One Economy – One Future

A Report of the Franklin-Southampton Alliance

October 2004

Prepared by MDC Inc. Chapel Hill, NC

Alliance Members E. Warren Beale, Jr. Teresa B. Beale* Felicia W. Blow Douglas W. Boyce (chair, Education & Workforce Committee) B. Scott Carter Peter E. Clark Ernest Claud, Jr. James P. Councill III Carolyn W. Crowder* Matthew W. Crowder Harriet Bain Duck (chair, Economy & Jobs Committee) Damian P. Dwyer (chair, Heritage & Environment Committee) Carl J. Faison Alline B. Farmer Robert M. Felts, Jr. Clarke E. Fox

Jane Riddick-Fries Deborah A. Goodwyn Alvin E. Harris, M.D. Brian K. Hedgepeth Michael W. Johnson* H. Massey Joyner Donna C. McCullough* J. Patrick Newman William A. Peak E. Kent Pope Lynne H. Rabil Sol W. Rawls, Jr.* David P. Setchel Janice H. Tawney Rowland L. Taylor* C. Harrell Turner Charles E. Turner Teri B Zurfluh * executive committee members

Contents Page I. Introduction 1 II. Current Situation: Analysis of Strengths and Challenges 4

• Economy and Jobs 4 • Education and Workforce 6 • Heritage and Environment 9

III. Strategies for Success in a Changing Economy 12

• Civic Leadership 12 • Economic Development 13 • Education and Workforce 18 • Heritage and Environment 23

Appendix A: Supporting Data 25 Appendix B: Models for Integrated City-County Economic Development 33 Appendix C: Proposed Timeline for Implementation 39

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I. Introduction

The Franklin-Southampton Alliance was formed in 2003 to set a vision for the economic future of our region. In many ways, the Alliance is unprecedented. We are a group of citizens from the City of Franklin and Southampton County, representing many segments of the community and many sectors of the economy. We are united in a desire to work together to lay the foundation for sustainable well-being in the region. While recent challenges – notably the floods of 1999 and the weakening of our historic economic base – provided the initial impulse for our efforts, our work has not been reactive but forward-looking. Taking stock of our assets and our weaknesses, we have been guided by this question: "What steps must this community take to ensure that we have a vigorous economic base; ample opportunities for all to work, earn, and build assets; a culture that promotes high educational achievement for all its citizens; and the wise stewardship of our natural and cultural amenities?" In short, how do we become a community that works well for everyone, both today and long into the future? Few communities ever take the time to ask and answer such questions. Fewer still ever stretch themselves to turn their answers into action. The Franklin-Southampton Alliance is about asking questions, seeking answers, and taking action. Working together over the course of a year, we have developed recommendations for creating a vibrant, sustainable economy. Our analysis and our action steps are grounded in MDC's "Cycle of Development." (See Figure 1.) This model for community economic development asserts a set of basic principles of development, to which the Franklin-Southampton Alliance subscribes:

• First, good jobs are both the engine and the end result of successful community and economic development. Good jobs – jobs that pay family-supporting wages and provide benefits – allow people the opportunity to earn income and build assets. Individual and community income and assets are fundamental ingredients of sustainable community prosperity.

• Second, the Cycle of Development is sustained when people and communities reinvest their income and assets wisely. Investments in education, health, the arts, and in the development of new and expanding enterprises help communities lay the foundation for future well-being.

• Third, when these wise investments in civic and economic capacity bear fruit, they produce smarter, healthier people, better community amenities, and an overall higher quality of life. These assets in turn make the community more attractive for additional development. And so the Cycle of Development is sustained.

The ultimate goal of the Franklin-Southampton Alliance is a community where the Cycle of Development flourishes forever and for all.

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Figure 1: Cycle Of Development

© Copyright 2002 MDC, Inc.

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The Work of the Alliance We began our work by examining the history of development in Franklin and Southampton County and by analyzing data about our current state of economic and community well-being. Our analysis revealed significant community assets. It also underscored strong external threats to the prosperity our community has traditionally enjoyed. Our conclusions:

• Our community cannot thrive if we maintain the status quo. • We must take deliberate action to create more high-wage jobs and secure our

long-term economic well-being. • We must make high educational attainment a reality for every young person in the

community and ensure that all adult workers have the skills they need to compete in the economy.

• We must preserve our environmental assets and small town/rural climate before unchecked sprawl forever deprives us this defining aspect of our character. Our heritage is also an important economic resource that should be cultivated.

• We must recognize that we are in a globally competitive environment when it comes to economic development. Franklin and Southampton County will be far more effective competing as a region rather than as separate jurisdictions, underfinanced relative to our counterparts elsewhere.

These are simple words, but making them reality will require deep commitment, hard work, and collaborative effort from the community's leaders, public and private. We invite you, our neighbors and fellow citizens, to help us make our vision a reality. Our Vision for the Future In ten years, the Franklin-Southampton area will be known for its outstanding quality of life, excellent schools, and prosperous economy.

• The community will enjoy a high level of civic involvement, and city and county institutions will work together harmoniously for the betterment of all.

• The community will value and preserve its heritage and natural environment, while tapping natural and cultural resources as assets for economic development.

• The economic base will be diverse and aligned with 21st century opportunities, providing jobs that offer family-sustaining wages and employee benefits. Traditional sectors such as forestry, agriculture, and manufacturing will thrive alongside services, arts-related enterprises, and other businesses.

• The workforce, K-12 schools, and community college will be aligned with the new economy.

• Excellent public schools will prepare all students for postsecondary education, and all adults will have access to lifelong learning.

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II. Current Situation: Analysis of Strengths and Challenges Economy and Jobs: Major Findings (See supporting data in Appendix A, Figures A1-A9.) The economic base of Franklin and Southampton County is shifting.

• We are a manufacturing-dependent economy with a high concentration of jobs in low-growth manufacturing.

• The competitive landscape is changing, and the historic engines of our economy – traditional manufacturing and agriculture – are unlikely to be significant sources of new jobs or wealth in the future.

• Compared to other communities, our economy is also highly dependent on government employment, a sector which can provide stability in times of economic downturn but is not likely to generate much job growth.

• A large under-skilled workforce will make it hard to generate and support high-wage work in the short term.

In this time of transition, the local economy depends heavily on the International Paper plant.

• The local International Paper plant is highly productive. However, the plant is expected to continue reducing managerial employment over time. Production employment will remain stable at best or decline gradually.

