US Route 64 Corridor (Edgecombe County, NC) Initiative
Prepared for the Federal Highway Administration
Summary ReportJuly 2003
AECOM Consult
2751 Prosperity Avenue, Suite 300
Fairfax, VA 22031
Phone: 212-973-2900
Fax: 703-641-9194
Project Type: Connectivity and access improvements
Project Objectives: Attract and accommodate a bio-manufacturing facility at the Long Site along the intersection of Kingsboro Road and the US Route 64 By-pass
Outcomes Metric: Expected employment gains, wage gains, and tax revenue impacts including personal income, sales and use, corporate income, and property tax gains
Economic Environment: Rural county with a history of traditional manufacturing
Economic History: Declining population, stagnant employment, significant manufacturing closings and layoffs, and high unemployment
Distinguishing Features: Edgecombe county is located 90 minutes east of the Raleigh-Durham region and Research Triangle Park and is in a position to attract a bio-manufacturing facility
Source: AECOM
I. Existing Conditions
The study focuses on Edgecombe County, North Carolina, a rural county located in the eastern region of the state, approximately 90 minutes east of Research Triangle Park in the Raleigh-Durham Metropolitan Statistical Area and 120 miles inland from coastal North Carolina. In recent years, Edgecombe has experienced population decline, employment stagnation, high unemployment, and significant manufacturing plant closings and layoffs. The most telling aspect of this decline is that it occurred during a period of strong economic growth for North Carolina and the United States. Edgecombe's struggles are an indication that the county is falling farther and farther behind the rest of the state and country.
In recent years, Edgecombe has suffered from a declining population and a lower population density, while the state has seen tremendous population growth. The population of Edgecombe County was 55,261 in 2002 making it the forty-sixth largest county out of the one hundred counties in North Carolina. [1] Edgecombe's population growth from 1990 to 2002 was -2.5 percent. [2] During the same time period the population growth rate in North Carolina was 26.0 percent. [3] Since the population has decreased, the population density of Edgecombe is also significantly less than the state's density, 109.42 people per square mile compared to 165.9 for the state. [4] These data indicate the rural character of the county, and the decline in population is an initial indicator of economic stagnation. Exhibit 1 summarizes the population growth for each county in the Global Transpark region (Edgecombe's region as defined by the North Carolina Department of Commerce), the region as a whole, and the state.
Exhibit 1: Global Transpark Region Population by County
| County | 2002 | 1990 | Percent Change |
|---|---|---|---|
| Carteret | 60,611 | 52,407 | 15.7% |
| Craven | 93,291 | 81,812 | 14.0% |
| Duplin | 51,091 | 39.995 | 27.7% |
| Edgecombe | 55,261 | 56,592 | -2.5& |
| Greene | 19,749 | 15,384 | 28.4% |
| Jones | 10,561 | 9,414 | 12.2% |
| Lenoir | 60,119 | 57,274 | 5.0% |
| Nash | 89,542 | 76,677 | 16.8% |
| Onslow | 153,480 | 149,838 | 2.4% |
| Pamlico | 13,170 | 11,368 | 15.9% |
| Pitt | 139,609 | 108,480 | 28.7% |
| Wayne | 115,260 | 104,666 | 104,666 |
| Wilson | 75,407 | 75,407 | 14.1%. |
| Region | 937,151 | 830,068 | 12.9% |
| North Carolina | 8,357,128 | 6,632,448 | 26.0% |
Source: North Carolina Department of Commerce
As shown in Exhibit 1, Edgecombe was the only county in the region to experience a decline in population between 1990 and 2002. Edgecombe's population loss occurred at a time when the region and the state experienced significant population growth. This decline in population implies that the Edgecombe economy is not keeping pace with the rest of the region or the state resulting in out-migration.
