2016 Annual Report Economic Development Partnership of North Carolina 2 3

2016 ANNUAL REPORT ECONOMIC DEVELOPMENT PARTNERSHIP OF NORTH CAROLINA 2 3

CONTENTS CONTENTS CONTENTS

WELCOME BUSINESS LINK NORTH CAROLINA

Executive Message & Board of Directors 4-7 Business Link North Carolina 24-25

Case Study 26-27 BUSINESS RECRUITMENT & DEVELOPMENT EXISTING INDUSTRY SUPPORT Business Recruitment 8-9

Existing Industry Support 28-29 By the Numbers 10-11

Case Study 30-31 CSX Case Study 12-13

Business Development 14-15 TOURISM

Tourism 32-33 COOPERATIVE MARKETING

Case Studies 34-37 Cooperative Marketing 16-17

FINANCIALS INTERNATIONAL TRADE

Financials 38-39 International Trade 18-19

Private Investment 40-41 Trade Shows 20-21

Case Studies 22-23 4 5

EXECUTIVE MESSAGE EXECUTIVE MESSAGE

Carrying out our first annual cooperative marketing program focused on promoting the state for new business investment. In 2016, the EDPNC launched its new cooperative marketing effort for business promotion. (The Visit NC tourism promotion team within EDPNC has long utilized a similar cooperative marketing program for tourism promotion.) More than 40 local, regional and private-sector partners joined the EDPNC across a schedule of 20 targeted marketing initiatives in the first year of this program. The new cooperative marketing program not only generated revenues through participation fees paid by partners to join the EDPNC in these marketing activities, the broad buy-in from the partner community fostered a unified approach in how the state and its many partners sell North Carolina for new A LOOK AT 2016 business investment. Meeting our new private fundraising requirement, which increased significantly from the first contract year of operations. The annual requirement for the EDPNC to generate non-state funds to supplement its public funding rose from $750,000 in its first contract year to $1.25 million in its second year, a 67 percent increase. Thanks to the tireless work of our board of directors, which leads the charge on AND THE ROAD AHEAD private fundraising for the EDPNC, the organization raised just over $1.25 million from more than 70 different investors.

In noting the above accomplishments, we cannot overstate the importance of partnerships to the work of the EDPNC. Economic development — whether in the form of tourism destination marketing, export assistance, small-business counseling, or business recruitment and expansion — is the epitome of a team sport, one that relies on a well-coordinated symphony of efforts by a multitude of Dear Partners, Investors and Stakeholders: players. We remain extremely grateful for the honor of working with and supporting so many of these partners — from Murphy to Manteo and along all points in between. The Economic Development Partnership of North Carolina (EDPNC) recently concluded its second full calendar year of operation since opening its doors for business in late 2014. In the coming year, the EDPNC will focus on executing its 2017 strategic plan, which further raises the bar on desired operating results across the entire organization. Relying on both public and private funding for its mission, the EDPNC is proud to lead economic development efforts in the nation’s ninth most-populous state, home to 100 counties and more than 10 million residents. Shoring up both our public funding and private funding resources will also be a priority, given how integral they remain to our ability to perform the important mission with which we have been entrusted. Though we are confident in the unrivaled quality of the “product” that As a private nonprofit that performs under contract with state government, the EDPNC was formed to take on “marketing and sales” we are tasked with promoting, we must continue to secure the necessary financial resources so that we can put in place a robust marketing responsibilities previously housed within the North Carolina Department of Commerce, including: and sales effort worthy of the product we represent.

• Recruiting new industry to the state We also look forward to serving as a consistent and credible authority on economic development matters affecting our state. Whether in • Supporting the growth and expansion of existing industry service to the new Governor’s administration or to the leadership of the North Carolina General Assembly, the EDPNC eagerly embraces its • Helping the state’s small- and mid-sized manufacturers sell more exports to customers around the globe continued role as an apolitical, nonpartisan voice that provides valuable insight “from the front lines” of its work recruiting new companies, • Counseling entrepreneurs on the first steps of starting a business in the state attracting more visitors and otherwise advancing the state’s economic development agenda. • Attracting tourism and new spending, including from leisure travelers, film and television productions, sports groups and retirees. We are proud of what we achieved this past year, but we recognize that for our organization, the pursuit of continuous improvement — in Economic development in North Carolina depends on the successful execution of these functions, and the EDPNC is honored to serve in our strategies, in our mindset and, most importantly, in our results — must always be the true north to which we constantly strive. this role. On behalf of the board of directors and staff of the Economic Development Partnership of North Carolina, we remain grateful for the opportunity to serve the citizens and communities of our great state. In this year’s annual report, we discuss some of the many highlights for our organization in 2016. Notable accomplishments include: Sincerely, Hitting or exceeding annual performance targets across all five of our core business units. Whether working to attract new jobs and investment to the state, connect existing employers with resources to support their growth, persuade overseas customers to buy products made in North Carolina, help would-be entrepreneurs navigate the first steps of starting a business, or lure visitors to spend their vacation dollars atop our mountains and along our beaches, the EDPNC team delivered strong results across key annual performance metrics. Furthermore, the organization achieved these results in a year that was not without its share of challenges.

