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NCSU clones five pigs
Success boosts genomics program
NCSU campus
to add offices
Centennial is a rare bright spot
Local
biotech could help
BioResource International, a fledgling Raleigh biotech company, is working
on technology that promises to rid consumers of worries about mad cow disease.
Beef industry
seeks to reassure
Consumers likely to become warier
Farmers
Search for Cattle Buyers, Fret over Mad-Cow Case
Quotes Geoff Benson, agricultural and resource economics
Businesses
Seek Greater Return on N.C. Investment in Steel Plant
Quotes Michael Walden, agricultural and resource economics
Boston
Covets Its Role as Biotech Hub, but Prediction of 100,000 New Jobs Spurs Competition
cites NC State, Duke and UNC-CH’s role in helping lure biotech jobs to N.C.
Dec. 30, 2003
The News & Observer
By Barbara Barrett, staff writer
© Copyright 2003 The News & Observer Publishing Company.
RALEIGH -- Jorge Piedrahita, clad in blue coveralls and clunky boots, peered at the two young male pigs being carted down a barn hallway and smiled like the proud papa he is.
"They are great," he said softly. "I love working with pigs. Smart animals."
The pair of 2-month-old males and another set of 2-week-old twin females are Piedrahita's babies, the first cloned pigs born in North Carolina. The first were born in October and announced this month with a news release from N.C. State University. They're proof that Piedrahita, and the university, have crossed a frontier.
Now Piedrahita is nurturing his interest in using cloning to improve human health, and NCSU has taken an important step in developing its genomics program.
These four pigs, and another female born Dec. 12, are the embodiment of nearly two years of work that Piedrahita, 45, has done since he came to NCSU last year.
The five cloned Duroc pigs are being measured and observed at a barn near campus. Piedrahita (pee-eh-dra-HEE-ta) expects another litter in late winter.
A few years ago, Piedrahita was a hotshot at Texas A&M University, a leader in cloning. His expertise was pigs, and he was focused on xenotransplantation -- the development of animal organs for transplant into humans.
NCSU lured him away with promises of a fancy, half-million-dollar laboratory and the chance to help start a genomics program at the NCSU College of Veterinary Medicine.
Research life here didn't start out rosy. Had you asked Piedrahita a year ago how things were going, he would have shrugged and said, "Well ..."
The lab wasn't in place yet, and Piedrahita and his staff were at least six months behind in their work.
But now he has new, if temporary, digs in a somewhat cramped office park off campus. His equipment is there, and the postdoctoral students and technicians working for him can do their work.
Piedrahita looks forward to moving into a grander lab in one of the new buildings under construction at the vet school. A new biomedical campus is envisioned there, and it was one of the keys to attracting Piedrahita to NCSU.
Just the beginning
Neil Olson, the research dean for NCSU's College of Veterinary Medicine, said the cloning news is just the beginning of what Piedrahita can bring to science.
"I think he'll set the standard of the impact of cloned animals on biomedical research," Olson said.
The news also helps NCSU.
"It's incredibly important," Olson said. "It is the cutting edge of biomedical research. It brings tremendous notoriety not only to the College of Veterinary Medicine but to N.C. State."
John Gilligan, NCSU's vice chancellor for research and graduate studies, said Piedrahita's work fits perfectly with the university's goal of attracting top genomics professionals in a variety of fields as it remakes itself into an agricultural university of the future.
"It is exciting because the techniques he's developing are at the forefront," Gilligan said of the cloning work. "It gives us a good life-science, high-tech image."
Piedrahita wants even more from NCSU. Someday, he dreams, he'll persuade the university's leaders to invest in a climate-controlled environment for cloned animals, an indoor facility with surgical rooms and other features.
For now, his pigs live in a barn with other university animals. He's been over there at least once a week lately, weighing and inspecting the cloned pigs.
Last Tuesday, swine education manager Curtis Powell, who takes care of the pigs, wheeled out the two young females. The reddish-brown piglets, hunched together in the cart, looked around amiably, then peered up at Piedrahita.
Powell lifted one, then the other, into a box on the scales. Each pig snuffled and peeked over the box's edge. The piglets, which had never been weighed, clocked in at 3.5 and 4.7 kilograms.
"They are doing fantastic," Piedrahita said, rubbing a little pig ear. "They're healthy. They're big."