• Strategic decisions about the plant are now made in Memphis. • Other corporate management rotates through the community, with little long-term

tenure that would develop commitment to Franklin and Southampton County. • The community lacks a "relationship manager" to tend to the needs of

International Paper and other major employers. With separate economic development infrastructure for city and county, no person or institution is in charge developing community efforts to help our major employers remain healthy and competitive.

Growth in the services sector can produce high- and low-wage jobs.

• The region has potential for growth in the retail and service economy. These jobs need not all be low-skill, low-pay jobs.

• The hospital (as well as other health care employers) is a promising source of new high-wage jobs as the health care field grows in economic importance.1

• The local workforce needs both "soft" and "hard" skills to capture high-value, high-wage service jobs.

Agricultural and natural resources are struggling to adapt to a new role.

• Agricultural and natural resource-based enterprises continue to generate income, but they produce less and less high-wage employment.

1 The education sector is also a stable source of good-paying jobs.

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• Landowners lack alternative uses for land and tend to monetize the value of their land assets through sales to developers.

• Many people are resistant to change; it is hard for many to let go of a historical identity rooted in agriculture.

• While only 5 percent of Southampton County's workforce is employed in farming, an estimated 45 percent of the county's businesses are tied to the agricultural economy. Agriculture remains an important part of our economic base.

• Peanut farming – a historic strength of the economy – is under stress as price supports weaken.

The cycle of development is constrained by an emerging low-wage economy.

• Throughout the U.S., the economy is generating an abundance of low-wage jobs. • A family-supporting wage in our community is between $8 and $13 an hour. • Manufacturing meets this goal, as do some new industries (for instance, Money

Mailer), but many service and retail jobs do not. • Some in the community do not view advancing their education as a personal or

family priority. • A wide gap in income, assets, and skills separates the top and bottom of the

economic ladder; the hard-to-employ lack skills and support. • The community needs more affordable, high-quality child care. We also need

public transportation options. Entrepreneurship opportunities are going unrealized.

• The incubator will be vital to growing local business. However, there is currently much community misunderstanding about the incubator.

• With the incubator in place, the community has an opportunity to build toward a full-fledged entrepreneurship support system. This system would include entrepreneurship education for youth and adults, venture financing, market development, and promotion.

• Financing business start-ups and expansions is a real challenge. New businesses would benefit from greater access to potential investors.

• Currently, agencies such as the Small Business Development Center of Hampton Roads offer counseling for small businesses in our community. However, we have no locally based business assistance center that offers readily available services five days a week.

Franklin and Southampton County are pursuing separate economic development paths.

• Many perceive that the city and county do not have shared economic interests and that they would not share equally in the fruits of collaborative efforts.

• The bifurcated city-county economic development efforts may hamper our competitiveness vis-à-vis other communities in attracting new industry. Also, separate city and county economic development efforts result in duplication of research and marketing costs.

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• A Joint City-County Economic Development Commission was created in 1987 but no longer functions.

Education and Workforce: Major Findings In today's economy, a community's competitiveness depends foremost on its human capital – the education, skills, creativity, and entrepreneurial abilities of its people. Successful communities ensure that all young people graduate from high school prepared for further education and work. They help all adults stay fit for work in an ever-changing and technologically demanding labor market. And they help adults with low literacy and other barriers to employment to gain the skills they need to participate in the economic mainstream. Strong public schools are an important part of the human capital equation and an essential part of the fabric for a strong economy and healthy civic life. Good schools don't just produce the next generation of educated citizens; they also act as a magnet to attract residents and businesses who value education and civic participation. How well does our community measure up to those requirements for prosperity? Too many children enter school poorly prepared to learn. Educators increasingly recognize the importance of the early childhood years in laying the foundation for success in school.

• In 2002-03, 27 percent of children entering kindergarten in Franklin needed intervention in language skills, along with 22 percent in Southampton County. Both were above the state rate of 20 percent.2

Children whose parents have low education levels and those who live in poverty are at high risk of not getting the preschool education they need. Both of these risk factors are prevalent in Franklin and Southampton County.

• More than one-third of our adults lack a high school education.3 • In 2000, the child poverty rate in Franklin was 35 percent, while Southampton

County's rate was 20.5 percent. For African American children, poverty rates were as high as 51 percent in Franklin and 34 percent in Southampton County, or 41.5 percent across the entire community. (See Appendix A, Figure A10.)

Our community has several strong preschool programs, operated by Head Start, the Children's Center, STOP, Southampton Academy, and the Franklin and Southampton public schools.

• The community is aware of the importance of early childhood education, and some local programs do a good job of involving and educating parents.

2 No Time to Waste: Indicators of School Readiness 2004 Data Book. 3 Data (from 2000 U.S. Census) refer to all adults over 25 years old, including mature and elderly adults.

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• However, existing programs are unable to provide high quality preschool education to all the families who need it.

• Many parents, especially single mothers with low education levels, need more support to create home environments that nurture learning for their young children.

• The Franklin Redevelopment and Housing Authority recently received funding to create a new Learning Center for adults with an adjacent playroom for children. The Franklin School Division will help provide parenting education at the center.

Both Franklin and Southampton schools divisions are close to attaining full state accreditation. Strong community support and strong parental involvement are essential ingredients for excellent public schools. Compared to many other communities in Virginia, our schools face certain challenges because of our large low-income population.

• Sixty-three percent of Franklin students qualify for free or reduced price lunch, along with 41 percent in the Southampton schools. The statewide rate is 33 percent.

• Schools with high proportions of low-income children need extra resources and outstanding teachers to overcome the disadvantages facing students from low-income homes and communities, but such schools typically have fewer resources and less experienced teachers than more advantaged school districts.

• The experience of school districts around the country shows that when a district has predominantly low-income or minority enrollment, it often becomes more difficult to retain middle class or white families. As fewer middle class families send their children to the public schools, it becomes more difficult to sustain strong community support for the schools.

• Data from the 2000 Census shows that 27.5 percent of all white children (ages preschool through grade 12) in the city and county attended private schools in that year, including 33 percent of all white children in Franklin.4

• Because many of Franklin's white children attend private schools, the city's public schools have disproportionately high African American enrollment. In Fall 2003, 76 percent of the children in the Franklin schools were African American, while only 63 percent of the city's population under age 18 was African American. The Southampton schools enroll equal numbers of blacks and whites, generally reflecting the racial makeup of the county's child population, 53 percent white and 45 percent black.5

4 Annie E. Casey Foundation's KidsCount online, based on U.S. Census data. 5 Population data from KidsCount online, based on U.S. Census. Fall 2003 enrollment data from Virginia Department of Education.

