Wednesday, February 23, 2011

Incestuous Politics Costing You Millions

A recent article in the Star News, "Cape Fear Future - Advocates' visions differ on area's direction", paints a very good bird's eye view of one of the many so-called "economic development" organizations that local taxpayers fund every year here in New Hanover County and the City of Wilmington. However, the article falls short in digging into the issue very deep.

Connecting the dots from our political establishment to these groups means following the money - and that can be a difficult task. It also means understanding who the key players are, and what their roles are in the community. Once these things have been established, it is hard to come to any conclusion other than the fact that we have an incestuous iron-clad political/business/media machinery in operation that dictates virtually everything about our lives, economy, and information we receive here in Southeastern North Carolina.

As has been reported right here on The Wilmington Watcher, Cape Fear Future (CFF) is a function of the Wilmington Chamber of Commerce; based on a consultant's direction - for a price of $250,000. The idea of the organization is to "further develop the Cape Fear region’s Knowledge Sector Economy to promote economic development and ensure the future prosperity of the region" according to the Chamber's website. The idea is that creative and knowledge sector jobs are what will save us all. Part of that recipe is to attract a larger gay community, according to Dr. Richard Florida, the highly paid consultant behind the creation of Cape Fear Future. Nothing against the gay community - but do we want our government using our money and resources to actively pursue such a thing? Is this an appropriate function of government?

It is important to look a little deeper in this issue in order to understand what is going on. Cape Fear Future has positioned itself as the new kid on the block; the younger, hipper economic development agency; the elite group of chosen visionaries who will guide us out of the economic darkness and into prosperity. The method used is through pursuing "knowledge sector" jobs, and advocating for educational ventures. Whereas venerable, powerful economic development cartels such as Wilmington Industrial Development (WID) focus on attracting and establishing industrial and manufacturing jobs by dangling taxpayer-funded incentives carrots in front of prospect corporations - Cape Fear Future claims to contrast this with a more forward-looking agenda. However, a study of the people involved in both groups paints an interesting picture.

Cape Fear Future is guided by a 47 member board, whose roster can be found here. When compared to the membership of WID, an interesting trend is noticed. The majority of the CFF board members are either members of WID, or have their specific company or business interest represented in both organizations. In fact, several of the CFF board members are voting members on WID's board of directors. CFF and WID share executive roles as well. For example, Jack Barto, President & CEO of New Hanover Regional Medical Center, is both Chairman of Cape Fear Future and the Vice-Chairman of WID, according to WID's list of 2010 directors here. Jim Bryan, Regional Executive V.P. of First Citizens Bank, is a board member of both organizations. Scott Satterfield, the well compensated leader of WID, is, you guessed it, another voting member of Cape Fear Future. WWAY reported a while back that his taxpayer-funded salary reaches beyond $300,000. Eric McKeithan, President of Cape Fear Community College, of who it was just revealed makes $334,000 thanks to taxpayers, is yet another board member of WID and member of Cape Fear Future.

And then there is the media. Bob Gruber, Publisher of the Star News is a member of both WID and Cape Fear Future board member. Gary McNair, General Manager of WECT, is as well. Andy Combs, G.M. of WWAY, is a member of the CFF board. So if one is expecting fair media coverage and a glimpse into the inner workings of these organizations, one should not hold their breath.

In fact, out of the 47 members of Cape Fear Future, the majority is represented in one way or another within WID, calling into question the true separation between the old industrial-focused economic development group; and the new, "forward-thinking" and "visionary" "knowledge-based" and "creative" sector  organization.

WID has traditionally been led by the elite corporate and industrial magnates of our region. This is understandable as their work consists of delving out taxpayer incentives to corporations such as GE and Hitachi. But Cape Fear Future is purporting to be the agents of change, riding the wave of the future, and implementing new strategies to attract the jobs of tomorrow. However, under the same leadership of the hospital administrators, bankers, publicly-funded academia, and other bureaucratic types that control WID; how is it that their economic focus is supposed to be entirely different?

In fact, Cape Fear Future has been so ineffective, that even the same city council that slapped itself on the backs for being so revolutionary in having a hand in their creation, is questioning their abilities. In this article by the Star News, Councilwoman Laura Padgett said of Cape Fear Future, “It hasn’t produced any specific additions to the community”. She also makes an interesting point that Cape Fear Future closes its doors to the outside world, despite a $20,000 contribution by city taxpayers. “They are a closed group of people. You can’t just go sit in on their meetings. You have to be invited”. Mayor Bill Saffo stated that city council needs to get more involved with Cape Fear Future - despite the fact that he is a charter member of both organizations; apparently alluding that he doesn't want to assume that duty upon himself.

So is it helping the community economically to have a myriad of taxpayer-funded alleged "economic development" agencies using the public's money to go off in their own chosen direction, without any accountability, without any benchmarking, and without any transparency? Is it a good thing to have two organizations - one claiming to be the industrial economic driver; the other claiming to be the wave of the future, attracting creative class and knowledge sector jobs - yet both having the same leadership at the helm? Economic data loudly says "NO". According to the NC Employment Security Commission report here, all of 2009 and 2010 reflected an unemployment rate in our area of around 10% give or take. Now into 2011, those numbers seem to be holding steady.

