A cross-section of Haywood County business leaders took over the reins of economic development this month, with county government passing the torch to the Greater Haywood County Chamber of Commerce to blaze a new path of economic prosperity.

A plan to move the Haywood County Economic Development Commission under the umbrella of the Haywood County Chamber of Commerce is moving forward.

Haywood leaders are no strangers to overhauling their economic development strategy and structure.

A major transformation played out just 10 years ago. When the dust settled on the politically charged process, the economic development director resigned.

An exploratory committee of Haywood County business leaders will examine in the coming months whether to reshuffle the county’s economic development arm for the second time in a decade.

The Haywood County Chamber of Commerce debuted a new logo this week, showing off more than a year of work to craft a design that represents the business organization’s role in the county.

Don’t expect business as usual at the Cashiers Chamber of Commerce as a new director takes over for the first time in more than 20 years.

The business organization became embroiled in controversy last year amid questions about whether the agency was effectively promoting the region and spending tourism tax dollars wisely. Shortly thereafter, the chamber’s longtime director, Sue Bumgarner, announced her retirement.

The state is forcing Jackson County’s hand when it comes to forming a single entity to oversee how tourism tax dollars are spent.

Jackson County has two tourism agencies — one representing the Cashiers area and one for Jackson County as a whole — that oversee room tax money collected by the lodging industry. Whether to merge the two into a single countywide entity has been a source of controversy since last year, prompting the formation of a task force to study the issue.

That may be for naught, however, since the county recently learned its current structure is out of compliance with state law.

It seems the county inadvertently triggered the mandate when it sought an increase in its room tax rate from 3 to 6 percent last year. Doing so required a special bill in the General Assembly. That same bill also required Jackson County to form a single tourism development authority.

While the county has held off on enacting the room tax hike, the county nonetheless was obliged to follow through on changing the structure of its tourism boards, according to County Attorney Jay Coward.

Cashiers tourism leaders have resisted attempts to do away with their separate tourism arm, which gets 75 percent of the room tax generated in the Cashiers area to spend on its own marketing. They argue that Cashiers needs its own tourism agency — with its own funding stream — to cater to its own unique visitor demographic apart from the county as a whole.

Those who supported a merger believe it would be more effective, eliminating the duplication and competition that currently exists between the two entities and putting the money to wiser use under a single tourism strategy.

It would seem the argument is now moot.

County Commissioner Mark Jones, who represents the Cashiers area and voted against the original proposal, said he does not believe the community will resist a unified Tourism Development Authority after all.

“But it’s going to depend on what the state recommends and what the makeup would be,” Jones said. “(There must be) a fair representation from all over the county.”

A county-appointed advisory group made up primarily of lodging owners has been meeting every two weeks to discuss this very issue. Jones said they are within two meetings or so of returning to commissioners with recommendations about the formation of a new group.

“There’s no template,” Jones said about statewide tourism efforts. “We thought we’d find something out there to serve as a good template to guide us, but it’s not out there.”

Instead, Jones said, each county in North Carolina more or less creates how to best manage tourism-generated tax dollars.

That is precisely why the legislation triggered the formation of a new unified tourism board: the state has sought uniformity in how tourism boards operate, a requirement that is imposed whenever counties come to the state seeking a tax increase.

“I hope you don’t mind some friendly constructive criticism of the bill,” Coward wrote Trina Griffin this week, a staff attorney for the N.C. General Assembly. “I understand that the plan is to legislate on a case-by-case basis a consistent statewide system of tourism promotion. The obvious suggestion for a change to save other counties and towns from being confused by future bills would be to pass one statewide law.”

Coward, as of late Tuesday, had not received a reply from the state.

David Huskins, who heads a consulting group that is helping Jackson County develop an economic development plan and who’s worked with them on this issue, said there’s no question Jackson County must put a single tourism development authority in place.

Huskins said Asheville and Buncombe County were the first in the state to seek occupancy tax legislation from the state. By the mid 1980s, the trend of enacting a room tax had pushed into the western end of North Carolina. But oversight in some cases was loose because of the varying structures of different tourism boards overseeing the money that was raised.

