The second-home economy has fueled far more than construction and real estate jobs over the past decade.
“If it’s someone’s second or third home, they aren’t bringing anything with them,” said Doug Worrell, the president of High Country Furniture in Waynesville. “They aren’t moving their furniture.”
As a new economy emerged to support the second-home movement, furniture stores have proliferated throughout the region.
Worrell saw a customer last week who bought a home at Bear Lake Preserve in Jackson County and wanted it furnished by Friday. On the other end of the spectrum, a couple who hadn’t yet closed on their lot, let alone started building, were already browsing for their dream furniture.
A brand-new house also calls for art and décor. Enter the many galleries and boutiques filling downtown store fronts through the region.
“What impact does the second home market have on Main Street? Major,” said John Keith, owner of Twigs and Leaves gallery in downtown Waynesville.
Many second-home owners make a hobby out of decorating their new mountain abodes, and Twigs and Leaves had the sales to prove it. But as second-home construction slowed over the past three years, so did the purchase of artwork, Keith said.
While Keith has no doubt the second-home market will return — few places can beat WNC as a destination for retiring boomers — some galleries have been unable to wait out the downturn. Just last month, Echo Gallery in the upscale Biltmore Village closed down.
No one knows the importance of the second-home economy more than Danny Wingate, the vice president of Haywood Builders in Waynesville.
Haywood Builders nearly tripled its sales over the first half of the decade, peaking at $30 million in sales in 2006. The robust growth was fueled almost entirely by the second-home market, Wingate said.
“Our business was made up primarily of high-end second homes,” Wingate said.
The large number of gated communities popping up in Jackson County spurred Haywood Builders to open a Design Center in downtown Sylva, where people building homes could pick interior features from kitchen cabinets to bathroom lighting.
“It was a platform for us to access the Jackson County market, particularly for cabinetry,” Wingate said. It was a savvy move: Wingate recalled one homeowner who spent $140,000 on cabinets alone.
But that has all changed now.
“We are off substantially,” Wingate said of sales today compared to that boom period.
Last year, sales had dropped to $12 million, a precipitous decline from the peak of $30 million in 2006.
Wingate has a bird’s eye view of the construction industry, with builders constantly funneling through his store, where both prices and customer service beat out his big-box competitors. Contractors who were once among his top 10 biggest clients are now struggling to find work.
“Even our big boys are out of work,” Wingate said.
Time for reflection
The slump in second home growth isn’t all bad, according to Ken Brown, Chairman of the Tuckasegee Community Alliance in Jackson County.
Brown questioned whether the growth rates of the past decade are sustainable. Jackson County saw the largest population growth of any county in WNC among year-round residents, as well the biggest increase in home construction, much of it in the second home market, according to the census.
“It is hard to gauge what kind of an impact that had when you have that many folks building second homes,” Brown said. “It is kind of unprecedented in my time.”
The economic downturn has been like a pressure relief valve on a boiler.
“I think we need to assess just what kind of development we want,” Brown said. “You wonder if that trend could happen again if the economy does pick up. It would put a tremendous amount of pressure on the county.”
Now is not the time for counties to let down their guard on mountainside development or roll back ordinances regulating slope construction, he said. Jackson County passed some of the region’s most progressive and restrictive development regulations four years ago — largely in response to the unparalleled building boom. But that could change given a slate of new commissioners elected last fall.
“We felt like they may try to weaken or water down the ordinances,” Brown said.
So Brown and like-minded citizens in Jackson County have formed a grassroots task force to keep an eye on any moves by the newly elected board of commissioners to undo construction regulations, Brown said.
Brent Martin, who lives in Macon County and works for The Wilderness Society in Sylva, said the face of the mountains could change dramatically if the second-home dynamic continues on its current trajectory.
“It will be very interesting to see what this place turns into in another 30 or 40 years,” Martin said.
“I don’t know how we would handle it. The current downturn is allowing us to catch our breath and step back and figure out how to address the next wave of it — because it is certainly coming.”
The rest of the economy might have suffered, but a couple of snowy winters are adding up to big bucks and good times for North Carolina’s ski industry.
Last year, the total economic impact of this segment of the state’s economic pie amounted to $146 million. That number is courtesy of the N.C. Ski Areas Association, which crunched and computed the figures for the 2009-2010 season and recently released its findings.
That good news doesn’t come as a surprise for ski industry workers such as Brittany Heatherly of Skis and Tees in Maggie Valley, who said the store was running out of rental equipment by 10 a.m. each day during the Christmas break.
“It’s been awesome,” Heatherly said. “Everybody is making a lot of money, and having fun. There have been a lot of people because it has been such good weather.”
(Clarification to readers: “Good weather” to the skiing industry would be the snow and cold many people have a difficult time dealing with.)
Heatherly, an avid snowboarder, said skiers and other winter-weather lovers didn’t let road conditions prevent them from getting to the slopes at resorts such as Cataloochee in Haywood County. Folks used four-wheel drive vehicles or put chains on their car tires.
N.C. Ski Areas Association defines “economic value” as the total value to the economy from the existence of ski areas. Winter value, employment value, capital improvements and economic multipliers were considered. The study looked from November to March as the “ski season” when compiling this report.
North Carolina has six ski areas: Cataloochee Ski Area, Sapphire Valley Ski Area, Ski Beech, Appalachian Ski Mountain, Wolf Ridge Ski Resort and Sugar Mountain Ski Resort.
Collectively, these ski areas provided 96 year-round jobs and 1,557 seasonal jobs during last year’s ski season. The industry generated over $32 million in gross revenue from ski area operations, including lift tickets, lessons, equipment rental, retail stores and food and beverages.
David Huskins, who heads the regional tourism group Smoky Mountain Host that is headquartered outside Franklin, said the rockslide and subsequent closure of Interstate 40 in the Pigeon Gorge section of Haywood County “obviously … impacted our region’s ski economy.”
“But, generally, reports are that it was offset by the continued natural snowfall through December-March 2010,” he added. “Good news for our region.”
