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DUKE ENERGY INVESTMENT REPORT: NORTH CAROLINA
From Site Selection magazine, September 2021
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High Energy

Duke Energy was one player in a record year for economic development in North Carolina.

DUKE ENERGY INVESTMENT REPORT: North Carolina
Until its recent commitment with Rauch and Ball Corp. to a billion-dollar complex in Concord, Red Bull was known in the region for its high-octane events and athletes such as slackline expert Alex Mason
Photo by Brian Hall courtesy of Red Bull Content Pool

Economic development activity in Duke Energy’s headquarters state is as robust as it’s been in years, even for a state that’s hovered near the top of several Site Selection rankings for many of those years (and won the 2021 Prosperity Cup). The momentum includes Duke’s own HQ.

In May, the utility announced that Duke Energy Plaza, the 40-floor office tower currently under construction in Uptown Charlotte, will become the company’s new corporate headquarters. Formerly known as Metro Tower, Duke Energy Plaza will house approximately 4,400 employees and allow the company to reduce its overall real estate footprint in the Charlotte area and reduce costs by at least $85 million over the next five years, which benefits customers.

The overall plan will involve selling two buildings and leaving a leased space at a third, as Duke continues its efforts to best house its approximately 6,000 employees and contractors in Charlotte.

“We’re excited to transition our employees into the Duke Energy Plaza, where we will drive additional collaboration and innovation to deliver the affordable, reliable and increasingly clean energy our customers expect and achieve our goal of net-zero carbon emissions by 2050,” said Donna Council, Duke Energy’s senior vice president of administrative services and real estate. “We’re moving to a new workplace model that provides teammates with more flexibility and hybrid work options, reducing the need for the large real estate footprint we currently occupy. We remain firmly committed to Uptown Charlotte with an office tower that we’ll be proud to call our new home.”

The actions also free up premium real estate in Uptown Charlotte for other purposes, Council noted, as the state and the metro area continue to be on a major roll attracting company growth.

Deal After Deal

“In the last 18-24 months, we have seen announcement after announcement — around 15 altogether — in RTP and its immediate environs, tapping the world-class labor shed being produced by the university system,” says John Geib, closing in on 40 years as an economic development leader for Duke Energy in the Carolinas. He recently took on a new job as director of technical services for the entire multi-state Duke economic development team. But the veteran leader knows the Tarheel state’s deals as well as he knows its roads.

“Fujifilm Diosynth Biotechnologies was one we competed hard for against Texas,” he says of a $2 billion investment in Holly Springs announced early in 2021. “The availability of our workforce prevailed over a much sweeter incentives package in Texas. Eli Lilly is building a big plant in RTP. Merck is doing a big expansion in north Durham. There are about seven to eight companies in the genetic medicine sector. They’re smaller, and it’s still a very experimental technology, but everybody agrees genetic medicine is the medicine of the future. To have that critical mass of a brand new technology is really important.”

Andrew Tate, director of economic development for Duke Energy in North Carolina, says a majority of inquiries over recent months have come from such sectors or niches as life sciences, battery, agribusiness, cryptocurrency mining, electric vehicles, food manufacturing, data centers and advanced materials manufacturing. 

 

Machelle BakerThis is a powerful illustration of the opportunities and confidence that growing companies have in North Carolina’s resilient economy, robust infrastructure and diverse manufacturing workforce.” 
— North Carolina Commerce Secretary Machelle Baker Sanders on the new beverage manufacturing and packaging hub from Red Bull, Rauch and Ball Corp. in Concord, July 2021

 

Geib says Nestle Purina Petcare’s plans to revive the site of a former MillerCoors brewery in Eden, North Carolina, has been a highlight of the past year. The 850,000-sq.-ft. brewery used to employ as many as 1,500, but was down to 520 employees when it was shuttered in 2016, which devasted the community. It was a huge water consumer, and the tax base went to nil.

Enter Nestle Purina Petcare, which last year needed to build capacity fast and therefore needed an existing building. They plan to be up and running by October 2021 and going full speed ahead by early 2022, pouring $450 million into the site and planning to hire 300 by 2022.

Geib calls the Nestle Purina investment “a big project for the community. They are a big water and power user, and they’ve reinvigorated the rail on site. They may have pulled the city of Eden from disaster and put them back on the map.”

Energy Boost from Red Bull and Friends

Noting the project leadership of Duke’s Tammy Whaley in the Charlotte market, Geib mentions another big deal of recent vintage that went by the code name of Project Aquamarine. 

It was announced in late July 2021 that global aluminum beverage packaging company Ball Corporation will create 220 new jobs in Cabarrus County and invest $383.8 million to join Red Bull and Rauch’s planned beverage manufacturing hub in Concord on part of the former Philip Morris site. Red Bull and Rauch had committed to their part of the project two weeks before.