Successfully expanding the scope of our existing industry support efforts. After realigning resources internally, the EDPNC ended 2016 in a much stronger position to identify and assist existing North Carolina employers with future growth plans. Given that many more jobs are created by the expansion of existing companies than those created by the recruitment of new employers, the organization is now better equipped to serve the needs of growing companies across the state, as well as the communities they call home. John Lassiter Jim Whitehurst Christopher Chung Launching and implementing our first strategic plan. Although the EDPNC is an outgrowth of the statewide Jobs Plan adopted in 2014, Chairman of the Board Vice Chairman of the Board Chief Executive Officer the organization itself did not have an formal blueprint that specified division-by-division goals and strategies to achieve them. In early 2016, plans were developed for each business unit — including key strategies, performance metrics, and annual goals across each of those metrics. Development of these plans, as well as the implementation and tracking that also took place in 2016, marked an important milestone in fulfilling the original vision of the EDPNC as an organization focused on intentionality, accountability and, above all, results. BOARD OF BOARD OFDIRECTORS 6 DIRECTORS board Secretary and Treasurer John Kane, head providing open-source software solutions,and of Raleigh-based Red Hat, agloballeaderin Whitehurst, chiefexecutive officer andpresident officers includeboard Vice ChairmanJim Staffing, serves asboard chairman.Other City Council and president ofCarolina Legal John Lassiter, aformer memberoftheCharlotte Rockingham. Beaufort, Chowan, Forsyth, Randolphand Onslow, Duplin,Moore, Guilford, Transylvania, urban counties includingWake, Mecklenburg, Board membersrepresent amixofrural and professionals. and hospitalityeconomic development owned business operators, entrepreneurs, including corporate executives, family- industry leadersfrom throughout thestate President Pro Tem, comprise business and Governor, Speaker oftheHouseandSenate Board members,whoare appointed by the critical strategic direction for theorganization. of NorthCarolina Board ofDirectors, providing serve ontheEconomic Development Partnership Seventeen business leadersfrom across thestate around thestate. EDPNC offices inCaryorotherlocations The board meetsroughly sixtimesayear at residential real estate office inChapelHill. County), owner oftheRE/MAX Winning Edge Fidelity Bank;andMarkZimmerman (Orange vice president for business development at Center in2014; David Craven (RandolphCounty), which openedtheTryon International Equestrian managing partnerinTryon Equestrian Partners, new members:Mark Bellissimo (Polk County), Also in2016, theEDPNC’s board welcomed three while recognizing exceptional performance. increases theEDPNC’s responsibility for results EDPNC’s business unitsandstaff. The plan specific performance metrics for allofthe 2016 approved a strategic plan that implemented leadership andstaff. To that end,theboard in demand accountability from EDPNC’s executive shaped by theirprivate-sector endeavors, Board members,withexpectations andexpertise prominent Triangle region projects. company behindNorthHillsandseveral other of Kane Realty Corp., theRaleighdevelopment Executive Vice President andCOO Retired Vice President andGM Murphy Family Ventures Carolina Legal Staffing Lenovo NorthAmerica John W. Lassiter Thomas Looney Jeffrey Turner David Craven Vice President Fidelity Bank President Retired Textile Executive Charles Creighton Mark Zimmerman RE/MAX Winning Edge Pleas McMichael Jim Whitehurst President andCEO Founder andCEO and Exporter Colony Tire Red Hat Owner Melanie McNamara Kane Realty Corporation Absolute Style Furniture Pisgah Enterprises Mike Hawkins Founder andCEO Founder andCEO John Kane President Jacksonville-Onslow Economic Convention &Visitors Bureau for Pinehurst, SouthernPines, Sheila Pierce Knight Marie Flow Arcuri President andCEO Executive Director Dealer Principal Caleb Miles Aberdeen Area Development Flow Lexus BOARD OFDIRECTORS Tryon Equestrian Partners Brooks Pierce McLendon East Coast Hospitality Mark Bellissimo Humphrey &Leonard Partner andAttorney Vimal Kolappa Robert Singer Managing Partner Founder 7 BUSINESS BUSINESS RECRUITMENT 8 RECRUITMENT pictured here. The project willhave asignificant economic impact. Seepage12 for more details. CSX isbuilding amassive intermodal rail terminal inEastern NorthCarolina, similar to its Ohio hub PROJECTS ANNOUNCED IN2016 RECRUITMENT ANDEXPANSION OF JOBSEXPECTEDFROM INCREASE INTHENUMBER 12% ANNOUNCED IN2016 AND EXPANSION PROJECTS EXPECTED FROMRECRUITMENT OF CAPITAL INVESTMENT INCREASE INTHEAMOUNT 15% HELPED CLOSE IN2016 EDPNC ANDITS PARTNERS AND EXPANSION DEALS THE OF BUSINESS RECRUITMENT INCREASE INTHENUMBER 43% More Projects, Close More Deals Successful Steps to Support visits to LittleWashington andEdenton. Asheville, Flat Rock andBoone;17 eastern andnortheastern counties in Triangle; 26western andnorthwestern counties duringgatherings inSylva, southwestern counties inCharlotte; 14 counties duringavisitto theResearch team heard from eightPiedmont Triad counties inavisitto Greensboro; nine recruitment, business development andresearch teams. Similarly, the EDPNC from 16counties madepresentations to membersofEDPNC’s business In theElizabethtown meetingin2016, localeconomic development officials industrial sites andbuildings,aswell asotherlocalbusiness assets. and provide avenue for counties to share information aboutavailable local regions across thestate. These familiarization meetingsbuildrelationships communities. EDPNCstaff went ontwo- to three-day visitsto multicounty The EDPNCalsotook to theroad to network withpartners in theirown qualified project leadsthat are handed off to business recruitment managers. with thosefirms to familiarize themwithNorthCarolina’s assets, anddevelops or relocation project butmightbepoisedto doso, cultivates relationships identifies foreign-based companies that aren’t actively pursuingan expansion team, whichwas established in2015. The multilingual team proactively investment inNorthCarolina through itsinternational business development Also in2016, theEDPNCramped upefforts to increase foreign direct utilizing theregional industry managers’relationships withexisting localfirms. focus more onindustry recruitment andlarge expansion projects, whilebetter incentives. That shiftenablesEDPNC’s business recruitment managersto companies withgenerally smallerexpansions noteligiblefor larger state eight “prosperity zones” —assumed therole ofassisting NorthCarolina managers whoroutinely interact withcompanies withineachofthestate’s The existing industry supportteam —composed ofeightregional industry greater integration oftheefforts ofthesetwo divisions. business recruitment andexisting industry supportteams andformalizing business recruitment andexpansion projects, includingfullystaffing its The EDPNCtook steps in2016 to better positionitselfto supportmore incentives andpermitting,resolve infrastructure andworkforce issues. private, to helpcompanies locate sites inNorthCarolina, navigate financial contact for growing companies. They work withpartners,bothpublicand The EDPNC’s business recruitment managersserve asaprimarypointof billion ininvestment. close dealson97 projects that announced plansfor 13,357 new jobsand$3.3 economic development partnersat thestate, regional andlocallevels, helped That isasignificantincrease over 2015, whentheEDPNC, collaborating with $3.8 billioninannounced new investment inNorthCarolina. and expansion projects in2016, resulting in14,944announced new jobsand The EDPNCanditspartnerssupported 139 announced business recruitment BUSINESS RECRUITMENT 9 10 11

BUSINESS RECRUITMENT BUSINESS RECRUITMENT

139 PROJECTS The EDPNC and its partners helped close deals on 139 business recruitment and expansion projects in 2016. According to announcements by company and state officials, those projects are expected to create the following:

14,944 $3.8 BILLION $696 MILLION NEW JOBS IN NEW CAPITAL INVESTMENT IN NEW ANNUAL PAYROLL

2016 Recruitment Projects 8,118 $2 BILLION OF NEW JOBS ARE CONNECTED TO OF PLANNED INVESTMENT IS 42% COMPANIES ESTABLISHING NEW CONNECTED TO COMPANIES OF PROJECT WINS ARE NEW FACILITIES IN NORTH CAROLINA ESTABLISHING NEW FACILITIES FACILITIES IN THE STATE

2016 Expansion Projects 6,826 $1.8 BILLION 58% OF NEW JOBS ARE COMPANIES OF PLANNED INVESTMENT IS OF PROJECT WINS ARE EXPANDING THEIR EXISTING CONNECTED TO EXPANDING EXPANSIONS OF EXISTING NORTH CAROLINA OPERATIONS EXISTING FACILITIES IN THE STATE FACILITIES IN THE STATE In 2016, Citrix announced plans for a 400-job expansion in Raleigh.

Projects by Number Investment by Industry Jobs by Industry As of December 2016, North Carolina was actively being considered for: 59 from new facilities and 80 from $2 billion from new facilities and $1.8 8,118 from new facilities and 6,826 from companies expanding existing facilities in billion from companies expanding existing companies expanding existing facilities North Carolina facilities in North Carolina in North Carolina $11.3 BILLION 38,385 206 IN POTENTIAL CAPITAL INVESTMENT POTENTIAL JOBS CONNECTED TO POTENTIAL BUSINESS RECRUITMENT Manufacturing - 105 Manufacturing - $3.12B Manufacturing - 9,236 CONNECTED TO PIPELINE PROJECTS PIPELINE PROJECTS OR EXPANSION PROJECTS

Service & Sales - 13 Service & Sales - $319.9M Service & Sales - 2,043

Warehouse & Distribution - 10 Warehouse & Distribution - $162.4M Warehouse & Distribution - 1,807 Sales Pipeline by Percentage Corporate Headquarters - 6 Corporate Headquarters - $150.5M Corporate Headquarters - 1,354 Of the 206 potential projects in the pipeline as of Dec. 31, 2016, 70 percent involved various types of manufacturing, while corporate headquarters relocations made up 4 percent. Here is the percentage by industry: Research & Development - 5 Research & Development - $87.9M Research & Development - 504

Advanced Manufacturing - 17.4% Textiles - 6.3%

Food/Beverage - 13.6% Pharma, Biotech, Life Sciences - 6.3%

Automotive/Transportation - 12.1% Business and Financial Services - 4.9%

Other - 10.6% Aviation - 4.3%

IT and Communication - 9.2% Metal Manufacturing - 3.9%

Plastics and Chemicals - 7.7% Energy - 3.4% 12 13

BUSINESS RECRUITMENT BUSINESS RECRUITMENT

2016 Recruitment and Expansion Projects Here are highlights of announced projects supported by EDPNC business recruitment and WHAT’S THE BIG DEAL? regional industry managers in 2016. (Recruitment projects, defined as companies locating new facilities in the state, are marked by an asterisk.)