Powell held a piglet up, its hooves scratching the air, so Piedrahita could check its underbelly.
It's interesting, Piedrahita said, pointing out the pigs' nipples. One has 14 nipples; the other has 13. Such differences occur in nature, so it was no aberration. But since clones are genetically identical, the difference between these two was unexpected, Piedrahita said.
What that tells us, he said, is that nipple development is not genetic. He jotted some notes.
That's the cool thing about cloning, Piedrahita said. If it worked perfectly every time, scientists wouldn't learn much.
Instead, with every mistake, he learns more.
New applications
That's what happened with this latest set of pig clones. Piedrahita developed these pigs with the idea of figuring out their placental growth in the womb and how it works out. He hopes to apply some of what he's learned to the human problem of intrauterine growth retardation, known as IUGR.
In humans, IUGR means fetuses don't grow properly during pregnancy. Babies can experience stress during birth and, once born, can suffer lung problems or low blood sugar.
For months in his research, Piedrahita created cloned pig embryos, implanted them in pig uteruses and then extracted the young fetuses to check out their placentas. Some were normal, but many were abnormal, with very little blood getting through from the mother pig to the tiny beings inside her.
Piedrahita said the results show that certain, "imprint" genes are important to placental development. Now, he hopes medical school researchers at Duke and UNC-Chapel Hill can build on his knowledge to help human patients. It's a new aspect to his research.
Indeed, his work now is moving along so quickly that it's tough to fathom what his next fascination might be. His latest interest is "nuclear reprogramming," that step in the very beginning of cloning when the DNA develops a certain way because of which proteins are influencing its string of genetic code.
How a skin cell's DNA can re-program itself in cloning to become a whole embryo is fascinating, Piedrahita said. It works well in some cases, but the researchers are seeing mistakes.
And the mistakes, as always, teach lessons.
Staff writer Barbara Barrett can be reached at 829-4870.
Dec. 30, 2003
The News & Observer
By Steve Cannon, staff writer
© Copyright 2003 The News & Observer Publishing Company.
RALEIGH -- N.C. State University's Centennial Campus is taking proposals for what would be the next phase of office development on the campus.
Next month, four developers are expected to propose building as much as 240,000 square feet of commercial space in one or two buildings on 5.7 acres across the street from Venture Center -- the campus' main office park.
Developers want the chance to build on Centennial Campus because it has little vacant space, while the rest of the Triangle's office market is suffering from record vacancy. So far, Craig Davis Properties, which built Venture Center, has been the only private developer allowed to build on the campus.
"The campus has become an attractive location," said Bob Geolas, coordinator for Centennial Campus. "Even during this difficult market, Centennial has been able to maintain lease up [rates] well over 90 percent; anything that can withstand what we've seen in the market suggests there's value at that site."
NCSU has asked Cary-based Craig Davis, Cary's Hamilton Merritt, Charlotte developer Lincoln Harris and Atlanta-based Carter & Associates to submit proposals for the site in January. Developers will meet with a university selection committee in February. School officials could choose a developer in March.
Centennial Campus has been a hot market since the late 1990s, attracting renters for three office buildings in Venture Center in about two years.
Technology companies set up shop in Venture Center, which covers about 363,000 square feet, to recruit NCSU graduates and take advantage of the university's research facilities. Tenants include Swiss power transmission technology company ABB, Ericsson IP Infrastructure, and software company TogetherSoft.
In the next few months, Craig Davis Properties will finish the fourth and final building in Venture Center: a 116,000-square-foot building, half of which is leased to the U.S. Department of Agriculture.
NCSU can't sell the land without approval from state lawmakers, so developers sign a long-term land lease with the school.
Geolas estimated that between students and faculty at the College of Engineering and Textiles, and office workers, about 6,000 people per day come to Centennial Campus.
Offices on Centennial Campus have attracted high prices from investors.
Last year, Davis and his backers, Steve and Art Sandler of Virginia Beach, Va., sold the three existing Venture Center buildings to GE Asset Management last year for $55 million, or about $151 per square foot. That was the highest price paid for a major office park in the Triangle in at least two years.
The site for new offices is across the street from the corporate headquarters for Red Hat, the world's largest distributor of the Linux computer operating system, which moved into a former Lucent Technologies building on campus last year.
"There's not a lot of demand for regular office space in other markets," said Jack Dunn, with Lincoln Harris. "We wouldn't want to be [at Centennial] if tenants didn't look at it differently from general suburban office space."