Money breakdown on individuals at ski areas
(Per person spending, and percent of total)
Lift tickets/tubing/ice skating: $44.78; 33.5%
Ski/snowboard lessons: $5.75; 4.8%
Equipment rental/demo at ski area: $13.81; 10.7%
Equipment rental/demo at other N.C. locations: $1.97; 1.4%
Food/beverage/restaurants on mountain/base: $16.88; 13.2%
Food/beverage/restaurants in other N.C. cities: $14.22; 9.8%
In many ways, Brian Hockman and wife Carrie of Claymates, a “paint your own pottery experience,” serve as the perfect business portrait of the new Dillsboro.
This is Dillsboro post the Great Smoky Mountains Railroad. A Dillsboro that maybe hasn’t exactly risen from the ashes like some resurrected phoenix, but a town that has, nonetheless, persevered and survived.
Claymates is located in the downtown section on Front Street: within a hop, skip and a jump of the railroad tracks that run through the town. The train once served as a major business conduit, disgorging crowds of tourists — about 60,000 a year — into the waiting arms of merchants.
Brian and Carrie Hockman came to Dillsboro a short time after the tourist train pulled out in 2008. In the midst of the recession, the train consolidated business operations to its new headquarters in nearby Bryson City and canceled passenger service to Dillsboro. The train moved just one county away, but the shift might as well have been to the moon as far as Dillsboro merchants were concerned.
People lost jobs — 22 full-time railroad employees and a handful of part-time workers were stranded. Stores lost money. Businesses went elsewhere.
So why did Brian and Carrie Hockman settle on the economically (and for merchants, emotionally) depressed Dillsboro during such a bleak period?
The rent was low in those just post-train days, and Pennsylvania native Brian Hockman was eager to start a business showcasing his photography. As a sideline, his wife started Claymates, a pick-out-a-cute-porcelain-figure-and-paint-it-yourself business — and the sideline became the mainline as the couple built a successful store. Brian and Carrie Hockman don’t depend heavily on tourists and walk-ins. Claymates instead relies more on events such as birthday parties, girls-nights out and office parties.
So recent news that the Great Smoky Mountains Railway has once again expanded seasonal excursions into Dillsboro doesn’t matter that much to Brian Hockman. Truth be told, he really just hopes his rent won’t increase as a result.
Other business owners in this small Jackson County town are more excited than that. But they, too, remain cautious — any help during these hard economic times is, of course, welcome news. Just be clear on this: Dillsboro won’t ever put all of its eggs back in that one basket again.
Here’s the deal
Great Smoky Mountains Railroad started four-hour roundtrip excursions from Bryson City to Dillsboro in January, and plans to continue them through this month. Tourists riding the train have an hour-and-a-half layover to wander the town.
On occasion, that layover means an extra customer or two for Jill Cooper at Haircuts by Jill on Front Street. Men who decide they need a trimming and a place to sit while their wives shop, she said, or men ordered in by their wives who want to visit other stores without them hovering nearby. Additionally, some of the train’s employees get their hair cut while in Dillsboro.
But even though the direct business benefit might be of marginal importance for Haircuts by Jill, Cooper is very happy the train is back — no matter for how briefly, or for such a short layover.
“It’s exciting,” she said.
The train has brought back a certain liveliness missing since it left, said Cooper, who lives — as well as works — in Dillsboro.
Limited runs by Great Smoky Mountains Railroad started back up in 2010, with the train bringing tourists in June, July, August and October. Peak season summer and fall runs were a good sign, but trips in the winter are an even better indication that Dillsboro might again secure a place in the train’s long-range regional vision.
“It is a bigger deal because we are coming in the winter,” agreed Sarah Conley, marketing manager for Great Smoky Mountains Railroad.
It turns out Dillsboro’s character was popular with train riders, and that had a lot to do with the train’s decision to restore passenger service to the town.
“Dillsboro is such a quaint little lively town, and it has a lot of strongholds. It is an added bonus for riders to have a destination. When they get off they say, ‘Oh this is neat. It is a little quaint historic town,’” Conley said.
Additionally, the 32-mile roundtrip from Bryson City to Dillsboro has sights that interest most riders, Conley said. There is the 836-foot Cowee Tunnel to pass through, The Fugitive movie site to eyeball, and the scenic Tuckasegee River to enjoy.
“Another thing that is really neat on the way to Dillsboro is they go by the train shop where our engineers work on the trains,” Conley said.
While the recession is still taking its toll on tourism, Conley said ridership was up last year compared to 2009.
Many of the passengers on these winter excursions are day-trippers, the marketing manager said. People who have visited Harrah’s Cherokee Casino and are looking for more things to do. Tourists who come over the Smokies by way of Gatlinburg and Pigeon Forge, Tenn., for an opportunity to ride the train, and North Carolina residents who are in search of something to do on the weekend.
In early January, new customers came into Twin Oaks Gallery and told owner Susan Leveille they had learned about her shop after visiting Dillsboro via a ride on the train.
“That was more than I had heard in a long time,” Leveille said of the train-Dillsboro connection.
Twin Oaks Gallery, which features works in pottery, glass, iron and such by local artisans and craftspeople, isn’t in direct sight of the train tracks. That means Leveille can’t be sure exactly how much business Great Smoky Mountains Railroad funnels into her store — she must rely on customers to tip her off.
“In concept, though, I think it is a great thing they are making trips here and connecting with Dillsboro again,” the longtime business owner said. “It can’t be anything but good for us.”
Staff writer Becky Johnson contributed to this report.
Although retail businesses might have found some relief toward the latter part of the year, homebuilders and real estate agents found fewer reasons for joy in 2010.
For homebuilders, the outlook was pretty bleak, according to Dawson Spano, president of the Haywood Home Builders’ Association. The bleeding in the industry, he said, has slowed but hasn’t altogether stopped, and many contractors around the region are still calling it quits — or at least still feeling the heat of the recession.
“Builders are getting out of the business, but not at the fast rate that it was last year,” Spano said.
The best way to characterize the situation, he said, is that things aren’t yet getting better, but at least they’re not getting worse.
The business they’re seeing now is different than what has long characterized the home building industry in Western North Carolina, with large developments of second and luxury homes on the decline or stopped altogether. And Spano said he’s not certain that kind of construction and housing market will ever return to the area.
