Building a better economy

Randee Haven-O'Donnell and I have a guest column in today's Chapel Hill News on Carrboro's efforts to actualize sustainability through locally-based economic development. Our approach is based largely on the thinking of Michael Shuman, author of "The Small-Mart Revolution," who served as a resource during the Board of Aldermen retreat back in January.

To read the column, go here. You can also read and comment on the N&O's OrangeChat.

Let me add to what is in the column that many of the ideas are not new to our area. Some of our most heralded economic success stories -- Weaver Street Market, Carrboro's Revolving Loan Fund, the Farmer's Market, Piedmont Biofuels -- are along the lines of the local living economy model. The recent Culture Shock initiative is also very much along these lines.

Michael Shuman's innovation lies in articulating a clearer rationale for this approach, one rooted in numerous case studies and economic analysis. As the column indicates, he also offers an integrated approach to a broad menu of economic development tactics. Our area has an opportunity to focus on this approach to undergird efforts by established businesses, entrepreneurs, government, and engaged citizens in a way that is invigorating culturally and socially while working toward economic growth, vitality, and sustainability.



I loved this column. Very nice.

I do have some questions about the money multiplier difference between small and large businesses.

1) The study you cite is in Austin -- anything but a small town. Has there been a look at small towns?

2) Even if the multiplier difference is that big, would more money *total* be going into the local economy from a Borders or from a local merchant like the ones we have in the area?

I only ask because you have to make sure you don't just go with the conventional wisdom in economic policy.

Also, the import substitution thing doesn't have a great track record with larger economies, though I don't know about towns. But maybe instead of trying to make stuff ourselves so you don't have to import it, it'd be more productive to focus on unique goods and services Carrboro has to offer that *can't* be imported? Then not only could you sell to Carrboro residents, but get folks from neighboring towns and areas to come buy Carrboro's goods. Just a thought, though.

I read you article and think the idea of encouraging a vibrant local economy is a good one. Carrboro really has some nice local places to shop like the Weav, Maple View Farms, etc.

I have a suggestion for y'all to consider there space for a locally grown firm that could grow into a fairly large business...I'm thinking of something like Quintiles which spun out of the UNC biostatistics department or SAS in Cary, which started out of the NC State statistics department.

I know the American Tobacco complex in Durham has done a good job of attracting successful local businesses like McKinney Silver and Smith Breeden.

I think it would be a great thing for Chapel Hill or Carrboro if they could serve as the HQ of a larger business with local roots.

Chris #1: the reason for undertaking a leakage analysis is exactly to answer the question you raise: where is money leaving our local economy and what leaks are most amenable to plugging. I do anticipate that an area we will be able to focus on will be energy. There are already a lot of folks in this area in the renewable energy and energy efficiency business and we have a citizenry that understands the environmental and economic benefits of such measures.

Chris #2: the town is reviewing its development review procedures along lines recommended by our consultant. This is to allow commercial space to come on line more easily. Last year the office vacancy rate for Chapel Hill/Carrboro was 6.3% and the retail rate was 5.9%. That's not a lot of space for larger firms. There is a large project in the works on 54 in Chapel Hill and several projects in the pipeline for downtown Carrboro.

A couple thoughts popped into my head. What about MORE local, organic farming? Seems like WS and WF are filled with conventional crops for most of the year. Maybe some partnership between local government, local stores, local supply stores, etc?

I like the idea Chris mentions above about local incubators. I know that BD has a small-business incubator for biotech companies. Perhaps Carolina North should have some of the same.

And, again, as a resident of Southern Village, nothing creates a strong local economy like connectivity. Birthday presents for school mates - Market Street Books. Dinner - Town Hall Grill. Groceries - Weaver Street. Night out - Lumina.

Walkable, by definition, leads to a more locally-based economy.

A new Innovation Center (incubator) is being planned as part of Carolina North. According to the maps we were shown at the last public meeting, it will be located just to the west of the current Environment Health and Safety building off Estes and will be one of the (if not the) first new buildings to be constructed as part of CN.

During the short session in which they gave us information on the Innovation Center, I asked whether it wasn't directly competing with Carrboro's economic development plan. The spokesperson from the Office on Research and Economic Development said they have been watching Carrboro's plan evolve very carefully and feel that there are good opportunities for collaboration. He doesn't feel the university's incubator would be competing with Carrboro because 'there is more than enough faculty innovation to go around.'

However, he also said no one from Carrboro has approached them. I asked him after the session to confirm that I heard him correctly and he did so.

My understanding is that the plan for the incubator is well underway, far ahead of the general planning for CN. At the LAC presentation to the Chancellor, the incubator was described as "near" CN.

BTW, I raised this question last fall with our staff and with the RTS consultants. Thanks for the reminder to bring it up again.

The unidentified speaker that you cite is unaware of meetings held between former Mayor Nelson, me, the town manager, Mark Crowell, Tony Waldrop et al. regarding technology transfer and Carrboro's economic development.

Are you going to tell us what plans were made at those meetings Mark?