“Over the years, some of the local governments were diverting funds outside of tourism – the tax was originally conceived for tourism promotion and marketing. But, a lot of local governments were saying if they needed a new ambulance, well tourists get hurt, too, and we have to provide services for them,” Huskins said.

That interpretation diluted the intent of the room tax — namely to provide a stream of revenue to further tourism — and created such an outcry from the tourism industry, the General Assembly by the mid 1990s moved to set up uniform guidelines.

“If you want an increase, you come under the new guidelines,” Huskins said flatly.

Commissioners did not decide on when exactly to form their new tourism development authority. Chairman Jack Debnam indicated a required public hearing could be held as soon as the April 16 meeting. The advisory committee meets this Thursday. Coward is expected to detail more of his findings regarding the state legislation.

After several years without a full-time promoter, the Maggie Valley Chamber of Commerce plans to bring back an executive director to help the valley rebound from a recession fraught with business closures.

“We need that presence,” said Teresa Smith, president of the Maggie Valley Chamber of Commerce. “There has been a little bit of a loss with not having someone work there full-time.”

Four years ago, former chamber director Lynn Collins left to become the executive director of the Haywood County Tourism Development Authority. After her departure, the Maggie Valley chamber chose to save money by not hiring a replacement.

“We decided to try to act without an executive director to try to put some money in the bank,” Smith said.

Instead, Smith took on some of the directorial duties until the chamber finances turned around.

“We are operating now on a positive note,” Smith said.

The chamber will not have to foot the entire salary for the new director on its own, however. The Haywood County Tourism Development Authority last month approved a $15,000 allocation to the Maggie Valley Chamber of Commerce to cover part of the new director’s salary.

The committee charged with filling the director position has not yet decided on a salary for the position, said Jan Pressley, head of the search committee. The remainder of the salary cost will come out of the chamber’s general budget.

The Maggie Valley Chamber of Commerce has a $150,000 budget this year — a sharp decline from the $300,000 budget it had in 2007. The decrease is due in part to a drop in chamber membership among businesses.

This year, the chamber has about 170 members, down from 220 members five years ago. The decline in membership is due largely to the economy.

“A lot of the businesses have gone out of business,” said Jena Sowers, the visitor’s center manager for the Maggie Valley Chamber.

Restaurants, attractions and performance venues have closed their doors. And, of course, a large number of Realtors and contractors have left the housing trade, Sowers said.

“It was sad because when we would get the letters from them dropping out, they said if they ever go back in business they would rejoin,” Sowers said.

The loss of members made it difficult to afford the executive director salary — even though the recession was perhaps the time when the business community in Maggie needed a full-time leader the most.

The chamber has also been hurting from a loss of funding from the tourism authority, which it once relied on heavily.

The tourism authority subsidized basic operations and overhead of the chamber and visitor center to the tune of $64,000 a year, compared to only $29,000 a year now.

That number is inching back up with the recently-approved $15,000 earmark from the tourism authority to help cover the director’s salary. The funding will come out of a special pot of room tax dollars designated for tourism promotion in Maggie Valley.

The face of Maggie businesses

The chamber has received seven applications for the executive director position, and the search committee expects to hire someone in January.

The director will oversee marketing, the daily business of the visitor’s center, work with other entities, including town officials and the lodging association, and be present at various meetings.

Because she also runs the Maggie Valley Inn and Conference Center, Smith could only devote some of her time to the chamber whereas a full-time director can focus all of his or her energy on the job.

“I think the biggest obstacle that I had was being able to be in attendance at a lot of meetings,” Smith said. “I think that just having that presence out there … will be an advantage.”

Like many small towns in the U.S., Maggie Valley has battled business closures, high unemployment and low economic growth during the past several years.

Businesses closed, leaving fewer chamber members and less dues money, which in turn prevented the chamber from hiring a director to help fix those very issues.

The lack of a chamber director also forced the town to pick up some of the slack by hiring a festival coordinator to continue to bring events to Maggie Valley.

Chamber of Commerce members seem to agree that a full-time director could only help Maggie Valley.

“It can’t hurt,” said Dan Mitchell, owner of Laurel Park Inn.

During the past several years, with the closure of the amusement park Ghost Town in the Sky and Soco Gardens Zoo, Maggie Valley has “sort of died,” Mitchell said.