Even though the data is lacking in support of publicly funded economic development agencies' efforts, that isn't stopping the pursuit of taxpayer dollars for such endeavors. Nor is the cheerleading from public officials waning. Several local organizations have been pushing hard for a taxpayer funded local arts council that would serve to obtain both state and federal grant money for government subsidized arts projects.

The Cape Fear Economic Development Council (CFEDC), the only known privately funded economic development group; and other publicly taxpayer-funded groups such as Do it Downtown (DID), Wilmington Downtown Inc. (WDI), Downtown Business Alliance (DBA), and of course Cape Fear Future held a meeting on Tuesday night to garner support form the community for the arts council. Their call for tax dollars would equate to a $50,000 contribution from the city and the county for a total of five years; or a grand sum of $500,000 - what they refer to as "seed money".

A colorful array of corporate magnates, investment bankers, and successful entrepreneurs led the call for more tax dollars for what they consider to be a viable economic driver. However, when confronted about investing their own money in such an endeavor, all but one, Tom Harris, owner of Front Street Brewery, balked at the notion. One of CFEDC's leaders Bill Graham told a packed audience, fairly diverse for and against support, that we have "an emergency on our hands", referring to the window of opportunity to create and initiate the arts council in order to obtain state grant money by April of this year. More on that meeting and the issue in general soon.

The situation in the theoretical sense can be summarized as the attempt to equate the use of taxpayer dollars into some sort of economic return for the taxpayer. However, there has never been a decrease in the tax burden due to the activities of these organizations. In fact, taxes have continued to climb. The total amount of money that city taxpayers have contributed to cultural, recreational, and economic agencies is more than $2.78 million - just since 2008. New Hanover County taxpayers have contributed twice that amount to outside agencies and economic incentives - over $5 million since 2009. For what local leaders refer to as modest investments for our economic health, have become enormous drains on taxpayer resources. At least there is one group, CFEDC, that operates without a hand in the taxpayer's pocket. If only others could take note.

Should we be content with our taxes continuing to increase in order to keep funding initiatives that have demonstrated no real economic growth? Initiatives that host our same elected leaders who sit on their boards, being the ones lobbying and voting for their funding? Agencies who use taxpayer money to pursue unknown goals, and then use their positions as political motivation at election time in order to support certain officials who favor their cause? The taxpayers of this community deserve more respect and appreciation than to be insulted and abused in this manner.


  1. Hi, Ben. Thanks for coming out last night. We disagree, but hope we can be cordial about it. A few corrections to the post above.

    1) The meeting last night was organized NOT by Cape Fear Future, but by Cape Fear Economic Development Council, Inc., of which I am president, chief AV tech and floor sweeper. If you hear of Cape Fear Future holding a public meeting at all, holding any kind of meeting more than twice a year or taking a public stand on anything moderately controversial, let us all know.

    2) CFEDC, while funded only by the contributions of time, energy and funds of board members, cannot remain so forever. We are all giving up a big chunk of our time and some money to invest in something we believe in because we don't see it happening on its own. Likewise, I would say the arts community should invest their time and money in developing an arts council. I would also argue that once they demonstrate their ability and willingness to find a way to work together for the common good, everyone would be more confident in "investing behind their success" as Tom Looney has said about this issue. I have heard some suggest that wealthy people and corporations should fund the arts council and leave it to the artists to operate. That suggestion demonstrates true naiveté. The council would be accountable only to the wealthy and corporate interests. No thank you.

    3) You say that everyone but Tom Harris balked at the notion of putting their own money behind an arts council. I filmed it and I have reviewed the video. I have watched it over and over and cannot read a single person's mind any better than you or I could in the gallery last night. Personally, I think most of us were dumbfounded by the fact that the arts council steering committee has already formed a 501c3 and had apparently not thought a moment about how to arrange for private individuals and corporations to contribute. If I were a city council member or a county commissioner, hearing that private donations or pledges had already been collected in some amount, I would be a lot more confident about the future financial prospects of the arts council with or without public funds. Two-years on, that ship has sailed. Probably would have been a good idea to work on a giving campaign for the last year. I, for one, WOULD invest in a publicly funded and publicly accountable arts council, but I would not invest in a private arts council dominated by wealthy donors or corporate interests.

    BTW - I guess the WECT reporter who interviewed you at the elevator as you entered last night (I realized later who you were) must have thought you were a member of CFEDC because his web report said CFEDC was/is against the arts council. I spoke with the news director this afternoon and he was apologetic (and a little embarassed?) that they flubbed it so badly. An honest mistake, I'm sure...

    Anyway, I bet we agree on more things than we disagree on. On this topic, our world views clash a bit, but I see where you are coming from and I respect your position. Thanks for being engaged.

    Lloyd Smith
    Cape Fear Economic Development Council, Inc.

  2. hmmm - regardless of whether these entities actually provide any real benefit to our area, it does not seem right that tax dollars should be used in this way - especially without clear reporting and transparency as to what the money is used for. It seems our community doesn't pay much attention to these types of actions by our elected officials, and perhaps we SHOULD be.


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