“We’re going back to the way it used to be, where you have builders building one, two houses a year,” Spano said. “I think the big developments are dead for a long time. The Balsam Mountain Preserves, the Sanctuaries, those big places — I don’t see people dropping 300 to 400 thousand for a piece of property.”
Homebuilders, though, are seeing a trend towards remodeling, and Spano thinks this may be where the market is going when the country finally drags itself out of the economic slump. Wherever it’s headed, he has no doubt that it will be scaled back.
Phyllis Osborn, executive officer for Haywood’s Home Builder’s Association, said that the numbers bear this out. What they’re hearing from contractors around the region is that work is there, but it’s smaller in scope and opportunities are still sparse, as evidenced by the drop in contractors still in the game.
“We are 136 in our membership and at the end of last year it was 148, so we’re continually dropping,” said Osborn. “And I know in years prior it’s been up almost to 200.”
Spano’s predictions that small building will lead the way out of the recession and beyond are echoed by the National Association of Home Builders, who released a study at the end of December proving that very trend. The NAHB found that 65 percent of builders that are still in business pull in less than $1 million annually.
“We are seeing market conditions returning to normal in many parts of the country after a long, hard downturn, and these companies have the agility to move quickly and start leading the economy forward,” said NAHB Chairman Bob Jones in a December statement.
In the real estate market, the general sentiment seems to be much the same – that things are still languishing, but the sales dips are not quite as deep as they were last year.
Bob Holt, who teaches about real estate for Southwestern Community College, said there are fewer agents than during the pre-recession boom years. The ones that have stuck with it, however, are staying relatively busy, he said.
“It is still slow, but things are turning around,” said Holt, a Franklin resident. “The prices are low, the interest rates are low — it is a good time to buy stuff.”
Holt said the situation would not improve significantly for another year or so, “until we clear out all the foreclosures” and the job situation improves.
In Haywood County, the Board of Realtors is looking to a merger with Asheville as a possible force to help mitigate the loss if the economic hits keep coming. For homebuilders, 2007 was the banner year, and for Western North Carolina’s real estate world, the benchmark for booming business was 2005. But as one real estate agent put it at a recent board meeting, 2005 probably isn’t coming back, so the future may be found in a new business model, not a return to pre-recession growth.
“If the real-estate market doesn’t improve, then neither will my membership,” said Lisa Brown, association executive for the Haywood Board of Realtors. The math is simple, and after taking a hit of more than 25 percent last year, the area’s agents are looking for a better 2011.
But John Keith, a Waynesville real estate agent in his second year in the county, remains optimistic. People are still buying, even if the pace is much slower. People still want to move here, even if they can’t make it happen until their current house sells.
“The market is still depressed, but I’m optimistic,” said Keith. “We still know that this is one of the best retirement relocation areas in the country, and there’s still a lot of people that are trying to get here.”
For his part, Spano takes a more poetic view of what’s coming in 2011.
“We’re in the valley of the shadow of death,” Spano said. “We’re there, except now we can see the light at the end of the tunnel.”
Despite a sour economy, many businesses in Western North Carolina are not only surviving — they are thriving.
Take Krismart Fashions on East Main Street in Sylva.
While many stores have seen sales decline and continue experiencing downward economic spirals, Krismart Fashions in October enjoyed its best sales month ever in the store’s 40-year history. December, too, showed promise: sales were up 20 percent.
Libby Hall, who owns the store with business partner and sister Jeannie Kelley, credits a diversified inventory featuring quality clothing at reasonable prices, a willingness to work hard, and — most importantly — the loyal support of clientele who make purchases here because they want to see Krismart remain open and do well.
“We are in a niche that hits all income brackets,” Hall said between ringing up purchases from customers eager to take advantage of a sale on New Year’s Day, when Krismart’s and a restaurant or two were practically the only small businesses open in town.
The customers that day reflected the store’s product diversification. Mostly women, in this slice of time ranging in age from 30-something to, perhaps, their late 70s. A sales staff was on hand to offer fashion suggestions and keep everything moving briskly at the cash registers.
It wouldn’t be accurate or fair to paint the economic situation as an all-is-absolutely-rosy picture if only business owners work hard enough, or to ignore the reality that many astute small-business owners have seen their stores go under despite Herculean efforts to prevent just that. But it’s also true many mom and pop stores such as Krismart are doing just fine.
Just ask Rob Willey, owner of High Country Style in downtown Waynesville.
He won’t say everything is peachy; 2010 was still a hard year for the upscale women’s boutique. But still, they’re making it. They even opened a new store in Asheville and started offering online sales to serve the large portion of their client base that spend part of their year living away from the stores’ mountain locations.
Willey said 2010 was actually better than 2009, especially the Christmas season.
“For us, business was better as far as overall sales,” said Willey. “People seem a little more willing to spend money this year.”
The last quarter, he said, was promising, and he’s cautiously optimistic that next year will continue to improve. Still, he’s not resting on his laurels; they’re focusing on online sales and improving brand image and customer service to stay relevant and profitable in what are still very tough economic times. But Willey said he feels like those efforts have served him well, and he’s confident that they’ll continue to do so.
“Overall, you know, it was a good year,” he said of 2010. “Not a great year, but still a good one.”
Across the street, Tammy Moseley, manager at Laughter Jewelry, is wishing that the bad economy would stop getting so much airtime. She realizes, of course, that not everyone is having an easy time of it, she said, but churning up fear in customers isn’t going to make them come back.
“It’s just fear, and I don’t know if confidence will be back today or this year or next year,” Moseley said. “Hopefully it’ll be back this year.”
Moseley and her store are 17-year veterans of the Waynesville retail scene. As for 2010, she said it wasn’t the banner year that 2009 was for her store — she, too, was unimpressed by Christmas sales — but in the grand scheme of the store’s history, it was still decent, still profitable.
“You always hope for the greatest year ever, every year,” Moseley said, but it was still a good sales year, and her outlook for 2011 is cautiously optimistic.
And, despite all the dreary financial news, startup businesses also abound. The entrepreneurial dream lives on in WNC.
Getting a handle on what’s happening
Linda Harbuck, executive director of the Franklin Area Chamber of Commerce, has seen the chamber’s net membership, year-over-year, decline by 33. Despite the drop, Harbuck, along with many other business experts in the region, felt the situation began to improve in the latter part of 2010.