In addition to the population decline, Edgecombe has experienced employment stagnation. The full and part-time employment levels in Edgecombe County have not experienced significant growth since 1985. Exhibit 2 demonstrates that the major difference between the employment growth experienced by Edgecombe County, North Carolina, and the U.S. is the vast fluctuation and instability of growth in Edgecombe. Edgecombe's annual employment growth continually fluctuates between positive and negative growth, and as a result, the net employment growth between 1985 and 2000 is minimal. Conversely, the North Carolina and U.S. annual employment growth rates are positive in all years except 1991. This resulted in 13.8 percent employment growth for Edgecombe County between 1985 and 2000 compared to 45.0 percent for North Carolina and 34.5 percent for the U.S. during this period. Edgecombe County is seeking to find a way to share in the employment growth experienced by the state and the country.
Exhibit 2: Annual Employment Growth Rates, 1986-2000
|
1986 |
1987 |
1988 |
1989 |
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Edgecombe County |
-0.94 |
-1.08 |
3.12 |
1.56 |
-2.08 |
1.51 |
3.08 |
-0.04 |
1.39 |
4.55 |
2.76 |
-3.25 |
1.91 |
-0.70 |
1.48 |
|
North Carolina |
2.99 |
3.41 |
3.93 |
2.38 |
1.68 |
-0.98 |
2.64 |
3.15 |
2.89 |
3.63 |
2.48 |
3.32 |
2.48 |
2.22 |
1.46 |
|
US |
1.98 |
2.71 |
3.14 |
2.02 |
1.59 |
-.055 |
0.46 |
1.93 |
2.52 |
2.60 |
2.17 |
2.37 |
2.58 |
2.23 |
2.22 |
Source: Bureau of Economic Analysis
Edgecombe County also suffers from higher levels of unemployment than the State of North Carolina and the U.S. Exhibit 3 presents the unemployment rates for Edgecombe, the state, and the U.S. between 1990 and 2001. Between 1990 and 2001, Edgecombe County's unemployment rate was higher than the rate of North Carolina, while the state's unemployment rates were lower than the U.S. in all years except 2001. Additionally, the gap between Edgecombe and the state's unemployment rates grew during this period. Edgecombe's struggles with unemployment demonstrate that the county is not experiencing the same economic success as the rest of the state or country. The condition may be characterized as chronic distress as the high unemployment rates are accompanied by decreases in county population.
Exhibit 3: Unemployment Rates, 1990-2001
|
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Edgecombe County |
5.1% |
7.6% |
8.3% |
7.0% |
7.1% |
8.2% |
12.0% |
10.8% |
9.3% |
8.2% |
7.4% |
9.6% |
|
Nash County |
4.3% |
6.5% |
7.3% |
6.1% |
5.1% |
5.3% |
6.3% |
5.7% |
5.4% |
5.1% |
5.2% |
6.7% |
|
North Carolina |
4.2% |
5.8% |
6.0% |
4.9% |
4.4% |
4.3% |
4.3% |
3.6% |
3.5% |
3.2% |
3.6% |
5.5% |
|
US |
5.3% |
6.6% |
7.2% |
6.6% |
5.9% |
5.4% |
5.2% |
4.7% |
4.3% |
4.0% |
3.9% |
4.6% |
Source: Employment Security Commission of North Carolina
Historically, Edgecombe has relied heavily on traditional manufacturing industries, such as apparel, packaged food products, fabricated textile goods, tobacco, and wood products, and in recent years the manufacturing industry in Edgecombe has suffered from a significant number of plant closings and layoffs. Exhibit 4 summarizes some of the major plant closings and layoffs in Edgecombe County since 1990 as reported by the Employment Security Commission of North Carolina.
