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Funny, We Don't Look Thinner

By J. Elias O'Neal, posted Apr 14, 2013
The Wilmington MSA then and now (Business Journal graphic)

There was no email, no press release, not even a certified letter when Phil Norris, chairman of the Brunswick County Board of Commissioners, learned that his county would not be included in the 2020 Census counts for metro Wilmington. 

“I had no idea,” Norris said after learning in mid-March the municipality would no longer fall within the Wilmington MSA. “We have some major concerns about this.” 

Wilmington councilwoman Laura Padgett put the news more bluntly: “It’s like a kick in the gut,” she said during a recent city council meeting.

Love it or hate it, Brunswick County is no longer part of the Wilmington metropolitan statistical area, or MSA. Instead, federal officials have moved it over to join the Myrtle Beach MSA that covers Horry County to the south.

Metro stats not only highlight population growth, they can also affect economic development efforts such as industry recruitment air carrier expansion.

The decision hasn’t stopped civic, business and economic officials from launching a frontal assault to bring one of the nation’s fastest growing counties back into the realm of the Wilmington MSA. 

Federal officials, however, say such a reversal is slim.  

Cluster buster  

The U.S. Office of Management and Budget (OMB) sets and revises the removal and addition of counties and cities for more than 300 MSAs across the country to be used in the next census by examining growth and commuting patterns.

In February, the office reconfigured more than 50 metro areas across the country, including six urban regions in North Carolina, as a result of the 2010 Census count. 

Metro areas in New Bern, Greenville, Winston-Salem and Charlotte also were affected by MSA changes. And like Brunswick County, Gates County in northeastern North Carolina crossed state lines and was added to the Virginia Beach-Norfolk-Newport News, Va. MSA. 

For the Wilmington MSA change, federal officials based their decision on population pockets in Brunswick County. The 2010 Census data had Leland, Navassa and Belville in the Wilmington urban cluster and Shallotte and Calabash in the Myrtle Beach-Socastee urban cluster. 

Because of a 643-person difference in the population count between the Myrtle Beach-Socastee and Wilmington clusters, Brunswick County was removed from the Wilmington MSA and added into the Myrtle Beach-Conway-North Myrtle Beach MSA, OMB officials said.

“It just makes no sense,” said Connie Majure-Rhett, president and CEO of the Wilmington Chamber of Commerce. “To remove a whole county of 112,000 people for just 643 people … that doesn’t seem like an efficient use of government resources.” 

Immediate effects

Under the new MSA geography, the Wilmington metro area now consists of New Hanover and Pender counties.

With about one-third of the region’s population missing from census estimates compared to the 2010 official count, the new Wilmington MSA is now the 175th-largest metro area in the country with an estimated 263,429 people residing in the two-county area as of July 1, 2012. That’s a 3.4 percent increase from the 254,884 residents recorded for the two counties in the 2010 Census, according to federal estimates.

In 2010, when Brunswick County was still included, the Wilmington MSA was the 141st-largest metro in the U.S., boasting more than 362,000 residents.

Brunswick County was a component of the Wilmington metro area from 1965 until 1983, and then from 1993 until the February 2013 delineation, according to federal officials. 

It’s the first time in the county’s history that its population counts have been aligned with the Myrtle Beach metro. 

Had Brunswick County remained within the Wilmington MSA, demographers project the region’s population would have exceeded 425,000 residents by the 2020 Census.

Having a North Carolina county aligned with a South Carolina metro area could create confusion for site selectors and retailers eyeing the region for expansion, said Steve Yost, president of North Carolina’s Southeast, one of seven regional economic development partnerships in the state.

“We certainly view it as a real surprise,” Yost said, adding that his division was working with local officials to try and get the designation reversed. “South Carolina is real competition to us, and we’d rather promote Brunswick County with the Wilmington MSA.” 

Yost said the switch was already affecting the region. 

He said that when an unnamed site selector learned about Brunswick County’s removal from the Wilmington MSA, the person had to conduct more research on the region.

“He was confused,” Yost said of the site selector. “It adds another layer of research and evaluation, which will make it harder to convince them this is a viable location for their expansion and growth.” 

Yost added that some pools of grant funding could also become more competitive for economic development, given the number of small- to mid-sized metros now competing for an even smaller pot of available monies. 

Jim Bradshaw, executive director of the Brunswick County Economic Development Commission, pointed out that a number of the county’s large industrial sites are concentrated in northern Brunswick County – about 10 miles to Wilmington compared to 40-50 miles to the Horry County line. 