“The year ended better than it began,” said Harbuck, citing business startups and expansions.
The Buzz Bus in Cullowhee, a cab service of sorts that ferries Western Carolina University students back and forth from Cullowhee to the bars and restaurants in Sylva, started making runs in October. Franklin resident Tim Crabtree, who owns the business with brother Sam, believes they’ll survive and make their dream of small-business ownership come true.
“Right now, we are just covering costs, but we are picking up business,” said Tim Crabtree, who added that the holidays have put a crimp in the new venture, because his student-customer base hasn’t been on campus for much of the time the service has been offered.
Chris Wilcox is also a new business owner, though he bought a beloved community mainstay with a built-in clientele when he took over City Lights Bookstore on East Jackson Street in Sylva from founder Joyce Moore. Wilcox bought the store about a year ago.
Monday, with the help of a group of volunteers, staff and Wilcox’s mother, Margot, the store closed its doors to customers so that a physical inventory of the 5,000 or so books could take place.
Margot Wilcox does the bookkeeping for her son. His first year has been promising, she said, and the financial future of City Lights Bookstore seems sound. Her son agreed, crediting Moore’s work to build the store as a foundation he can work from.
“Incremental changes,” Wilcox said, is what he’s looking at. Such as offering Google eBooks, so that his customers can shop locally for digital media. City Lights Bookstore has offered ebooks through its website for several years, but Google eBooks, Wilcox said, expands what the store can provide — and helps him compete against corporate-owned bookstores and websites.
Interestingly, another independent bookstore with a different business model is also finding a strong, loyal customer base. The two-year-old Millie and Eve’s Used Bookstore in Franklin, located on U.S. 441 a few miles south of the town, is defying conventional business wisdom and finding it can compete with the big boys.
Eve Boatright and business partner Millie Griffin have a simple financial formula.
“If there’s no money at the end of the week, we don’t get paid,” said Boatright, a transplant from Britain, just outside London.
But they are making it financially, and doing it by offering 62,000 used books through trade (plus offerings by local authors). Additionally, to help drive traffic into the store, the women accept payments for Verizon and Duke Power. There is a Civil War section, classics section, children’s section as well as more conventional offerings such as mysteries and romances.
In neighboring Swain County, several new stores have sprung up and are making a go of the gifts market in Bryson City.
Robert Hoyle is the proprietor of one such establishment. He and his wife decided to open up Nannie’s Country Store on Fry Street in downtown Bryson City, which they bill as “a slice of country life.”
Hoyle and his wife moved to Bryson City from the Atlanta area after their kids were grown and gone, and have started the store as something of a retirement business venture.
The shop sells local gifts and crafts along with novelties and a few other odds and ends, and while Hoyle said he hauled in less this Christmas than he’d hoped, he’s still optimistic about next year’s outlook.
“It was difficult, with all the opening expenses, but it was successful at the same time,” Hoyle said as he looked back at 2010. “In this climate, people are not spending money, they’re just not. But I’m hoping that we do very, very well [in 2011]. We have a lot of new business ideas, some of the business ideas no one in Bryson City has. Hopefully, this next year will be great.”
Just around the corner on Everett Street, Lance Holland is also finishing his inaugural year in the retail business with his gourmet food and gifts shop, Appalachian Mercantile. Holland, too, was disappointed in the Christmas season, but has decided that, overall, 2010 was profitable enough to warrant another year on the lease.
He’s no stranger to the retail industry – his wife is in charge of retail operations at nearby Fontana Village – so he started the venture on a one-year trial basis. And while he said it couldn’t be called a banner year for sales, it’s been decent enough, especially considering that he opened in the grip of an economic slump.
“This is a brand new undertaking for me, and I’ll have to say that I’m kind of enjoying it,” said Holland. “It seems like the economy’s kind of finally turning around a little bit, and if I didn’t think it was going to be a little better, I wouldn’t be continuing.”
He said he’s hoping, too, that once word gets out about his gourmet offerings — which include a range of items from sauces to sweets — that it will become a bigger draw, possibly boosting his Christmas sales next year.
Not all newcomers are finding it so easy, though. In Canton, Johnetta Heil, who owns the Plaid Sheep Yarn Shop, said she too was disappointed with Christmas, but the rest of the year was a pretty mixed bag for her new business as well.
“It’s been up and down,” she said of the year overall, but she’s hoping that 2011 will give her the increased exposure she said her store needs to boost sales.
“People just don’t know I’m here,” said Heil. But she, like Willey at High Country, has been changing her business strategy to fit the economy and draw in more customers. She’s adding new classes monthly and is planning a camp this summer to get local kids interested in fiber arts.
David Huskins, head of the seven-county regional tourism group Smoky Mountain Host, headquartered outside Franklin, said the tourism industry has faced serious challenges beginning in 2008 and continuing through 2010. But not all is gloomy for this important leg of WNC’s economic chair.
“Our members have shared anecdotal information — they don’t like to give out their numbers, but will give a general impression — that verifies that at best the region has been flat in the tourism economic sector in 2010 compared to 2009 and 2008, which is actually a positive,” Huskins said.
Two vitally important regional businesses, The Great Smoky Mountains Railroad and Nantahala Outdoor Center, are reporting revenues increased year over year. The railroad, Huskins said, is upwards of 15 to 18 percent, though ridership is relatively flat.
“The revenues are up because of some creative repackaging they did this year with their first-class ticket sales and some creative online marketing they implemented to promote the first-class ticket,” he said. “NOC is reporting great success with its new retail outpost in Gatlinburg, which opened early last spring.”
Like Harbuck, the head of Smoky Mountain Hosts said he believes the economic situation began improving toward the end of the year.
“While we don’t have figures for 2010, our members have indicated generally ‘flat’ numbers compared to 2009,” Huskins said. “There is evidence of an upward trend in numbers and revenue this year in October and continuing through the first two weeks of November, which most of our members have indicated was perhaps the best since 2007.