Staff writer Steve Cannon can be reached at 829-8917.
Dec. 30, 2003
The News & Observer
By Sabine Vollmer, staff writer
© Copyright 2003 The News & Observer Publishing Company.
BioResource International,
a fledgling Raleigh biotech company, is working on technology that promises
to rid consumers of worries about mad cow disease.
key facts
BioResource International
Employees: 5.
Founded: 1999.
Business: Develop enzyme technology for agricultural, medical and industrial use.
Funding:
$2.8 million from venture capital and private investors and grants.
Corporate home: NCSU's Centennial Campus, Raleigh.
A method to decontaminate cattle feed and meat-processing machinery would be the ideal solution for the cattle industry and consumers, said Barrett Slenning, a veterinarian and associate professor at N.C. State University.
"Decontamination is a huge issue," said Slenning, who specializes in diseases affecting animals raised for human consumption.
"Currently, there are no approved procedures."
But if it receives regulatory approval, BioResource's patented technology could change that.
The technology is based on an enzyme that dissolves prions, the infectious protein snippets that cause variations of the disease that infects cattle, sheep, deer, elk and humans.
Prions are predominantly found in the brains and spinal cords of infected animals. Once ingested, prions remain dormant for years, but the diseases they cause are always fatal.
Until the U.S. Department of Agriculture reported the first U.S. case of mad cow disease Dec. 23 -- in a dairy cow in Washington state -- interest in the technology was muted, said BioResource president Giles Shih.
But the infected Holstein triggered meat recalls, scrambling at regulatory agencies and a steady stream of inquiries about BioResource's technology.
"My phone's been ringing and e-mails are flooding in," Shih said.
Shih's father, Jason, a NCSU biotechnology professor, stumbled on the enzyme, called Versazyme, in 1987.
Dissolves prions
Produced by a microbe that occurs naturally in the soil, the enzyme proved capable of breaking down keratin, a tough protein that makes up hair, wool, fingernails and chicken feathers.
In the spring of 2001, the Shihs discovered the enzyme also dissolves prions, which defy heat, irradiation and other enzymes. Subsequent tests on infected cattle brain tissue at a lab in Lelystad, Netherlands, showed Versazyme added to the tissue samples destroyed the prions.
Unlike other, highly corrosive, decontamination attempts that involve high-pressure cooking and bleach, BioResource's technology would be gentle. The enzyme could be added to steam-clean machinery and in rendering processes that produce cattle feed.
BioResource still needs funding from corporate partners, and its technology must receive government approval. Shih hopes that reports from the U.S. General Accounting Office and the Food Safety Inspection Service that document contamination problems will help BioResource get the research grants and corporate funding it needs to develop a commercial product.
Path of contamination
According to the government reports:
* Brains and spinal cords of slaughtered cattle and sheep have been banned from U.S. cattle feed since 1997, but enforcement of the ban was spotty until at least two years ago, according to the GAO.
* During a 2002 survey, the Food Safety Inspection Service found central nervous tissue on more than one-third of machinery used to strip cattle carcasses. The meat produced by such machinery is used in hot dogs, bologna and pizza toppings.
* Consumers cannot always tell which beef products contain central nervous tissue, a GAO report found. Products containing the tissue include beef stock, beef flavoring and bone-in meat cuts.
* Dairy calves may receive protein supplements made from raw cattle blood. Until now, researchers thought blood doesn't contain prions, Slenning said. But that belief will surely receive renewed scrutiny, he added.
Staff writer Sabine Vollmer can be reached at 829-8992.
Beef industry seeks to reassure
Dec. 30, 2003
The News & Observer
By Mark Minton, staff writer
© Copyright 2003 The News & Observer Publishing Company.
Burger King sold more hamburgers last weekend than it did the same time a year ago, and Wal-Mart said it has noticed no decline in its customers' taste for beef.
But experts caution it is
still too early to gauge consumer response to the first discovery of mad cow
disease in the United States and subsequent reports tracing the diseased cow
to Canada.
organic beef?
National Organic Program regulations on livestock require that
a farmer raising organic livestock provide food "composed of agriculture
products, including pasture and forage, that are organically produced."
A farmer must not:
* Use animal drugs, including hormones, to promote growth.