THE CSX County Capital Company Location Jobs Investment INTERMODAL RSI Home Products* Richmond 175 $18.3M Avadim Technologies Buncombe 551 $20.4M RAIL TERMINAL Everest Textile Co.* Rutherford 610 $18.5M JELD-WEN* Mecklenburg 210 $38M

Grifols Therapeutics Johnston 390 $210M Local and state officials are calling CSX’s intermodal rail network and lower shipping Nash counties. decision to build a massive intermodal costs by up to 40 percent by converting Aurobindo Pharma USA* Durham 275 $31.7M rail terminal in Rocky Mount a “game freight from highway to rail,” said CSX Tolson said he was told the company’s WHEN THE CCX TERMINAL changer” because it is expected to attract spokeswoman Kristin Seay. preference would be locating the terminal IS BUILT, IT WILL BE THE Prescient Company* Alamance 205 $18.8M manufacturers and distribution centers to in a county closer to the Triangle region, a MOST TECHNOLOGICALLY Eastern North Carolina while stimulating But it took much more than North targeted and fast-growing market for the ADVANCED RAIL TERMINAL Relias Learning Wake 470 $4.5M more shipping at the Port of Wilmington. Carolina’s strategic central East Coast terminal’s local service. Nonetheless, CSX IN THE WORLD. location to win — and then hold on to — gave him the project specifications. GF Linamar Automotive* Henderson 350 $217M Building the facility is expected to create the competitive project both Virginia and roughly 250 to 300 short-term jobs South Carolina aggressively pursued. After first raising a possible site that think about rail, the way they think about Corning Optical Cabarrus, Catawba, Forsyth 355 $205M in engineering, technical services and proved inadequate, Tolson suggested the distribution.” construction. Once completed, the terminal When CSX was considering sites for its Rocky Mount location across U.S. Highway HAECO Americas Guilford 500 $60M itself will bring 149 well-paying permanent new hub, EDPNC Business Recruitment 301 from North Carolina Wesleyan College. CSX must meet hiring commitments and jobs to a region that has struggled Manager Ellen Tai was North Carolina’s retain its current employment in North INC Research Wake 550 $51.5M with higher unemployment rates in the primary point of contact for the Florida- Tolson also met with Wesleyan College’s Carolina to take advantage of $122 million state. Over time, the terminal will have a based railroad company. president to make sure he was on board. in state incentives approved to support K-Flex USA Franklin 100 $45M multiplier effect of spurring 1,500 new jobs Then the local partnership successfully the terminal and its infrastructure needs, statewide, officials say. “I thought Ellen from Day One understood obtained purchase options on total including up to $110 million from the state Snyder’s-Lance Mecklenburg 200 $38M the power of this project and was very acreage that was more than adequate for Department of Transportation, $4.3 million The so-called Carolina Connector, or CCX, helpful in helping us navigate doing the planned 450-acre terminal. in Job Development Investment Grants, Citrix Wake 400 $5M which is on track to open in late 2019, business in North Carolina and the and $7.8 million in intermodal tax credits. will transfer large freight containers of opportunities that come with it,” said With options and the neighboring college’s Mountaire Farms Chatham 600 $50M consumer goods such as food, furniture Louis Renjel, vice president of strategic support in hand, important pieces had The CCX terminal will be able to handle and appliances between trains and trucks infrastructure at CSX. fallen into place. up to 400,000 containers a year Uniquetex* Cleveland 150 $31M before shipping them to East Coast when it opens, with room to grow to destinations and elsewhere across the U.S. That navigation became tricky when the What sealed the deal, CSX’s Renjel said, more than 1 million, Renjel said. It will Alamac America Knits Robeson 189 $1.1M first announced choice for the site fell “was assembling the project, it was be environmentally friendly, he said, CSX is counting on its intermodal rail through after opposition from property thinking about incentives, it was our eliminating more than 16 million truck miles CSX* Edgecombe 149 $160M system to convert a share of the 9 million owners who did not want to sell their land confidence that the Carolina Gateways annually from North Carolina highways and loads of freight now carried by trucks in for the project. Partnership and the Rocky Mount public operating with near-silent robotic cranes King Charles Industries* Anson 100 $12.5M the East to rail, because shipping by rail is officials had the ability to bring the project and directional lighting to reduce light on cheaper and more environmentally friendly About a week later, CSX heard from from concept to reality.” surrounding areas. Altec Industries Inc. Yancey 150 $15M over long distances. The Rocky Mount Norris Tolson, president and chief hub “will increase access to national and executive officer of the Carolinas Gateway “The North Carolina DOT (Department “When the CCX terminal is built, it will be GKN Driveline Sanford, Alamance, 302 $206.6M global markets for North Carolina ports Partnership, which is dedicated to of Transportation) was great,” he added. the most technologically advanced rail Catawba, Lee, Person and businesses through CSX’s extensive economic development in Edgecombe and “They are cutting-edge in the way they terminal in the world,” he said. BUSINESS BUSINESS DEVELOPMENT 14 DEVELOPMENT Annual Conference inTokyo The NorthCarolina tableat the2016 Southeast U.S.-Japan Association CAROLINA TO PURSUEFOR NORTH TO BUSINESS RECRUITERS IDENTIFIED ANDREFERRED DEVELOPMENT TEAM LEADS THAT THEBUSINESS THE NUMBEROFQUALIFIED 39 DEVELOPMENT TEAMIN2016 INTERNATIONAL BUSINESS GENERATED BY THE EXPANSION LEADS RECRUITMENT AND THE NUMBEROFBUSINESS 329 and conducted 177visitsto companies. made 70 conference presentations In 2016, theteam attended 164events, other strategies. show events, onsite company visitsand through industry presentations, trade The team connects withcompanies Japan, CanadaandSouthKorea. Carolina’s economy: Europe, China, geographic markets importantto North international directors located infive But theteam alsoincludesEDPNC out oftheEDPNC’s Caryheadquarters. focused onthedefense industry, operate including anewly created position Business development team members, to pursue. leads” for thebusiness recruitment team Thirty-nine ofthosebecame“qualified In 2016, theteam identified329leads. North Carolina. recruitment team to present optionsin the company to EDPNC’s business expand intheU.S., theteam introduces develops into aproposal to locate or If acompany’s potential growth business model. opportunities inNorthCarolina for their and make themaware ofspecific with executives ofidentified companies Team memberscultivate relationships or expand operations inNorthCarolina. companies that could beready to locate seeks outforeign-based anddomestic The business development team actively the business recruitment team. new foreign-direct investment leadsfor North Carolina, primarilyby generating to increase job-creating investment in development team executes strategies The EDPNC’s international business and Cultivates Companies Poised to Expand Business Development Team Identifies companies from 70 countries. executives ofadozen Fortune 100 of Commerce secretary metwith staff andtheNorthCarolina Secretary industries, business development team exhibition for the aerospace anddefense Air Show inEngland, amajortrade At theFarnborough International chain. representing theentire industrial supply 200,000 visitors and65,000 exhibitors fair. Hannover Messe draws more than in Germany, theworld’s largest industrial Washington, D.C., andHannover Messe SelectUSA Investment Summitin members alsoparticipated inthe In 2016, business development team Yokohama. Automotive EngineeringExpositionin corporate crowd participating inthe The event istimed to tapinto the industry opportunitiesinNorthCarolina. this timefocusing onautomotive Carolina investment seminarinJapan, team plansto present anotherNorth In May 2017, thebusiness development operations intheU.S. someday consider locating orexpanding Japanese corporations that may North Carolina’s business assets to investment seminar, whichpresented Japanese companies participated inthe Executives from more than80 Annual Conference beingheldthere. the Southeast U.S.-Japan Association September, just before andaugmenting investment seminarheldinTokyo in local partnersto host aNorthCarolina Those activitiesincludedjoiningwith BUSINESS DEVELOPMENT 15 COOPERATIVE COOPERATIVE MARKETING 16 MARKETING Farnborough International AirShow inEngland withlocalpartnersin2016. The EDPNC’s cooperative marketing initiatives includedattending the PARTNERS IN 2017 EDPNC PLANSTO OFFER OPPORTUNITIES THE MARKETING COOPERATIVE THE NUMBEROF 21 ACTIVITIES IN2016 COOPERATIVE MARKETING ONE ORMOREEDPNC WHO PARTICIPATED IN PRIVATE-SECTOR PARTNERS REGIONAL AND THE NUMBEROFLOCAL, 48 LED BY THEEDPNCIN2016 AND HOSPITALITY EVENTS CONSULTANT MEETINGS IN TRADESHOWS, SITE JOINT PARTICIPATION ACTIVITIES SUCHAS COOPERATIVE MARKETING THE NUMBEROF 19 U.S. for foreign direct investment and Washington, D.C., whichshowcases the the SelectUSA Investment Summitin brewing industry professionals; and attendees represent more than10,000 and Brew ExpoinPhiladelphia,whose Germany; theCraft Brewers Conference industrial technology trade fair in from 39 countries; theHannover Messe 100,000 visitors and1,500exhibitors trade event that attracts more than Show inEngland,an aerospace industry sectors, includingtheFarnborough Air in events focusing onspecificindustry The EDPNCsetasidespotsfor partners Targeted industry gatherings participated. Twenty localandprivate-sector partners cities inNew York andNew Jersey. Chicago, Cleveland, Columbus and Phoenix, Los Angeles,Atlanta, Dallas, site consultants inmarkets including: one-on-one meetingswithpremier economic development partnersfor of localandregional, publicandprivate The EDPNCtraveled withsmallgroups Site consultant meetings included: cooperative marketing program In 2016, theindustry-focused for suchactivities. they would pay if signingupindividually resulting insignificantsavings over what Partners cost-share withtheEDPNC, Carolina divisionto promote tourism. conducted by theEDPNC’s Visit North is modeledafter asimilarprogram The cooperative marketing program or expand operations. that may beconsidering where to locate North Carolina’s assets to companies and activitiesfocused onpromoting EDPNC cooperative marketing events private-sector partnersparticipated in In 2016, more than45regional, localand Engages Local Partners New Cooperative Marketing Program COOPERATIVE MARKETING Processing magazine. the standard advertising rates inFood in theinsertfor significantlyless than organizations were ableto purchase ads state. Local economic development profiled anumberof companies inthe food andbeverage manufacturers and highlighted NorthCarolina’s assets for makers inNorthAmerica. The insert thousands offood industry decision publication distributed to tens of of Food Processing magazine, atrade published intheOctober 2016 issue ads ina16-pageadvertorial insert development organizations to place which invited localeconomic cooperative printadvertising effort, The EDPNCcompleted itsfirst Cooperative advertising hospitality events in2016. partners participated infour different than two-dozen localandprivate-sector Incentives Symposium inDenver. More Professionals inTaxation’s Credits and and reception at theInstitute for twice-annual forums; andadinner Industrial ManagementAsset Council’s together; VIPdinnerevents at the states andJapanesecorporations that bringsseven Southeast U.S. Conference inTokyo, aconference U.S.-Japan Association Annual before theopeningofSoutheast Carolina investment seminarheldjust hospitality events includingaNorth influencers together withpartners at consultants andothercorporate The EDPNCbrought site selection Hospitality andVIPfunctions EDPNC. nine targeted industry events withthe and three utilitycompanies attended local economic development partners 70 international markets. In2016, 30 draws more than2,600peoplefrom 17 INTERNATIONAL INTERNATIONAL TRADE 18 TRADE Photo courtesy of theNorthCarolina State Ports Authority. Port of Wilmington EXPORT ASSISTANCE SERVICES IN2016 NUMBER OFCOMPANIES NEW TO EDPNC 311 ASSISTED BY THEEDPNCIN2016 REPORTED BY COMPANIES TOTAL VALUE OFEXPORTS $832.2M SUPPORT IN2016 EDPNC EXPORTASSISTANCE NUMBER OFCOMPANIES RECEIVING 558 Companies withExportsin2016 International Trade Team HelpsMore Japan, Chinaand HongKong. foreign offices inCanada,Mexico, Europe, South Korea, of whomspecializes inspecificindustry sectors) andseven multilingual trade experts located inNorthCarolina (each The EDPNC’s international trade divisionemploys social andpoliticaldata. provides overseas market intelligence includingeconomic, with potential buyers anddistributors at shows, and companies to international trade shows, setsup meetings markets. The team alsoleadsdelegations ofNorthCarolina distributors or agents,andmarket research oninternational export education programs, customized searches for new International trade team services includeproviding developing export markets. that often don’thave staff dedicated to exploring and are free ofcharge, whichisessential to smallerbusinesses and develop overseas salesopportunities.The services small- to medium-sized businesses enablethemto identify The international trade team’s services to NorthCarolina’s companies —from 77in2015 to 89 in2016. team increase thenumberofcounties where itsupported The strategic outreach helpedtheinternational trade export promotion services. was to make thosecompanies better aware oftheEPDNC’s EDPNC international trade staff theyear before. The goal in counties where there hadbeenlittle interaction with Also in2016, thetrade team reached outto companies during theyear. businesses exported $739 millionworth ofmerchandise trade staff supported 501 companies in2015, andthose million worth ofproducts in2016. By comparison, EDPNC last year, andthosecompanies reported exporting $832.2 The EDPNC’s trade specialists assisted 558companies increase theirincome from exports. more NorthCarolina companies enter foreign markets and In 2016, theEDPNC’s international trade team helped in 2017. continue to have anegative impactonexports nationwide growth globallyandthestrengthening U.S. dollarmay is more importantthanever, because slowed economic Helping more companies enter and navigate export markets INTERNATIONAL TRADE 19 20 21