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By several measures, the Franklin and Southampton County schools are overcoming these challenges.

• As of Fall 2004, five of Southampton's schools are fully accredited, and the sixth is very close to full accreditation. (Accreditation is based on Virginia's Standards of Learning, or SOL scores.)

• Franklin's high school and middle school are fully accredited, and its elementary school is very close.

Most students graduate from Franklin and Southampton High Schools with solid preparation for further education and training.

• However, some youth drop out or graduate unable to take the next step. • We must catch the students who currently fall through the cracks, while

maintaining outstanding academic and technical programs for all high school students.

Both Franklin and Southampton High Schools offer an array of career and technical education options, as well as Advanced Placement and dual enrollment courses. (The latter, offered through Paul D. Camp Community College, enable high school students to earn college credit.)

• At Franklin High School, nearly half the graduates earn advanced diplomas. • At Southampton High School, in a typical year as many as 83 percent of

graduates plan to attend college, and another 5 percent enlist in the military. • However, many students, parents, and even some educators undervalue technical

education. Students need more exposure to the career opportunities available with a two-year technical degree.

Our community has several youth programs that promote educational achievement, and we have many families who are involved with the schools and teach their children to value education.

• However, we also have many parents who are unable to assist their children due to their own lack of education or demanding work schedules.

• Home or neighborhood environments marred by crime and drug abuse, especially in Franklin, negatively affect some young people's school life.

• Too often, at-risk students cannot get the extra help they need, either in school or in the community, because school staffing ratios are not optimal and/or funding for community programs is inadequate.

• The community needs more efforts to increase parental involvement with the schools and raise achievement for at-risk students.

As small school districts with limited resources, Franklin and Southampton County benefit from some shared programs that serve students with special needs and special interests.

• They participate in regional partnerships for nursing education (Southampton Memorial Hospital's LPN program), special education (Southeastern Cooperative Educational Program), arts education (Governor's School for the Arts), and other services.

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• Additional opportunities for collaboration could further benefit students in Franklin and Southampton County.

The Alliance did not reach a conclusion about the merits or consequences of having two small, separate school divisions serving the same community. This will remain an enduring issue until it is analyzed more fully. Many adults are not prepared to compete in a high-skill, rapidly changing job market. In an era when jobs that pay family-supporting wages require education beyond high school, one-third of the adults in our community lack even a high school diploma. (See Appendix A, Figure A11.)

• Some low-literacy adults who were able to earn a living in the old manufacturing-agricultural economy now need new skills.

• Some adults, with multiple barriers to employment, need more intensive assistance.

• To keep existing businesses strong and make the community competitive for new business development, we need workers who are smart, adaptable, reliable, and ready to learn new skills and new technologies.

The community has many institutional assets for workforce education and training, but there are also some gaps in available training options.

• Several organizations offer ABE and GED courses, including schools, faith-based organizations, social service departments, and others.

• Several local employers provide tuition reimbursement for employees who take courses, and several key industry certifications can be completed locally.

• Counselors and faculty at Paul D. Camp Community College provide assessment and referral to training programs at the college and elsewhere, and the college offers a wide array of degree and certificate programs as well as short-term training programs.

• JobZone also helps people find opportunities for training and work. • We need more short-term, flexible education and training options that give adults

a credential and/or a leg up in the job market. • We also need new options for young adults who have dropped out of school and

are floundering, unable to enter the job market. Heritage and Environment: Major Findings Land use planning has not been forward-looking. Our community is not preparing for the development pressures that we will increasingly face.

• We need citizen input to strike the right balance between development and preservation of our rural character.

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• Citizens are not sufficiently involved in land use planning. Some citizens are concerned but feel powerless to affect decision-making. Others are satisfied with the status quo or unaware of the need for farsighted planning.

• There is little monetary incentive for "good development" and little disincentive for "bad development."

• The level of citizen awareness and concern regarding land use planning is increasing. Civic groups that are involved in promoting aesthetics represent a potential asset for land use planning and zoning.

Local historic and environmental assets are not developed or promoted to their full potential.

• We have an abundance of untapped cultural and environmental resources. • Some elements of cultural infrastructure exist (e.g., Agriculture and Forestry

Museum, Rawls Art Museum), and others are planned. • There are citizen groups promoting cultural and environmental interests, and there

is potential local funding for development of cultural and environmental projects. • However, historic preservation efforts are segmented and not economically

oriented. Currently, no economic benefits are generated from local history regarding the Civil War or Nat Turner's Rebellion.

• In developing historic assets, we face competition from bigger attractions in nearby communities – Williamsburg, Jamestown, Richmond, and others.

Thriving communities are characterized by a rich array of unique, locally owned and operated small businesses. Such businesses are underdeveloped in our community.

• Many Franklin and Southampton residents travel out of the area to shop because local businesses do not offer adequate hours, parking, or variety of inventory.

• However, some citizens consciously choose to patronize locally owned and operated businesses.

• Potential to develop a more lively array of small businesses, especially recreational venues and gathering spots, is limited by the nature of our business owners and local consumers. We have few gathering spots in part because we lack a consumer base to patronize such businesses.

• In Franklin, aesthetic and infrastructure improvements have made the downtown area more attractive for shopping and gatherings.

• We have organizations that can foster new business development, including the Chamber of Commerce, incubator, and Workforce Development Center.

While our community has much attractive housing stock, we also have housing problems that must be addressed.

• Nearly half the housing units in Franklin are rental units, including much low-rent housing. While affordable housing is an important community feature, the high concentration of low-cost housing – some of it poorly maintained – presents challenges for the community. A significant number of substandard housing units exist in the county; however, that number is decreasing. (See Appendix A, Figure A12.)

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• Some programs are in place to address housing concerns, including Community Development Block Grants and Habitat for Humanity. However, public and private programs are insufficient to propel many low-income residents into better rental housing or home ownership.

• The city has a Housing and Redevelopment Authority; the county does not. However, government agencies in both the city and county are addressing housing issues.

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III. Strategies for Success in a Changing Economy The Franklin-Southampton Alliance recommends several goals and strategies to propel the community toward greater prosperity. These recommendations are based on our analysis of the current situation and on the following principles, which we believe are essential to community prosperity and health.

