Surry Business

Taxable retail sales in Surry County fell to $41.1 million in July, according to a new report from the North Carolina Department of Revenue.

Surry County’s taxable retail sales totaled $65.2 million in July 2006 and $48 million in July 2005.

Mount Airy’s taxable retail sales were $22.6 million in July 2007, $37.2 million in July 2006 and $26.8 million in July 2005.

The high numbers from July a year ago may be due to a one-time tax event, but other statistics from the Department of Revenue reinforce the image of eroding retail sales.

June figures for the past three years show a steady decline in Surry County — $53 million in 2007, $55.8 million in 2006, $58.9 million in 2005. Mount Airy’s taxable retail sales fell to $29.6 million this year from $31.9 million in June 2006 and $31 million in June 2005.

The N.C. Department of Revenue cautions that its data are compiled from reports and remittances made by taxpayers and may not be directly comparable to reports for other months. The department’s monthly reports show tax collections for each month based on retail sales in the previous month.

Mount Airy is the only Surry County city large enough (population 5,000 or more) to be included in the department’s month retail sales reports

The public can learn more about Fibrowatt USA, a company planning to build a renewable-energy power-generating plant in North Carolina, when the N.C. Cooperative Extension Service hosts a “community open house” from 4 to 7 p.m. Tuesday, Nov. 13, at the Surry County Extension Service’s office, 210 N. Main in Dobson.

It’s no secret that Fibrowatt has had its eye on Surry County and other N.C. locations for the past four years. The company uses technology developed in England to generate electricity from poultry litter. Surry County is one of the state’s major poultry producers and Wayne Farms has a large broiler-chicken production operation at Dobson. Neighboring Wilkes County is the state’s largest broiler-chicken producer. Fibrowatt officials plan on consuming 500,000 tons of chicken litter to generate 40 to 50 megawatts annually.

What’s not as widely known is that Fibrowatt and officials in North Carolina have quietly accelerated plans for the new development and their efforts to choose a site. The Winston-Salem Journal reports that Fibrowatt now has narrowed its choices for the first plant to Surry and Wilkes counties.

A 10-member delegation from Surry and Wilkes counties traveled last month to Benson, Minn., where they attended the opening of Fibrowatt’s first U.S. plant. That generating station employs about 100 people.

Bryan Cave, Surry’s agriculture-extension director, told the Journal that some in the group were curious to see whether an odor would be detected near the operation. They also wanted to know how the litter was brought in (in sealed trucks) and the process that it went through before burning. The Fibrowatt process heats chicken litter to produce gasses burned to produce steam that turns generators. The depleted chicken litter, sterile and dry, later can be used for fertilizer and feed supplements.

“I could stand right beside the plant in Minnesota and not smell litter at all,” Cave told the newspaper. “Everyone is entitled to their opinion. Based on the science and what I’ve seen, there’s not a great big issue there.”

Charlie Sink, a Wilkes County commissioner, also made the trip and said that the Minnesota facility is an impressive, modern plant. Worries about odor seem to be local people’s biggest concern, he said, so he stood next to the plant’s storage building and smelled nothing objectional.

The Journal article said Fibrowatt’s preferred site in Wilkes County is at North Wilkesboro’s industrial park off N.C. 268. A preferred location in Surry County was not named in the Journal’s article.

Robin Rhyne, president of the Surry County Economic Development Partnership, has been Surry County’s lead contact with Fibrowatt since 2005. In a Mount Airy News article on Oct. 29, Rhyne acknowledged some environmental groups’ concerns about odors, plant emissions and waste products, but pointed out that waste disposal also is an environmental problem. She said no other organizations have proposed an alternative “green” solution to disposing of chicken litter.

In addition to Surry and Wilkes counties, five other counties have attracted Fibrowatt’s interest. The company has said it may build as many as three generating stations in North Carolina. The other counties being considered are Stanly, Montgomery, Moore, Duplin and Sampson. Fibrowatt intends to have informational sessions at all seven. The Wilkes County community open house is scheduled for 4 to 7 p.m. Nov. 14 at Wilkes Community College’s Walker Center in Wilkesboro.