INTERNATIONAL TRADE INTERNATIONAL TRADE

Global Petroleum Show Location: Calgary, Canada Industry: Oil and Gas London N.C. Companies: 4 Projected Sales: $1.2M

Toronto

Seoul High Point, NC Cary, NC Medica Tokyo Location: Dusseldorf, Germany Industry: Life Sciences N.C. Companies: 9 Shanghai Projected Sales: $360,000

Mexico City Expo Mueble Hong Kong Location: Guadalajara, Mexico Industry: Furniture N.C. Companies: 5 Projected Sales: $2.5M

Index Dubai Location: Dubai, UAE Industry: Furniture N.C. Companies: 6 Projected Sales: $1.55M

Trade Winds - Latin America Landforces Location: Santiago, Chile Industry: Varied, U.S.-led Trade Mission Location: Adelaide, Australia N.C. Companies: 6 Industry: Defense and Security Projected Sales: $1.5M N.C. Companies: 5 Projected Sales: $490,000

2016: A Few Key Points Global Connections: By The Numbers

The EDPNC’s international trade division, which employs trade specialists located in North Carolina, Canada, Mexico, Europe, South The number of companies Total value of Korea, Japan, China and Hong Kong, coordinates and leads the participation of North Carolina companies in international trade shows. that attended international exports reported by The division’s services include introducing businesses to potential buyers and distributors of their products or services. More than 200 trade events with the companies assisted by companies attended 36 international trade events with the EDPNC in 2016. This map highlights several of those events and the companies’ 201 EDPNC in 2016 $832.2M the EDPNC in 2016 estimates of sales they expected to close by attending.

Companies’ total projected Major trade shows amount of sales from attended by groups EDPNC international trade Trade shows attended by EDPNC-led Countries where EDPNC-assisted participating in trade shows of companies led by team office locations groups of North Carolina businesses companies reported export sales $415.5M with the EDPNC in 2016 36 the EDPNC 22 23

INTERNATIONAL TRADE INTERNATIONAL TRADE

Trade Show Helps Waste Bin Manufacturer Increase Sales in Latin America

Otto Environmental Systems North America, a manufacturer of plastic waste bins for residential and commercial use, has turned to the EDPNC in recent years for assistance in expanding its foreign markets in Latin America. SUCCESS Otto employs roughly 300 people in Charlotte, where it opened its North American headquarters in 1988. The company, which traces its roots to a family business that began in Germany in the 1930s, is a subsidiary of the Otto Group based in Roermond, Netherlands.

The company, which also provides services including container logistics, servicing, STORIES repair, design and custom molding, currently sells throughout the U.S. and exports to nations around the world. But in recent years, it has focused on expanding sales in markets closest to North Carolina — particularly Central America, South America and Caribbean nations.