Laurel Park Inn usually closes during the winter but will remain open after a bad business year, he said.

It will take collaboration between business owners to revive Maggie Valley, Mitchell said.

“When you bring (a customer) in, you’re helping the valley,” he said.

Because her business Nutmeg Bakery is relatively new to the area, Brenda Schwartz said she is not sure what the chamber has done in the past but wants to see Maggie Valley expand beyond motorcycle rallies.

“I’d like to see more business development,” Schwartz said. “It needs to be a diverse group.”

Since October last year, at least nine new businesses moved to Maggie Valley. Four qualify as bars. But the new ventures also included a hair salon, an antique shop and grocery store.

Brenda O’Keefe, owner of Joey’s Pancake House, has seen several directors come and go during her business’ more than 40 years.

“I do think we need a director,” O’Keefe said. “I would want them to be out in the community.”

The director should be a regular face around town and in businesses, especially those that are currently struggling, and should hold marketing seminars for its members, she said. Maggie Valley businesses need to work on cultivating a repeat customer base — something that has helped her business through slow times.

“Give people what they want, and they will come,” she said.

The director should also reach out to businesses that are not chamber members, or rather possible future members, and paint a rosier picture of Maggie Valley’s future, O’Keefe said.

When having a conversation with Penny Morgan, you’ll hear a lot of phrases that aren’t often associated with business in Haywood County. “Military contracts” is probably the most notable. “Top secret” might be another.

Morgan owns a company called Aermor, and she just won $10,000 in the Haywood County Chamber of Commerce’s yearly Business Start-up Competition to get the tech company off the ground.

Technically, Aermor provides “network operations and cyber operations support” to its clients, but really, it’s hard to put definite borders around exactly what the company does; it’s nebulous, it changes with contract and client. But here’s an example:

Recently, Morgan and her team won a role as a subcontractor with the military as part of an effort to combat improvised explosive devices. That initiative is funded to the tune of $157 million, and Aermor will be using its tech skills to add context, data and expert information — gleaned from a variety of sources — to the military’s traditional intelligence-gathering techniques, providing research, training and analysis to military personnel trying to combat IEDs in the field.

It’ll bring a top-secret security clearance to the company’s Canton office, and probably several new, highly skilled employees who are paid with federal funds.

And this, said Morgan, is what she believes is the highlight of her business and what set her apart from other competitors in the start-up contest, which is put on annually by the chamber and attracts potential entrepreneurs from around the county to compete for the startup cash.

“Aermor is looking to bring in funds that do not already exist in Haywood County. We’re not looking for the same people that take their money to one place and turn around and spend it somewhere else,” said Morgan.

And that’s what seemed to put her over the top with the judges, too.

The competition is judged by a four-person panel of representatives from the economic development and financial sectors in the county.

Scott Connor, senior vice president and marketing executive for First Citizens Bank in Haywood County, said it was the genesis of completely new money that really impressed him.

“We felt that it would be bringing jobs and dollars to Haywood County that may not come here otherwise,” said Connor. “It would be monies that she wouldn’t be taking from a neighboring business.”

And among the other small business owners in the competition, Morgan’s proposition is truly unique. She currently has four full-time workers and around 11 part-time, and she hopes to grow that number as her contracts increase, bringing jobs to the county that are well above minimum wage or minimum skill level.

She realizes that this isn’t your average startup, and it’ll probably fly under the radar of most in the county. Her predecessors in the first-place spot have often been consumer services — a dance studio, a brewery, and other service outfits seeking Haywood customers. But Morgan sees that lack of local customers as one of her greatest assets.

“It’s a very different kind of concept,” said Morgan. “I’m not asking anyone in Haywood County to come and use my business. I’m growing the job force, growing the training, and not asking for any patronage,” she said.

Plus, she’s got the skills and knowledge to back it up, which also went a long way towards winning the hearts and dollars of the judges.

Morgan spent much of her career in the military, graduating from the U.S. Naval Academy and going on to spend 14 years as a surface warfare officer. She did overseas deployments, she taught military strategy and seamanship, she worked with anti-terrorism squads. Basically, she knows the military and its people. And since those are now her clients, that knowledge and those contacts are pieces of capital that are invaluable to her company’s success.