The loss of textile, apparel and furniture manufacturing in North Carolina has left the state littered with vacant industrial facilities, but there’s growing interest in adaptive reuse and repurposing of those buildings for residential housing.

Landmark Asset Services, a division of The Landmark Group, turned one such building into Globe Tobacco Lofts at 838 S. Main St. in Mount Airy. After two years’ work and an investment of $7.4 million (helped with a $427,000 low-income housing tax credit through the North Carolina Housing Finance Agency), Landmark Property Management has begun leasing 43 one-, two- and three-bedroom apartments in the 124-year-old, 67,000-square-foot building that had been vacant for about 30 years. Built in 1883, it was a barrel-making shop until 1916 and later used as a textile company’s warehouse.

Rehab Builders Inc., the general contractor for the project, created high-ceilinged apartments with hardwood floors, modern kitchen appliances, washer-dryer hookups, mini-blinds, ceiling fans, walk-in closets, central air conditioning and heat pumps. Twenty thousand square feet is reserved for community space including a fitness center, library and study area with computers. There is indoor parking. Outside on the 3.2-acre site at South Main and Worth streets, there is a large courtyard, playground and picnic area, gazebo and arbor, and sitting areas.

Rents range from about $350 for a one-bedroom apartment to $625 for a three-bedroom apartment, a representative from The Landmark Group told The Mount Airy News. Some units are reserved for families whose incomes fall within federal guidelines, other apartments have no income restrictions.

William M. “Bill” Spencer, vice president and Special Projects Group manager for Mount Airy-based contractor John S. Clark Co., is another entrepreneur and investor working on an adaptive-reuse project. He and his partner bought a former feed-and-seed store, the Von Leake Building in Winston-Salem, for $275,000. When renovation is completed next summer, the building will have four condos, ranging from 1,300 to 2,200 square feet, that Sinclair hopes to sell for $344,500 to $583,000. You can read about Sinclair and his project here.

Mount Airy already has one of North Carolina’s showplace adaptive-reuse projects. Lee and Judy Mills and F. Eugene “Gene” Rees Jr., all of Mount Airy, bought a former tobacco-leaf plant built in 1892 and later used a Renfro Hosiery Corp. sock-making facility. The building became obsolete and sat vacant from the 1990s until the local businessmen began renovation in 2002. The developers cleaned out the interior, demolished insignificant “add-on” structures, and turned the remaining 100,000 square feet into high-end, owner-occupied condominiums. The 37 units now have a tax value in excess of $6 million.

Because the building is on the National Register of Historic Places, the project qualified for tax credits, according to Preservation North Carolina. Although tax credits are often used as an equity tool requiring that the property be held and rented for at least five years, the developers of Renfro Lofts chose to apply the state and federal credits in a pass-through structure that allowed the condominium buyers to benefit from the tax credits. In addition to the marketing benefit of available tax credits, the pass-through structure created a property that was owner occupied rather than renter occupied. Possibly the first project in North Carolina to use this pass-through financial structure, the Renfro Lofts condos were sold out within 120 days in the preconstruction period.

Pike Electric Co. (NYSE: PEC) of Mount Airy, N.C., on Tuesday reported higher first-quarter earnings despite a decline in revenues.

Total revenues for the quarter that ended Sept. 30, 2007, were $139.7 million, $10.2 million less than in the comparable quarter a year ago. Storm restoration revenues alone were down $7.5 million to $4.8 million for the first quarter of fiscal 2008. However, core powerline revenue (the company’s mainstay business) per billable hour increased 10.2 percent year over year, reflecting more favorable pricing from contract renegotiations and the elimination of certain accounts that did not meet the company’s profitability goals.

Gross profit for the quarter was $23.3 million, or 16.7 percent of revenue, a 17.9 percent increase from $19.7 million, or 13.2 percent of revenue, for the first quarter of fiscal 2007, primarily due to improvements in operational efficiency, the successful elimination of certain low-margin accounts, and the negotiation of more favorable pricing on contracts.