• Regional collaboration will take us farther than working separately. Whenever possible, we should combine forces across city and county, and with neighboring jurisdictions, to maximize our resources and strength. At the same time, we must not give up our local identity or community pride.

• Our people are our greatest asset. We must ensure that all our people have the education and skills they need to thrive in today's economy and to sustain a competitive economy in the future.

• Successful communities have broad-based, inclusive leadership. The Franklin-Southampton Alliance has engaged many citizens who have not held formal leadership positions in the community. We should continue to encourage a wide range of citizens to be involved in civic affairs.

Our goals are stated in terms of where we would like the community to be in 2010. They address three major areas: jobs/economic development; people/education and workforce; and environment and heritage. To achieve these goals, we are recommending many strategies which would be implemented over a period of several years. Appendix C provides a timeline for initiating the strategies. Besides the strategies directly related to jobs, people, and environment/heritage, an overarching strategy will ensure implementation of our recommendations: creation of a new organization, "Franklin-Southampton Futures." Civic Leadership: Create a community organization to provide leadership for change Overarching strategy: To provide ongoing leadership for the implementation of the strategies presented in this report, we will create "Franklin-Southampton Futures," a new nonprofit 501(c)(3) organization whose membership draws from the Alliance and other citizens. Franklin-Southampton Futures will oversee and monitor the implementation of the recommendations presented in this report. Over time, it will address additional issues that arise in the community. The Chamber of Commerce will provide administrative support for the organization. If needed, Franklin-Southampton Futures will seek modest funding from the city, county, and local foundations.

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Economic Development: Harness our strengths to develop a vibrant, higher-wage economy Goal 1: Economic development will be led by highly effective, forward-looking structures which are grounded in city-county and regional cooperation. Strategy 1A. Create an organization that is structured, funded, and staffed to lead highly effective economic development efforts for the entire community. To increase our competitive stature in economic development, we urge the community to integrate and consolidate efforts to attract, grow, and incubate businesses, expand tourism, and create a community climate where enterprise can flourish and higher-wage work is a reality for all. Research by MDC and the Franklin-Southampton Alliance convinces us that a successful regional economic development apparatus needs to do the following:

• Service the full continuum of business development – from entrepreneurship to business retention, expansion, and recruitment.

• Coordinate or provide key support services, such as marketing and research. • Address the strategic economic interests of the region, while also attending to the

needs of the jurisdictions that make up the region. • Emphasize accountability and return on investment. • Draw on the strengths and resources of the private and the public sector. • Invest in the highest quality staff available to compete with well-resourced

jurisdictions. There are several ways city and county economic development efforts might be integrated and consolidated to the mutual benefit of both political jurisdictions. One model is a public-private partnership responsible for integrating all economic development efforts and securing "breakthrough" opportunities for the whole community. Another model is a joint city-county economic development authority. Note: We envision that long term, this new organization would coordinate implementation of many of the economic development strategies recommended below (strategies 1B through 3D). However, in the short term many of these strategies could be initiated by an existing local economic development organization – the Chamber of Commerce, the city, or the county.

Implementation plan: Creation of an integrated city-county economic development organization requires endorsement from the two local governments. The Chamber of Commerce is also a likely partner. We will contract with Mac Holladay of Market Street Services to provide advice on the structure and strategic priorities of a joint city-county organization. We seek city and county approval for the concept of an integrated economic development organization in November 2004. We will seek a decision on the organization's structure and city and county funding commitments in Spring 2005.

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Funding: City and county governments currently devote approximately $540,000/year to economic development. A portion of the Chamber's budget also supports economic development work. The Camp Foundations and Franklin-Southampton Charities are ready to commit another $400,000/year for five years to a public-private city-county partnership for economic development. Combined, these sources could provide an annual investment of nearly $1 million for a joint economic development effort. Resources/models: Mac Holladay/Market Street Services; Corinth (MS) Alliance; Martinsville-Henry Economic Development Corporation.

Strategy 1B. Evaluate the wisdom of joining the Hampton Roads Economic Development Alliance (HREDA) to deepen linkages to the engine of the Southeast Virginia metropolitan economy. Our community needs to monitor and understand how the Hampton Roads economy is evolving and be alert to opportunities to capitalize on these developments, particularly in the realm of entrepreneurial businesses that serve regional needs.

Implementation responsibility: City and county governments would decide whether to join. Mac Holladay/Market Street Services can provide advice on this question. Funding: Private funding will be required to support membership in HREDA.

Goal 2: The economic base will be strengthened and expanded to include a strong mix of business and industry types. Strategy 2A. Implement a "relationship management" program to identify needs and opportunities presented by major local employers, including International Paper, Hercules, Southampton Hospital, and Narricot Industries. Periodic conversations with managers and human resource directors would alert the community to opportunities to develop training programs (including internships or apprenticeships), needs for public services, and other initiatives to keep these local employers strong and competitive.

Implementation responsibility: In the short term, this effort would be led by the Chamber, Paul D. Camp Community College, and existing economic development organizations. In the long term, it would be led by the new, integrated economic development organization. Funding: Same. Resources/models: Wilson (NC) Economic Development Council's Industrial Management Council.

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Strategy 2B. Aggressively recruit and nurture businesses that will strengthen the Cycle of Development for the community. Southampton County and Franklin should focus on adding businesses that meet the following criteria: the promise of high wages, the ability to employ displaced manufacturing and agricultural workers, and connection to sectors of the economy that are growing faster than average. Warehousing and distribution is an example of a sector that meets these criteria. Our accessibility to the Norfolk port and Interstate 95, along with the availability of affordable land, makes us a competitive location for distribution and warehousing facilities if we can create the infrastructure needed to support these enterprises. Mac Holladay/Market Street Services can provide data on sectors that meet our criteria and for which we can be a competitive location.

Implementation responsibility: New integrated economic development organization, perhaps in collaboration with Hampton Roads Economic Development Alliance. Funding: Same.

Goal 3: The community will support a vibrant entrepreneurial economy. New, locally owned businesses will capitalize on our natural resources, cultural heritage, and other local assets. Research on entrepreneurship distinguishes several types of entrepreneurs, who have differing goals and identities.6 We see potential to develop and attract four types of entrepreneurs in our community:

• "Aspiring entrepreneurs" include youth who find the entrepreneurial ideal attractive. We should provide educational options to young entrepreneurs and take measures to support and retain them in the community as economic and civic assets.