“Her background is a very impressive resume,” said Connor, a contest judge. “She already has, it seems, the skills abilities and contacts to make it successful.”

Chamber Director CeCe Hipps said that the type of novelty and sustainability Morgan seems to bring to the table is precisely what the competition, now in its sixth year, is all about.

Each entrant must submit a business plan, but winning is about more than just having an impressive plan.

“It’s not just a business plan, but it has also to do with the sustainability in the county, the number of jobs it will create and if there are any other businesses in the area already doing the same thing,” said Hipps.

Small businesses that can bring long-term jobs and a unique economic perspective will always be a boon to the county, which is why, said Hipps, the competition was born and continues to remain strong.

“Small businesses are what make up our economy, and more than half of the jobs in America either own or work for a small business, so there’s a big drive to promote small business. That’s what the chamber does,” said Hipps. “The reality is that small businesses are an integral component of our economic future.”

Now that she’s won the money, Morgan said she plans to build it back into the company’s infrastructure, upgrading equipment and training to ensure that Aermor can keep its niche in the county’s business community for years to come. Her roots, she said, are in Haywood County, and she intends for her business to put down strong, lasting roots here as well.

“I was born and raised in Bethel. I’m not an outsider coming in. I was born and raised in Haywood County and that’s where my heart and soul is and will always be,” said Morgan.

Her plan is ambitious — to be a 100-person, $26 million outfit in five years — but she believes it’s feasible, especially with the injection of cash, which, she said, was a welcome but unexpected surprise.

“I was shocked, but I think I can be a good steward of those funds,” said Morgan. “And hopefully next year I can be sponsoring the competition.”

Less than a year after opening a new visitor center in downtown Waynesville, the Haywood County Chamber of Commerce learned last week that its funding for the site is on the chopping block by the Haywood County Tourism Development Authority.

The county tourism agency plans to open its own visitor center downtown and end its subsidy for the one run by the chamber.

The tourism agency is better positioned to operate a one-stop shop for tourists looking for things to do and see in the county, according to TDA Director Lynn Collins.

“Our sole purpose in life is to market Harwood County as a destination,” Collins said.

It makes sense for the TDA, which is in charge of branding and marketing the county, to run its own visitor center for tourists to provide a seamless message rather than contract the role out to the chamber.

“This is a good time for us to take control of our program and tell our story the way we want to tell it,” Collins said.

The chamber received $30,000 from the TDA to run a visitor center. Losing that revenue will not be easy and could mean the loss of staff, according to CeCe Hipps, the Haywood chamber’s executive director.

“Anytime an organization gets that big of a budget cut, we will have to look at how we do our day-to-day operations,” Hipps said.

The chamber says it will not shut down its visitor center, however, despite the loss of funding. A visitor center is still central to the chamber’s mission, Hipps said.

“Chambers are considered a trusted and established source of information,” Hipps said. “Regardless of the outcome of this we will maintain our visibility and maintain our visitor center. Nothing will change for us from that aspect.”

The result: two visitor centers less than three blocks apart in downtown Waynesville.

The turn of events comes as the Tourism Development Authority grapples with budget shortfalls of its own. The TDA raises money with a 4 percent tax on overnight lodging, bringing in close to $1 million a year. That money is pumped back into tourism promotions, from national advertising campaigns to mini-grants for local festivals.

As tourism has dropped with the recession, however, the TDA has seen its budget shrink by more than $200,000 in three years. This year alone, the TDA has come up $115,000 short of what it anticipated, leaving the agency struggling to make mid-year budget cuts.

“We didn’t just wake up one morning and say ‘Let’s go take the chamber’s funding away from it.’ There is a quite a bit of planning and pros and cons and up and down that when into this,” said Ken Stahl, TDA finance chair.

However, the chamber learned only last week that its visitor center funding is in jeopardy with the start of the new fiscal year come July. Such short notice will make it hard to adjust, Hipps said.

Key members of the chamber board and TDA board met last week to discuss the issue. Ron Leatherwood, the incoming president of the chamber board, said the TDA might be willing to phase out the visitor center funding over two years rather than doing it all at once. That would certainly soften the blow, he said.