Net income for the first quarter of fiscal 2008 totaled $5.3 million, or $0.16 per diluted share, compared to net income of approximately $1.6 million, or $0.05 per diluted share, for the first quarter of fiscal 2007.

“Pike’s performance continues to benefit from our efforts over the past several quarters to improve our operations, as evidenced by our year-over-year gross profit margin improvement,” stated Chairman and CEO J. Eric Pike. “While our revenues were lower than last year due to our efforts to exit certain low-margin accounts during the latter half of fiscal 2007, along with significantly lower storm activity during this first fiscal quarter, we continue to focus on delivering consistent core powerline performance while maintaining industry-leading profitability levels.”

Pike continued, “One of our primary objectives over the next several quarters is to increase productive employee levels and implement initiatives that enable us to attract new hires while also investing in our long term employees. We remain confident that Pike Electric is well positioned to capitalize on the positive industry dynamics, to continue delivering quality service to our customers, and to add value to our shareholders over the long term.”

Based on current customer contracts and business conditions, for its fiscal year 2008, the company continues to expect core powerline revenues to range from $550 million to $560 million. The company expects total gross profit margins to be in the range of 16-17 percent.

Pike Electric hosted a conference call Tuesday to discuss financial results for its fiscal first quarter. A replay can be accessed by dialing (888) 203-1112. The passcode is 4988589. The replay will be available until Nov. 13.

Based in Surry County, Pike Electric is one of the largest providers of outsourced electric distribution and transmission services in the United States. Its core activities consist of the maintenance, upgrade and extension of electric distribution and sub-500 kilovolt transmission powerlines for more than 150 electric utilities, cooperatives and municipalities. Pike Electric services a contiguous 19-state region that stretches from Pennsylvania in the north to Florida in the southeast and Texas in the southwest and is a recognized leader in storm restoration services.

John S. Clark Co. in Mount Airy will build a $10.6-million athletic and aquatics center for Brunswick Community College in Supply, N.C.

The contractor’s Wilmington office will supervise the project. Jerry Winegar is the project manager, Tom Beach the estimator and Sam Pace is the construction superintendent.

The complex was designed John Sawyer Architects and Clark Patterson Associates.

John S. Clark Company, LLC, established in 1958, provides fully integrated general construction and other related services in 24 states from its headquarters in Surry County and offices in Greensboro, Winston-Salem and Wilmington, N.C.

The company has experience in industrial, commercial, retail, health sciences, technology and church construction.

John S. Clark Co. is consistently ranked in Engineering News-Record’s “Top 200 General Construction Firms in the U.S.”and Business Journal’s “Top 5 General Construction Firms in North Carolina.”

Alicia and Gabriel Torres came from Mexico to Mount Airy, N.C., in 1986 with little money, but a lot of determination to work hard and earn a better life in the United States. Twenty-one years later, they’ve built a multi-million-dollar business, Eagle Carports Inc., that recently paid $700,000 for the 132,000-square-foot former apparel plant where both once worked. They expect to spent $300,000 to $500,000 to renovate the facility, add equipment and bring new jobs to Surry County.

Gabriel’s brother, Benny, has a similar story to tell. Also an immigrant, he built T-N-T Carports Inc. in Mount Airy. It, like Eagle Carports, has plants across the United States and employs dozens of workers including many Hispanic immigrants.

Winston-Salem Journal writer Sherry Youngquist tells how Alicia and Gabriel Torres achieved the American dream in her Nov. 3 article, “Growing business brings couple full circle.”

Mount Airy-based Granite Development LLC, a Surry County real-estate and commercial development company, has started building a shopping center in front of the Wal-Mart off Peters Creek Parkway in Winston-Salem, the Winston-Salem Journal reports.

“The shopping center will be named Parkway Village and will be anchored by SunCom, Quizno’s Subs and Burger King,” the newspaper states, adding, “Granite (Development) said there is available office space remaining with the project.”

You can see Granite Development’s prospectus for the project here.

