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Joining Efforts: Triad group wants to leverage region's assets
Journal Photo Illustration by Nicholas Weir
An aerotropolis, which relies on strong transportation links, could draw more companies to cluster near Piedmont Triad International Airport.
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Published: May 16, 2009
When Kelly King, the chief executive of BB&T Corp., was invited to help get a global logistics cluster off the ground in the Triad, he had one main question for the backers.
"I asked them how serious they were about moving this aerotropolis effort forward, and not just sitting around talking about its potential," said King, who also serves as the chairman of the Piedmont Triad Leadership Group.
"Aerotropolis" is a relatively new phrase for describing an industrial cluster attracted by and relying on strong transportation links. Although aerotropolises typically cluster around an airport, local leaders are trying to emphasize not just Piedmont Triad International Airport, but also the strength of the area's trucking industry and its highway corridors and distribution centers.
Most companies with operations near an aerotropolis tend to make or distribute time-sensitive products or services, such as pharmaceutical, apparel, health-care and perishable products.
King said that his question was a fair one given that several attempts at regionalism here since the early 1990s have fizzled, mostly because of the reluctance of local government officials to financially support projects outside their jurisdictions.
"I felt this is an eminently logical economic project with great potential, but it was going to need serious consideration and cooperation that crosses city, county and economic borders," King said.
After hearing the group's plans, King climbed on board. The plans include:
□ Creating a 25-member aerotropolis leadership board.
□ Establishing subcommittees involving local planners, transportation and marketing officials.
□ Developing a long-term land-use plan for the region.
□ Building a Center for Global Logistics at a Guilford Technical Community College campus in northwest Guilford County.
A formal presentation of the leadership board and its goals is expected by June 30.
"Even if we don't do anything, a lot of development is going to take place around the FedEx hub at the airport," King said.
FedEx has delayed the opening of its cargo-sorting hub at Piedmont Triad International Airport -- awaited since April 1998 -- from June until early fall because of the recession's effect on its business.
"The question is whether you frame the development and make it attractive enough to appeal to companies wanting an East Coast logistics presence, or allow it to be a hodgepodge of companies just serving the hub," King said.
The concept of a Triad aerotropolis surfaced in 2007 when John Kasarda, the director of the Kenan Institute of Private Enterprise at UNC Chapel Hill, presented the results of a study on the airport.
Kasarda and officials with the Triad aerotropolis effort acknowledge that the concept is not new. There are at least eight major aerotropolises in the country, the nearest being in Atlanta and Memphis, Tenn.
However, that means that there is a logistics gap between Atlanta and Baltimore that the Triad could fill, said King and David Congdon, the chief executive of Old Dominion Freight Line Inc. and the chairman of the aerotropolis leadership board.
Startup money for the aerotropolis will come from an unspecified grant from the federal program Workforce Innovations in Regional Economic Development. Theresa Reynolds, a supervisor of the WIRED proposal, said that there is no specific budget for the aerotropolis project, but financing does comes from various groups for educational, marketing and other efforts.
After June 2010, the money will have to come from local and state resources, said Don Kirkman, the president of the Piedmont Triad Partnership. King is leading the effort to raise money privately for the aerotropolis initiative and a similar project for the region's home-furnishings industry.
The leadership group also wants to organize the home-furnishings industry into a cluster, trying to attract more distribution and warehousing, as well as manufacturing, because of the region's same assets.
Kirkman said that the aerotropolis concept "is exactly what the U.S. Department of Labor envisioned when it created the grant program -- aligning economic development and work-force development efforts at the regional level" based on a region's assets.
Congdon said he took the chairman's role because he is a strong proponent of regionalism.
"There are a lot of agendas in the region, but this is an effort where we can come together with a common vision," Congdon said. "No one city or county can do this alone."
The job-loss sting of the recession has become a major selling point for the aerotropolis effort, supporters say.
Gayle Anderson, the chief executive and president of the Greater Winston-Salem Chamber of Commerce, said that the recession gives the region time to get the aerotropolis cluster "ready for takeoff when the economy moves ahead. There could be a significant role for Winston-Salem in the areas of medical devices and medical diagnostics and testing."
Dan Lynch, the president of the Greensboro Economic Development Alliance, said that like biotechnology -- another emerging industry cluster -- the competition is getting tighter for logistics.
But he says he believes that the Triad can differentiate itself and persuade companies to consolidate their distribution centers here, with its lower cost of doing business and its logistics advantages.
"The decision by FedEx Express to locate a huge sort facility at the airport definitely sets us apart from almost all other cities we compete against for expansion and relocation projects," Lynch said. "The existing UPS and future FedEx ground hubs further tip the scale in our favor.
"Add the large number of trucking companies that have major operations in the region and an outstanding interstate highway system with our central East Coast location, and you can see how we can make a compelling case for the aerotropolis model," Lynch said.
The Triad's quest to become an East Coast distribution hub is not pie-in-the-sky, said John H. Boyd, the president of The Boyd Co. Inc., a site-selection company in Princeton, N.J.
"You need to understand that many of our corporate clients are still rationalizing their distribution networks post-NAFTA, as well as in anticipation with additional free-trade agreements with Latin America in the years immediately ahead," Boyd said. "Those decisions will have north-south, not east-west, implications.
"From where we sit, the Triad can indeed make a strong case for new distribution-related corporate investment. These facilities generate high-paying jobs in information technology, telecommunications, software engineering and numerous other white-collar fields," Boyd said. "They are largely green, non-polluting -- aside from truck traffic -- and pay enormous property taxes."
Boyd said that often a company's first entrance into a community is through distribution or warehouse centers.
"Distribution promotion becomes a good investment on the part of the community as it might likely result in further investments and jobs down the road by that sector," Boyd said.
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
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