Power Cord Maker Dives Deep Attending key trade events is one way to do that. In September 2016, EDPNC into Overseas Markets International Trade Manager Mike Hubbard assisted Otto with obtaining State Trade and Export Promotion Grant funds to reimburse its travel costs to Trade Winds – In 2013, Stay Online Corp. attended its Kuldip Wasson, EDPNC director of global Stay Online owners Joe and Bellinda Higgins Latin America. first international trade show outside the operations, and partners such as the Small Photo courtesy of the Small Business U.S., just as it was beginning to explore Business and Technology Development Technology and Development Center The U.S. Department of Commerce-sponsored trade forum held in Santiago, Chile, overseas markets for its products. Center (SBTDC) in Raleigh have been with enabled U.S. companies to participate in their choice of trade mission stops in Chile, What a difference three years makes. the Higginses for their entire exporting Peru, Bolivia, Paraguay, Uruguay, Argentina and Mexico. Over two days in Chile journey — creating a network that has we can choose from our root cords, cut off with federal grant funds to offset travel and Peru, Otto participated in meetings with foreign distributors and buyers who The end assembly manufacturer of power connected them to export education an end and mold in-house the necessary costs of some of the many international had been pre-screened by Commerce’s U.S. Commercial Services unit as possible cords, plug adapters and other power classes, funding to attend trade shows, plug, according to the customer’s needs. trade shows it has attended since CeBIT matches for the company’s products and services. connectivity products has attended many foreign market analysis, help with Our in-house molding capabilities have 2013. Wasson also introduced them to more trade events, increased its exports developing a strategic export plan and increased sales opportunities for us around SBTDC international trade counselor Alex “It was our first Trade Winds, and it was extremely good for us,” said Travis Dowell, from 5 percent to 20 percent of company assistance in finding the Prague location the globe.” Viva, who helped Stay Online develop a director of international sales at Otto Environmental Systems North America in sales, opened a warehouse and distribution for their new warehouse and distribution strategic export plan. Charlotte. “All the meetings were pretty serious and well-coordinated.” center in Czech capital, Prague, and center, which opened in 2015. The EDPNC’s Wasson coordinated expanded the demand for its products well Stay Online’s participation in its first The EDPNC’s help hasn’t stopped at The company made a sale to a Peruvian distributor at Trade Winds, Dowell said, and beyond its initial foreign markets in Canada “The distribution center in Prague has international trade show, as part of export assistance. In 2016, Wasson and is actively working with five new prospects it met there. and Latin America. changed the landscape in the customers the North Carolina pavilion at the 2013 Harry Swendsen of the EDPNC’s existing we have been able to attract,” Bellinda CeBIT in Hannover, Germany, the largest industry support team visited Stay Online’s “We came back to North Carolina from the event with five very solid leads, not to “Now we ship to more than 100 countries Higgins said. “We can stock our inventories information technology trade show for Creedmoor plant and learned a portion of mention more connections, more knowledge, and more confidence in doing business a year,” said Bellinda Higgins, Stay in Europe and have it shipped from industry professionals. The show was a it had HVAC and roofing issues that were in this area of our world,” he said. Online co-owner with her husband, Jim. Prague.” good fit, since Stay Online’s products cater keeping the company from expanding And exporting has contributed to the to the needs of businesses such as original production and hiring new personnel. “The EDPNC was very critical to our part in Trade Winds,” Dowell added. “It’s a company’s ability to grow from 30 to 85 The Prague location supports a Stay equipment manufacturers, technical Swendsen encouraged the Higginses to very good resource. They also support local export training. I attended an export employees since 2013. Online edge — its ability to draw on a large businesses, data centers and hospitals. apply to a state grant program that could compliance seminar that was sponsored by the EDPNC in Asheville recently. I was inventory or quickly customize products help renovate the building. able to take away a lot of good nuggets from that.” The connection between exports and before shipping. The company also has no “Kuldip was instrumental,” Higgins said. job creation is the core reason federal required minimum-order quantity (MOQ). “He made sure we had an interpreter. And In December 2016, the state approved Dowell expects to continue working with the EDPNC and its partners as the agencies annually name Exporters of the he made sure we had all the services we a $499,190 grant to help renovate the company focuses on growing its exports in Latin America and the Caribbean, Year and President’s “E” for Exports Award “Through our immense inventory and no needed to rev up for the show.” Creedmoor building, contingent upon and even explores possibilities in Africa.. While the percentage of the Charlotte winners in each state. Stay Online won MOQ, we can offer same-day shipping,” the company committing to a 50-job company’s sales attributable to exports is relatively small today, Dowell said, “we both recognitions in 2016. Higgins said. “If something isn’t in stock, The EDPNC has also assisted the Higginses expansion. would like to double that every year.” 24 25

BUSINESS LINK NORTH CAROLINA BUSINESS LINK NORTH CAROLINA

Small Business Counselors Help Startups with Permitting and More

Whether your ambition is to open a restaurant or an IT consulting firm, you’ll have to comply with regulations common to all startups in North Carolina and a few that are particular to your type of small business.

The EDPNC’s Business Link North Carolina (BLNC) team should be your first call. Through its toll-free number, BLNC provides free one-on-one counseling to would- be entrepreneurs and startups navigating the legal requirements of establishing a small business in North Carolina. Find out more about this critical resource on Page 26.

20,152 NUMBER OF CALLS AND CASES ASSISTED BY BLNC COUNSELORS IN 2016

14% INCREASE IN NUMBER OF CASES HANDLED BY BLNC OVER 2015

71% OF CALLS CAME FROM STARTUPS

100 BLNC ASSISTED CALLERS FROM ALL 100 COUNTIES IN NORTH CAROLINA BUSINESS LINK BUSINESS CAROLINA NORTH 26 27

BUSINESS LINK NORTH CAROLINA BUSINESS LINK NORTH CAROLINA

Case Study: Phone Call Clears Potholes on the Road to China

What must a small North Carolina business navigate in order to ship a container of valuable technical textiles to China? OUTREACH HELPS INCREASE CALLS Besides more than 6,000 nautical miles of ocean? Paperwork.

In February 2016, Scott Hay, owner of Mooresville-based TO SMALL-BUSINESS Davy Textiles, called the Business Link North Carolina (BLNC) toll-free line seeking more than the typical guidance on establishing a small business in the state. He wanted assistance with his China-bound container of technical textiles, which had been delayed in a U.S. port for months as COUNSELORS Hay worked to address questions raised by U.S. officials.