Exhibit 4: Summary of Edgecombe County Closings and Layoffs, 1990-2002
| Date | Company | Product | Number Affected |
|---|---|---|---|
| April, 1990 | Carolina Freight Carrier | Trucking Terminal | 241 |
| December, 1990 | Fawn Industries, Inc. | Plastics Manufacturing | 108 |
| January, 1991 | Burlington Industries, Inc. | Drapery Fabrics | 300 |
| March, 1995 | Edgecombe Manufacturing Co. | Women's Apparel | 107 |
| July, 1995 | Lucas Body Systems | Printed Circuit | 310 |
| August, 1995 | Rocky Mount Undergarment | Undergarments | 130 |
| June, 1996 | Black & Decker Corp. | Power Hand Tools | 900 |
| September, 1996 | Runnymede Mills, Inc. | Hosiery | 200 |
| April, 1999 | Rock Mount Instruments, Inc. | Organs | 57 |
| March, 2000 | Universal Leaf Tobacco | Tobacco Bailing | 175 |
| March, 2001 | Ansell Golden Needles | Industrial Knitted Gloves | 100 |
| November, 2001 | Glenoit Corp. | Knit Fabric | 100 |
| January, 2002 | Pillowtex Corp. | Decorative Bedding | 172 |
| June, 2002 | Tri-County Group Home | Residential Care Facility | 9 |
| November, 2002 | Glenoit Fabric HG, Corp. | Knit Fabrics | 89 |
| December, 2002 | Pinetops Library | Branch Library | 3 |
Source: Employment Security Commission of North Carolina
The 1990s were a prosperous decade for North Carolina and the U.S.; however, during this same period, Edgecombe County experienced numerous closings and layoffs in the traditional manufacturing industries, high unemployment rates, and slow employment growth. Edgecombe's difficulties during a prosperous economic period indicate a severe problem and the need for economic development assistance. Edgecombe needs to find a way to share in the employment growth and economic success of the state. In order to do this, Edgecombe must look beyond the traditional manufacturing industries and turn to new, expanding industries that have seen success in North Carolina, such as biotechnology.
II. Highway Project
The highway project necessary to attract a bio-manufacturing facility and to increase the competitiveness of Edgecombe County focuses on access improvements to the US Route 64 By-pass. The Long Site, the site selected by an ad hoc Advisory Committee for the bio-manufacturing facility, is approximately five miles east of Rocky Mount, NC and six miles west of Tarborro, Edgecombe's county seat. The Long Site is located along the intersection of Kingsboro Road and the US Route 64 By-pass as shown in Exhibit 5. The access improvements necessary for the Long Site include interchange improvements for Kingsboro Road and the US Route 64 By-pass and possible frontage roads.
Exhibit 5: Map of the Long Site
The map shows that the Long Site is located at the intersection of Kingsboro Road and the US Route 64 By-pass, which is located approximately five miles east of Rocky Mount, NC and six miles west of Tarborro, NC. Additionally, the map shows that the Long Site is 13 miles east of US Route 64's intersection with I-95 and 56 miles east of I-40 and Raleigh, NC.
Source: AECOM
The transportation improvements needed at the Long Site and the interchange of Kingsboro Road and the US Route 64 By-pass are estimated to total between $30 million and $40 million by the Carolinas Gateway Partnership. At the time of this report, specific plans and studies of these access improvements and their costs are not available nor is the project included in the State Transportation Improvement Plan (STIP) or in the North Carolina Department of Transportation's (NCDOT) Long Range Plan.
III. Objectives of the Project
One of the industries that is experiencing growth in the Raleigh-Durham region and the state is biotechnology, and in 2002 the Advisory Committee indicated that it would like to use the transportation investment to capitalize on this success by attracting a bio-manufacturing facility to the Long Site. The following are reasons for why biotech companies would be interested in locating in Edgecombe County:
Large manufacturing labor force
Proximity to Research Triangle Park (RTP), approximately 90 minutes east of RTP
Lower costs for labor, land, and construction than the Raleigh-Durham region
Significantly larger tax credits and incentives for locating in Edgecombe County than in Raleigh-Durham
The location of a bio-manufacturing facility in Edgecombe County would be particularly dependent upon the access to US Route 64 and the Raleigh-Durham region because many biotech supplies and shipments would be from or to Raleigh-Durham. The vast majority of the supplies needed to produce biotech products would be coming from outside of Edgecombe and a significant number would be coming from Raleigh-Durham. The biotech products that are still undergoing testing will need to be shipped back to the Raleigh-Durham region, while biotech products that are already on the market will be shipped across the country.
