Golden LEAF Struggles to Help Areas That Need Aid Most

Source from:  By AMY MARTINEZ, The Associated Press RALEIGH, N.C. 09/30/2004

Members of the Golden LEAF board of directors knew little about the 50-worker project from Jones County. But what they did know didn't look too promising. Dubbed MS Mega, the project needed $300,000 from Golden LEAF for a 24,000-square-foot manufacturing plant in Trenton, a small farming community in southeastern North Carolina, to make military aircraft parts for Camp Lejeune and Cherry Point. The project's owner was pitching in just 5 percent of the total cost. The Marines had not yet committed to buy the parts. At least half of the new jobs would be part time, and it was unclear whether they would pay well. Meeting at a hotel near Raleigh-Durham International Airport on Sept. 2, Michael Almond urged other members of the Golden LEAF board to turn down MS Mega. "Our money is all at risk, and basically it's not being matched with skin in the game by the owner of the company," said Almond, who is president of the Charlotte Regional Partnership, an economic development organization. But Frank Holding, executive vice chairman and director of First Citizens Bank, pointed out that Golden LEAF had given money before to projects that didn't amount to much. Besides, he argued, even if MS Mega failed, Jones County would have a new facility for attracting other projects. "The first occupant of the building might not be successful. Sometimes, it takes two or three," Holding said. Golden LEAF's 15-member board sided with Holding, voting overwhelmingly to give Jones County the money. MS Mega had one important thing going for it: Jones County is the kind of place Golden LEAF was set up to help. The case of MS Mega illustrates how difficult it is to attract substantial economic development projects to rural North Carolina, even when money isn't a problem. Golden LEAF, which was formed in 1999 after the state settled health-related claims against cigarette manufacturers, has $405 million in assets. Much of that money is supposed to go to economically distressed communities struggling from tobacco's demise. Golden LEAF can give money only to government agencies and nonprofits, not directly to individuals or businesses. The organization plans to spend $15 million on economic development between now and June 30. During its annual call for proposals in August, it received 212 requests totaling nearly $98 million. Only about half were from predominantly rural counties in the state. What's more, few of the proposals involve new or expanding businesses, such as MS Mega. Many would, at best, create jobs indirectly, such as by improving worker training. Valeria Lee, Golden LEAF's president, concedes: "We'd like to have more projects from throughout North Carolina." Lee said she and her staff of seven have tried harder this year to increase the number of proposals from rural communities, including holding meetings throughout the state to explain what Golden LEAF looks for in a grant request. But many rural communities do not have a full-time economic developer experienced in grant writing, she said. Also, many communities lack adequate roads, schools and Internet access, making it difficult to attract interest in the first place, she said. Lee also pointed out that some projects, although originating in a more urban county, have regional or statewide significance. Many of the 32 proposals from Wake County, for instance, involve agricultural projects at N.C. State University. Fifteen proposals came from Pitt County, mainly because of East Carolina University. Even so, there's no disputing that attracting businesses to rural North Carolina is a challenge. Robeson County Manager Kenneth Windley is still trying to attract a steel-tubing plant, six months after persuading Golden LEAF to give $400,000. Initially, he had secured only half that amount. But in March, a lawyer for the project's owner threatened to take the plant - and the 300 jobs that go with it - somewhere else. "Since several communities have locations at least as attractive to us as Robeson County, our selection of your site was based largely on your incentives and the county's desire to help us succeed," the lawyer wrote Windley. Windley went back to Golden LEAF and got another $200,000, but the project remains on hold. In the meantime, Windley has turned his attention to several other projects that have not yet asked for Golden LEAF money. In Jones County, MS Mega is being hailed as an economic lifesaver. The county has lost two apparel factories in the past 20 years and depends on a diminishing number of tobacco jobs. Many residents commute to work in surrounding counties. "We don't have many good jobs here," said Larry Meadows, Jones County's manager. "Now, we send our young people off to college, and we don't see them unless we go to Raleigh to visit." Meadows declined to identify MS Mega's owner, citing a confidentiality agreement. One of the best things about the project, he said, is that it might spin off other manufacturers. That's all well and good, says Almond, but he says that Golden LEAF went too far for MS Mega. "Yes, we are all looking for ways to help people in rural North Carolina," he said. "But sometimes we have differences of opinions." Holding hasn't changed his mind, either. Standing up for MS Mega "was my way of speaking up for a poor county," he said. "If it was located in a big metropolitan area, I probably would not have spoken up as quickly." Enditem