A Vision for Sustainable Businesses in Orange County

Its been a really intersting six months or so for economic development in Orange County. Change is definatly afoot. But what will rise from the ashes? I don't think anyone really knows for sure. But that isn't going to stop me from guessing.I'm still skeptical of a county wide economic development oraganization that would represent all the towns and the county. Though I have heard some eloquent arguments in this ideas favor. Its true we need a unified PR campaign to fix our anti-business image. But there are fundamental relationship problems between our local governements and the people in them that could prevent something positive from occuring. In short they don't trust each other and haven't for decades. A new government run economic development organization isn't going to fix that.My prediction is that the Town of Hillsborough, the Town of Chapel Hill, and the County will collaborate in some way. Finding the funds to seal the deal is going to be the hard part. I belive that the Town of Carrboro will remain the oulier even if it gets a seat at the table.So this is a great time for us to shape the conversation and guide the ship in a direction we want. To help do that I share my detailed vision bellow. Its a business plan for a new independent organization. One that doesn't pretend to represent the opinions of everyone. Please provide your edits and additions in the comments. Thank you to everyone who provided input and edits to this plan.Carrboro Sustainable Development PartnersCarrboro Sustainable Development Partners (CSDP) is a community development corporation whose goal is to build sustainable communities in Carrboro, NC. It will develop buildings, infrastructure and funding to accommodate businesses that are likely to match well with Carrboro’s competitive advantages as an established urban entertainment center adjacent to a major research university, while also pursuing social goals such as reinvestment in targeted community projects.Our primary mission is to assist and fund new for-profit and not-for-profit organizations in business sectors traditionally not supported by our local governments. Such as web and green technology. Why these sectors? Because they are high growth with long term benefits, create high paying jobs, and support other companies that contribute significantly to Carrboro’s economy.Another one of the CSDP primary goals is to transcend business revenue leakage from our county. Not to stop businesses from leaving our Town and County but to benefit from it when it does happen. This will be accomplished by investing in new businesses in exchange for equity. Currently our local governments have small loan programs that do debt financing for local business. We must use more financial instruments, such as equity financing, to boost our economy.When businesses out grow the resources in Orange County and move we can still own part of them. For example: If the CSDP existed when Quintiles was located in Orange County and we invested in them we'd have some very valuable stock right now. Those shares could have been used in many ways to benefit all citizens. The capital that CSDP gathers would be used to fund projects for the benefit of the community in the areas of sustainable energy, Internet bandwidth to homes and businesses, and local food.Carrboro currently lacks a few important resources to build a sustainable community. One of those is modern office space in downtown with large contiguous space.1 The recent economic recession put a stop to four commercial development projects in downtown Carrboro. This has seriously stunted positive growth in our community. Which is essential for tempering the cost of living in Orange county. Other factors such as the cost of land and construction has made it hard for traditional development to proceed.The first CSDP project will be to raise funds to develop new modern mixed-use projects. These projects will fill critical gaps in office space in downtown Carrboro. They will be informed by plans developed by The Village Project and contributed to by citizens of Carrboro and Orange County.The second CSDP project will be the creation of a business accelerator. This new venture will work to meet CSDPs primary goal of assisting and funding new for-profit and for-benefit corporations. 2 The new office space will be used to attract businesses of all sizes. From idea to IPO both single person companies and those with many employees. Our focus will be on companies that provide good matches to our shared community values.Future community projects that will funded from CSDP profits, mentioned above, will be in Internet bandwidth for knowledge, clean energy to fuel prosperity, and local food to feed everyone.InternetCurrently high speed Internet is available for purchase in Carrboro. But its cost can be prohibitive and its quality poor. Our definition of “high speed” is anything above 10MB synchronous over fiber. As of this writing this type of high speed Internet is only available for a $1500 non-refundable install fee and $3,000 (approximately) a month from one Internet Service Provider.CSDP believes that 10MB and higher should be available to all businesses who want it with a more modest install fee and lower monthly rates. There are many other examples of this cost structure for fiber in North Carolina. 3The Towns of Chapel Hill and the Town of Carrboro are installing a fiber ring in conjunction with the North Carolina Department of Transportation. We believe they need a private partner to invest in a system for public access to high speed fiber Internet. CSDP profit could be used to fund this.Clean Energy(please help write this part)Food(please help write this part)1 Creating Carrboro's Economic Future, http://townofcarrboro.org/ecd/PDFs/RevisedCarrboro10.15.pdf2 For Benefit Corporations http://www.fourthsector.net/learn/for-benefit-corporations3 Greenlight - Wilson’s Community Network, http://www.greenlightnc.com/

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http://www.facebook.com/home.php?sk=group_173061552726685

I started a Facebook group at the above url to discuss and report about the future of business in Orange County. Join us!

Brian,Why do you believe that the towns of Hillsborough and Chapel Hill and the County will collaborate but Carrboro will remain the outlier?  Why do you think Carrboro might not get a seat at the table?  At first I thought that you were saying that the other governments might deny Carrboro but reading between the lines I am wondering if you are also saying that Carrboro should limit its participation.  Could you explain further? Jim Rabinowitz

Jim,
I think Carrboro has a unique vision that the other municipalities don't fully share (at a staff and elected level).

More on that vision here:
Local Living Economy Task Force Recommendations http://townofcarrboro.org/ecd/PDFs/LLETF.pdf

Creating Carrboro’s Economic Future http://townofcarrboro.org/ecd/PDFs/RevisedCarrboro10.15.pdf

I personally want to see Carrboro go the direction they are headed with a few course corrections, as outlined in my plan. (Heck I'd like to see Chapel Hill and Orange County go this way too.) Thus Carrboro's participation in a new unified organization could serious dilute there progress.

Please provide some feedback on the contents of my plan. I shared it here so it could improve with the input of many people. Not to stir up a never ending debate. Those types of discussions tend to hold us back.

"Carrboro Sustainable Development Partners (CSDP) is a community development corporation whose goal is to build sustainable communities in Carrboro, NC. It will develop buildings, infrastructure and funding to accommodate businesses that are likely to match well with Carrboro’s competitive advantages...."  There's a lot of risk in taking an equity position in a start-up. It's very hard to predict which ones will do well. Just because Quintiles was successful doesn't mean that the next OC start-up would succeed. (If it was this easy to pick winners, then many day traders would retire young.) The town can still 'own' Quintiles--just buy the stock. But again this lack of portfolio diversity is risky: If the town is interested in playing the stock market, it would make more sense to buy the SP500 or the Dow rather than a risky start-up.Also, picking companies based on shared values is a dicey proposition for individual  investors but it's unfair on taxpayers. If a single investor wants to risk his/her own money using this metric, fair enough, but to use shared values as a valuation tool for investing other people's money is objectionable. Shared values are from common.There's also a lot of risk in prescribing which technologies the town should and shouldn't support (web and green vs. something else) - what happens if there is some large unforseen shift in those markets? e.g. Suddenly the Web design company that the town supported finds that all Web development has moved to India, and the company shuts down because it can't compete. The town loses money because some official thought they could outplay the market. Minimizing risk through portfolio diversification is the safest and most responsible play--this is why many governments are only allowed to buy AAA rated bonds. Very low return but very low risk of default.Rather than take such a central planning approach to economic development, wouldn't it make more sense to give developers an incentive to build the kinds of building that start-ups need and give start-ups the tax breaks they need to get on their feet? Let developers assume the risk of building the commercial space that small companies need. But also let them reap the reward if they do a good job.Wouldn't it better serve the citizens if the town created an environment that supported business rather than dictating what it will and won't invest in?

 

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