The US Route 64 By-pass provides access to I-40 and I-95, which connect Edgecombe with the Raleigh-Durham area and the rest of the U.S.; however, the current interchange with Kingsboro Road would not provide sufficient capacity for the large volumes of truck and auto traffic associated with the bio-manufacturing facility. This lack of capacity at the interchange would result in severe congestion and back up on the US Route 64 By-pass, Edgecombe's primary means of accessing Raleigh-Durham and the U.S. Interstate System. Therefore, in order to attract a bio-manufacturing facility to the Long Site, the site must have quality frontage roads and safe, efficient access to US Route 64.
IV. Economic Development Efforts and Activities in Edgecombe County
Edgecombe County's economic development activities are tied closely to the Carolinas Gateway Partnership, the economic development agency for Edgecombe and Nash Counties. Due to Edgecombe's strong manufacturing history, the economic development goals in Edgecombe have focused on attracting and retaining industrial businesses and manufacturing facilities. Edgecombe County and the Carolinas Gateway Partnership have formed a new organization, Golden LEAF, Inc. (Long-term Economic Advancement Foundation) for economic development funding and support.
The Carolina Gateways Partnership (hence called the Partnership) is the public-private economic development agency for Edgecombe and Nash Counties. The Partnership was created in 1995 to attract, expand, and retain businesses in the region. The recruitment strategy of the Partnership focuses on marketing the region to businesses and industries, particularly manufacturers. As part of their marketing efforts, the Partnership provides assistance with site selection and expertise on the incentives available for businesses expanding or relocating to Edgecombe or Nash County. In 2000 and 2001, the Partnership helped bring in more than $133 million in new and expansion investment to Edgecombe that resulted in the creation of more than 1,600 new jobs (based on estimates by the Partnership). The Partnership will be involved in the marketing of Edgecombe County and the Long Site as a beneficial location for biotech companies to locate a bio-manufacturing facility.
Golden LEAF, Inc. (Long-term Economic Advancement Foundation) is a non-profit corporation established in 1999 to provide economic assistance to the economically distressed and tobacco dependent regions of North Carolina. Golden LEAF, Inc. receives funds from the tobacco settlement of 1998 to distribute to these distressed regions. Golden LEAF, Inc. uses its share of the North Carolina tobacco settlement funds to create an endowment and to award annual grants in the following program areas: education assistance, job training, employment assistance, scientific research, economic hardship assistance, public works, industrial recruitment, health and human services, and community assistance. Any non-profit (tax-exempt organization) or government agency may apply for Golden LEAF grants, but preference is given to applicants in economically distressed and/or tobacco dependent regions. In 2000 and 2001, Edgecombe County received a share of over $5.9 million in grants.
In August 2002, Golden LEAF, Inc. announced an $85 million economic stimulus package that focuses on expanding the development of the biosciences industry in North Carolina. The package is designed to allow North Carolina to continue its success in the biotechnology industry and to spread this success throughout the state. Golden LEAF, Inc. estimates that the stimulus package will generate at least $350 million in new investments in North Carolina and create 25,000 new jobs over the next five years. [5] This stimulus package will provide further support to the Carolinas Gateway Partnership and Edgecombe County in their efforts to attract a bio-manufacturing facility to the Long Site.