• "Survival entrepreneurs" include people who develop home-based businesses and informal enterprises to supplement their inadequate incomes. Recent research by the Aspen Institute showed that 53 percent of low-income entrepreneurs had large enough gains in household income to move out of poverty, thanks largely to their businesses. Support for survival entrepreneurs can be a useful strategy for increasing the economic independence of low-income, low-wealth citizens.

• "Lifestyle entrepreneurs." Many people seeking the alternative lifestyle available in rural communities and small towns become entrepreneurs by necessity as they seek to support themselves. The more small towns and rural places can consciously attract and support these new residents, the more they can add to their small business base. Lifestyle entrepreneurs are good candidates to capitalize on the rural and agricultural assets of a community like ours.

• "Growth entrepreneurs," who are driven by the desire to start a business to create jobs and wealth, can be prime contributors to a small town, rural economy. The

6 Corporation For Enterprise Development, Mapping Rural Entrepreneurship, 2004.

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presence of an incubator and a local climate that actively supports small businesses can increase our community's attractiveness to growth entrepreneurs.

A supportive climate for entrepreneurship and small business development includes entrepreneurship education, access to capital, and technical assistance. A business incubator can be a significant bonus. In addition to urging the community to develop and maximize those general elements of support, we have identified types of businesses that we believe have particular potential locally and whose development should be actively encouraged. Strategy 3A. Make the incubator fully functional. Benchmark its programs against the best in the country for communities of similar size. Ensure that tenant businesses have access to technical assistance and financing. Consider using the incubator as a one-stop center that provides business assistance to entrepreneurs throughout the community, not just its own tenants.

Implementation responsibility: The city and incubator board. Pursue collaborative arrangements with the Small Business Development Center of Hampton Roads as well as other potential partners including the Center for Innovative Technology (CIT), Virginia Electronic Commerce Technology Center (VECTEC), and Center for Technical Data Information (CTDI). Funding: Consider whether current funding is adequate to provide needed services; if not, pursue additional funding. Resources/models: Triangle Incubator South (Dunn, NC); National Business Incubation Association (www.nbia.org).

Strategy 3B. Ensure that new and expanding small businesses throughout the community have access to capital and technical assistance. Counseling and skill-building workshops to help entrepreneurs with business planning, market assessment, identifying sources of financing, management, and other issues can help nurture successful businesses. Our community should assess whether there are gaps in availability of technical assistance and/or financing for locally owned, new or expanding small businesses and if so, how can they best be filled.

Implementation responsibility: The new integrated economic development organization should explore needs for business capital and technical assistance, perhaps tapping expertise at UVA or Old Dominion Business School. Focus group interviews of local entrepreneurs and bankers could be useful in identifying gaps in technical assistance and business financing. Funding: Local banks; tap into federal business investment programs, including USDA's Rural Development relending program.

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Resources/models: Triangle Incubator South (Dunn, NC) has operated a USDA-funded relending program for over ten years. It also offers comprehensive one-on-one counseling and workshops for entrepreneurs on business planning, marketing, etc.

Strategy 3C. Develop entrepreneurship education programs for youth and adults. To build a sustainable, entrepreneurial economy, the community should be actively training people to become job creators, not just job fillers. Programs for high school students and adults help individuals assess their personal potential to become entrepreneurs as well as assessing the feasibility of their business ideas. Programs teach basic business skills (marketing, accounting, management, business planning) and often link students to resources in the community that can help with financing and mentoring.

Implementation responsibility: Paul D. Camp Community College and local high schools, with support from new integrated economic development organization and Chamber of Commerce. Funding: Would require seed money from local foundations, banks, or other sources, possibly matched by the Kauffman Foundation (a national foundation devoted to promoting entrepreneurship). Once established, programs would be integrated into college and high school offerings and self-supporting. Resources/models: REAL Enterprises (www.realenterprises.org); Kauffman Foundation (www.kauffman.org); National Association for Community College Entrepreneurship (www.nacce.com); Consortium for Entrepreneurship Education (www.entre-ed.org).

Strategy 3D. Support the development of small, locally owned businesses in promising sectors that are compatible with the character of the community. For example:

• Promote specialty retail businesses with a "local flavor." Identify current businesses and pursue cooperative marketing opportunities. Help local businesses become technologically savvy, including using on-line marketing. Help them develop customer-friendly practices.

• Identify retail, hospitality, and entertainment gaps and develop or recruit businesses to fill these gaps. Survey local residents to see what they are going out of town to buy. Upgrade the base of shopping, dining, and entertainment businesses to capture a larger percentage of spending by residents of Southampton County, Franklin, and surrounding areas as well as tourists. Position the community as a convenient retail destination for the southwestern fringes of the Hampton Roads metro area as well as a small-town shopping destination offering distinctive merchandise for tourists.

• Capitalize on natural and cultural resources as opportunities for tourism. Develop a network of local cultural and environmental attractions that can generate business opportunities and attract tourists. Inventory cultural and environmental resources and use both community voices and outside experts to frame stories about local history. Explore the potential to create a driving tour, trail, and/or

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museum based on the Nat Turner story. Develop environmental tourism experiences such as boating on rivers and bike trails along pipelines, augmented by services for tourists such as bed and breakfast inns, boat rental, and restaurants.

• Pursue natural resource and agricultural-based opportunities for entrepreneurship. Work with Virginia Tech, the Virginia Department of Forestry/Timber Resources, and Virginia Department of Agriculture to audit the county's natural assets and develop a strategic plan for their wise and productive use, including opportunities for value-added agriculture.

Implementation responsibility: New integrated economic development organization. Funding: U.S. Department of Agriculture; Kellogg Foundation.

Resources/models: Mikki Sager of the Conservation Fund's Resourceful Communities Program, based in North Carolina; Handmade in America (www.handmadeinamerica.org); Virginia Board of Forestry; Nature Conservancy.

Education and Workforce: Prepare adults and youth to succeed in a competitive 21st century economy Goal 4: More adults will be prepared for a high-skill, rapidly changing job market. Strategy 4A. Offer "Career Readiness Certificates" to help unemployed and underemployed adults get jobs. This certificate, currently being tested on a pilot basis in Virginia and other states, supplements a high school diploma, GED, or college degree. It uses the nationally recognized Work Keys assessment system to measure and certify a person's skills in three areas that are highly valued by employers: reading for information, applied math, and locating information. People receive Bronze, Silver, or Gold certification, based on their test scores. The credential will help people – especially those with no formal credentials beyond high school – get jobs and advance in the labor market, and it will help employers sort through job applicants. It will also guide the college in developing short courses to prepare people for the tests. Career Readiness Certificates are also available to high school students, and Virginia provides funds to school divisions to implement the testing program in high schools.