* Provide feed supplements or additives in amounts above those needed for adequate nutrition and health maintenance.
* Feed plastic pellets for roughage.
* Feed formulas containing urea or manure.
* Feed mammalian or poultry slaughter byproducts to mammals or poultry.
* Use feed, additives and supplements in violation of the Federal Food, Drug and Cosmetic Act.
(USDA)
After the disease was reported last week in a Holstein in Washington state, foreign importers imposed U.S. beef bans that are sure to drive beef prices down from their recent record highs, analysts and agriculture experts said. Less certain is whether concerns over beef safety will diminish U.S. consumers' taste for steaks and hamburgers.
"It's too soon to say," said Christine McCracken, a food analyst at FTN Midwest Research. "A lot of people probably still have a lot of turkey and ham sitting around from the holiday."
McCracken said the firm's surveys of supermarkets show no weakening in demand, even as a precautionary beef recall widened to eight states and Guam.
"Our customers trust us," Wal-Mart spokeswoman Sharon Weber said. "They know food safety is a top priority for us. I believe they're confident the product is OK."
Other businesses hastened to reassure customers. Hardee's issued a public statement reassuring that none of its beef comes from the Washington packing plant, and McDonald's assured that its beef is safe to eat and said the mad cow situation "has absolutely no connection whatsoever to McDonald's or to our suppliers."
Wendy's reiterated Monday that the Washington meat plant involved in the case is not in the supply chain for its fast-food restaurants. Wendy's also underscored its policies that prohibit the use of "downer" animals such as the diseased cow. The chain reported the mad-cow announcement has had no effect on sales from Friday through Sunday.
Boutique beef may gain
Still, farmers who raise cows strictly on grass or other natural feeds could benefit if consumers become wary of cattle raised in feedlots.
On a small farm north of Louisburg, Charles Gupton raises cattle that he feeds on grass and hay. The diet ensures his cows never eat feed mixed with byproducts such as poultry litter, which is used to fatten cattle in feedlots.
Since 1997, the U.S. government has banned farmers from feeding cattle the byproducts of other cattle, because scientists believe that is how mad cow disease spreads in cows.
But cattle can still be fed the byproducts of other animals, such as chicken litter, say advocates who hope consumers will turn to "natural" or "grass-fed" beef.
Gupton, who has been raising grass-fed cattle for about three years on his Shiloh Farm & Retreat, said he disrupts the strict grass diet only long enough to call his herd in from the field. To coax them in, he uses a handful of corn or a mixture of molasses and kelp, he said.
Gupton said his customers, who sign up to buy the beef directly from him, can be secure about the product he supplies because of the diet he insists on and his knowledge of his cows' histories.
But even as advocates such as the Organic Consumers Association tout specialty beef, they face a problem: The supply is tiny. Gupton's entire "herd," for instance, numbers three cows.
Unclear definitions
Consumers also may be confused by the different names applied to some of the speciality beef.
For instance, Whole Foods Market, with several stores in the Triangle, says the cattle that produces its meat are free of antibiotics and hormones, and are not fed animal byproducts.
But unlike the strictly grass-fed variety, the chain's cattle are fattened in feed lots before slaughter, Marketing Director Cheryl Galway acknowledged. The chain does not claim that its beef meets all the USDA standards for organic beef.
The organic term "gets pretty technical," she said. "'All natural' is what we sell." Even "grass-fed" can be a dicey term -- as it can be applied to cows that have only been fed grass for some of their life. That has caused some of the small-scale farmers to switch to "grass-finished," Gupton said.
Whatever you call it, beef is likely to cost less soon.
Geoff Benson, an agricultural economist at N.C. State University, said the foreign bans on U.S. beef account for about 10 percent of domestic production. With that demand off, prices will fall in the short term, he said. Price declines on the cattle futures markets are showing the way, he said.
Staff writer Mark Minton can be reached at 829-4649.
North Carolina University Takes Proposals for Office Development
Dec. 29, 2003
Knight Ridder/Tribune Business News, CNNMoney.com, Kiplingers.com, Black Enterprise Magazine, Tallahassee Democrat, Wilmington (Del.) News-Journal, Roanoke Times and World News, Norfolk Virginian-Pilot, Knoxville News-Sentinel, Columbia State, Greenville (S.C.) News, Myrtle Beach Sun-News, Charleston (W.Va.) Gazette, Montgomery (Ala.) Advertiser, Hattiesburg (Miss.) American.