V. Analysis Methodology
The construction of the transportation improvements at Kingsboro Road and the US Route 64 By-pass and the construction and operation of a bio-manufacturing facility on the Long Site would generate substantial economic impacts for Edgecombe County. The economic and fiscal impacts are measured in terms of:
- Employment
- Wages
- Personal income tax revenues
- Sales and use tax revenues
- Corporate income tax revenues
- Property tax revenues generated by the bio-manufacturing facility
The diagram shown in Exhibit 6 depicts the methodology utilized in this study to estimate the total economic impacts of the proposed transportation improvements and the bio-manufacturing facility on Edgecombe County, including the use of the Bureau of Economic Analysis' (BEA) RIMS II multipliers to estimate the total employment and earnings impacts that result from the construction of the transportation improvements and the construction and operation of a bio-manufacturing facility in Edgecombe County.
Exhibit 6: Methodology for Estimating the Economic Impacts with RIMS II Multipliers
Source: AECOM
The economic development scenarios designed for a bio-manufacturing facility locating in Edgecombe County were based on data from recently built or planned bio-manufacturing facilities in the Southeastern U.S. and in biotech centers throughout the rest of the country. Biotechnology companies' 2001 10K filings with the Securities and Exchange Commission (SEC) were researched to determine the size, cost, and number of workers employed at new bio-manufacturing facilities. The three scenarios studied are designed to measure the likely size of a bio-manufacturing facility located on the Long Site. For the most part, the new bio-manufacturing facilities are 50,000 square feet or less; however there are a few large manufacturing facilities by the larger biotechnology and pharmaceutical companies, including Biogen and Eli Lilly. As a result, the scenarios for Edgecombe include a bio-manufacturing facility that is roughly the same size as the average (150,000 square feet), one that is approximately the same size as the smaller facilities (50,000 square feet), and one that is the average of the larger facilities (400,000 square feet). The three scenarios are presented in Exhibit 7 below.
Exhibit 7: Summary of Bio-manufacturing Facility Scenarios
| Scenarios | Square Footage | Employment | Construction Cost |
|---|---|---|---|
| Scenario A | 50,000 |
65 |
$4,075,000 |
| Scenario B | 150,000 |
194 |
$12,225,000 |
| Scenario C | 400,000 |
517 |
$32,600,000 |
Source: AECOM
VI. Results
The total impacts represent the sum of the economic and fiscal impacts for the construction of the transportation investment and the construction and operation of the bio-manufacturing facility. In order to present the total impacts for the bio-manufacturing facility scenarios, a few assumptions had to be made. First, the access improvements that would make the construction and operation of the bio-manufacturing facility possible have a range of impacts. As a result, the total results for each bio-manufacturing facility scenario are shown in two exhibits: Exhibit 8, which shows the total results if the transportation investment totals $30 million and Exhibit 9, which presents the results if the transportation investment totals $40 million. Additionally, the employment has been converted into permanent jobs by summing the full-time equivalent jobs of one-year duration and dividing them by 20 years to determine the "permanent" jobs created (or at least those jobs that exist for 20 years).
The calculation of the total investment results also requires an assumption on the number of years that the bio-manufacturing facility would operate. According the General Depreciation System (GDS), the recovery period of nonresidential real property (such as an office building, store, or warehouse) is 39 years. [6] The recovery period is the number of years over which costs are recovered, and as a result, the analysis assumes that the bio-manufacturing facility would operate for at least 39 years. It is important to note that the results shown in Exhibits 8 and 9 assume that no growth in the facility's operation or increases in tax rates occurs during the 39 years of operation.