“Going forward, we are optimistic that 2011 will see improved numbers in the region’s tourism economic sector, albeit only slight improvement. We will trend as the entire state does and the nation does. Our concern is with reports that gas prices will approach the $4.50 to $5 per gallon range by late spring-early summer 2011. We are a drive market and if that happens, it will be significant.”
What to say about 2009? How about this: it ended on a high note for the overall economy, and that is good for the citizens of this country and this region.
Here’s a sampling of the business news that bodes well for the coming year. A report released Jan. 4 from the Commerce Department shows that the U.S. manufacturing sector grew in November at its fastest pace in four years. That was the fifth consecutive month of growth for the U.S. manufacturing sector.
Overall, the economy is beginning to grow. Fourth quarter figures are not tabulated yet, but the U.S. economy grew by 2.2 percent in the third quarter (July through September 2009). That news came on the heels of four consecutive quarters of a shrinking economy, the worst four-quarter performance since the 1930s.
We’re still losing jobs, but that may end soon. Economists expect data released this week to show that about 8,000 jobs were lost in December after 11,000 were eliminated in November. In the first quarter of 2009, the U.S. economy was shedding about 500,000 jobs a month, so businesses large and small seem to have reached their new employment level.
Although there are still many weak areas — particularly construction spending, which has fallen to its lowest level since July 2003 — overall this economy feels like it is moving forward. In Haywood County, four of the last five months have seen an increase in the number of houses sold — year over year — and an increase in the dollar value of those homes. As houses move and the backlog of available properties decreases, that should lead to a corresponding increase in construction spending. Similar increases, slight though some of them are, are being reported in other Western North Carolina counties.
The stock market is making up for the losses of the last couple of years, and the Federal Reserve has made a point of saying interest rates are going to remain low.
Here’s why the economic news is good for everyone. First, families and individuals will feel the benefit as the rising tide lifts almost all ships. As those still employed feel more secure in their jobs and as some employers even make new hires, these people can plan ahead for their family’s well being rather than continue living paycheck to paycheck. Those who have dropped health insurance or quit saving for their retirement or their kids’ college can once again look to the future and put a few bucks away.
Small businesses, brutalized over the last couple of years, may finally have the funds to begin making purchases and getting caught up on the debt accumulated from just staying alive. The economic benefits from these small companies becoming confident can lift entire communities.
And as families and small businesses get better off, tax revenues to local, state and federal coffers will increase. Many detest taxes of every kind, but we also believe that quality public schools, community colleges and universities, well-maintained law enforcement and rescue departments, the continued delivery of social services and public healthcare services, and a strong public sector make for a stronger economy and stronger communities. Government at all levels needs money, and as the business climate brightens so do the prospects for government workers and all the public services that help make this country such a unique place.
We don’t want a return to the falsely inflated economy of two years ago. What we need is a slow, steady turnaround that rewards those with good habits, fosters a healthy business climate and provides opportunity for those willing to work for it. The beginning of 2010 points to just such a scenario.
It has been a difficult year for environmental nonprofits. State budget cuts have meant fewer grants and philanthropic endowments have suffered with the stock market. Meanwhile, the focus of giving has shifted towards social issues, like providing food, housing and services for the working poor or jobless.
How do you convince someone of the necessity of protecting the environment when people are suffering? That’s a question that Kate Parkerson, development director for the Land Trust for the Little Tennessee, has to answer.
“Finding ways to help communities get through these times is very important but preserving natural resources in rural counties is a way to ensure that they continue to support themselves,” Parkerson said.
Parkerson said environmental causes always represent the smallest slice of the philanthropic pie, but the current economic climate has squeezed their resources from two directions.
“Foundations and state funding have been cut, so the Catch2222 is that you rely more on private donors at a time when they are stretched,” Parkerson said.
Parkerson said LTLT has been fortunate with its private donations this year, but even after cutting its budget by 20 percent, the organization is looking at starting next year in the red.
LTLT received over $1 million from a scenic byway grant to protect the Wood Family Farm in Andrews, but the money hinges on their ability to match it at 30 percent.
Parkerson said in today’s fundraising environment, it pays to have a clear message.
“Clean water, healthy forests, productive farmlands are the basic things that support rural economies. If these things are healthy, the people have a way of supporting themselves,” Parkerson said.
Another hit to environmental initiatives is waning support from state and local government, according to George Ivey, a grant writer and project manager for nonprofits.
Haywood County ceased even nominal contributions to nonprofits, including local environmental groups. Meanwhile, the cash-strapped state froze and even robbed trust funds designated for land conservation. That impacted Ivey’s work with Haywood County tobacco farmers looking for new crops that would make farming viable again, which in turn would preserve the agricultural landscape.
“There simply wasn’t as much grant money to go around to help farmers trying to transition away from tobacco. That money definitely seemed to dry up,” said Ivey, who lives in Haywood County.
Corporate donations were down as well, given the troubled economic times.
“When they are laying off staff, it is difficult for them to make a sizeable donation. There was a definitive drop-off there,” said Ivey, who often courts large corporations and corporate foundations to support environmental initiatives.
Ivey said some funders recognized the hard times environmental groups were facing and increased their giving. But environmental groups had to write better proposals and be more judicious about which projects to pursue, judging the effectiveness of each and weighing how well they fit their mission. That’s not necessarily a bad thing.
“The best projects would still rise to the top and get funded over the ones that weren’t as well thought out or seemed redundant,” Ivey said.
An easy area to scale back was special events that gained public awareness for a group’s mission and built support for their work, but didn’t net a return, like fundraising dinners.
Another side effect is that environmental groups collaborated more. Sometimes groups with overlapping missions ended up working together at the request of donors themselves.
“They said maybe y’all need to talk together or work together better,” Ivey said.
Some environmental groups simply couldn’t maintain the staff they once had. The National Parks Conservation Association shut down a field office in Asheville and laid off a staff person who worked to protect the Great Smoky Mountains National Park and Blue Ridge Parkway.
But the news isn’t all bad. Houk Medford, executive director of the Blue Ridge Parkway Foundation, said his organization is doing better than it did last year.
The foundation serves as a fundraising entity for the National Park Service’s work to maintain and improve the land bordering the parkway.
“I think the support is a reflection of the strong interest people have in the Blue Ridge Parkway because for a lot of people it’s the national park in their backyard,” Medford said.
