Charlotte growth pushes limits: region must make sure its utilities, roads and other infrastructure are prepared for an influx of people and companies.

Unless infrastructure needs, including water, education, electricity and transportation, are addressed soon, the Charlotte region could have trouble sustaining its rapid growth. That was the consensus of a group of leaders assembled by BUSINESS NORTH CAROLINA for a round-table discussion of the region's economy, sponsored and hosted by Central Piedmont Community College in Charlotte. Participating were Ronnie Bryant, president and CEO of the Charlotte Regional Partnership, an economic-development nonprofit; Tony Zeiss, president of Central Piedmont Community College; Bryant Kinney, vice president for regulatory and governmental affairs of Charlotte-based Duke Energy; Clyde Higgs, vice president for business development of the North Carolina Research Campus in Kannapolis; and David Jones, a partner at Kennedy Covington Lobdell & Hickman in Charlotte and chairman of the Charlotte Housing Authority. The round table was moderated by Arthur O. Murray, BNC managing editor for special projects.

Can Charlotte maintain the growth it has experienced in the past couple of decades?

Zeiss: Growth is happening. But it carries challenges. And I see three for our region, including a tax rate that we're going to have to be careful about because we still want to attract new companies and jobs. The second one is public education and public schools. And the third one is infrastructure. We're in desperate trouble with the roads. And right behind roads are water and sewer.

Kinney: Talking about the economy without talking about infrastructure is like talking about a car without wheels. Infrastructure improvements are absolutely critical, whether it's public education, highways or our business of energy. North Carolina expects by 2030 to see 4 million new residents. A lot of that growth will come here in the Charlotte region. We have to have the infrastructure to manage it. We're not going to close the borders.

Jones: There are other aspects of the infrastructure issue that we have to keep in mind. Charlotte is operating under some severe air-quality issues. We need to look very hard at how we get people into different types of mass transit. Last fall, there was a serious movement to defund mass transit. Thankfully, the voters were more astute than some of the people who were leading the charge.

Kinney: At Duke, we are seeing 40,000 to 60,000 customers added annually. Just over the next five years, we expect to spend about $7 billion on capital infrastructure, whether that's power plants, power lines or other backbone systems that keep the lights on. Over the next 20 years, we expect to need close to 11,000 more megawatts of electricity. That's about four plants the size of McGuire Nuclear Station.

Higgs: There are some real-life ramifications of our water situation in trying to recruit farming and biotechnology companies. We were on the list of a company that was looking at our region as a new location, and because of our water issue we just kind of got pushed down the list. It's a real concern.

Zeiss: Back to K through 12. This is the one, the public schools, that worries me the most. At this college, 77% of recent high-school graduates have to be remediated in mathematics and 72% must be remediated in English. That does not bode very well for an economy. You can't sustain a great economy, even if you have the infrastructure and reasonable tax rates, unless you have the people who have the skills to do all the jobs.

Jones: But when you are talking about infrastructure, you're talking about tax rates. You can make an excellent argument that we're not doing nearly enough in terms of public investment. And while you can also argue that our taxes are high, you have to drop back and consider what the right tax structure is to pay for these needs, particularly when you include education.

[ILLUSTRATION OMITTED]

Zeiss: These numbers were just put out by the Charlotte Regional Partnership: 22% of workers in the region have less than a high-school diploma, 28% have only a high-school diploma. That's 50% of our work force, 1.3 million workers in our region, who have a high-school diploma or below. That won't get it. We won't be able to attract the jobs. So who's going to retrain them? The community colleges. We have to have infrastructure, good tax rates and, certainly, a good school system, beginning with K through 12.

How will the region's water needs affect economic development during the next 20 years?

Kinney: We have to keep our arms around the supply, and not just during droughts. Water is going to be an issue, not only for this region but also for this state. We have to manage the future growth. Industry that doesn't see water is available in Charlotte won't relocate here.

Bryant: What the drought has underscored is our lack of regional, multicounty and multistate cooperation. This is not a Charlotte problem. This is not a Charlotte region problem. It's a Southeastern United States problem. We're in litigation right now with South Carolina and, really, that's not the way this should be handled.

Kinney: Duke manages the Catawba River from up near Morganton down through Lake Wateree in South Carolina. We were able to put together, from utilities up and down the river chain, a group focused on how we manage the river. We talked on a weekly basis when the drought was very severe, back in the fall, and determined cooperatively, regionally, how to manage the shortage of water. A lot of legislators are looking at the model we have created here along the Catawba.

Bryant: I'm glad to see it happening in the private sector. Now we need to move that type of collaboration to our public sector.

Jones: There are some things we can do that would go a long way toward water conservation. People who administer building codes and real-estate developers ought to be facing some positive pressure--market pressure--to look at construction techniques that are sensitive to our conservation, such as road-paving materials that create less runoff and more absorption.

Is the region too dependent on banking?

Jones: Forty years ago, a bank was a place where they took in deposits and made loans. Banking today is a much more internally diversified industry, with a whole lineup of products that aren't traditional banking products. They do so many things. Recent downturns in the mortgage-lending market may make you wonder whether that's always a good idea, but it's a fact. We're probably not overly dependent on the banking industry because banking itself is diversified.

Higgs: If you start peeling back that banking onion, you can see companies in the information-technology sector that depend on banks, but the banks are not their only well. We are not overly dependent on them. They attract some really important companies that help with our economy.

Zeiss: When a bank comes to Charlotte, other companies come with it--auxiliary companies that help support that whole industry. So, yes, we are diversified, but part of that diversification comes from the very fact that the banks are here.

[ILLUSTRATION OMITTED]

Where is the region's economy headed? What sectors will emerge?

Higgs: We definitely see the medical-and-biotechnology sector as an emerging industry and not just at the North Carolina Research Campus. A lot of people don't know that Charlotte has a great ancestry and that a number of technology companies are already here. That's one of the things that we hope to exploit in the next nine or 10 years.

Jones: With the research campus, we have an opportunity in this region to really change people's perception about what goes on in Charlotte. We also have two large regional hospital chains with huge presences here--one headquartered here--and that adds to it.

Bryant: In the 20-plus years I have been in this business, I don't think I have been associated with a project as exciting as what's going on there in Kannapolis. To see that project coming off the ground, looking at the tremendous impact that's projected, not only on Kannapolis or Cabarrus County but also on this region, is thrilling. Most of that research and productivity has taken place on the eastern side of the state, but now this side of the state will become a significant player.

Jones: I expect a continuing increase in the number of people who come into their retirement years and view Charlotte as a nice alternative to Florida. Industries that cater to active retirees--real-estate developers or golf communities or companies that focus on the needs of an aging population that will need health care further into the future--are likely to be important aspects of the region's emerging economy, which ties in nicely with the biotech and health-sciences aspects of the research campus.

What kind of impact will the North Carolina Research Campus have on the region?

Higgs: Scan the U.S. for a minute and look at some of the big hubs for science and technology--Boston, San Diego, San Francisco. Your typical research hub may have one, maybe two universities anchoring the campus. We're going to have over seven. Then when we talk to companies about locating to our region, one of the first questions they'll ask is, 'What about the work force?' And they always ask about the community colleges because they want to know that when they hit the ground they can hire a hundred people to work in their shop.

[ILLUSTRATION OMITTED]