Implementation responsibility: Paul D. Camp Community College. Funding: The college has applied for a seed grant from the Camp Foundation, which would enable it to integrate Career Readiness Certificates into all its occupational and technical programs. Once the system is in place, costs will be covered by the college's regular budget.

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Strategy 4B. Career pathway programs. Leading community colleges around the country have developed career pathway programs that help disadvantaged adults get an entry-level job and then advance in the labor market. These programs identify sectors of the regional economy that offer high-wage, high-demand jobs. (Sectors often include health care and information technology.) They offer basic skills training (for adults with low literacy and little work experience), entry-level training, and upgrading education/training for those working in the field. Most successful programs are developed and operated collaboratively by a community college, employers, and community-based organizations. An example is the information technology career ladder system in San Francisco, which provides six-week literacy and computer training, followed by entry-level training in web design, mouse certification, or A+ certification (ranging from six to twelve weeks). Once graduates are working, they can return to the college for more advanced training in web design, network administration, or other specialties.

Implementation responsibility: Paul D. Camp Community College, perhaps in collaboration with the Workforce Investment Board, Public Housing Authority, and/or Department of Social Services. Funding: This strategy is essentially an expansion of existing efforts at the college. Additional funding could be sought from the Workforce Investment Board, Department of Social Services, or Public Housing Authority. Resources/models: Workforce Strategy Center (www.workforcestrategy.org)

Strategy 4C. Develop a Middle College to help high school dropouts advance their educational and career prospects. The Virginia Community College System is testing middle colleges as a promising way to advance educational and career opportunities for young high school dropouts. Virginia's middle colleges enroll dropouts between ages 18 and 24 in a program that teaches workforce skills through project-based learning, offers remedial courses, enables students to work toward a college degree or certificate, and provides a Career Readiness Certificate (described above).

Implementation responsibility: Paul D. Camp Community College, with support from public school divisions. Funding: The Virginia Community College System provides operating funds for a small number of middle colleges, awarded through a competitive grant process. The college can apply for funding in June 2005, to launch the program in Fall 2005. Resources/models: Virginia's first two pilot middle colleges were established in 2003 at J. Sargeant Reynolds and Southside Virginia Community Colleges. Additional programs were funded in 2004 at Danville, Germanna, and New River Community Colleges. The Gates Foundation and Jobs for the Future (www.jff.org) are national resources for middle college models.

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Strategy 4D. Develop new training programs targeted to high-wage, high-growth occupations in the region. Paul D. Camp Community College regularly meets with employers to evaluate the need for new programs and recently started a nursing program in response to local demand. In collaboration with the new integrated economic development organization, the college could be even more proactive in identifying opportunities for education and training in new fields.

Implementation responsibility: New integrated economic development organization, in partnership with Paul D. Camp Community College. Funding: Same.

Strategy 4E. Implement a biennial workforce readiness/workforce needs survey. The Hampton Roads Chamber of Commerce and Opportunity Inc. (the regional Workforce Investment Board) periodically conduct an employer survey for the Hampton Roads region. The most recent survey, published in April 2003, provides employers' insights about needs for skills and training in the region. However, it does not break out data by county or city, nor does it assess workforce readiness. Franklin and Southampton would benefit from a survey that provided data on the workforce readiness of residents in our community, as well as data on the needs of local employers. This information would help us develop appropriate education and training programs to prepare our residents for job opportunities in Franklin, Southampton County, and the regional economy.

Implementation responsibility: New integrated economic development organization. Funding: Same. Resources/models: Tupelo (MS) Community Development Foundation (www.cdfms.org/cc_overview.cfm)

Goal 5: All children will enter school ready to learn. Strategy 5A. Develop family literacy programs. These programs provide preschool education for children along with literacy and parenting instruction for parents. Programs are operated by schools or community organizations. Some are targeted to families in public housing, and some include home visits. Outcomes include: parents improve their literacy skills and parenting skills; programs can also include job readiness training; parents read to their preschoolers and young children are introduced to reading; the home environment becomes more supportive of education.

Implementation responsibility: This effort could be led by the Franklin Redevelopment and Housing Authority, a social service agency, or churches.

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Funding: Federal or state funding may be available; some programs are funded through foundation grants. Resources/models: National Center for Family Literacy (www.famlit.org); National Even Start Association (www.evenstart.org); Virginia's Even Start coordinator (Dot Preston, VA Department of Education, 804-225-3997).

Strategy 5B. Enhance existing preschool programs. Some excellent preschool programs are in place in our community, but more children need to be served. We must expand existing programs and ensure they meet high standards of quality, such as the national Head Start standards.

Implementation responsibility: Local Head Start, public school divisions, and other preschool programs.

Goal 6: Franklin and Southampton schools will be fully accredited and recognized by the public as excellent, and all young people will be prepared for further education and rewarding work, including technical careers. Strategy 6A. Initiate an independent study of whether two separate school divisions are the most effective way to provide public education for our community. The community needs to take a hard, honest look at whether our public schools are organized appropriately for maximum educational success. This can best be done by a nonpartisan, unbiased study group comprised of citizens from the city and county, with professional support from a consultant, university, or other expert on K-12 school organization.

Implementation responsibility: The new Franklin-Southampton Futures organization would lead the community in a process of research and dialogue, engaging an outside organization for guidance and assistance. Funding: This effort would require funding from local foundations to engage a consultant.

Strategy 6B. Engage parents in their children's education. Family support is a key ingredient for successful students and successful schools. Rural communities and small cities have used several methods effectively to engage parents in supporting the public schools, improving public education, and supporting their children's learning. Approaches include:

• Creating Parent Information and Resource Centers where parents learn leadership skills, parenting skills, how to participate in parent-teacher conferences, how to help their children with homework, and other skills.

• Educating parents about academic standards, testing, and grade-level expectations through community meetings, PTAs, inserts in the local newspaper, churches, etc.

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• Training parents to be advocates for their children and advocates for strong schools.

Implementation responsibility: To implement these approaches in Franklin and Southampton County, a local organization would need to adopt this agenda, raise money, and hire staff. We could create a local chapter of Parents for the Public Schools (a national organization devoted to engaging parents to support public education), or an existing community organization could provide leadership. Funding: Would require grant funding. Resources/models: Parents for the Public Schools (www.parents4publicschools.com); Forward in the Fifth (www.fif.org ); Hattiesburg (MS) Area Public Education Foundation (http://www.publiceducation.org/i_org.asp?action=showorg&id=23); Public Education Network (www.publiceducation.org).

