Carolina North: Two Years of Diminishing Economic Expectations

Wednesday, May 30th, 2007

Yesterday’s Carolina North outreach, once again, was heavy on promises – the vast possibility of grey goo, the escalating energy efficiencies of blue sky projections – light on details.

As a NC taxpayer, I’ve been waiting for UNC to produce a real, updated business plan reflecting 2007’s economic realities. Hey, we’re plunking down billions at the Carolina North craps table – it would be nice to have a quantitative, verifiable analysis of the project’s risk-reward profile.

Chancellor Moeser, you owe us NC taxpayers a reality-based report on our expected rate of return for our vast collective investment.

And, please, not another self-serving 2004 Market Street Services economic impact analysis report [PDF], which, to be charitable, was a fluffy confection spun from dreams of an enduring legacy, chunks of ad hoc economic observations and community boosterism of the worst calibre.

Your Carolina North quarterback, Jack Evans, reset the economic expectations yesterday (May 29th). Your team, with barely two months left of your self-imposed deadline, will have to drive hard to produce a believable economic impact report.

To give a small bit of perspective on how far we’ve come, here is UNC’s May 25, 2005 PR trumpeting the benefits of Carolina North:

Study shows Carolina North will be catalyst for jobs, tax revenue

CHAPEL HILL – Carolina North, the proposed living and learning campus of the University of North Carolina at Chapel Hill, will generate 7,500 local jobs and about $48 million in annual tax revenues by 2020, according to an economic impact study released today. It also has the potential to position Carolina as a leading national center of research and public-private partnerships, according to Market Street Services of Atlanta, which conducted the study for the university.

“Carolina North will expand Carolina’s multiple missions, boost innovation and redefine our engagement with the region, state and world,” said University of North Carolina at Chapel Hill Chancellor James Moeser. “The great news from this study is that Carolina, through Carolina North, can continue to be a catalyst for the economic transformation of our state.”

The Carolina North draft conceptual plan outlines concepts for mixed-use development at a 900-plus-acre tract of UNC-owned property one mile north of the main campus off Martin Luther King Jr. Boulevard (formerly Airport Road). The draft plan proposes to develop only about 25 percent of that total site over the next 50 to 70 years. Carolina North would include classrooms, labs, housing, schools, community spaces, offices and limited commercial space in a campus-and-village setting.

Carolina North would attract private companies to Chapel Hill to partner with university faculty to transform faculty research into products and

services to improve quality of life. Public-private partnerships would allow the university mission to grow at a time when state and federal funding are no longer growing at previous rates.

The Market Street study will be presented at Thursday’s (May 26) meeting of the university’s Board of Trustees. The study includes analysis of the projected economic impacts at the end of the project’s second phase (15 years) and at full build-out (50 years).

Other study highlights include:

· In the first two phases alone (15 years), the gains in the local and state economies reflect similar numbers to a medium-sized firm building new headquarters in the area year after year.

· By the end of phase 2 (approximately 2020)

Tax Impact: About $48 million in tax revenue annually
$26 million in state income tax
$14.6 million in state sales tax
$2.8 million in local sales tax
$5 million in property tax

· Employment Impact:

7,500 full-time, ongoing jobs (non construction)
$433 million in annual salary and personal income
8,876 construction-related jobs
$353 million in salary and personal income (construction)

· Business Revenue:

$600 million in annual business revenue (non construction)
$979 million in business revenue (construction)

Plans for Carolina North are still in the conceptual design phase. Before the university can move forward to collaborate with the towns of Chapel Hill and Carrboro on the plans, it must resolve issues related to the university-owned Horace Williams Airport, which occupies part of the Carolina North tract.

The university announced in April 2002 that it would close Horace Williams Airport. In September 2002, the N.C. General Assembly passed legislation requiring the university to keep the airport open until January 2005. In July 2004, the legislature adopted language requiring the university to keep the airport open until an accessible replacement facility could be found for Medical Air, which serves the university’s Area Health Education Centers program.

The N.C. Senate recently passed a special provision that would allow the university to close the airport, provided that Medical Air operations have access to, or utilize, the Raleigh-Durham International Airport to serve the needs of patients, physicians and passengers associated with AHEC’s statewide programs.

The university’s Board of Trustees also will hear a report at its Thursday meeting about a consultants’ study to help the university identify an alternative site for an airport.

-30-

For a copy of the full economic impact study report, please go to: http://cn.unc.edu/economic_impact.pdf

Interviews with Market Street consultants can be arranged through News Services. In addition, for comment about the economic impact of Carolina North on the local community, reporters may call Aaron Nelson, executive director of the Chapel Hill-Carrboro Chamber of Commerce, at 919-967-7075.

I wonder if the Chamber’s Aaron Nelson, today, would give that report a passing grade?

Hard to believe given that today’s paucity of detail, the changing nature and scope presented yesterday and the rather obvious flaws ($5 million in property taxes? Really?) in Market Street’s Carolina North sales brochure.