Surry County has issued $11 million in building permits, Editor Andy Matthews reports in the Mount Airy News. The projects include several we’ve reported before, including the first phase ($1.4 million) of Hugh Chatham Memorial Hospital’s $48-million expansion and improvement project in Elkin.

“Elkin is actually undergoing a ‘mini-construction’ boom,” Matthews reports, “with the hospital expansion; an $18-million, 221,000-square-foot Super Wal-Mart; a $4.5-million, 100-room, 3-story Fairfield Inn & Suites hotel; and a new Walgreens drugstore.”

Other projects mentioned in The News’ report (plus some of our own notes) include:

A $925,089 medical office building that BGSS Investments LLC is constructing at 100 North Pointe Boulevard in Mount Airy. The principals in BGSS Investments are Bobby Harold, co-founder of H&W Trucking, and his children Gary Harold and Susan Harold Thomas.

A $385,560 addition being developed by Diversified Investment Properties (partners Todd Surratt and C. Richard Vaughn Jr.) at the Southeastern Sign Works site, 609 Junction St. in Mount Airy.

A $482,030 addition at the Golden Living Center (formerly Surry Community Nursing Center), a skilled-nursing facility at 542 Allred Mill Road in Mount Airy. The building permit for what will be the Penny Walker Rehabilitation Center was issued to Beverly Health and Rehabilitation Services which is, like Golden Living Centers, a subsidiary of Beverly Enterprises Inc.

A $225,000 permit to Linda and Scott Needham for renovation and remodeling at 215 E. Main St. in Pilot Mountain, a building once occupied by Pilot Hosiery Mills.

Leading the list of residential building permits are two homes in the State Road area north of Elkin near Cedarbrook Country Club. One is a $550,000 permit issued to Mark and Vickie Heiner, 219 Camp Creek Lane; the other a $360,000 permit issued to Samuel Jason Couch, 326 Camp Creek Lane.

For the third consecutive year – and for the sixth time in seven years – North Carolina ranks first in Site Selection magazine’s annual state business climate analysis.

Fifty percent of each state’s total score is based on the magazine’s survey of corporate real estate decision makers and 50 percent comes from data associated with actual project activity as tracked by Site Selection’s proprietary New Plant database. The survey respondents ranked Texas ahead of North Carolina and put Georgia third. However, North Carolina moved to the top of the overall list because it attracted more investment dollars and larger plants than Texas. (Click here for Site Selection’s feature article about North Carolina.)

The magazine’s annual report gives high weight to the decision makers’ opinions. The objective statistics may run counter to the opinion makers’ views. Ohio ranked near the top in new plants (No. 1), new plants in 2004-06 (No. 2), investment dollars (No. 3) and total size of facilities (No. 2), but the Buckeye State ranked 14th of on the executive survey and finished seventh on Site Magazine’s list of choice states.

The magazine this year asked survey respondent to rank site-selection criteria in order of importance. Here’s the result:

1. Existing work-force skills.
2. Ease of permitting and regulatory procedures.
3. The state and local tax scheme.
4. Land and building prices and supply.
5. Availability of incentives.
6. Transportation infrastructure.
7. State and local economic development strategies.
8. Flexibility of incentives programs.
9. Access to higher education resources.
10. Union activity.

“A state’s business climate will, in general terms, reflect its performance in these areas,” wrote Editor Mark Arend, who added, “It is clear that environmental concerns are emerging as a new priority for the corporate real estate profession, particularly on the industrial side. The extent to which states can work with private industry to ameliorate those concerns may one day soon be an important new business-climate criterion.”

Southern Community Bank and Trust has four new employees.

Maria Sierra is a new teller in Mount Airy where Southern Community has two offices: 2010 Community Drive (off Rockford Street) and downtown at 255 E. Independence Boulevard.

Sam Luster joined the northern region commercial banking group in Yadkinville as a commercial banker; Christen Woodard is a teller in the Stratford Road office; and Steve Knott is a mortgage-loan originator in the southern region mortgage department.

Southern Community Bank and Trust also has Surry County offices in Elkin, Dobson and Pilot Mountain.