Strategy 6C. Provide more tutoring, mentoring, and enrichment for at-risk students. The public schools and after-school programs in the community (including Boys and Girls Club, YMCA Black Achievers, CHROME, and others) currently provide some of these services. However, much more could be done. One model is provided by Citizen Schools, an after-school and summer program for children ages 9-13 that operates out of public school buildings. Children participate in enrichment activities such as hands-on apprenticeships, homework time, "team time," and explorations in the community. Other models are provided by numerous youth mentoring programs around the country, which recruit volunteers to serve as mentors to youth.

Implementation responsibility: A local organization would need to pursue this agenda and raise money. Funding: The Citizen Schools program charges sliding scale tuition, with tuition credits provided by local agencies. It relies on adult volunteers as well as paid staff. There are many sources of funding for after-school programs. (See www.afterschool.gov.) Resources/models: Citizen Schools (www.citizenschools.org); National Mentoring Center (www.nwrel.org/mentoring/foundations.html); Volunteer Hampton Roads is a regional nonprofit resource center that recruits volunteers and could help a local organization to establish a volunteer tutoring/mentoring program in Franklin and Southampton County.

Strategy 6D. Reach out to low-income high school students and their families to help them prepare for and enroll and succeed in college. We recommend pursuing two promising models. First is the Bridge Partnership, in which community colleges work with high schools to identify 10th-graders who are at risk of not being prepared for

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college. Students are assessed and receive counseling, tutoring, and special classes to raise their aspirations and improve their academic skills. The program also informs and involves parents. Virginia is piloting this national program, and Paul D. Camp Community College is involved. The college currently is working with Suffolk City Schools and could expand the program to Franklin and Southampton High Schools. Educational Talent Search is a federally funded program operated by community colleges in collaboration with public school districts. It provides funding for counselors to work with low-income high school students and their families to help them prepare for college, apply, and obtain financial aid. Paul D. Camp Community College is interested in implementing this program in collaboration with local school divisions.

Implementation responsibility: Paul D. Camp Community College, in partnership with Franklin and Southampton School Divisions. Funding: The college currently has state funding for the Bridge Partnership. Educational Talent Search is funded by the U.S. Department of Education, and colleges can apply for the next round of grants in December 2005. Resources/models: Bridge Partnership (www.league.org/league/projects/bridge/index.html); Educational Talent Search (www.ed.gov/programs/triotalent/index.html).

Strategy 6E: Raise community awareness of the strengths of our public schools. The Franklin and Southampton schools already do much to communicate with parents and the community at large through mailings, events, and newspaper articles. We should consider whether there are additional efforts that might further strengthen support for the public schools.

Implementation responsibility: New Franklin-Southampton Futures organization. Heritage and Environment: Maintain an attractive environment with good housing and rural character Goal 7: Forward-looking, visionary land use planning will benefit the entire community. Strategy 7A. Create a city-county citizens' mobilization committee to promote citizen involvement in visionary land use planning. This committee's functions could include: publishing a community newsletter; arranging visits to model developments; presenting slide shows to community groups; encouraging the inclusion of planning concepts in school curricula; highlighting the costs of bad development; documenting successful efforts to make change; and administering a grant program for neighborhoods.

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Implementation responsibility: The Franklin-Southampton Alliance will recruit citizens from both the city and county to form this committee. Funding: The committee will require a limited amount of staff support from the Chamber of Commerce or Economic Development agency. Small grants from local foundations would allow committee members to visit model sites, arrange for speakers, and develop educational materials. Resources/models: The Conservation Fund, "Better Models for Development in Virginia" and rural heritage materials (www.conservationfund.org); Southern Rural Development Center, Southern Perspectives, Winter 2004 Issue, "Rural Development and Urban Sprawl" (www.srdc.msstate.edu).

Strategy 7B. Develop multi-faceted support for improving housing and increasing home ownership. Efforts would include conducting a housing inventory, educating the community about the value of home ownership, and creating incentives and financing assistance to improve the housing stock. We would:

• Pursue grants for redevelopment. • Provide home ownership training for first-time home buyers. • Create incentives for owners to fix up existing homes. • Develop new ordinances and enforce standards.

Implementation responsibility: Initially with local government housing officials and Habitat for Humanity. Funding: Community Development Block Grants (CDBG), state funding, or other local government sources. Resources/models: Habitat for Humanity (www.habitat.org); Virginia Department of Housing and Community Development (www.dhcd.vipnet.org).

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Appendix A: Supporting Data Employment Overall employment remained relatively stagnant in Franklin and Southampton County over the past twenty years. Jobs have increased in services, government, and retail trade, while manufacturing employment has gradually declined. (Note: manufacturing employment shown in Figure A1 does not include jobs at International Paper or other firms in Isle of Wight County that employ substantial numbers of Franklin and Southampton County residents.)

Figure A1 Employment change in major industry sectors, Franklin and Southampton County

Source: Bureau of Economic Analysis

0500

100015002000250030003500

1980

1984

1988

1992

1996

2000

Indu

stry

Em

ploy

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t

ServicesGovernmentRetail TradeManufacturing

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Our region has a high percentage of employment in manufacturing, compared to national averages. Employment in agriculture and government is also above average. We have a below-average percentage of jobs in retail trade and services, sectors with rapid national growth which represent unrealized local potential. (Note: Figure A2 includes jobs in Isle of Wight County as well as Franklin and Southampton County.)

Figure A2

Percent of workforce employed in major industry sectors, Franklin-Southampton-Isle of Wight region vs. the U.S., 2000

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Agriculture Manufacturing Retail Trade Services State andLocal

Government

RegionU.S.

Source: Bureau of Economic Analysis

The majority of the large employers in Franklin and Southampton County are government institutions. (The International Paper plant is not shown on this list because it is located in Isle of Wight County.)

Figure A3 Largest employers in Franklin City and Southampton County, 2003 Employer Number of Employees Southampton County Public Schools 500-999 Narricot Industries, Inc. 250-499 Southampton Correctional Center " Southampton Memorial Hospital " Wal-Mart Associates Inc. " Franklin City Public Schools " City of Franklin 100-249 Paul D. Camp Community College " Deerfield Correctional Center " County of Southampton " Hercules Incorporated "

Source: Virginia Employment Commission

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Unemployment in Franklin and Southampton County has closely tracked the state average from 1993 through 2002. (More recently the monthly unemployment rate in July 2004 was 4.1 percent in Franklin and Southampton County and 3.5 percent statewide.)

