Haywood County economy outpaces its peers
Joey Del Bosque scrolled through his appointment book for the week; time slot after time slot was filled, with just enough room to breathe.
Belle On Main, a salon and massage parlor along South Main Street in Waynesville, opened in May and quickly started picking up business.
“It seems like we have really hit our stride,” Del Bosque said, adding that the business averages almost one walk-in customer a day. “We have been really well received.”
Del Bosque seems to have launched his new salon and massage parlor at the right time — just as Haywood County’s economy appears to be bouncing back from the recession. Haywood County was just ranked among the top 20 counties in the state economically, according to the North Carolina Department of Commerce — positive reinforcement for how the county’s economy is faring.
But, similar to county and tourism leaders who were worried about Haywood County’s financial future, Del Bosque was not always so sure enough revenue would come rolling in. Del Bosque recalled washing the dishes in his kitchen one night and suddenly panicking.
“What am I thinking? Double mortgage? Double taxes?” Del Bosque said, replaying his doubts.
But, now just six months after opening his doors, Del Bosque is hiring a new employee.
“It has paid off, and I am thrilled,” Del Bosque said.
When he started out, he only employed one other person. When she left, Del Bosque kept the business running by himself, but after the New Year, he will not only replace his departed employee but add another.
“By adding more people to the team, I can service more people,” Del Bosque said. “We don’t have to turn anyone away.”
While a single new employee is no big deal on the surface, that sort of growth in a small business is nothing to scoff at. New jobs, no matter where they come from, are a key symbol of economic prosperity. Haywood County saw a net gain of 218 new jobs between January 2010 and January 2012.
Moving on up
A county’s unemployment rate is one of four components that the state Department of Commerce uses to categorize the economic health — or distress — of its 100 counties. Counties are grouped into three tiers: the top 20, the middle 40 and the bottom 40. Other factors considered are population growth, median household income and property values per capita.
Every year, the Department of Commerce crunches the numbers and dishes out “tier rankings.”
For the last several years, Haywood County has hovered just inside the middle Tier II ranking, performing well, just not well enough to be deemed among the 20 in Tier III. Some economic leaders in the county were actually shocked to find out Haywood County had moved up in the rankings.
“I didn’t think we were a Tier III county,” said County Manager Marty Stamey. “We barely made Tier III.”
The state Department of Commerce sent a letter to Stamey explaining the reason for their new, more prosperous ranking. Although the county saw a decline in its per capita property values, “this negative impact could not offset the significant jump in population growth,” the letter read.
Haywood County moved from the 59th most populous county to 38th in the state.
“There is a reason that they are moving there. It could mean jobs. It could economic development,” said Tim Crowley, assistant secretary for communications and external affairs at the N.C. Department of Commerce.
CeCe Hipps, executive director of the Haywood County Chamber of Commerce, has seen anecdotal proof of the county’s population growth potential.
The chamber distributes pre-made packets of information to people who express an interest in moving to Haywood County, and as of late, Hipps said the chamber has had more inquiries about residency.
When she first started, the chamber mailed or handed out 30 to 40 packets a month. During the recession, it dipped to about 10 a month, she said. But, just in a matter of days this month, the chamber gave out seven moving packets, indicating the population could be on the move upward.
“This is a dramatic increase,” Hipps said. “And, their timeframe is quick.”
Rather than saying they want to move to Haywood County in a few years, more visitors are telling chamber workers that they hope to relocate within a year.
The number of existing home sales has indeed been rising. The second quarter of 2012 not only saw a spike in existing home sales — 177 sales in a three-month perdiod — it hit an all time high for any single quarter since 2008, according to Haywood County real estate data.
In addition to a rise in population, Haywood County also has the 15th lowest unemployment in the state, according to the Department of Commerce.
Good news, bad news
For Haywood County, a Tier III ranking is both a blessing and a curse.
“It’s like bittersweet news,” Stamey said. “It’s good that your economic factors are in the top 20 in the state. … [But] It hurts us.”
County leaders were happy with the Tier II position because it showed Haywood County had a good economy but also gave them benefits Tier III counties don’t receive.
“Two was a good place for us,” Hipps said. “I think our comfort level is at two.”
Mark Clasby, executive director of the Economic Development Commission, said from an economic development standpoint, he would prefer a high Tier II ranking.
The rankings affect how much a county gets in state tax credits for business that create new jobs.
“It’s kind of good news-bad news in a way,” Clasby said. “When I am trying to compete on attracting new jobs, it gives me a little bit less to work with.”
As a Tier II county, Haywood secured $175,000 in state tax credits for Sonoco Plastics, which is adding 35 jobs during its $11.7 million expansion. That equals $5,000 per new job created.
Had Haywood County been classified as a Tier III county at the time, incentives would have only amounted to $750 per job — far less than what it obtained as a Tier II.
“Going to $750 from $5,000, to me, is a big deal,” Clasby said.
Although being categorized as a Tier III county can almost seem like a punishment, the goal of the tier system is to give counties experiencing more hardship than others a leg up when it comes to attracting businesses, which is why Tier I and II counties can offer better tax credits.
“The reason generally for something like this is to make sure that less prosperous counties are economically competitive,” Crowley said.
On the plus side for a higher ranking, businesses could be drawn to a county because of its Tier III status, which denotes a healthy economy, meaning those counties do not need as much help.
However, Haywood County is different from most of the other Tier III counties, which are counties that include or surround major urban hubs like Charlotte or Raleigh. Although its sits just down the highway from Asheville, Haywood County is still fairly rural, and for that reason, it does not have as many economic incentives to offer by comparison, Clasby said.
“They have more resources that they can throw into the mix than we can,” he said of other truly urban areas.
Another downside of a Tier III ranking is a decline in the number of grants the county is eligible for — particularly health department grants.
Haywood County Health Director Carmine Rocco noted that the county has already missed out on two grants that would have benefited the county — one to increase access to primary care and another for diabetes. Both grants were only offered to Tier I and II counties.
“We were basically, by our designation, excluded,” Rocco said. “It’s a concern when you are either eliminated or the likelihood of being funded is reduced because of the tier you are placed in.”
Rocco said he thinks the county is put at a disadvantage because of its tier ranking and because it is sometimes classified as an urban county given its proximity to Asheville.
“It’s a challenge for county governments to be funded fairly,” Rocco said.
County Manager Stamey worried that the county may not receive as much money from the Golden Leaf Foundation or N.C. Rural Center — or that its share of matching funds to land grants will now be higher because of its Tier III status.
“It is going to make it harder to be eligible for those grants,” Stamey said.
Despite concerns from county leaders that its ranking will affect how much money it receives in grants, the Golden Leaf Foundation, a nonprofit that awards funding to formerly tobacco-dependent, rural communities, said that it will continue to working with Haywood County as it always has as long as it keeps submitting quality grant proposals.
“We are very active in the county, and we will continue to be so,” said Dan Gerlach, president of the Golden Leaf Foundation.