Medford said they key to fundraising for environmental causes is to realize that the preserving natural resources is work that looks to the future.
“The message has to be future-based with a present moment sense of urgency,” Medford said.
Around Thanksgiving, they begin showing up outside stores with a red kettle, a jingling bell and a smile. In many people’s eyes, Salvation Army bell ringers are as integral to the holiday season as Christmas trees, carols and Santa Claus.
So when Ingles dared to ban the bell ringers last month, the Western North Carolina-based grocery chain faced a powerful backlash from many of its customers.
Pulling the plug on what has become a kind of Christmas tradition did not pan out for Ingles, which decided last week to allow the bell ringers once more in some stores in Western North Carolina.
While the Salvation Army struggles to recoup lost time and meet its fundraising goals this year, it is also experimenting with new techniques, like debit card machines and online kettles.
It remains to be seen if the organization can successfully raise funds to meet a demand that has skyrocketed amidst a recession.
But for the rest of this holiday season, consumers can expect bell ringers to continue their tradition of braving the cold to benefit those in need.
To have or have not
In a move designed to ease solicitation of its customers during the holiday season, Ingles decided last month to prohibit the Salvation Army from stationing its bell ringers outside grocery stores.
The grocery chain also hoped to form a more consistent policy. Since the recession hit, an increasing number of organizations have asked that they, too, be allowed to solicit outside Ingles stores.
What appeared to be a simple business decision to help customers quickly fueled public outrage.
Far from being grateful about the measure, customers e-mailed and called the company, and wrote to their local newspapers, demanding that Ingles permit bell ringers to front its stores.
Meanwhile, the Salvation Army publicly maintained its cool.
“We understand that it was a business decision that needed to be made by Ingles,” said Capt. Craig Gontner, area coordinator for the Western North Carolina branch of the Salvation Army. “For us, it was unfortunate, but it was understandable.”
Luckily for the Salvation Army, Ingles was soon swayed by public opinion. It decided to allow bell ringers to chime during the week of Christmas.
That compromise, however, was still unacceptable to many customers.
Lynda Pierce, an Ingles customer in Waynesville, said she just doesn’t understand why Ingles would want to ban bell ringers.
“It’s not hurting them,” said Pierce.
Ingles’ decision was widely unpopular, partly because bell ringing has become synonymous with the holidays for Pierce and many others across the country.
“The kettles have established themselves as a Christmas tradition, especially in small towns like ours,” said Gontner.
Last week, Gontner received word that Ingles had a change of heart and decided to allow bell ringers at a few stores after all.
“There are additional stores in our service area, but the exception was granted for Waynesville and Canton only,” said Gontner.
Ron Freeman, Chief Financial Officer for Ingles, said his company fully supports the Salvation Army’s mission and hopes the organization reaches its fundraising goal this holiday season.
“We’ve spoken with Salvation Army representatives in a number of our market areas and have come up with solutions that everyone can work with,” Freeman said, adding that each year Ingles donates cash and food worth millions of dollars.
Fred Galloway, a Waynesville resident who has been a bell ringer for 11 years, said he was “very worried” about Ingles’ initial decision, but is grateful the company had a change of heart.
“It’s a prime spot,” said Galloway.
Wal-Mart, another prime spot for Salvation Army, also altered its policy on bell ringers this year, allowing bell ringers at its storefronts only until Dec. 24, instead of the usual Dec. 31.
Though Wal-Mart’s decision will undoubtedly hurt the Salvation Army’s fundraising goal, there has been little outcry over that policy change. Meanwhile, Bi-Lo only allows bell ringers on Fridays and Saturdays, and Food Lion allows all charitable organizations to solicit its customers for two Saturdays each year. Belk is one of the few companies that don’t have any such restrictions in place for bell ringers.
While the Salvation Army is relieved that it has won back a place in front of Ingles stores, the organization has not escaped this holiday season unscathed.
“We’re halfway through the season,” said Tim Pullin, a Waynesville resident who was frustrated by Ingles’ initial ban. “It’s impossible, making up all that lost ground and time.”
The WNC branch of the Salvation Army is, indeed, behind on its fundraising goal. It has managed to raise $18,600 this year, down by $22,000 from the same period last year.
In 2008, the branch raised a total of $116,000 from its 11 kettle sites and 40 counter kettles in seven western counties.
A number of factors could be blamed for the major dip in donations.
The Salvation Army started fundraising a week later than usual. The poor economy is another potential culprit.
But donations have been on the rise the last six years, and the WNC branch raised a record amount of money in 2008, when the country was still bogged down by the recession.
The weak economy has meant, inevitably, a greater need for charitable services.
According to Gontner, demand for the Salvation Army’s services has skyrocketed by 40 percent.
“This was not the year for us to see a decline,” said Gontner.
“Because they’re struggling, a lot of other people are going to be a struggling, too,” said Pullin. “It’s going to be a long, cold winter, and a lot of people are going to be hurting.”
It’s difficult to discount the Ingles factor in the Salvation Army’s fundraising troubles this year. After Wal-Mart, the Ingles stores in Canton and Waynesville rake in the most money for the WNC Salvation Army.
While customers flooded Ingles stores to buy turkeys the day before Thanksgiving, no bell ringers were around for one of the biggest fundraising days of the year.
They will be back at Ingles in time for another pivotal fundraising period, the week before Christmas.
“It is going to allow for us to hopefully come close to what we did last year,” said Gontner. “With us being behind by $22,000 this early in the game, it was very difficult for us to even be optimistic.”
The age of plastic
On a sunny winter day, bell ringers Linda Arnold and Lynda Self are standing outside the Belk in Waynesville next to a sign that signals a new day in bell ringing — debit card “kettles.”
This is the first year bell ringers in Western North Carolina are accepting plastic. Since fewer customers are carrying cold hard cash, the organization has decided to adapt to the card-carrying culture.
But so far, it’s the customers who are having trouble adapting.
The three card machines, which are available at high-traffic Wal-Mart and Belk sites, receive only a few swipes a day.
“It doesn’t appear the public at large has adapted to a debit card kettle,” said Gontner.
