Continuous growth of the Cape Fear Region’s industrial sector is a vital component to making key advancements in our area and contributing to the global supply chain. Industrial projects have been steadily on the rise in our area and are expected to increase over the coming years, providing positive impacts and increased opportunity for our community. We asked a panel of local experts to share their thoughts about recent projects and their predictions for what lies ahead.
What is making southeastern North Carolina an increasingly attractive region for industrial projects?
KEN DULL: The industrial activity we continue to see in the region is the culprit of decade’s worth of work from our business development community. This certainly didn’t happen overnight. The forward thinking of New Hanover and Pender County has led to a diverse array of project announcements in our region – from corporate/back office to food processing to manufacturing and distribution/logistics, etc. Quality of life, healthcare, education and transportation infrastructure play important roles in the dynamics of this market.
HANS BEAN: North Carolina is the ninth largest state and growing larger each day and southeastern North Carolina alone has the fastest growing county in the state. Global markets recognize this growth. New businesses are moving into the region to take advantage of our workforce, rail and truck capability, and a growing community of supply chain logistics professionals. It also helps that our region offers convenient access to a deep-water port and international airport in Wilmington. These assets help connect North Carolina to the world.
HILL ROGERS: Southeastern NC is an attractive region for industrial projects for a variety of reasons: 1) highway and rail infrastructure providing critical linkages to attractive east coast markets, 2) the NC Port of Wilmington, 3) strong population growth, 4) strong university and community college system, 5) low tax and “right to work” status offered by the State of North Carolina, 6) a strong local business community, and 7) last − but not least − a coordinated and unified approach to recruitment.
CODY CRESS & TYLER PEGG: The basic answer to this broad question is southeastern North Carolina (SE NC) offers a high quality of lifestyle. The various amenities include an historic downtown riverfront and multiple beaches along with medical facilities and educational facilities that all add to this lifestyle. SE NC has a relative low cost of living index, low taxes, and a low unionization rate. SE NC has access to several local and statewide incentives, grants, and public/private partnerships that can help expanding and relocating businesses. This process is one area that can be improved upon from a procedural and competitive standpoint, but we are still fortunate to have access to these. Lastly, SE NC offers a midway point between northern and southern states with a network of infrastructure that offers a competitive advantage for logistics. This infrastructure includes the deep-water Port of Wilmington, a major interstate and road network (74/76, I-40, HWY 421, and HWY 17), rail service, and an international airport.
What investments has our community made to position ourselves well given the current economic conditions?
CRESS & PEGG: Community investments have been made in education and infrastructure for healthy future economic growth in SE NC. Expansions and improvements in both UNC-Wilmington and Cape Fear Community College help attract additional and more-talented students. The Pathway to Excellence Program partnership between CFCC and UNCW provides a track for guaranteed admission to UNCW for CFCC students that maintain certain academic criteria. Infrastructure improvements have been, and continue to be, made in roads, rail, the port, the airport and in other important utility expansions, such as water, sewer, natural gas, internet, and power. Pre-Covid-19, DOT had plans for approximately 40 major projects in our local area; hopefully, these projects remain on the books. ILM International Airport is in the middle of a 3-phase and 4 plus-year expansion where the terminal would grow by about 75 percent, expanding to approximately 160,000 square feet. The Cape Fear Public Utility Authority (CFPUA) recently completed the Hwy 421 water and sewer expansion, providing service to nearly 1,000 developable acres along this corridor. This corridor, from the Isabel Holmes Bridge to the Pender County line, is one of the last portions of New Hanover County suitable for industrial development − and this infrastructure is essential to growth.
DULL: Growth in New Hanover County, from an industrial perspective, is likely to continue on the northern side of the county. With that in mind, the investment made in infrastructure (water & sewer) along the U.S. Hwy 421 corridor was absolutely critical. Product development, in terms of shovel ready sites and spec buildings, is of equal importance. What Pender County and our economic development allies at Wilmington Business Development continue to do in the Pender Commerce Park has positioned us well for future investment. Between the U.S. Hwy 421 corridor − which includes the Pender Commerce Park − and what New Hanover County is doing at its Blue Clay Road Site, we are certainly excited about the current and future economic conditions of the region.
ROGERS: The investments in infrastructure and population growth are the primary drivers for making our region attractive for industrial projects. The infrastructure investments include water and sewer expansion along US 421 in New Hanover and Pender Counties and along US 74 in Brunswick and Columbus Counties. The NC Port of Wilmington has dramatically increased their infrastructure with new neo-Panamax cranes, deepened shipping channel, and expanded turning basin. Our community colleges play a critical role in educating and training our region’s workforce as well as being an active participant in recruiting industry.