By staff report
© Copyright 2003 Knight Ridder.
RALEIGH, N.C. -- N.C. State University's Centennial Campus is taking proposals for what would be the next phase of office development on the campus.
Next month, four developers are expected to propose building as much as 240,000 square feet of commercial space in one or two buildings on 5.7 acres across the street from Venture Center -- the campus' main office park.
Developers want the chance to build on Centennial Campus because it has little vacant space, while the rest of the Triangle's office market is suffering from record vacancy. So far, Craig Davis Properties, which built Venture Center, has been the only private developer allowed to build on the campus.
"The campus has become an attractive location," said Bob Geolas, coordinator for Centennial Campus. "Even during this difficult market, Centennial has been able to maintain lease up rates well over 90 percent; anything that can withstand what we've seen in the market suggests there's value at that site."
NCSU has asked Cary-based Craig Davis, Cary's Hamilton Merritt, Charlotte developer Lincoln Harris and Atlanta-based Carter & Associates to submit proposals for the site in January. Developers will meet with a university selection committee in February. School officials could choose a developer in March.
Centennial Campus has been a hot market since the late 1990s, attracting renters for three office buildings in Venture Center in about two years.
Technology companies set up shop in Venture Center, which covers about 363,000 square feet, to recruit NCSU graduates and take advantage of the university's research facilities. Tenants include Swiss power transmission technology company ABB, Ericsson IP Infrastructure, and software company TogetherSoft.
In the next few months, Craig Davis Properties will finish the fourth and final building in Venture Center: a 116,000-square-foot building, half of which is leased to the U.S. Department of Agriculture.
NCSU can't sell the land without approval from state lawmakers, so developers sign a long-term land lease with the school.
Geolas estimated that between students and faculty at the College of Engineering and Textiles, and office workers, about 6,000 people per day come to Centennial Campus.
Offices on Centennial Campus have attracted high prices from investors.
Last year, Davis and his backers, Steve and Art Sandler of Virginia Beach, Va., sold the three existing Venture Center buildings to GE Asset Management last year for $55 million, or about $151 per square foot. That was the highest price paid for a major office park in the Triangle in at least two years.
The site for new offices is across the street from the corporate headquarters for Red Hat, the world's largest distributor of the Linux computer operating system, which moved into a former Lucent Technologies building on campus last year.
"There's not a lot of demand for regular office space in other markets," said Jack Dunn, with Lincoln Harris. "We wouldn't want to be at Centennial if tenants didn't look at it differently from general suburban office space."
Farmers Search for Cattle Buyers, Fret over Mad-Cow Case
Dec. 29, 2003
Knight Ridder/Tribune Business News, Miami Herald, CNNMoney.com, Kiplingers.com, High Point Enterprise.
By David Nivens
© Copyright 2003 Knight Ridder.
Howard Horney, a Siler City stockyard owner, spent the day Friday on the telephone searching for cattle buyers.
Horney said he could sell as many as 700 head of beef cattle Monday at Carolina Stockyards and another 1,200 on Friday. Cattle can sell for as much as $600 a head.
"And everybody wants to sell," Horney said. "I've talked to people in six states and nobody knows what's going to happen with the market."
By Monday, North Carolina stockyards may know the full impact of the market reaction to the discovery of mad cow disease in a Holstein cow in Washington state, Horney said.
But it could take months for the markets to settle, North Carolina State University economist Geoff Benson said Friday, and cost the industry hundreds of millions of dollars.
In North Carolina, most cattle are sold as calves at local auctions and sent to feed lots out west. As many as 20,000 North Carolina farmers raise beef cattle.
Horney has operated stockyards in Siler City, Mount Airy and Statesville with his brother H.L. Horney for 50 years. Each year, 90,000 head of cattle pass through the Siler City stockyard gates.
"We still have cattle to sell and there will be more beef coming back to us because of the export restrictions," Horney said. "We don't know who will be buying."
The biggest buyers of U.S. beef exports slapped bans on American products this week. Beef futures trading nearly stopped Wednesday on the Chicago Mercantile Exchange because no one was buying, and restaurant stocks tumbled.
That hurts Horney's customers, many of whom borrow money to raise a herd.
"If prices fall too much too fast, they can get hurt on the margins," Horney said.