According to Sammy Fowler, kettle coordinator for WNC’s Salvation Army, 99 percent of donations are still cash.
There is hope, since the machines have been well received in other parts of the country, Gontner said.
“Here, we haven’t accepted it just quite as readily,” said Gontner, who predicts that more people will be more comfortable with using the machines next year.
Multiple theories exist for why customers in WNC are breezing past the debit card kettles.
Self, who was ringing outside of Belk in Waynesville last week, said most people drop spare change into the red kettles. Self postulates that that’s not enough money to warrant pulling out a VISA card.
Arnold added that most people are in a hurry and uneager to linger outside in the cold to punch numbers on a credit card machine.
But that doesn’t mean the machines aren’t handy.
“It’s a good option to have,” said Arnold.
Added security is another benefit of the machines. While stealing traditional kettles that carry large chunks of change could be relatively easy, a thief could be clueless about what to do with a stolen credit card machine.
Other than the debit card kettles, the Salvation Army has added two new ways of donating in recent years.
Consumers can donate gift cards with leftover balances, or to an online red kettle.
Scores of Haywood County taxpayers criticized the county’s proposed budget at a public hearing Monday (June 1) saying commissioners had not looked thoroughly at every possible option before proposing job cuts and a property tax increase.
Nearly 150 residents attended the meeting, many waving signs denouncing additional taxes.
The proposed budget recommends cutting 35 county positions and increasing the property tax rate by 1.7 cents from the current rate of 49.7 cents per $100 to make up for a $7 million budget shortfall. The 2009/2010 fiscal year starts July 1.
“Come up with cost saving ideas instead of the typical knee jerk reaction of raising taxes,” county resident Bill Davis suggested to commissioners.
Resident Ted Carr said it was ludicrous for commissioners to even consider a tax hike at a time when the economy is causing many to struggle.
“With the economy in the tank and the jobless rate as high as it is, I think it’s unconscionable that you’d suggest a 1.7 cent increase,” Carr said.
Others said county residents would suffer with a tax increase.
“For the people who are on fixed incomes, I see a heavy hit if you raise the taxes,” warned resident Yvonne Mazet. Though Mazet opposes a tax increase, she could give few specifics when interviewed about how she would make up for the $7 million budget shortfall the county faces.
“I’m just one person. I don’t know all the answers. I don’t know where to cut. It’s not my job,” Mazet said, adding “I don’t want my taxes raised.”
Commissioner Skeeter Curtis told the audience of concerned citizens that the budget shortfall had left commissioners with few options.
“I want to find some more money, too, but I don’t know where it’s going to be right now because we’ve cut right down to the bottom,” Curtis said.
Some audience members said they understood the county is in a tough position, but that commissioners had gone too far with some of the proposed cuts.
“Our budget is at a place right now where we’re going to have to juggle, but when we cut our health out and we cut our schools off, we cut our throats,” said resident Danny Heatherly, referring to proposed cuts to the Department of Social Services and the public school system.
Audience members had plenty of suggestions, but in many cases, commissioners had already taken them into consideration.
Resident Linda Bennet suggested the county cut funding to programs that don’t benefit all citizens, like nonprofits.
“I’m not saying they’re not good causes, I’m not saying you’re not being sweet by paying for them, but if it’s not a program that benefits every single person, that’s the program you look at first,” Bennet said.
But the county already plans to cut all funding for nonprofits next year, and pre-emptively pulled funding for the remainder of this fiscal year. The cuts have impacted organizations like the Haywood County Arts Council and the Haywood County Fairgrounds.
Resident Pat Carr agreed with many other audience members, saying that the county should pare down to the essentials like many residents have had to do.
“When I have to cut my budget, I look to see at what is a necessity and what is not a necessity,” Carr said. “I’d much rather see recreation programs cut than teachers cut.”
The county has already proposed significant cuts to recreation, including yanking all funding it provides to individual towns.
“We’re not giving any money to the town of Waynesville (for recreation) this budget,” Curtis said. “Canton is getting zero dollars this year.”
Audience members had other suggestions. For instance, Tammy Maney suggested increasing room taxes paid at area hotels and motels to alleviate some of the tax burden from county residents.
But Commissioner Mark Swanger pointed out that hiking the lodging tax requires approval by the state General Assembly.
“A couple of speakers mentioned the ... increase in occupancy tax, but that requires legislation in Raleigh,” Swanger said. “That’s a state statute that authorizes that.”
State law also dictates that room tax money must be invested back into tourism and can’t be spent on general county services.
Other audience suggestions included closing county administrative offices one day a week, raising the deductible county employees pay on their health insurance premium, reducing the salaries of some of the highest paid county administration, and consolidating some county and town services.
Resident Bruce Gardner said the commissioners need to examine cuts to even the smallest expenses, like turning the lights of the county justice center off at night.
“It’s the little things, it’s the dollars,” that add up, Gardner said.
Some residents blamed the county for frivolous spending in the past, saying it contributed to the county’s tough position today. Tammy Maney made that point just after Commissioner Chairman Kirk Kirkpatrick asked her to limit her speech to three minutes.
“If you’d been as strict with money in the county as the time limit to get up here and talk about it, we’d all be a lot better off,” Maney said.
Resident Sharon Miller pointed to the county’s grading of the Beaverdam Industrial Park in the east end of the county in hopes it would lure industry as an example of wasteful spending.
“(You spent) $1 million for the tearing down of a mountain where a year later there’s still no development there,” Miller said.
Resident Johnnie Curé, one of the most vocal of the tax opponents, pointed to the former county board’s purchase of 22 acres of land on Jonathan Creek over a year ago, intended for recreation purposes, as an example of wasteful spending. The former board of commissioners spent more than $1 million on the parcel.
“Why did we spend it when we didn’t have it?” Curé demanded. “You must have a great deal more stewardship when it comes to our money. Stop asking for more and more of it. There is no more to take.”
Curtis encouraged audience members to stay involved in the budget process.
“Stay engaged, because it is your budget, and it is your county,” Curtis said.
Commissioners will go back to the drawing board for another budget work session at 3:30 p.m. on Thursday, June 4, at the Haywood County Justice Center. A vote on the budget is scheduled for Monday, June 15 at the commissioners’ meeting at 5 p.m.