Ball will manufacture aluminum cans for Red Bull and other customers in a new, 800,000-sq.-ft. operation. With Ball’s commitment, the three companies at the new beverage manufacturing hub will create more than 600 jobs and an investment exceeding $1 billion by 2027.

Duke Energy was part of a coalition of organizations that worked to attract the project, including the North Carolina Department of Commerce and the Economic Development Partnership of North Carolina; the North Carolina Community College System; North Carolina Railroad Company; Cabarrus Economic Development; the City of Concord and the Charlotte Regional Business Alliance.

A state release explained that Ball’s expansion will be facilitated, in part, by a Job Development Investment Grant (JDIG) approved by the state’s Economic Investment Committee. Over the course of the grant’s 12-year term, the project is estimated to grow the state’s economy by more than $1 billion. Using a formula that takes into account the new tax revenues generated by the 220 new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $3,084,000 spread over 12 years.

Because Ball is locating in Cabarrus County, classified by the state’s economic tier system as Tier 3, the company’s JDIG agreement also calls for moving as much as $1 million into the state’s Industrial Development Fund – Utility Account. The Utility Account helps rural communities finance necessary infrastructure upgrades to attract future business.

Geib calls the project “a great reuse of a site that had originally housed an industry that is no longer in operation in the United States. Philip Morris had a 2,000-acre tract in Concord that is absolutely beautiful and fully outfitted with infrastructure.”

The site was shuttered a decade ago, then sold to a private group of investors (known as Bootsmead LeaseCo) who made the wise decision to maintain the site’s industrial zoning rather than develop residential on the land. “Most owners wouldn’t have gone for that,” Geib says. “They agreed to it and got a huge win, and there’s still enough property to put another big project on that site.”

The Hits Keep Coming

Another recent project served by Duke is the $550 million, 355-job new drug manufacturing plant from California-based Amgen at its site in Holly Springs in the Raleigh-Durham metro area of Wake County near Research Triangle Park. It’s the same community that earlier in 2021 welcomed the $2 billion investment from Fujifilm Diosynth.

“At this new facility, we plan to include some of our most advanced technologies,” said Arleen Paulino, Amgen senior vice president, Manufacturing. “We chose North Carolina for this new plant because of the robust biologics ecosystem, and we are excited to partner with the Wake County business community to further expand biotechnology regionally.”

That ecosystem includes the three universities that gave RTP its name: North Carolina State University in Raleigh, Duke University in Durham and the University of North Carolina at Chapel Hill. They are important partners in the North Carolina Biotechnology Center, an organization that Duke and others have supported since 1984: NCBiotech was the first state-funded effort in the nation founded to grow a state’s life science strengths.

That talent pool will be crucial in not only helping the new “FleXBatch” plant meet sustainability commitments, but also the company’s commitment to diversity, inclusion and belonging. In December 2020, Amgen announced its role as a founding member of OneTen, a coalition of many of the world’s largest, best-known companies that aims collectively to hire 1 million Black Americans into well-paying jobs over the next 10 years.

“The Holly Springs facility will play a role in achieving this OneTen commitment,” said the company.

duke energy

Construction on the new 40-story, 1-million-sq.-ft. Duke Energy Plaza in Charlotte is on schedule to be completed by the end of 2022.
 

Duke’s John Geib says among the other projects on the state’s slate are Pratt & Whitney’s planned high-performance aviation components facility in Asheville — “a huge win in a part of the state that doesn’t lend itself to manufacturing” — and Apple’s huge investment in a campus in Raleigh, coming back to the city several years after it finished runner-up to Austin, Texas, for an earlier project.

“They took down land and are going to do something big there,” Geib says of the company’s 3,000-job, 1-million-sq.-ft. R&D hub. Apple not only has pledged to invest $1 billion there by 2032, but will also establish a $100 million fund to support schools and community initiatives across the state.

It’s not as if RTP’s reputation needed burnishing, but Geib says it had been in a lull before recently. Now several legacy GSK buildings have been repurposed, among other projects, and land in RTP is getting tight again.

“Apple took down the last of the really big RTP sites,” he says. “What’s going to be our next move to craft a new RTP? I’ve advocated that there’s the opportunity to do that, and Duke could be a participant in that partnership.”

But just like the first time around, it might demand patience, he says.

“RTP started in 1959, and didn’t have their first win until 1970,” he says.

Major corporate investments by the likes of IBM and other electronics companies, then by biotech, plus developments such as NCBiotech and the addition of workforce development assets have helped the RTP gamble pay off ever since that first high and dry decade.

 Things were dry for only about six weeks of the pandemic, Geib says, “and then we had a record year in economic development. People are starting to realize that North Carolina has its act together. We have great workforce preparedness, and made big expenditures.

We have very business-friendly tax policy, a reasonable cost of living, great transportation networks and competitive energy costs. Folks are starting to recognize ‘there is a potentially better solution we need to have on our radar,’ and North Carolina is the beneficiary of that — an overnight success many years in the making.” 


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