Last year, the United States exported $2.6 billion in beef. North Carolina accounts for about 1 percent of that production and farmers raised 920,000 animals last year, according to the state Department of Agriculture.
Through the holiday week, at least a dozen countries blocked U.S. beef, including Canada, Japan, South Korea and Mexico. The bans could block 70 percent of U.S. beef exports.
Many countries blocked exports from Canada last spring and Great Britain following mad cow disease outbreaks since the 1980s.
"All we can do is look at what happened in those cases," said Benson, a N.C. State University economist. "The bans will make for extra product in the market and lower prices in the retail stores."
Benson said beef prices could drop 10 to 20 percent in the stores. A fast-shifting market could cost producers money, Benson said.
"Many of the producers retain some ownership of the cattle that go to the feeder lots," Benson said. "They are at risk if they have cattle in the lots now and the prices drop."
Most cattle are sold to the feeder lots in the fall, Benson said, and cattle producers hope the markets recover soon for next season.
Canada still has not recovered from the spring outbreak which has cost the industry tens of million of dollars, Benson said.
"We know the beef is safe," Horney said. "This trouble is about the markets."
State officials said Wednesday they will step up monitoring for mad cow disease.
State inspectors examine every cow slaughtered, and they conduct follow-up laboratory testing of animals that can't walk or that show signs of disease.
Businesses Seek Greater Return on N.C. Investment in Steel Plant
Dec. 26-Dec. 29, 2003
Associated Press, CNNMoney, Kiplinger.com, Miami Herald, Birmingham News, Pittsburgh Post-Gazette, Louisville Courier-Journal, Norfolk Virginian-Pilot, Charleston Post & Courier, Harrisburg Patriot, Flint (Mich.) Journal, Asbury Park (N.J.) Press, Sarasota (Fla.) Herald-Tribune, Lakeland (Fla.) Ledger.
By staff report
© Copyright 2003 Associated Press.
WINTON, N.C.--Five years ago, Billy Theodorakis rose to his feet and cheered when then- Gov. Jim Hunt announced that Nucor Corp. would build a steel mill in Hertford County.
Theodorakis, owner of Walter's Grill in downtown Murfreesboro, imagined black-booted steelworkers ordering mugs of coffee and barbecue after their shifts.
But it didn't work out that way. Business is so slow that Theodorakis can barely pay the utility bills. Last year, he lost about $10,000.
"When you throw a big rock into a small pond, you expect waves," he said. "We've barely seen a ripple."
Economists say the Nucor mill, about 125 miles northeast of Raleigh, highlights the limits of economic development projects in rural counties.
The roughly 600 jobs created by Nucor and the businesses that have sprung up to serve the mill are filled by people who live across six counties. With that wealth spread out, it's hard for many of the people who live in the region to see any real impact.
State officials have used Nucor as evidence that economic incentives work. Earlier this month, state Commerce officials cited Nucor in their efforts to persuade the General Assembly to award $240 million in tax breaks to three companies. Hunt said he considers recruiting Nucor "the most self-satisfying achievement" of his tenure as governor.
In recruiting Nucor, Hunt and other state officials were trying to boost economic development in a large region stretching from the Outer Banks to Roanoke Rapids.
And since receiving $161 million in state tax breaks, the mill has hired 391 people at an average salary of $60,000 -- about three times the area's average wage. Nucor has invested $480 million in the plant, two-thirds more than expected. And Hertford County's unemployment rate is just 4.1 percent, about 2 percentage points below the state average.
But that rate is deceiving, employment officials say. Jobs are so scarce that many people have given up looking for work and thus do not show up on the official unemployment statistics.
Unemployment remains high in much of the area. And where it is low, as in Gates County, it's due to folks driving to jobs in the shipyards in Newport News, Va., or the Ford plant in Suffolk, Va.
Nucor might be pumping millions of dollars into the state economy, but little of it is concentrated in one area.
Hertford County's poverty rate, for instance, is 48 percent higher than the rest of the state. The average income per worker is 37 percent below the state average. And last year, property tax revenue in the county was virtually the same as in 1987.
Plywood covers several buildings on Main Street in Ahoskie, the largest town near the plant.
"From Hertford County's perspective, the economic incentives would have generated a much bigger bang if the money invested in the area had stayed there," said Mike Luger, director of the Office of Economic Development at UNC-Chapel Hill. "But economics isn't always that simple."