BEAN: The recent investments by the North Carolina General Assembly are paying off in our region. The General Assembly has allotted $45 million to North Carolina Ports in each of the last two budget cycles. Those funds have supported major infrastructure improvement efforts at both the Port of Wilmington and the Port of Morehead City. Thanks to these investments, North Carolina Ports is able to better support its growing customer base by offering greater port capabilities and global connectivity.
What industries are showing interest in expanding or relocating to the Cape Fear region?
ROGERS: Industries involved with skilled manufacturing are actively looking at our region, as well as industries looking to capitalize on our port infrastructure and our natural resources infrastructure. I think these inquiries will continue as executives and their employees want to relocate away from high tax, high regulatory, and congested urban areas and into lower tax regions.
CRESS & PEGG: SE NC has a diverse background in industry beginning with importing/exporting via the Cape Fear River. During the 20th century, shipbuilding along the Cape Fear River flourished and Wilmington housed, until 1960, the headquarters of the Atlantic Coast Line Railroad (ACL). More recently, SE NC has seen expansion in light manufacturing, warehouse and distribution, last mile distribution, e-commerce, finance, software, healthcare, education, tourism, agricultural, aerospace, research and development for several pharmaceutical operations, as well as national defense and military.
BEAN: Our economic development partners across the state are seeing growth opportunities in warehouse/distribution, e-commerce, manufacturing, as well as cold storage opportunities to support the North Carolina agriculture and grocery sectors and the medical, pharma and life sciences sectors.
DULL: Our project engagement continues to be strong through these unprecedented times and it’s certainly not limited to one specific industry. We are seeing interest in distribution, manufacturing, corporate/back office, etc. It’s important that we keep this region’s economy diverse, thus retaining home grown talent − products of UNCW & CFCC. Our general contracting teams take pride in their experience and relationships across multiple sectors.
How can our region capitalize on the growth of e-commerce?
CLARK HIPP: Continue to invest in quality of life issues, like bike paths, greenspace, cross city trail, and other activities. Schools are another important area to focus.
ROGERS: Our region can certainly be viewed as a “last mile” destination. As e-commerce becomes more localized with same day delivery, having an inventory of warehouse and industrial product to meet those logistical needs will help our region become more attractive to business and industry.
DULL: In order to take advantage of the trends accelerated by the pandemic we must have product ready for those enticed by speed to market. Modern industrial buildings of scale with accessibility to highways, ports and airports are essential in e-commerce recruitment. We also must have state and local support, in the way of incentives, accelerated permitting, etc. to encourage these types of investments and compete with other attractive locations.
BEAN: Speed and e-commerce go hand in hand. Wilmington and the southeast region are a perfect fit for demand-based models that require guaranteed performance and flexible distribution options. Additionally, our region’s access to fintech with acceleration of trade transactions and our massive supplier base for industries such as furniture and DIY adds e-commerce value.
CRESS & PEGG: Embrace it and make future investments in this sector! We have several top tier universities and community colleges that we can train to work and compete in these e-commerce occupational fields. Other ways we can capitalize are to invest in new and updated infrastructure, including fiber gigabit internet such as Google Fiber. The region is beginning to see Class-A office and industrial speculative buildings in several areas. Investments that are already completed or in the process are: expansion of ILM International Airport, new water and sewer services to unserved areas such as highway 421 corridor, increased expansion of fiber services, etc. We need to continue our expansion of these services and help encourage smart growth of our bridges and road network.
Talk about one current or upcoming development project in our region that you’re excited about.
DULL: There are numerous projects we are heavily involved in and excited about but due to the competitiveness of these projects we cannot breach confidentiality requirements.
HIPP: The completion of I-40 some 20 years ago greatly enhanced our region’s connection to Raleigh and the Research Triangle. The continued enhancement of Hwy 74 into I-74 will provide a similar enhanced connection between our region and the Charlotte metro area. It also enhances our connection to the I-95 and I-26 transportation corridors. This continued enhancement will provide another transportation link for our region to the major north and south interstates.
ROGERS: Our team is very bullish about the development of International Logistics Park (“ILP”), a North Carolina Department of Commerce certified mega site situated on US Highway 74 in Brunswick and Columbus Counties consisting of over 1,000 acres. The first phase of our park consists of approximately 70-acres, which has been cleared, graded, and permitted with four lots approved for over 1.2 million square feet of industrial development. ILP has water, sewer, electricity, and fiber optic capacity in place or readily available. The first building at ILP will be the International Commerce Center, a 150,000 SF industrial spec building that will be expandable to 300,000 SF. Architectural plans for the building are nearing completion and will be submitted for a building permit within the next 30 days. Construction could be completed as early Q1-2021.