The visitor center funding is more than 10 percent of the chamber’s annual budget, and it will be a challenge to make up the difference, Leatherwood said.

But Leatherwood said he understands why the TDA, which is in the tourism business after all, wants its own visitor center. If they can serve the number of visitors they hope to — 40,000 a year — it will surely be a good thing for the county, Leatherwood said.

“Hopefully it will be successful for all of us. A rising tide lifts all boats,” Leatherwood said.

A full-service visitor center

The TDA envisions a full-service visitor center, where tourists will be awed by an endless list of things to do in Haywood County, from crafts to fly-fishing to motorcycle rides. Not to mention a clearinghouse for all the special events going on any given weekend, something that doesn’t exist now.

“We hope to achieve a little bit of synergism here,” said Stahl.

And since the TDA lives and breathes tourism, it can best disseminate that information, Collins said.

“We have a very good handle on what is going on in the county,” Collins said.

Collins also wants their visitor center to be open seven days a week, compared to the chamber’s visitor center, which is only open on weekdays.

The TDA is negotiating a lease to house the visitor center and its administrative offices in a storefront on Main Street across from Mast General store — in the thick of the downtown action. It’s a better spot for snagging foot traffic than the chamber’s location, Stahl said.

Stahl hopes a new visitor center will catch 40,000 visitors a year compared to the 6,000 seen at the chamber’s visitor center.

“When the foot traffic is in the thousands up there on Main Street, it is an opportunity for us to reach out and touch a lot more people than what we have been for essentially the same amount of money,” Stahl said.

The chamber’s visitor center is past the courthouse in a historic home a block beyond the main shopping district. To Hipps, the location is ideal: at the corner where Russ Avenue, a main corridor into downtown, feeds into Main Street.

The chamber just moved into the building last June. It had been without a permanent home for much of the past decade, bopping from one location to another every few years. A visible spot for the visitor center was the top consideration in the quest for a permanent site.

“That was our main driver. We wanted to have a gateway into the downtown area,” Hipps said.

The chamber’s physical quarters are impressive and inviting. The stately historic brick home has a wide front porch decked out in rocking chairs. The lobby has a grand double staircase and features include hardwood floors and black-and-white checked bathroom tiles. Its interior décor is appointed with comfy sofas and lush ferns. The front lawn is crowned by stately oaks with views down Main Street.

“We wanted something that would give people a really good first impression,” Hipps said.

The chamber made a sizeable investment when signing a three-year lease on the building.

Hipps said tourists quickly make themselves at home there.

“Finding the perfect home for a visitor center was so key. Had we known this a year ago we probably would have looked at other options,” Hipps said.

Move in the cards

Until now, the TDA has been holed up in an obscure county office building carrying out a mostly administrative role. Few in the county could tell you where the agency was headquartered, despite its very showy mission of broadcasting Haywood’s tourism accolades to the world.

Despite a sweetheart deal — the county charged the TDA only $250 a month in rent — the TDA had been contemplating a move to new offices for a couple of years.

But it was spurred recently into action by a massive reshuffling of county office space — one that might leave the TDA with no home at all.

Most of the occupants housed in the same office building as TDA are moving to an abandoned Wal-Mart being remodeled for various county departments. The project was motivated by the need to replace the antiquated quarters of the Department of Social Services but has led to musical chairs for other county offices as well.

The county hasn’t decided yet whether TDA can stay where it is, whether it might give the space to different county departments, or whether it will sell the building.

While it’s not certain TDA will get the boot, it was enough to get the TDA’s attention.

“They have not said definitively we have to move any certain time. Their exact words from the county manager were it would be prudent for you to start looking,” Collins said.

It seemed like a good time to pull the trigger on something they wanted to do anyway.

“We don’t want to wait until the music stops and not have a chair,” Stahl said.

If the TDA is going to fork out substantially more in rent, it will cut into its already tight budget. To make it work financially, the TDA will take visitor center funding away from the chamber to cover the rent, bringing visitor enter operations in-house in the process.

“If we are going to move we want to move into something that totally completes our mission,” said Alice Aumen, chair of the TDA board.

Part of that mission is to bring the TDA to the next level as an agency.

Since the TDA’s creation 25 years ago, it has funded visitor centers run by both the Haywood chamber and Maggie Valley chamber.