He added the change could also negatively affect the commission’s efforts to recruit new commercial enterprises to the area since many national retailers and restaurant chains use MSA data to target expansion. 

“It’s going to get confusing when you’re dealing with industry and retail,” Bradshaw said. “They are going to want to know why we’re in the Myrtle Beach metro but market ourselves as being apart of the Wilmington metro.” 

Jon Rosborough, Wilmington International Airport director, said adding new flights to the airport could also become more challenging under the new MSA designation. 

He said airline carriers consult census data frequently when looking to add flights or expand service at an airport. 

A slide of 34 places in the national MSA rankings, along with the Brunswick County alignment with Myrtle Beach International Airport, could become problematic for the Wilmington airport. 

“When carriers look at the MSA numbers, they are going to assume that all the residents in Brunswick County are going to Myrtle Beach’s airport,” Rosborough said. “Even though they are not in our MSA on paper, they haven’t moved and will still use our airport … the overall change could negatively affect us.”

Another impact could be the way Medicare funding is distributed to medical institutions.

Officials with the Centers for Medicare & Medicaid Services, a federal agency within the U.S. Department of Health and Human Services that administers the Medicare program and works in partnership with state governments to administer Medicaid, use the MSA designations to calculate wage index values for providers based on their labor markets.

Depending on the size of the metro area, payments could increase or decrease based on the population and medical services provided. No announcement has been released about whether Wilmington’s new MSA designation could warrant a lower hospital payment because of the smaller population. 

Officials with the Centers for Medicare & Medicaid Services could approve the new MSA designations in the coming months. 

Brunswick County unemployment statistics also will be dropped from the Wilmington MSA in 2015.

The recent designation, however, will not impact all geographic-based funding. 

For example, the Wilmington Metropolitan Planning Organization, a transportation planning group, should remain unaffected, said Mike Kozlosky, the group’s executive director.

He said the organization has an established urbanized planning boundary, which is used to determine funding allocations from the federal government, that would not change as a result of the new Wilmington MSA make up. 

Hoping for a reversal

A number of area governing boards – the Wilmington City Council and New Hanover, Brunswick and Pender boards of commissioners – have passed resolutions seeking the reversal of the OMB decision.

The Wilmington Chamber of Commerce also has contacted chambers from a number of other areas that lost counties in the MSA update, including Richmond, Va., Charleston, W.Va. and Houston. 

And U.S. Rep. Mike McIntyre, D-Lumberton, recently requested that federal officials take another look at the move, which affects his district.

Members of McIntyre’s office are slated to have a meeting April 16 with OMB officials to present information, such as commuting and growth patterns, to have the decision reversed.

“Our office is working with local leaders and elected officials in gathering further information to present to the Office of Management and Budget (OMB) regarding the removal of Brunswick County from the Wilmington MSA,” McIntyre said in a statement. “We are committed to pursuing every available option to reverse this decision."

That could be a tough task. 

Despite appeals from various metros across the U.S., the OMB has never transferred a county from one MSA to another in response to such requests, agency officials said. Officials said the only way the office would reconfigure a metro area would be because of its own methodology or changes made to the process by legislative action.

New regional vision 

Not everyone is quick to have Brunswick County rejoin the Wilmington MSA – especially economic and business leaders in Horry County.

Brad Lofton, president and CEO of the Myrtle Beach Regional Economic Development Corp., said having Brunswick County join the Grand Strand metro area could be advantageous for both municipalities.  

“We’re excited about working with our neighbors that have a great reputation for economic development,” Lofton said. “Combining will allow both communities to look better on paper for potential companies.” 

James H. Johnson at the University of North Carolina at Chapel Hill Kenan-Flagler Business School said Wilmington business and economic officials might be overly concerned about the reclassification.

Johnson, a Kenan Distinguished Professor of Strategy and Entrepreneurship at the school, said site selectors were increasingly considering other factors beside population counts and regional growth patterns and also looking into an areas’ quality-of-life and health factors such as obesity rates. 

But many regional business and economic officials say they don’t want to start back at square one but would rather have Brunswick County returned to the metro. 

“When a business is looking to move or expand, they will look at the MSA to see if the area is growing,” Rosborough said. “We are at an opportune time to capture economic development, and we don’t need this blip in the road to interfere with that. Our strength is in numbers.” 

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