BEAN: A couple of areas NC Ports is really excited about development is in the cold chain and food processing. We are working with multiple developers to deliver much needed chilled and fresh capabilities to our region. This will help serve the produce and medical, pharma, and life sciences in logistics and distribution. We are also working with established food producers and developers focused on expanding food processing to leverage the region’s significant agriculture production base for more finished products.
CRESS & PEGG: Pacon Manufacturing has been making news over the past 18 months for their relocation and expansion from Somerset, NJ, to Navassa, NC. Pacon manufactures sanitary wipes, pads, towels, drapes, and liquids. Pacon has been in the process, over the past 12 months, of building out their new space, installing new manufacturing lines and relocating lines from New Jersey, and is committed to employing 300 essential workers. This project proves how the economic development groups, including Wilmington Business Development (WBD), North Carolina’s Southeast (NCSE), and Brunswick Business and Industrial Development (BBID), work to not only attract, but also provide vital guidance during the entire relocation and expansion process.
What opportunities have recent upgrades at the Port of Wilmington opened up for our region?
BEAN: North Carolina Ports has an aggressive expansion plan backed by more than $200 million in capital improvements. This initiative enables us to tailor our growth to meet customers’ needs and better facilitate long-term plans and business projections. Completed improvements include a wider turning basin, berth enhancements, air draft improvements, and three neo-Panamax cranes which allow the largest vessels transiting to the East Coast to reach the Port of Wilmington. NC Ports also recently opened a multi-million dollar refrigerated container yard at the Port of Wilmington. This project triples the port’s on-terminal refrigerated container capacity and allows us to better support the growing agriculture and grocery sectors across North Carolina. Other improvements in development include the container terminal master plan which will increase the Port of Wilmington’s annual throughput capacity to more than one million TEUs as well as the building of a new truck gate complex. Together, these projects will enable NC Ports to meet the demand of increased volume on container moves at the Port of Wilmington. Lastly, the re-launching of a next-day intermodal rail service connecting Wilmington to Charlotte provides us the ability to play a larger role in integrated manufacturing and distribution supply chains.
HIPP: Increased port activity results in increased transportation of goods and materials. This activity should result in increased attention to transportation issues, including a new or upgraded crossing of the Cape Fear River.
CRESS & PEGG: The Port of Wilmington made history in May 2020 when the MV Hyundai Hope became the largest container ship to ever dock there. The Port Authority completed four projects over recent years to enable this, including expanding the turning basin, expanding container berth space, improving air draft over the river, and installing additional and larger cranes. This $200M in improvements to accommodate 14,000 TEU (twenty-foot equivalent units) container ships opened the Port of Wilmington up to additional markets including SE Asia, India, etc. In addition, the port has added avenues for additional revenue, such as refrigerated cold storage space under a public-private partnership. Furthermore, these upgrades and business expansions have brought more awareness to our representatives in Raleigh, which should help our area obtain more incentives and grants.
DULL: Recent investments by the State of North Carolina in its ports has led to tremendous growth at the Port of Wilmington. With an expanded turning basin, new cranes, expansion of its container yard, etc. we’ve seen the arrival of the largest ships now calling on East Coast Ports. The port now has a proof of concept and the ammunition to attract additional carriers/services to Wilmington. With additional carriers comes added volumes, thus further demands in trucking, warehousing, etc.
What advantages does our region offer over other East Coast port communities that make it attractive for commercial investment?
ROGERS: The Port of Wilmington has always been viewed as a niche port. It will never be the size of Savanah, Charleston, or Norfolk. As a result of not being “too big,” the Port of Wilmington has the ability and track record of providing excellent service to the small and mid-size shipping lines that struggle to gain market share at the larger East Coast ports. Notwithstanding the Port’s overall lack of size, the recent investments now allow for the Ultra-Large Container Vessels (ULCV’s), which carry 14,000 TEUs, to utilize the Port of Wilmington, thereby increasing our region’s accessibility to other markets. The first ship of this size sailed in the Port on May 20, 2020.
DULL: We’ve got more land available − at a competitive cost − within 20 miles of the port than most of the competition. This 20-mile radius, from a transportation perspective, is cost favorable. You often hear the phrase “at-port model”. Advancing the “at-port model” represents opportunity to us developers. Another key differentiator for us is the efficiencies associated with North Carolina Ports. From a truck turn time perspective to crane moves per hour, they are on a different level than neighboring ports and in that industry, time is money.