Jonathan Wheeler said he counts his blessings each day that he works at the mill, which sits on 900 acres on the Chowan River.
His job, monitoring a blast furnace that turns scrap metal into molten steel, pays twice as much as his previous position at a sawmill in Roper. Yet Wheeler and his wife, Karen, live in Edenton and prefer to shop in Chesapeake, Va. Wheeler is usually so tired after his 12-hour shift that he heads straight home.
"Nothing against Ahoskie -- it's a nice place -- but we don't do our shopping there," Wheeler said.
Those who envisioned all that Nucor money pouring into local shops now wonder why the expected benefits have bypassed them.
"We had all hoped to see new restaurants, more stores and bigger roads," said Henry Byrd, owner of Action Realty, a real estate brokerage in Ahoskie. "It hasn't happened."
The mill has attracted 23 support companies that employ 199 people, according to North Carolina's Northeast Partnership Inc., a nonprofit corporation that promotes the area. The list includes trucking firms, waste processors and tool repair shops.
Established businesses have also benefited. Metal Tech, a machine shop in Murfreesboro, repairs tools for Nucor. The extra business has given shop owner Ray Felton the confidence to spend $120,000 for a new milling machine. Ten people have been hired at the 60-person shop since Nucor arrived.
"A lot of people here would be hurtin' for certain without Nucor," Felton said.
Still, many in the area expected more. Some thought metal fabrication plants would spring up around the mill, to convert the steel sheets into finished products. Instead, most of the steel is shipped out of the state.
"People thought Nucor would be our savior," said Don Craft, Hertford County manager. "But anyone here will tell you this county is in distress and has been in distress for the past 100 years. Nothing's changed."
Expectations were fueled by state officials, who predicted huge benefits from the project. A 1998 study commissioned by N.C.'s Northeast Partnership said the mill would pump nearly $400 million a year into the region's economy. All told, the plant would boost the region's economic output by $6 billion over 15 years.
Now, five years later, the person who did that study says the results are "almost impossible to verify." Stephen Layson, an economist at UNC-Greensboro, said the projected economic benefits of new manufacturing projects are muted if people live long distances from their jobs.
Nudge is not enough
"The state can nudge a company like Nucor into a poor area, but it can't control where money made by those employees is spent," said Michael L. Walden, an economist at N.C. State University.
Larry Freeman sells manufactured homes and used cars along a busy stretch of N.C. 42 in Ahoskie, just 15 minutes from the steel mill. In three years, Freeman has not made a single sale to a Nucor employee.
"We need two or three Nucors, because one isn't enough to boost business," he said.
The weak economy has not helped. Five manufacturing plants, including a Perdue chicken processing plant and two aluminum factories, have shut down in the area since Nucor opened. More than 1,400 people have lost their jobs because of the shutdowns.
Many of these laid-off employees thought they would be able to land jobs at Nucor. But the company recently stopped accepting applications, and fewer than 1 percent of its employees leave each year.
Many people in the area are accustomed to low-wage service jobs where turnover is high and employers are always accepting new applications, said Krista Jernigan, manager of the Ahoskie branch of the N.C. Employment Security Commission. Some get upset when they are told that Nucor isn't hiring, she said.
Others resent the tax breaks the company has received.
Because the mill recycles scrap metal, it is exempt under federal law from 80 percent of local property taxes. So, instead of paying about $4 million a year to Hertford County, Nucor pays $300,000 a year, say county officials.
But even those who wanted more from Nucor say the county would be in much worse shape if Nucor had not built the mill.
Jessie Robinson, owner of the Trade Mart convenience store in Ahoskie, figures that Nucor employees account for less than 5 percent of his sales.
But if Nucor left, his business would probably decline 10 percent to 15 percent, he said. "There's a psychological benefit to having them here that can't be quantified. If Nucor left, this would be a busted town. It's all we got."
Boston Covets Its Role as Biotech Hub, but Prediction of 100,000 New Jobs Spurs Competition
Dec. 26, 2003
The Christian Science Monitor
By staff report
© Copyright 2003 The Christian Science Monitor.
CAMBRIDGE, MASS. -- Inside a former furniture warehouse, scientists at a new biotech facility are busy studying cell proteins.
Across the street, in this neighborhood that straddles MIT and Harvard, a former candy factory is being transformed into the research headquarters for European biotech giant Novartis.