Holly Yanker, BLNC senior small business counselor, connected Hay to resources that expedited release of his container, helped him get a three-year export license from Chinese authorities and introduced him to new distributors for his product in China. A campaign to broaden awareness of expand one of our companies into North the EDPNC’s small-business help-line Carolina.” The counselor “not only told Yanker helped Hay obtain documents from the North contributed to a nearly 14 percent increase me where to get additional information I Carolina Secretary of State’s Office that satisfied Chinese in the number of calls and cases counselors needed,” the caller said, “she also took the requirements for proof his company was legally registered in handled in 2016. time to take me to the sources, find the the state. She also introduced Hay to Glenn Jackman, EDPNC appropriate channels and then walked me senior international trade manager specializing in the textile The partnership’s Business Link North through the steps.” industry. Carolina (BLNC) team provides free one-on-one counseling to would-be A surveyed bookstore owner said: “Several Holly Yanker, right, BLNC senior small business counselor, Jackman, in turn, connected Hay with Annabel Rong, EDPNC entrepreneurs and startups on navigating years ago we lived in Illinois and started and Jonetta Appling, left, of the North Carolina Department trade director in Shanghai, and export compliance trainer the legal requirements of establishing a small business. If there was something of Revenue, were among speakers at a July event targeting Mike Alloca of Alloca Enterprises, who advised Hay on ways a business in North Carolina, primarily like Business Link, it would have made all minority- and women-owned small businesses at Guilford to resolve questions holding up his container. through its toll-free number. the difference in the world... My startup Technical Community College. process would never have gone so All told, the documents and discussions contributed to The team handled 20,152 calls and cases in smoothly without [the counselor’s] help.” release of the valuable container, which carried roughly 10 2016, a large increase over the 17,746 total Carolina counties in both 2015 and 2016, percent of Hay’s total China sales in 2016. They also helped of 2015. BLNC callers range from restaurant last year BLNC strategically campaigned to Hay develop an export compliance manual specific to his owners and innkeepers to biotech raise awareness of its services by reaching company and acquire his Chinese exporting license. The team not only addressed 2,406 more enterprises and web-design consultants. out directly to counties with the least call SEVERAL YEARS AGO WE LIVED IN ILLINOIS cases without expanding its staff of three In English and Spanish, BLNC counselors volume. Under the campaign, EDPNC’s “It’s a license that gives you authority to export waste AND STARTED A SMALL BUSINESS. IF THERE full-time and one part-time counselor, answer questions about licensing and research team identified small businesses material into their country,” Hay said. “It’s very difficult its survey of a representative sampling permit requirements, access to forms in counties where fewer calls originate. WAS SOMETHING LIKE BUSINESS LINK, IT to obtain, even for large corporations.” Hay’s business of callers indicated that 90 percent of for business structures, tax ID numbers BLNC counselors then called those WOULD HAVE MADE ALL THE DIFFERENCE IN reprocesses technical textiles out of waste from cut and sew clients in the first half of 2016 would have and more. Counselors also make referrals businesses directly to build awareness and THE WORLD. MY STARTUP PROCESS WOULD operations, textile mills and decommissioned military goods. rated their customer service experience as to local, federal and state agencies, ask where they might need support. NEVER HAVE GONE SO SMOOTHLY WITHOUT “above average” or “excellent.” state occupational licensing boards and [THE BLNC COUNSELOR’S] HELP. Rong continued to help in October 2016, when Hay attended programs that can help new businesses Also in 2016, BLNC expanded its marketing the Cinte Techtextil China trade show for technical textile and A surveyed caller in the medical supply find grants, alternative lending institutions, and outreach to minority-owned, women- — BLNC caller and bookstore owner nonwoven products in Shanghai. She walked the floor with business said the BLNC counselor “was mentoring and more. owned, and veteran-owned businesses, to from Mecklenburg County Hay, translated and introduced him to five new distributors. “I very helpful, very knowledgeable and better support those often underserved didn’t know this free service existed,” Hay said. made sure I had all the help I needed to While BLNC took calls from all 100 North small businesses. EXISTING INDUSTRY EXISTING INDUSTRY SUPPORT 28 SUPPORT wood waste going through itsfirst grading process at the company’s intake yard. and ChrisMcCurry andyard managerTravis Oglesby watch recycled Appalachian in 2016, after beingnominated by theEDPNC.From left,company owners Marty recycled tree bark,received theLeadership Award inSustainable Manufacturing House inSpruceThe Pine, Bark N.C., whichmanufactures wall covering from ASSISTED BY REGIONALMANAGERS IN 2016 JOBS CREATED BY GROWTH OFCOMPANIES 2,304 INDUSTRY MANAGERS IN2016 COMPANIES ASSISTED BY REGIONAL YEAR-OVER-YEAR INCREASE IN 14% MANAGERS IN2016 BY REGIONALINDUSTRY COMPANIES WEREASSISTED 1,056 Takes onNew Role in2016 Team Assists More Companies, billion incapital investment. Tier 1and2projects calledfor 5,979 new jobsand$1.5 Tier 1andTier 2counties, 61 percent ofthetotal, andthose EDPNC supported 59 recruitment and expansion projects in billion incapitalinvestment. In2015 by comparison, the counties, andthey calledfor 5,443new jobsand$2.34 of thoseprojects, or66percent, were inTier 1andTier 2 recruitment andexpansion projects in2016. Ninety-two and existing industry teams supported 139 announced The combined efforts oftheEDPNC’s business recruitment Wake. distressed thanTier 3counties suchasMecklenburg and Carolina DepartmentofCommerce asmore economically counties, often rural counties designated by theNorth more companies withexpansions inTier 1andTier 2 The shifthascontributed to the EDPNC’s abilityto assist supporting larger expansions ofexisting companies. time to focus onattracting new companies to thestate and It hasalsoprovided thebusiness recruitment team more businesses operating intheirregions and poisedto grow. the regional industry managers’existing relationships with The changehasenabledthe EDPNCto take advantage of EDPNC’s business recruitment team. incentives. Those projects were previously managedby the Carolina withexpansions noteligiblefor thelargest state responsibility for assisting existing companies inNorth In addition,theregional industry managersassumed full prior year, anearly 14percent increase. businesses from allover thestate, compared to 927 the In 2016, theregional industry team supported 1,056 their workforce andmore. funds to renovate buildingsandbuynew equipment,train resources that canhelpthemfindqualified workers, access need to grow. The managersthenconnect businesses to leadership andbecome familiar withwhat thecompanies where they visitcompanies, buildrelationships withtheir to oneofeightmulticounty regions, or“prosperity zones,” Each oftheteam’s regional industry managersisassigned business growth andexpansion. in thestate to awidevariety ofservices designedto fuel manufacturers andothercompanies already operating The EDPNC’s existing industry support team connects

EXISTING INDUSTRY SUPPORT 29 30 31

EXISTING INDUSTRY SUPPORT EXISTING INDUSTRY SUPPORT

CASE STUDY

WE CANNOT OFFER ENOUGH THANKS TO THE FOLKS AT EDPNC RECYCLING FOR BRINGING THIS GRANT OPPORTUNITY TO OUR ATTENTION.

— Tom Caudle, President of Unifi AND GROWING

Your favorite jacket may have had its start environmentally responsible,” said Tom The small flakes are sent to Unifi’s recycling in a bale of plastic water bottles recycled Caudle, president of Unifi, Inc. center in Yadkinville, where they are into fiber by a North Carolina yarn maker. further chopped, melted, reformulated Unifi’s recently completed expansions of its and textured into yarns. Unifi received In addition to being made in an Reidsville and Yadkinville facilities in North a $190,000 state grant to support its environmentally responsible way, that Carolina are important parts of meeting 47,000-square-foot addition to the plant, jacket could be highly water repellent and that demand. The EDPNC supported those which was built in 1997. offer superior moisture-wicking and odor job-creating projects by making Unifi control. aware of available grant funding that could Since REPREVE was introduced, Unifi has help them expand their existing facilities. transformed more than 5 billion plastic The domestic and global market for bottles into REPREVE fiber. In addition, high-performance apparel is one reason “We cannot offer enough thanks to the demand for Unifi’s REPREVE and other Greensboro, N.C.-based Unifi has invested folks at EDPNC for bringing this grant PVA fibers has grown from just 20 percent $130 million over the past three years to opportunity to our attention,” Caudle of the company’s consolidated sales in expand production of its REPREVE fibers said. “The team provided an abundance of fiscal year 2010 to 35 percent of sales in and other premium value-added (PVA) much-appreciated counsel and assistance fiscal year 2016. yarns. in completing the grant process.” “The expansions in both Reidsville and REPREVE, made out of plastic bottles In September 2016, Unifi opened a $28 Yadkinville help to fulfill Unifi’s goal of and other polyester waste, is already a million bottle processing center at its vertical integration for our REPREVE success story. Introduced in 2007, the Reidsville plant, which will add 87 new recycled product line, adding flexibility, REPREVE brand was part of Unifi’s move jobs to bring employment there to nearly expanding production capabilities and from producing commodity yarns to 350. Earlier in the year, Unifi finished a $10 supporting volume growth,” Caudle said. making high-tech performance fibers. The million expansion of its REPREVE recycling “The growth and expansion of REPREVE transition helped Unifi survive dire times center in Yadkinville, which added 19 new has helped transform our business.” for textile companies in the 2000s, and be jobs at the yarn-manufacturing plant with consistently profitable in subsequent years. roughly 1,000 employees. The projects Garrett Wyckoff, EDPNC senior business helped REPREVE bring its entire recycling recruitment manager, assisted Unifi with REPREVE-based materials are now found process in house. the Reidsville expansion. Tracy Dellinger, in high-profile brands including Patagonia, EDPNC regional industry manager, Fossil, The North Face and Haggar. They As part of the Reidsville project, Unifi supported the company’ s expansion in are even part of the seat covers in Ford’s received a $500,000 state grant that Yadkinville. Fusion hybrid car and F-150 truck. supported adding 80,000 square feet to a 47-year-old facility. That addition created “We truly could not have completed this The company expects demand for its space for the new 150,000-square-foot process without the dedicated efforts of flagship REPREVE and other PVA yarns bottle processing center where plastic Tracy and the EDPNC,” Caudle said. to grow, as “customers and consumers water and soda bottles are cleaned, sorted, Baled bottles and a bale breaker at the Unifi plant in Reidsville increasingly prefer products that are de-labeled and chopped into plastic flakes. TOURISM TOURISM 32 The coquina outcrop at Kure Beachat low tide CAROLINA IN 2016 LODGING DEMAND INNORTH INCREASE INCOMMERCIAL 5% TO NORTHCAROLINAIN2016 REVENUE FROMDOMESTIC VISITORS INCREASE INCOMMERCIAL LODGING 9% TO NORTHCAROLINAIN2016 GENERATED BY DOMESTIC VISITORS HOTEL ANDMOTEL ROOMREVENUE $3.5B Demand andRevenue in2016 State Attracts Record Lodging state. The industry supported more than45,000 businesses inthe 211,400 in2015, increasing 3.2percent over theprioryear. The state tourism industry directly employed more than receipts grew 3.9percent, to $660.8 million. rose 7percent, to more than$1.1 billion,whilelocaltax State taxreceipts from domestic visitor spendingin2015 increase over 2014. $21.96 billion,anall-timehighfor thestate anda3percent who live intheU.S.) cameto NorthCarolina andspent In 2015, anestimated 54.6milliondomestic visitors (those confident they willbehigherthan2015 totals. figures weren’t available intime for this report, Visit NC is and localtaxrevenue that spendinggenerated. Whilethose of peoplevisitingthestate, how muchthey spentandstate Additional importantmeasures for 2016 includethenumber added to theVisitNC e-newsletter distribution list. and state Welcome Center visitors whorequest to be of websites, consumer callsto Visit NC’s toll-free number, the combined numberofvisitors to theVisitNC.com family percent more thanthe2015 total. Consumer inquiriesare receives. In2016, consumer inquiriestotaled 7.1 million,9.2 Visit NCalsotracks thenumberofconsumer inquiriesit 22 percent. over 2015. Over thepast 10years, room demandhasgrown than 35 millionroom nightsbooked in2016, up5.1 percent Room demandinNorthCarolina alsoincreased, withmore growth nationally. 2015 and a percentage that outpaced the 2 percent average hotel andmotel room revenue, an8.9percent increase over In 2016, NorthCarolina tourism generated $3.52 billionin production andretirees. group tours, meetingsandconventions, sportsevents, film Carolina’s standing asamajordestination for leisure travel, Visit NCexecutes marketing programs that advance North local levels. and itspublicprivate partnersat thestate, regional and the success ofcreative marketing by Visit NorthCarolina Record hotel room bookingsandrevenues in2016 attest to TOURISM 33 34 35