Exhibit 8: Total Economic Impacts with $30 Million Transportation Investment and 39 Years of the Bio-manufacturing Facility's Operation (in 2002 dollars)
| Scenarios | Permanent Employment | Total Earnings | Corporate Income Tax Revenues | Property Tax Revenues for Facility | State Retail Sales & Use Revenues | County Retail Sales & Use Revenues | Personal IncomeTax Revenues | Total |
|---|---|---|---|---|---|---|---|---|
| Scenario A | 275 |
$168,697,527 |
$1,111,401 |
$1,857,509 |
$2,936,275 |
$1,857,318 |
$11,227,376 |
$171,666,437 |
| Scenario B | 797 |
$490,175,184 |
$3,222,780 |
$5,466,316 |
$8,531,773 |
$5,396,709 |
$32,398,828 |
$498,864,280 |
| Scenario C | 2,106 |
$1,295,107,986 |
$8,516,900 |
$14,456,470 |
$22,542,079 |
$14,258,822 |
$85,596,991 |
$1,318,081,356 |
*All earnings and revenues assume 1 year of construction for the transportation investment and bio-manufacturing facility
**All earnings and revenues assume 39 years of bio-manufacturing facility operation
***Yellow highlighted cells are those impacts used to calculate the total impacts. Personal income and sales and use tax
^Assumes straight-line depreciation for the life of the facility (39 years) and a salvage value that is 10% of the construction cost
Source: AECOM
Exhibit 9: Total Economic Impacts with $40 Million Transportation Investment and 39 Years of the Bio-manufacturing Facility's Operation (in 2002 dollars)
| Scenarios | Permanent Employment | Total Earnings | Corporate Income Tax Revenues | Property Tax Revenues for Facility | State Retail Sales & Use Revenues | County Retail Sales & Use Revenues | Personal IncomeTax Revenues | Total |
|---|---|---|---|---|---|---|---|---|
| Scenario A | 279 |
$170,937,527 |
$1,127,377 |
$1,857,509 |
$2,975,263 |
$1,881,980 |
$11,374,635 |
$173,922,413 |
| Scenario B | 801 |
$492,415,184 |
$3,238,756 |
$5,466,316 |
$8,570,762 |
$5,421,371 |
$32,546,087 |
$501,120,256 |
| Scenario C | 2,110 |
$1,297,347,986 |
$8,532,876 |
$14,456,470 |
$22,581,067 |
$14,283,484 |
$85,744,249 |
$1,320,337,332 |
*All earnings and revenues assume 1 year of construction for the transportation investment and bio-manufacturing facility
**All earnings and revenues assume 39 years of bio-manufacturing facility operation
***Yellow highlighted cells are those impacts used to calculate the total impacts. Personal income and sales and use tax
^Assumes straight-line depreciation for the life of the facility (39 years) and a salvage value that is 10% of the construction cost
Source: AECOM
VII. Study Recommendations
As a result of the early stages of planning for the transportation project and the use of the Long Site, this study recommends to Edgecombe County and the State of North Carolina the following measures before any consideration is given toward funding for the proposed highway project:
- Edgecombe County and the Partnership must further explore the opportunity to construct a bio-manufacturing facility with specific biotech companies. Make contact with biotech companies in the Raleigh-Durham region or in other biotechnology center in the U.S. and determine who might be interested in locating a bio-manufacturing facility on the Long Site.
- Once a list of biotech companies potentially interested in locating a bio-manufacturing facility on the Long Site is established, begin discussions with the firms on the size, construction cost, and potential employment levels of the new facility. Additionally, confirm who would pay for the construction of the facility. If the company expects the county or state to provide significant incentives, a new analysis would need to be developed to determine if the benefits still outweigh the costs. The analysis performed for this study assumes that the biotech company would assume the entire cost of construction.
- Work with NCDOT or county highway planners to develop a highway investment study for the interchange improvements required at the intersection of Kingsboro Road and the US Route 64 By-pass. The highway study should include specific construction plans and requirements, detailed cost estimates, traffic capacity estimates, and travel time and travel cost savings estimates.
[1] North Carolina Department of Commerce, Economic Development Information System.
[2] North Carolina Department of Commerce, North Carolina Economic Review 2002, p.27.
[3] Ibid.
[4] Ibid.
[5] Golden LEAF, Inc. Press Release, August 15, 2002, www.goldenleaf.org/n20020815.html.
[6] Department of the Treasury Internal Revenue Service, How to Depreciate Property, 2002, p. 29.