CRESS & PEGG: Available industrial-zoned by-right acreage within proximity close to the port is unique to our area. Many East Coast port communities do not have developable industrial land within 20 miles of its port. Our area has private land as well as port-owned land that provides flexibility and options for industrial users. The Port of Wilmington, in itself, offers the advantage of efficiency. The port touts a 32-minute average dual turn rate, for both container drop-off and pickup. Time is money and this makes it advantageous for port users. Our market also features industrial space with lease rates that are highly competitive to other East Coast port communities.
BEAN: Southeast North Carolina offers convenient access to the Port of Wilmington, Port of Morehead City and Wilmington International Airport. The region offers rail access via CSX and is conveniently connected to major thoroughfares including U.S. 421, I-40, I-95, I-85 and I-77. Speaking from a ports perspective, North Carolina’s ports are among the most market-accessible ports on the U.S. East Coast. Within 1,000 miles of North Carolina’s borders are more than 170 million U.S. and Canadian consumers, more than 65 of the country’s top 100 metropolitan areas and nearly 60 percent of total U.S. retail sales. More specifically, what makes the Port of Wilmington so competitive is its level of efficiency. The Port of Wilmington offers the fastest truck turn times on the East Coast and lacks the waterside congestion that many neighboring ports face. These landside and waterside efficiencies make our port an attractive option for customers.
HIPP: From a transportation standpoint, our connection to I-40 and our regional airport offer significant benefits. From an educational standpoint, we have UNC Wilmington and CFCC providing opportunities for higher learning and job training. But maybe more importantly, our region is blessed with a quality of life prized by many. We have an active, historic downtown, wonderful beaches, and a very active arts and entertainment community. Employers understand that these qualities attract workers and therefore look to locate in such areas to encourage a productive workforce.
What role does the expansion at the Wilmington International Airport play in creating business opportunities locally?
CRESS & PEGG: Simply put, being more connected to areas outside of Wilmington is critical for our growth. What is really needed are more direct flights for business travelers. With the expansion of ILM’s terminal, expectations are to see more direct options in the near future. ILM gets very high remarks at being very efficient and a pleasure to move through. Parking is generally ample, lines are short, and security works well. The expansion might come with some short-term growing pains, but it is what our region needs long-term.
ROGERS: It is critical that our region have a first-class airport with daily non-stops to important Tier-1 cities and primary markets. ILM has done a fantastic job of staying ahead of our region’s population growth and anticipating critical business traveler needs. Additionally, ILM has the runway infrastructure to support air cargo shipments.
HIPP: Even with the current impact to travel from the Covid-19 outbreak, work-related travel will remain an important part of business. Our airport is a significant element in connecting our region to the larger, global market.
DULL: Wilmington International Airport (ILM) provides a convenient travel experience for companies and people in Southeastern North Carolina seeking reliable links to the global marketplace. The expansion efforts of ILM could/should also lead to additional carriers/services, which is imperative as we compete with other successful markets that have made notable investments their airports.
How have co-investment projects, such as that between New Hanover County and CFPUA along the US Hwy 421 corridor, improved our area’s commercial attractiveness?
HIPP: Bringing water and sewer services to the HWY 421 corridor has expanded the potential for larger, more complex users. Structures housing large industrial users typically require fire suppression systems and limited water pressures makes these systems very expensive. Such collaborations also demonstrate to companies interested in investing in our community that our region’s leaders are willing to find solutions that will benefit both the community and the growth of business.
CRESS & PEGG: The co-investment project between New Hanover County and CFPUA was considered a cost-recovery project with developers, or private money, aiding in the project. Duke Energy was a major contributor as a result of environmental fines from its Sutton Power Plant located along this Hwy 421 corridor. This corridor is a vital connection for our manufacturing, warehousing, and distribution companies where the interconnectivity to I-140, I-40, Port of Wilmington, and rail service makes this area convenient and efficient for these uses. This water and sewer infrastructure allows for smart industrial growth in accordance with the New Hanover County Unified Development Ordinance (UDO). This smart industrial growth is evidenced by recent development in the Pender Commerce Park and industrial/flex buildings along this corridor. This development allows creation of core jobs and a strong economic foundation for SE NC.
DULL: Water & sewer are essential utilities for any community to thrive − creating business and lifestyle opportunities alike. As previously discussed, this forward-thinking investment made by New Hanover County has already resulted in business and industry relocating to the U.S. Hwy 421 corridor − nearly 100 businesses big & small are between the Isabel Holmes Bridge and Pender Commerce Park. We expect this trend to continue and plan to play a major part in further development here.