TOURISM TOURISM

CREATIVE AND COOPERATIVE MARKETING SUPPORTS TOURISM ACROSS STATE

Visit North Carolina markets the state in a variety of ways, including participating in trade shows and tourism conferences, taking travel writers on tours of the state’s attractions, developing relationships with tour operators, placing paid advertisements and utilizing its varied websites and social media outlets to attract more visitors.

Visit NC offers cooperative tourism marketing and advertising opportunities to communities from all over North Carolina. Under the Visit NC cooperative program, local tourism offices pay to join the state’s advertising and marketing campaigns and get additional exposure for less cost.

Here are highlights of Visit NC marketing activities in 2016, including some national recognition they received.

Travel South Domestic Showcase recognize exceptional work and Nast Traveler, the Cooking Channel, For the first time in nearly 20 achievement in hospitality, travel, CountryLiving.com, Rachael Ray years, North Carolina hosted the tourism and media. Every Day, Inside Hook, Martha Travel South Domestic Showcase, a Stewart Living, Men’s Journal, Travel regional event focused on increasing “Beauty Here” Campaign + Leisure, and Wine Spectator as travel to and within Southern states. In fall 2016, Visit NC released a new well as contributors to other top The March 2016 show in Winston- television commercial, titled “Beauty brands such as Skift, The Daily Meal, Salem set a record, with more than Here,” to strengthen awareness of The Today Show, The Huffington 450 attendees. It offered the perfect North Carolina and increase interest Post and Zagat. Several stories were opportunity for Visit NC and more in travel to the state. The “Beauty published as a result. They included than 40 local tourism partners from Here” TV spot presents a more a feature in US News & World Report the state’s Coastal Plain, Piedmont intimate look at the state’s core highlighting Wilmington, Wrightsville and Mountain regions to meet with attributes, allure and uplifting spirit. Beach, Carolina Beach and Kure domestic group tour operators Visit NC website traffic from media Beach and reaching more than and media. Six pre-showcase trips markets where the commercial aired 960,000 readers. Separate articles in enabled operators and journalists grew 76 percent year-over-over. That The New York Post and amNew York to experience various regions of included 131 percent growth from spotlighted Durham and reached North Carolina before returning Atlanta and 123 percent growth from a combined total of more than 16.7 to Winston-Salem for the Travel Nashville, the two largest target million readers. South Showcase. The number of markets. The Visit NC social media participants in these trips — 38 tour team promoted six advertisements Response to Natural Disasters operators and 28 journalists — also in October across Facebook and In the wake of several devastating set a record for any state hosting the Twitter to drive awareness and natural events in North Carolina in showcase. extend the reach of the “Beauty 2016, Visit NC created several free Here” campaign. The ads reached co-op marketing opportunities Adrian Awards 796,000 people across Facebook for businesses in areas impacted Out of more than 1,200 entries and Twitter in out-of-state markets by Hurricane Matthew and the submitted for 2016, Visit NC was alone. Appalachian wildfires. The program, honored by the Hospitality Sales and meant to help tourism partners Marketing Association International Annual New York Media Mission who lost business during recovery for its outstanding work on three In January 2016, more than 40 from the disasters, includes campaigns: a Gold Adrian Award Visit NC partners mingled with complimentary VisitNC.com display for the Vacation Big Campaign, a representatives from top national advertising, enhanced partner Gold Adrian Award for the Vacation media outlets at Visit NC’s New York listings on VisitNC.com, featured Big “Scroll” TV spot, and a Bronze media mission. The 91 media guests events, travel deals and social media Adrian Award for the Project 543 included staffers from Architectural placements. During the first three An image from Visit NC’s “Beauty Here” television commercial website redesign. The Adrian Awards Digest, Brides magazine, Condé months of the program, which was 36 37