And across the Charles River, Harvard University is plotting its next major expansion: a new life-sciences research campus.
These are just a few of the signs of how the Boston area has grabbed a lead role in a field that many see as one of the most promising industries of the new century: biotechnology.
But even as new outposts of biomedical research rise here, Massachusetts faces competition. Thousands of jobs are at stake, in an era when downsizing is the trend in established sectors such as manufacturing.
Recently, a North Carolina industry group took out a full page ad this month in the Boston Globe inviting biotech firms to come down south, and the speaker of the state's House of Representatives sent personal letters to several CEOs.
It doesn't quite equal the shots fired at Ft. Sumter to start the Civil War, but the stakes are huge in this economic battle between the states.
"It's a big prize," says Mark Dibner, president of BioAbility, a biotech consulting firm based in North Carolina's Research Triangle Park.
With its cluster of top research universities and hospitals, the Boston area has long enjoyed a big chunk of the biotechnology business. Only the San Francisco Bay Area produces as many Ph.Ds, patents, and startups in the field.
Bay State's challenges But for all its advantages, Massachusetts faces rival states that are touting lower costs of living. Some are also exploiting growing anger within the industry that Massachusetts cities are among those seeking to buy cheaper drugs in Canada.
The field of biotech is transitioning beyond infancy. Companies are just beginning to mine potential commercial applications of cells. One study by the Massachusetts Biotechnology Council found future advances could produce 100,000 new jobs and billions in revenues.
Today, there are 280 biotech companies in Massachusetts, employing more than 30,000 workers. But it is also a fragile moment, as the state's biotech firms mature from start-ups focused on research into more expensive business of developing and manufacturing of drugs.
One company, Transkaryotic Therapies Inc., is typical: founded by a doctor at a Harvard-affiliated teaching hospital, TKT was 12 years old before the firm's first drug was ready for manufacture.
State leaders worry that maturing biotech companies may eventually go the way of other industries that were born in Massachusetts and then slipped away. First, textiles moved south. Then, after pioneering the field of computing and becoming dominant in in so-called minicomputers, the state lost out to California's Silicon Valley. "History must not repeat itself," MIT president Charles Vest told a summit of Massachusetts life-science industry leaders in September. "We can't miss this one as we did the silicon revolution."
The region remains a research leader. Many of the world's largest pharmaceutical companies have opened research facilities here. One is Novartis, which announced that it will move its entire research division here from Switzerland along with as many as 1,000 jobs. Harvard's plan to build a life sciences campus in the Allston section of Boston promises to bolster that lead.
But Massachusetts has enjoyed less success convincing firms that grew up here to keep their manufacturing operations in the state. BioGen IDEC, for example, still has 1,500 employees in Cambridge but built the second largest biomanufacturing facility in the world in North Carolina's Research Triangle Park.
High paying biomanufacturing jobs are an alluring target in states like North Carolina, which wants to employ former textile, tobacco, and furniture workers. Plus, biotech factories pollute less and require less energy than other industries.
That explains why a recent survey of local and state economic development agencies found 83 percent identified biotechnology as one of their top two targets for industrial development, a Brookings Institution study noted.
North Carolina boasts a lower cost of living, cheaper land, and a strong research base anchored in Raleigh and Durham by Duke, North Carolina State and University of North Carolina. The state government has long supported biotech, opening a center to fund training and business development in 1981. More recently, the state committed $60 million of tobacco-settlement money to train workers for biotech jobs.
By contrast, says Michael Astrue, CEO of TKT, says his firm had to import workers trained in manufacturing quality and toxicology from other states to staff its Cambridge manufacturing facility.
Bad place for business? "It's not an easy place to do business," says Mr. Astrue, who received one of the letters from North Carolina's House Speaker, Richard Morgan. "Governors of other states call personally, begging us to move, and throw money at us, and here we get treated very rudely by significant people in the political establishment."
Plans by Massachusetts cities to reimport drugs from Canada certainly aren't making biotech companies feel welcome.
"The Canadian medicine crowd would love to turn Massachusetts into a biotech ghost town," one industry source says.
Gov. Mitt Romney's life-science development official, Scott Sarazen, admits the state has "historically been complacent" about biotechnology. He cites new tax rebates and funding for emerging technologies as evidence the state is trying to do better. "Just like the industry is dynamic and growing, we have to always stay current with it.”