CRAVER'S COMMENTS
August 2001
IN THIS ISSUE
- YOU DO THE MATH
- THE LOCAL ECONOMY-BOOM OR BUST?
FUTURE ISSUES
I REALIZE THAT THERE HAS BEEN A LONGER THAN USUAL GAP BETWEEN NEWSLETTERS BUT I HAVE AN EXCUSE. MY OLD COMPUTER CRASHED AND WITH GEORGE BUSH’S HELP I NOW HAVE MY TAX REFUND AND A NEW COMPUTER ON WHICH TO DO NEWSLETTERS.
THINGS TO BE PROUD OF
ALL OF YOU UNC FANS WILL JUST HAVE TO TOLERATE THIS ONE. I CAN’T PASS ON THE CHANCE TO CONGRATULATE DUKE FOR ITS NATIONAL CHAMPIONSHIP THIS SPRING AND THE ABSOLUTELY TERRIFFIC COACHING JOB DONE BY COACH K AFTER BOOZER GOT HURT.
DID YOU KNOW?
THREE RESEARCHERS, TWO FROM UNC AND ONE FROM DUKE, RANKED IN THE TOP TEN LAST YEAR IN GRANT MONEY RECEIVED FROM THE NATIONAL INSTITUTES OF HEALTH. THIS MADE THE TRIANGLE SECOND ONLY TO SAN FRANSICO IN SUCH FUNDING.
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Here is where it gets interesting. If you recall the politicians
all said that they would take the total of the new valuations
and divide that figure by the previous year’s budget to
determine what tax rate figure would be “revenue neutral."
To that tax rate they did say that they would add two
to three cents more to cover growth and inflation. Now I went to
public school so long ago that they actually taught addition,
subtraction, multiplication and division. This was before “new
math” and long before ”fuzzy math”. According to the
Heraldsun.com web site that we all go to in order to look up
what our neighbor’s house is worth, my house increased by 64% in
value. The average increase county wide according to this site
was 70%. Putting aside the insult that my house had not
increased as much as the county average, I took this news to
mean that my taxes should at least remain “revenue neutral”.
Next I did the math. I multiplied the new tax rate by the new
valuation to determine my taxes for this year. Then I compared
it to my last year’s tax bill. My taxes increased 28.5%.
Somebody lied!!
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THE LOCAL ECONOMY- BOOM OR BUST?
The economy, which has been strong since the early 90’s (if you believe the Democrats) and strong since the early 80’s (if you believe the Republicans) started taking a decided downturn in the second quarter of last year. Downturns can be described in different ways but my favorite definition was always that a recession was when your neighbor is out of work and a depression is when you are out of work. Despite the fact that numerous layoffs have occurred in the area, especially in the formerly booming “.com” industries, the Triangle economy remains strong. It was reported last week that the unemployment rate in the Triangle had climbed to an alarming 3.5%. This is high compared to the 1.8% unemployment we had grown used to over the last five plus years. In my college days as an economics major I was told that 3% to 3.5% unemployment was considered full employment in a healthy economy. Granted, if you are the one laid off, that is not very comforting. But remember how excited we were years ago when it fell to 3.5%.
However, many groups have faith in the area’s future. Let’s examine some of the development taking place currently in the Triangle. I am always amazed by Americans insatiable appetite for retail and the availability of capital to feed it. The Southpoint Mall complex continues to push toward a March 2002 opening. The only announced casualty so far due to the slowdown has been the I-Max theater. This loss is as much to blame on the general reshuffling in the movie retail outlet business as it is on the push by Raleigh to gain an I-Max ahead of Durham after Crabtree lost Nordstrom’s to Southpoint. Across from the mall on Fayetteville Road will be the new Renaissance Center which will contain more high end shopping, hotels and offices. Across I-40 to the north will be an auto mall, a collection of car dealerships in a park-like setting. University Ford recently pulled out of this project, a move that not only affects the auto mall but the American Tobacco complex downtown. American Tobacco’s developer, Capital Broadcasting of Raleigh, had already released new drawings of the complex showing its expansion into the University Ford property.
Briar Creek, which had originally announced plans for a regional mall (along with Southpoint and the new mall at I-540 and US-1 in north Raleigh), has redesigned its retail complex and is proceeding with a lot of construction along the new Briar Creek Parkway. For those of you unfamiliar with Briar Creek, it is located off of the Lumley Road exit of I-540 near the airport. It makes a good target for a Sunday afternoon drive.
Durham announced last week that building permits for the first five months of this year were double what they were for the same period in 2000. Granted, even though a lot of the projects obtaining permits this year have been in the planning stages for one or more years, there have been few developers announcing pullbacks. In fact, just the opposite is happening. There are several areas that are literally exploding with growth. On the eastern side of the Triangle is the corridor between Raleigh and Wake Forest and the area to the southeast of Raleigh into Johnston County. By the way, Johnston County was the fastest growing County in North Carolina as reported by the last census. One of the best examples of the growth explosion is the US-70 corridor between Durham and Raleigh. In just six developments alones there will be 6,880 homes, 2,664 apartments, and 1,250,000 sq. ft. of retail space.
The real boom area over the next five years in my opinion will be in Chatham County. I know of at least six new major developments both announced and unannounced. The county has recently purchased land for a North Chatham Senior High. The major roads in the county are being widened to four lanes. There seems to be abundant land, water, and other resources available for growth. Oh yes, and it’s close to South Point Mall.
The bottom line is this. Our economy is better than most of the rest of the country. For those of you not old enough to remember, the economy in the whole country is actually very good. The national economy is constantly making adjustments. In the current case it’s adjusting to: how to use the internet for commerce, how to thoughtfully capitalize the new “.com” industries, how to take care of the ever changing needs of “baby boomers”, and how to supply and trade with the entire world which has suddenly joined one global economy. That may sound like a difficult task but I think we will weather it with ease.
A footnote. I am not sure if the states with the best economies are attracting the most people or the states that are attracting the most people get rewarded with the best economies. In the 90’s, the economy of 11 states grew at an annual rate of more than 5 % including North Carolina.