TOURISM TOURISM

announced in November 2016, Visit NC state parks landing page had a strong during “CBS This Morning.” The segment donated more than $5,300 in advertising surge in visits. showcased what Charlotte and North space. The program is available through Carolina have to offer. It reached 3 million June 30, the end of fiscal year 2017. Expanded International Outreach viewers and generated $4.7 million in Chinese visitors represent the fastest- advertising value. #NCFallOfFame Campaign growing segment of travel to North Visit NC’s second annual #NCFallOfFame Carolina. In addition, China ranks third Inaugural Snapchat Campaign campaign drew on user-generated content overall in overseas visitation to the state, In 2016, Visit NC wanted to show potential and leveraged relationships with digital but first in spending by visitors from visitors and residents it doesn’t take a lot influencers to promote fall travel to the overseas. So in 2016, Visit NC began its of planning to take a day or weekend trip state. This year’s campaign included eight first-ever marketing campaign in China. in North Carolina. The goal was to create weekly themes. Travelers accessed a Visit NC participated in the U.S.-China Snapchat stories that would inspire travel wealth of Fall of Fame content on the Visit Travel Leadership Summit, a trade show by a younger target audience. Visit NC NC website, including winning content and seminar hosted by Brand USA and traveled to different destinations each submissions, a stream of user-generated the China National Travel Association, week during the summer to capture a photos and videos, and links to relevant as well as the Travel South China Sales mix of videos and photos at places such travel planning content. Fall reports from Mission to Beijing and Shanghai. Through as The Gorge Zip Line in Saluda and the North Carolina state parks rangers and Travel South, Visit NC has contracted with Karen Beasley Sea Turtle Rescue in Surf other partners supplemented the content. East-West Marketing to represent North City. The newly launched Snapchat channel Social media efforts aimed at generating Carolina to the travel trade in China. In a posted 182 original snaps and had more use of the #NCFallofFame hashtag resulted separate effort, Visit NC celebrated a new than 53,000 views during the 10-week in 3,319 hashtag mentions. In addition, Visit flight from Raleigh-Durham International campaign, resulting in a gain of more NC’s public relations team worked with Airport to Paris by working with Delta Air than 750 followers. Visit NC team will be Michael Lanza of The Big Outside travel Lines to host French journalists and tour looking for more opportunities to engage blog on a weeklong October visit as part of operators on a trip around the state. audiences through the unique Snapchat #NCFallofFame. His time in North Carolina platform. led to five pieces on his website, The Big Excursions for Cyclers Outside, and other channels, reaching In an effort to extend the economic impact Charlotte Champions Award 250,000 people. and reach of the annual seven-day Cycle Visit NC received a Local Champions NC Mountains to Coast Ride, Visit NC Award from the Charlotte Regional Visitors “Reclaim Your Weekend” Campaign teamed with the North Carolina Amateur Authority/Visit Charlotte in February 2016. Both U.S. National Parks Service and North Sports organization to create Visit NC Visit NC was recognized for its efforts Carolina’s state parks system celebrated Excursions during the ride. These daily to bring international tour operators and their centennials in 2016. So Visit NC excursions gave participants and those the Travel South International Showcase sought to drive visitation to all its parks, traveling with them the opportunity to to Charlotte. Held in November 2015, complementing state and national efforts. take a break and experience attractions the showcase brought close to 350 Visit NC partnered with in-state media throughout the state. Participants paid to delegates to Charlotte, including about 90 groups (the North Carolina Association have a motorcoach take them from the international buyers and tour operators. of Broadcasters, North Carolina Press overnight host city in the morning, stop at Foundation and North Carolina Outdoor attractions and a destination for lunch and Visit NC 365 Advertising Association) to inspire park then arrive at the next overnight host city Visit NC hosted its annual state tourism visitation by residents who, in turn, can in the late afternoon. conference, Visit NC 365, at Harrah’s encourage visits by out-of-state friends Cherokee Resort in Cherokee in March. and family. The “Reclaim Your Weekend” Super Bowl, Super Exposure The location was the farthest west the campaign reinforced that weekends Visit NC’s public relations team, in conference has ever been held. The event are fleeting — too valuable for doing partnership with the Charlotte Regional drew near record attendance. Roughly chores. Campaign channels included Visitors Authority and marketing firm 600 tourism, business and government television, radio and print and integrated Luquire George Andrews, organized and leaders from across the state gathered for messaging about the state’s parks. The supported a visit by “CBS This Morning” sessions on subjects including reaching $250,000 media investment by Visit NC in January 2016, prior to the Super Bowl digital influencers and millennials, and its partners was projected to generate matchup between the Carolina Panthers creating destination-quality trails in rural approximately $4 million in advertising and the Denver Broncos. “Charlotte vs. North Carolina, customer service, and The Visit NC team works the booth at the U.S. Travel Association’s IPW trade show, the travel industry’s premier international marketplace exposure over a 12-month period. In the Denver: Which is the Real Super City?” was unconventional sports marketing. and the largest generator of visitors to the U.S. months following campaign’s launch, the a nearly seven-minute segment broadcast FINANCIALS FINANCIALS 38 supporting the EDPNC’s mission of advancing economic development across thestate, seePage 40. 2015-16 fundraising campaign.For more information aboutourprivate investors and theimportantrole they play in Red Hat, amultinational open-source software company invested basedinRaleigh, $100,000 intheEDPNC duringits FY 2016 Expenses FY 2016 FundingSources and investment offices. $18,994,075 inrevenue andhadexpenses totaling $18,672,260, includingcontracts withforeign trade In fiscal year 2016, runningfrom July1,2015, through June30, 2016, thepartnership received a total of investment across NorthCarolina. individuals andfoundations supportingEDPNC’s mission to foster sustainable jobcreation andcapital with theNorthCarolina DepartmentofCommerce andprivate dollarsthrough investors —companies, The Economic Development Partnership ofNorthCarolina receives state fundingthrough itscontract A By-the-Numbers Look at aPublic-Private Partnership Other Private Funding Federal Grants State Contract Revenue General Office Expenses Information Technology Facilities andUtilities Travel andProspect Hospitality foreign trade offices) (including contracts with Professional Fees Advertising andPromotion Personnel $16,994,549 $5,058,630 $9,778,229 $1,960,481 $933,640 $900,013 $270,778 $270,778 $402,571 $831,356 $370,215 $165,873 89% 53% 27% 11% 5% 5% 5% 2% 2% 2% 1% FINANCIALS 39 40 41

PRIVATE INVESTMENT PRIVATE INVESTMENT

2016 Private Investors

The EDPNC is grateful to the private companies and individuals who helped the organization meet its $1.25 million fundraising goal during the contract year ending in October 2016. The following list includes investors who supported the EDPNC’s mission in 2016.

HITTING OUR Want to invest in the EDPNC? Email Patrick Coughlin at [email protected] or call him at 1-800-886-0280.

$100,000 or More $50,000-$99,999 PRIVATE Duke Energy Piedmont Natural Gas Red Hat North Carolina Railroad Company ElectriCities of North Carolina Martin Marietta INVESTMENT MetLife

$10,000 - $49,999 Alex Lee Inc. Moore & Van Allen AT&T North Carolina’s Electric Cooperatives Balfour Beatty Construction NC Realtors BB&T Ogletree, Deakins, Nash, Smoak & Stewart Biltmore Farms Orange County Economic Development GOALS Bissell Companies Parker Poe Adams & Bernstein Chatham Park / Preston Development PNC Bank Company PSNC Energy DUKE ENERGY: $200,000 INVESTOR Childress Klein Railway Association of North Carolina Choate Construction Shelco Crescent Communities SunTrust Flow Lexus SteelFab In 2016, the Economic state for business relocations responsibilities it assumed from provide more predictability Joseph M. Bryan Foundation Walbridge Development Partnership of and expansions, tourism Commerce in 2014. in resources and planning. All Kane Realty Womble Carlyle Sandridge & Rice North Carolina reached its and film production, as well private investors in the EDPNC Medical Mutual of North Carolina annual goal of raising at least as other responsibilities the For example, the ability to will be invited to sign up for $1.25 million in private funding EDPNC assumed when the raise targeted private funding an informative e-newsletter, between October 6, 2015, and state privatized its economic enabled the EDPNC to revamp attend the partnership’s annual Under $10,000 Clancy & Theys Construction Company October 5, 2016. development efforts. In the AccessNC, the state’s online meeting and participate in Aberdeen & Rockfish Railroad Co. Robert Singer (EDPNC board member) contract year ending in October database of available industrial certain events with the EDPNC’s Kimley-Horn Colliers International More than 70 companies 2016, the EDPNC raised buildings and sites. The board of directors. Absolute Style Furniture Samet Corporation and organizations invested, $1,277,579 in private investment. database is a critical resource Koury Corporation Deloitte nearly twice the total of the for quickly identifying the real In addition, investors making Allegacy Federal Credit Union Sheila P. Knight (EDPNC board member) fundraising year when the goal Sixteen states have embraced estate options best-suited five-year commitments at Lenovo Foundry Commercial was $750,000. public-private partnerships to a company considering the highest annual level will Allen Tate Corporate Services Southern Industrial Constructors such as the EDPNC to carry where to locate or expand. be asked to participate in a Pisgah Enterprises Inc. Grubb Properties October 6 is a key date for out economic development In 2016, the EDPNC launched new business advisory council Barnhill Contracting Company SREE Hotels the EDPNC because it is functions at the state level, with the newly dubbed SelectNC that will meet with EDPNC NAI Beverly-Hanks Commercial, Asheville Hatteras Venture Partners the effective date of the Illinois being the latest. platform, which utilizes updated leadership twice a year to hear CaptiveAire Systems Thomas Looney (EDPNC board member) partnership’s operating contract technology and provides easier about the partnership’s progress NAI Carolantic Realty, Raleigh Timmons Group with the state. That agreement Access to private funding navigation. in supporting new jobs and CAPTRUST Jeffrey & Linda Turner Charitable Fund currently requires the EDPNC — a key benefit of the public- investment in North Carolina NAI Piedmont Triad, Greensboro Truliant Federal Credit Union raise at least $1.25 million private partnership model The EDPNC’s private fundraising and in promoting tourism. The Carolina Legal Staffing Johnson Automotive each contract year in private — has enabled the EDPNC efforts are currently focusing on council will also provide advice NAI Southern Real Estate, Charlotte WK Dickson & Co. dollars to supplement its public to significantly enhance securing five-year commitments and feedback on the EDPNC’s CenturyLink K&L Gates funding for marketing the the business marketing from investors, which will strategic planning. PwC (PricewaterhouseCoopers) Wells Fargo 15000 Weston Parkway | Cary, NC 27513 T: 919.447.7777 | F: 919.447.7780