Municipal Networking: St. Cloud Soars Above Chapel Hill

Wednesday, March 14th, 2007

As longtime readers and local voters know, I’m a strong advocate for bringing community-owned information infrastructure to Chapel Hill. Simply, to create a truly free new Town Commons benefiting our citizenry.

I’ve been working the issue now for over three years – banging the drum of strategic economic stimulus, social improvement – bridging the “digital divide” – and governmental innovation.

Local naysayers, like Councilmembers Strom and Kleinschmidt, continue, at least for now, to impede a tactical approach to building up Chapel Hill’s information infrastructure.

I’m a results oriented guy. I like to think that these folks, when faced with success after success, will eventually join in and seize this cost effective opportunity to kick start a key economic driver for Chapel Hill’s healthy future.

To that end, I’ve provided example after example, here and abroad of how a municipal network catalyzes a community’s innovative drive.

Two years ago I started talking about St. Cloud, Florida’s plan to provide free and ubiquitous connectivity to their community of 8,500 households.

Sep. 11, 2006, just prior to asking Council, again, to get the muni-networking ball rolling, I posted on St. Cloud’s wildly successful six month anniversary (Municipal Wifi: St. Cloud on Cloud Nine).

“So let the naysayers and talking heads let fly, but the little secret that is secret no more is that the results of a carefully planned and deployed municipally owned system delivered free to the citizens as a public service is actually the most successful, beneficial and effective model in existence.”

So says Jonathan Baltuch, who help found MRI, a consultancy specializing in planning economic development strategies for municipalities.

March 6th, 2007 marked St. Clouds’ community-owned network’s first year anniversary.

How are they doing?

MuniWireless says One year later, St. Cloud citywide Wi-Fi network shows impressive results:

St. Cloud, Florida’s network has received so much press because it is one of the few city-funded, city-owned networks in the US and it provides free Internet access to residents and businesses. Although the city owns the network, it has outsourced operations and maintenance to HP.

Jonathan Baltuch, founder of MRI, the consultant to the city, says: It is therefore fitting that at this year’s Muniwireless conference in Dallas the Cyber Spot celebrates its first anniversary on March 5, 2007. Being a pioneer with the first municipal owned system of its kind (although dozens of other communities are following suit), the Cyber Spot was immediately the subject of attack by the incumbents who were terrified by the prospect of communities taking back their digital rights. All throughout this year, while rumors and misinformation flew across the net fueled by various dubious sources, St. Cloud went about its business of providing its citizens with a premium quality service that saved the residents millions of dollars, eliminated the digital divide and created economic, educational and social opportunities for the citizens of the community.

Another by-product of this effort is that the city collected a comprehensive database of real world statistics and system information on the network.

Baltuch adds: The uptake rate of 77% is impressive when you consider that fee-based networks are attempting to reach uptake rates of about 20%. Incumbent broadband providers of cable and DSL rarely break 30% in any area after many years in the market. If the goal is true digital inclusion then reaching 20% – 30% in a community is unacceptable. This is why municipalities should be directly involved in providing this alternative service, hopefully for free, but at minimum for an extremely low cost.

Indeed, those who say that a municipally owned broadband network can never deliver good service are simply wrong. Many of the critics of municipally owned broadband mischaracterize the networks as being run by city employees who have no experience in delivering broadband service. In reality, most cities that fund and own the network, outsource the deployment, operations and maintenance to private companies. St. Cloud’s partner is HP.

At the end of 2006, Novarum, an independent wireless testing company, surveyed cellular and Wi-Fi broadband networks across the US. They ranked St. Cloud’s network no. 1 (and the only one with 100% service availability) ahead of Sprint, Verizon, AT&T, Earthlink and many others.

Why St. Cloud must be breaking the bank to provide this level of service! Afraid not:

The Capital expense was funded through the local economic development fund. The annual operational expenses are funded through the internal savings to City operations, which exceed the annual cost of operations.

That is the same argument local advocates have been making all along.

We could’ve been St. Cloud. We could’ve, and can still be, a competitive contender in the networked world.

You think Chapel Hill is safe? St. Cloud is in Florida – too far away to snatch North Carolina mind share.

As reported in today’s MuniWireless Greenville, North Carolina rolls out downtown Wi-Fi hotzone

The size of the coverage area is 1.3 square miles (3.3 square kilometers). It encompasses City Hall and the Pitt County Courthouse. This area is home to many businesses and the town commons where concerts are held in the spring and summer.

If the city decides to roll out a network that covers the entire community the area of coverage will be 31 square miles (80 square kilometers), and the initial cost estimate is approximately $2.5 million. The cost of the test bed is $51,000. It utilizes an existing Internet connection of 6mb down and 1mb up. The systems integrator/ISP is WindChannel out of Raleigh, NC and they are installing a Nortel Networks solution using 7220 access points and a 7250 centralized controller.

Greenville.
North Carolina.
Home of East Carolina University.

Eating Chapel Hill’s lunch.

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