While it made sense for the TDA to outsource visitor center operations in its infancy — in the early days it had no staff of its own let alone an office — it has grown into a major marketing force for tourism and needs to take a leading role in serving tourists once they arrive.

There’s another advantage to running its own visitor center: to advance marketing research, Collins said. Currently, TDA staff responsible for marketing the county don’t interface directly with the traveling public on a daily basis. Collins wants to survey visitors and find out what brought them here, where they are from, how much they are spending, who’s in the traveling party, and what they like to do.

“It helps us get to know our visitors better. We can conduct all kinds of market research to build our marketing program appropriately,” Collins said. “If you don’t have research you are flying by the seat of your pants.”

The days of shotgun advertising is over, said Aumen.

“This is a huge opportunity for us to do research on who the actual visitor is,” Aumen said.

Plus, TDA can capture the email addresses of visitors, which are worth their weight in gold for direct marketing through social media like Facebook.

While the TDA is in the business of luring visitors to the county, there’s still an advantage to engaging those who are already here.

“Even though they are already here, we can get information in their hands that would make them want to extend their stay or come back for a visit at another point in the year,” Collins said.

Fulfilling a mission

Before moving in to its new office last year, the chamber invited the TDA to share the space. The two entities could run a joint visitor center and share overhead expenses, Hipps suggested.

Talk of co-locating the chamber and TDA have surfaced on and off over the years, but this marked the first formal invitation to the TDA to move in together.

“We wanted to continue and strengthen our partnership and to continue to work together and collaborate,” Hipps said.

Hipps said the two entities have the same common goal, namely “to promote Haywood County.”

It’s common for chambers of commerce and county tourism agencies to share offices and staff while maintaining separate budgets. It’s done in Asheville to the east and Jackson County to the west.

But co-locating with the chamber did not fit the TDA’s mission.

While tourism is the TDA’s only focus, the chamber recruits new businesses, promotes commerce, supports entrepreneurs and engages in economic development.

“A visitor center is not their primary mission,” Stahl said.

But Hipps said tourism is integral to the county’s economy, and thus integral to the chamber’s mission.

“Our model has always been everyone in this county is connected to tourism,” Hipps said. “We can’t dissect and separate the chamber from tourism.”

That said, the chamber’s visitor center does serve as a point of contact for people moving to Haywood County, buying a second home, relocating their business, starting a new business — all of whom may have started out as just a tourist at one time.

“We are so connected with the big picture that the overall economic impact is much greater than the numbers for foot traffic that comes through the door,” Hipps said. “Our business model is all inclusive.”

The chamber’s visitor center is critical a point of contact for business inquiries, said Leatherwood. You never know when a “lone eagle” will stroll into the visitor center, for example. That term refers to a mobile professional who can do their job online from anywhere and may be seeking a new place to move, Leatherwood said.

A county of many visitor centers

The visitor center run by the Haywood Chamber is one of four funded by the TDA.

“We are probably the only TDA in the state that funds four visitor centers,” Stahl said.

One in Maggie Valley run by the Maggie Valley Chamber of Commerce gets $30,000 a year from the TDA. The other two — one at the highway rest area in Balsam and one off the interstate in Canton — are staffed by the TDA at a cost of $25,000 each.

The Canton visitor center was opened only three years ago, but tourist traffic there has not panned out. A cinderblock car wash beside a gas station was converted into a visitor center.

Faced with a budget shortfall last spring, the TDA shut the Canton visitor center for six weeks. Traffic had fallen sharply anyway due to a rockslide that shut down I-40. But even once I-40 opened again, numbers remained low. In the fall, hours were scaled back, and in January it was shut completely. The TDA plans to turn it over to volunteers with the Canton merchant association.

The visitor centers in Maggie Valley and at Balsam draw higher numbers of visitors (see chart). Neither is on the chopping block for now.

The TDA will continue funding the visitor centers that perform better, but could not justify funding those that saw such a small number of visitors, Stahl said.

Hipps said the chamber is grateful for TDA support all these years and believes the two entities will continue to work together.

“We have a very successful business model here. TDA has been a part of that success by helping to fund that part of what we do,” Hipps said.