment is impressive when you consider the uneven national economy," Massey said.
   Bristol's losses last week also are a reflection on the national economy, he said, "But we don't have all our eggs in one basket. That's going to help. It doesn't take away from the hurt of what happened, but it allows us to take the lick and keep on ticking, so to speak."
   Fair said that if Carter County has had one strategic downfall, "it's not looking at all the other types of industries and putting all your eggs in one basket on manufacturing. Yes, you've got to work that hard and long, but at the same time, there's tourism, there's recreation. Health is going to be a big one, and retail, too," he said.