It’s slim pickin’s out there, as Western Carolina University students are finding out. This past weekend, more than 1,100 graduates walked across the stage and into the most unforgiving job market in decades.
The competition is stiff. Fewer companies are hiring — the college reported a 30 percent decline this year in the number of career fairs held for students, said WCU Career Services Director Mardy Ashe. The downturn has hit every field, even traditionally stable ones like healthcare, where recruitment of students is down 16 percent.
New grads are competing with much more experienced workers who have been thrust back into the job market. Alumni contacts to the Career Services office have increased dramatically, as more people in the workforce lose their positions, Ashe said.
Ashe commonly hears students say that they feel finding a job won’t be tough for them, even though they know the market is a challenge right now.
“Many of them are very naïve about what to expect after graduation,” Ashe said. “On the other hand, some of them are also planning. They’re looking at alternatives.”
With resourcefulness and flexibility, some students have been successful. Here’s how a few WCU grads landed a job in this tough economy.
For Amanda Tomlinson, a finance and accounting double major, scoring a job meant doing something she hadn’t planned on. Tomlinson initially wanted to work for a bank — financial planning is her specific interest — but kept hitting a wall.
“I started applying three months ago, and probably applied for 40 positions,” Tomlinson said.
Tomlinson scoured online job search engines like Monster, CareerBuilder, and even Craigslist, to no avail. Without experience in her field, most employers wouldn’t even grant her an interview.
“Businesses sent back replies saying, ‘You’re not qualified,’” said Tomlinson. “But my biggest problem is that they didn’t let me get to the actual interview. I’m a pretty driven person — I double majored and finished in three years. But applying online, they just shut you out of the system.”
Tomlinson got turned down for even the most basic gigs, including a bank teller position.
“They sent me a one line response that said, ‘You’re not qualified,’” she said. “It was really upsetting. With the knowledge I’ve gotten from WCU, I’m qualified, but nobody wants to give me the opportunity. It was very, very tough.”
With no luck in her desired field, Tomlinson began to look elsewhere. The approach worked. She was hired as a clerical assistant for a building materials company. She’ll be handling paperwork as the company gets contracts for jobs funded by the federal stimulus package.
“It’s not really something I wanted to do, but it is something,” Tomlinson says. “I’m going to be out of school, and I have to pay bills.”
Ashe gives Tomlinson big kudos for her persistence, which played a role in her success.
“The more things you send out, the greater the likelihood you’ll be lucky,” Ashe said. “I would be persistent in this kind of economy until they tell you to stop.”
But Ashe says she would be cautious relying too much on job search engines, which, as Tomlinson discovered, don’t always yield results.
“The job search engines are not as successful as students think they’ll be,” Ashe said. “You’re competing with millions of people who’ve got the same things you’ve got.”
Having geographic flexibility is also helpful, Ashe said. Tomlinson narrowed her search to Western North Carolina, since she wanted to stay close to her boyfriend, a football player at WCU.
“Students and alumni with the most problems are those who are inflexible geographically,” Ashe says. “Consider other parts of the state, or even the Southeast.”
Geographic flexibility was key in helping Cara Ward, a theater major, land a prestigious graduate school assistantship.
“I was originally aiming for Florida. That’s where I’d like to end up,” Ward said. “I found things there, but the opportunities were better in other places.”
Those places included Wayne State University in Detroit — Ward’s hometown, and the last place she figured she would end up.
“I swore I would never return to Michigan after I left,” Ward chuckles. “But when they offer you something like that, you don’t say no,” referring to the graduate assistantship she landed at Wayne State.
Going straight to graduate school after college wasn’t in Ward’s original plans either, but she couldn’t let the opportunity pass her by.
“My original plan was after graduation I would get a job, work for a couple of years and make sure this is what I wanted to do, and then apply for grad school,” said Ward. “But I figured I might as well do it.”
Ward also has a summer job lined up at Stagedoor Manor, a theatrical summer camp for kids serious about breaking into the industry. She’s working as a costume designer, and will design six shows over the course of the summer.
How did Ward manage to find such great gigs? Some serious networking. She came across both opportunities at the Southeastern Theater Conference, where she was able to impress potential employers face to face and hand them her portfolio of design work in person.
“Networking is more than essential to theater students especially,” Ward said. “At the conference, I made connections with other people throughout the country and the world and had my portfolio reviewed by all of them.”
In the current economy, networking is the best way to find a job, Ashe affirms, and racking your brain for who you know. Any connection is worth trying, she says, including friends of family, family of friends, former employers, and faculty members.
Free labor, big payoff
It’s not always fun to work for free, but in recent WCU graduate Stephanie Drum’s case, the end reward was well worth it.
This past spring, Drum held a part-time, unpaid internship five days a week at Lake Junaluska in Haywood County. The Lake doesn’t generally take on interns in the spring, but since Drum agreed to work for free, they agreed to let her come on. Drum, who concentrated in professional writing, gained a wealth of experience in her field, creating walking tour and visitor guides as well as web content.
Then, as luck would have it, a temporary communications specialist position opened up at Lake Junaluska. The department didn’t have to look far for a qualified candidate, since Drum had been learning the ins and outs of the business for months. Lake Junaluska officials offered her the position.
For Drum, the internship provided a direct path into her desired field.
“I think I would have had a very hard time if I hadn’t interned,” she said. “I’m glad they make us do it.”
Indeed, the communications and English departments at WCU require students to do an internship as part of their coursework. But mandatory or not, Drum says every student should try to do one.
“If they get offered the chance to take an internship, even if it’s not required, they really should,” Drum said. “It will pay in the end.”
Ashe says finding an internship is one of the smartest moves a student can make when it comes to scoring a job, because employers “want to see directly related experience.”
Now Drum has professional experience in her field, which will come in handy when her job ends in July. Still, Drum isn’t limiting her job search to just one field. She knows the market’s tough, and she’s willing to be flexible.
“I’m kind of worried about getting a job in my field. If I can’t do that, I’m pretty sure I could find a seasonal job,” she says. Drum may even return to the summer gig she’s held for a few years during college — working at Wal-Mart.