ROGERS: Access to water and sewer is always a primary criterion to be commercially attractive for industry. Without water and sewer, a community has no chance to compete for these industrial opportunities. NHC and CFPUA are to be congratulated for making those investments to this industrial corridor.
How have other policies and decisions of our local governments and elected officials affected the commercial interest in our region?
DULL: Most recently, the City and County are making, or have made, more innovative zoning codes which expand business development opportunities that quite frankly did not exist previously. The drawback is that special use permits have impeded some growth, but, overall, these changes have been a positive. Increased infrastructure investment in the region previously mentioned, like water and sewer, port expansion, and the completion of I-140 have helped spark additional interest as well.
ROGERS: Separate and apart from the industrial opportunities that are coming to our region, we will continue to see population growth regardless of what happens in the industrial space. Employers want their employees to have “numerous” options for quality housing, education, and healthcare. Our leaders must embrace this growth, as it will lead to infinitely more employment opportunities and improved quality of life for everyone. Additionally, our local and state officials have invested in economic development efforts and their support of Wilmington Business Development, Brunswick Business & Industry Development, and North Carolina’s Southeast is critical to our future success.
HIPP: Both county and city governments are completing major updates to their land development codes and ordinances. These reviews have been long overdue and appear to be addressing current issues and goals of future development.
What factors make the Cape Fear region uniquely appealing for warehouse distribution centers?
BEAN: One of the factors that makes the Cape Fear region appealing for warehouse distribution centers is readily available sites near the Port of Wilmington with room to grow. This is important because as this area grows and the consumer base advances, we will need access to more distribution.
ROGERS: People want to live here. They need a reason to live here. Often that “reason” is their job, or an opportunity for a job. When I travel around the state and the country, I hear constantly from people saying, “I would love to live in Wilmington.” The combination of job opportunities and natural resources is a unique feature. While that is more of a qualitative reason, I believe it is an important factor that influences the thinking of decision makers. Nonetheless, a growing population (as opposed to a shrinking population) will drive more demand for warehouse distribution centers.
CRESS & PEGG: From a trucking and rail distribution perspective, we can only serve half the pie, the Port of Wilmington and ILM provide the other half, and more, allowing a global connection and network to the world. The Cape Fear region also includes two military installations, Camp Lejeune and Fort Bragg, within a one- to two-hour drivetime making this a prime location for military contractors and businesses affiliated with the military. According to local census data, approximately 18,000 military personnel exit the military on an annual basis and many of them look for work to remain in SE NC. Our educated, talented workforce is another valuable and unique asset for our community.
DULL: Previously mentioned advancements/investment at the Port of Wilmington obviously play into the appeal for additional warehouse and distribution projects. But the port is just a piece of the transportation pie. Interstate connectivity to major markets and our appealing Mid-Atlantic location − within 700 miles of 70 percent of the U.S. industrial base − are of equal importance. Not to mention ILM and the advantages associated with the continued expansion of our convenient airport.
What impact will commercial investment have on the citizens of southeastern North Carolina?
CRESS & PEGG: There are several ways that commercial investment will positively impact the citizens of our region. First, there will be tax revenue generated from these companies. This is huge positive impact for keeping our property taxes lower while being able to still afford the infrastructure investment for continued growth. No one likes higher taxes, and one way to keep them low is to foster smart growth. Another way commercial investment helps the community is through job growth. Our area thrives on having lots of retirees coming to our region, but we also need and want to attract younger people with families. To attract them, we need jobs and decent levels of compensation. Our area has made a lot of progress on that front with companies like nCino, Live Oak Bank, PPD, Alcami, Screen Gems, Pacon, Verizon, New Hanover Regional Medical Center, UNCW, GE, and others, but we definitely need more. Think of all the UNCW and CFCC graduates along with our military service men and women that would love to stay and be a part of our community. With the continued commercial investment, we hope to have the jobs that attract and retain this talent already in our area.
DULL: An enhanced job and tax base keeps the tax rate lower for residential users. In addition, a diversified economy provides jobs for those that want to stay in the region, retaining home grown talent. A rising tide floats all boats!
BEAN: As we see more investment in our region, we can anticipate an increase in jobs, tax base, global connectivity and market access, manufacturing potential, just to name a few. You can expect to see a multiplier effect as these areas improve which will ultimately increase opportunities across the board.
ROGERS: #1- jobs, #2-jobs, #3-jobs. More jobs will lead to more investments within our community, be it roads, healthcare expansion, recreational opportunities, and cultural amenities. Our region cannot thrive without a healthy private sector.
Cece Nunn - Sep 28, 2020
Christina Haley O'Neal - Sep 28, 2020
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