The single most relevant meeting took place in 2005, as I recall. The University folks discussed their desire to have an incubator (now called the Innovation Center) and we discussed the possibility that it would be in Carrboro. Of course, if it is owned by the University, then the taxability of the incubator would be unclear (depending on how the Fiscal Equity discussions with UNC go).

We also discussed the fact that Carolina North will require a lot of support services and that there are an inadequate number of places where the private sector support services can go in Chapel Hill and Carrboro at present. We discussed the possibility that some of the putative commercial growth in the Northern Transition Area might provide locations for some of the private sector support services that Carolina North will need.

We also discussed the types of commercial space that UNC spin-off businesses would be looking for. The UNC officials said that one major area of need is (relatively) inexpensive "wet lab" space. The general feeling a the meeting was that Carrboro is not looking for development that invloves a lot of fume hoods venting into our atmosphere and that, in any case, as a practical matter, if cost per square foot of space is the most important factor, then there can be no competition between southern Orange County and many surrounding communities.

But, on the other hand, if UNC spin-off businesses (or any other businesses for that matter) place a high value on being conveniently accessible to/from UNC and if they value locating where there is a high quality of life, then Downtown Carrboro could be a very significant opportunity - particularly as some of the larger redevelopment projects come online, creating office space that businesses can start small in and still have room to grow.

As a practical matter, Carrboro already plays this role for UNC in some respects. We have a number of local software/internet companies located Downtown, including at least one software company that spun-off from UNC and was established using a loan from Carrboro's Small Business Revolving Loan Fund. Other software/internet companies such as Webslingerz are not exactly direct spin-off businesses (in that they are not necessarily implementing technologies developed at UNC), but are nonetheless related in that they were established by a group of UNC graduates who elected not to leave the general area (because, as mentioned above, they value the quality of life in Carrboro).


I'm not surprised that inexpensive wet lab space is one of the major needs for UNC business spinoffs. While biotech spinoffs are often attractive because of the potential financial upside, they are also notoriously expensive to get off the ground. And while biotech incubators have succeeded in some places they are a management nightmare. In addition to the issue you raised about having multiple fume hoods exhausting a variety of agents into the air there are also issues such as: who keeps the inventory of chemicals for the site; who tracks the waste (chemical, radioactive, biological) disposal for the site; who maintains the security for the site; who decides what research is appropriate for the site; etc. In the end, a university-run incubator (for biotech at least) makes the most sense because they have the necessary infrastructure to handle these tasks.

Too bad Jack Evans made it abundantly clear that CN will not act as a focal point for R & D involving "green" technology. Did anyone read about Butner's bid to be the site of the government's next bio-weapons lab? $540 million deal, I believe.

Thanks for sharing information about one of these meetings.

UNC is a local resource, a strength of both towns and the county, that can provide commercial benefits to the community. Shouldn't we support spin off businesses, even if they have fume hoods?

I wouldn't rule out fume hoods altogether; both my parents worked under them all of their adult lives. But the fact is that fume hoods are designed to vent airborne contaminants outside because those contaminants are too dangerous to be released inside. And that is not what I am hoping for in Downtown Carrboro.

There's a lot of research on campus that could lead to businesses other than those that require wet labs. Lots of opportunities for information technology start ups, including those related to green technology (such as energy modelling). GIS is another hot field. A quick Google search on "environmental engineering" Chapel Hill Carrboro, turns up 3 hits. All in Durham.

2005 was a long time ago for both the university and the town, in terms of the evolution of thinking about economic development. Maybe it's time for a new conversation.

Good point.

Mr Chilton,
I'm glad to hear you wouldn't discourage all work involving fume hoods in Carrboro. I didn't realize you were only talking about downtown Carrboro. I think one must consider the possibility of local businesses generating more or different kinds of pollution to support a local living economy. It's not that different than the demands of Piedmont Biofuels' biodiesel processor, althought they are very focused on sustainability and serve as a model of responsibility. Where would be a good place to locate businesses with fume hoods, water waste, etc. in Carrboro (or elsewhere in Orange County)?

I happen to work with some outstanding members of the Computer Science department that do image analysis. I'm a minor part of a submitted STTR grant to create new imaging tools with a local branch of Kitware, Inc. So, I agree that there are lots of good science ventures that need not use hoods, although I too have worked in hoods for most of my adult life.
Here's an idea, how about a research venture aimed at scrubbing fume hood exhaust so that it is non-polluting, based at Carolina North. : )


I think the idea of a new business designed to "scrub" fume hood exhausts is a great one (I can't comment on the feasibility though). But it's not just what comes out of the hoods that is important for wet-lab space but also what is being used/stored on site: e.g., consider the EQ site fire in Apex. The universities are spending more and more time (and paperwork) monitoring what chemicals/toxins come into their facilities, how they are being used, and how they are stored/disposed of. Given the tremendous increase in documentation that is occurring within the universities I still question whether small businesses will have the experience, manpower, and acumen to do so on their somewhat limited (and often tenuous) budgets.

I think I might be responding to the wrong point - I'm still back on my point about Carolina North having a small business incubator facility, which I agree with you, would make meeting the bureaucratic regulations much easier.


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