Figure A4 Unemployment rate in Franklin/Southampton and Virginia (annual average)

Source: Virginia Employment Commission

The unemployment rate varies significantly race. Black residents, particularly men, experience high levels of unemployment.

Figure A5 Unemployment rate for Franklin and Southampton County by race, 2000

Source: 2000 U.S. Census

The 2000 U.S. Census also found that a very high percentage of young African-Americans are unemployed. 57.5% of African-American males ages 16-19 were unemployed compared to 21% of white males.

3.1

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Franklin City andSouthamptonCountyVirginia

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Between 1990 and 2000, more residents of Franklin and Southampton County began working outside the City and County. Fewer work close to home than in the past. Still, the majority of our residents work within Franklin or Southampton County.

Figure A6 Commuting patterns for Franklin and Southampton County, 2000

010002000300040005000600070008000

1990 2000

Num

ber o

f Res

iden

ts

Work Inside theCity/County

Commute Outside theCity/County

Source: 2000 U.S. Census

Income Our community's personal income rose in comparison to the state during the 1980s, but we lost ground in the 1990s. Our per capita income remains below that of the Norfolk Metropolitan Statistical Area.

Figure A7: Per Capita Personal Income as a percent of Virginia

Source: Bureau of Economic Analysis

0%

20%

40%

60%

80%

100%

1971 1976 1981 1986 1991 1996 2001

Southampton& FranklinNorfolk MSA

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After making gains in the 1980s, Franklin and Southampton County are currently losing ground on earnings per job when compared the state and to the Norfolk Metropolitan Statistical Area.

Figure A8 Earnings per job as a percentage of state average

Source: Bureau of Economic Analysis The self-sufficiency standard for Franklin and Southampton County indicates that a single adult with an infant requires an hourly wage of at least $9 per hour. A household with two adults and two small children requires a combined annual salary of $33,000.

Figure A9 Self-Sufficiency Standard for Franklin and Southampton County, 2002 Monthly Costs Adult with

Infant 2 Adults, Infant &

Preschooler Housing $445 $445 Child Care 336 662 Food 257 496 Transportation 231 441 Health Care 142 193 Miscellaneous 141 224 Taxes 270 476 Earned Income Tax Credit (-) -120 0 Child Care Tax Credit (-) -50 -80 Child Tax Credit -50 -100 Self-Sufficiency Wage

- Hourly - Monthly - Annual

$9.10 $1,602 $19,224

$7.83 per adult

$2,757 $33,084

Source: Action Alliance for Virginia's Children and Youth

0%10%20%30%40%50%60%70%80%90%

100%

1971 1976 1981 1986 1991 1996 2001

Southampton &FranklinNorfolk MSA

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Education An extremely high percentage of children in Franklin and Southampton County live below the poverty line. Without enriching preschool experiences, many children from poverty homes are poorly prepared to enter kindergarten. And school-age children in high-poverty families often need extra support from their school and community to achieve at a high academic level. Figure A10: Children Under Age 18 in Poverty, 2000

35.0%

51.2%

20.5%

34.1%

12.3%

26.2%

0%

10%

20%

30%

40%

50%

60%

All children African American children

FranklinSouthampton CountyVirginia

Source: Kids Count County Census Data Online

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More than one-third of the adults in Southampton County and Franklin lack a high school diploma, and only 13 percent have a four-year college degree. Even compared to the rural South, our adults are undereducated. (Note: These figures include the approximately 1100 prison inmates in Southampton County, most of whom probably have low levels of education. Even if we assume all the inmates are high school dropouts and subtract them from the adult population, 30 percent of the remaining adults still lack a high school education.) Figure A11 Educational Attainment, Adults Age 25+, 2000 Percent with Less than High School or Bachelor's Degree

34.3%

22.0%

18.5%

13.2%15.0%

29.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Southampton & Franklin Rural South Virginia

<HSBA+

Source: U.S. Census (Southampton & Franklin; Virginia) Current Population Survey (Rural South)

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Housing Over 46% of the housing units in Franklin are rental properties. The high rental proportion creates maintenance challenges and indicates a lack of wealth based on home ownership. A smaller percent of residences in Southampton County are rentals, but a large number of older trailer homes present a risk of substandard housing. Figure A12 Home Ownership and Rental, 2000 Franklin Number Percent

Occupied housing units 3,384 100 Owner-occupied housing units 1,818 53.7 Renter-occupied housing units 1,566 46.3

Southampton County Number Percent

Occupied housing units 6,279 100 Owner-occupied housing units 4,663 74.3 Renter-occupied housing units 1,616 25.7

Source: 2000 U.S. Census

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Appendix B: Models for Integrated City-County Economic Development

In order to increase its competitive stature in the area of economic development, the Franklin-Southampton Alliance urges the community to integrate and consolidate its efforts to attract, grow, and incubate businesses, expand tourism, and create a community climate where enterprise can flourish and higher-wage work is a reality for all. There are several possible ways in which this integration/consolidation could be structured, governed, and financed to the mutual benefit of all political jurisdictions. We describe these options below. Rationale Why does an integrated/consolidated approach to economic development make sense for Franklin/Southampton? 1. Small jurisdictions like the City of Franklin and Southampton County acting alone

can rarely muster the resources and leadership to attract, grow, retain, and incubate businesses as successfully as larger jurisdictions with deeper pockets and bigger assets. Success at supporting economic development requires staff and organizational support that is strong, deep, nimble, and multi-dimensional. This kind of infrastructure is expensive to build and to sustain. It is well beyond the reach of strong communities acting alone, but much more possible when communities work together to consolidate their efforts, as our examples from Mississippi and Virginia show.

2. In small communities where resources are scarce, it is all the more important for

economic development efforts to be aligned so that jurisdictions can maximize the impact of all their investments. Alignment matters most where there are few resources to spare.

3. Politics may be local, but economic development is increasingly regional. The issues

that truly matter to businesses – the presence of a strong, willing workforce and solid transportation and information infrastructure – are regional, not local issues that require regional leadership and management.

4. In a global economy with numerous, well-funded competitor communities, it makes

little sense for Franklin and Southampton to work against one another to chase the same prize. With so many vested interests in common, it makes far more sense for Southampton and Franklin to work together to enhance their shared competitiveness.

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The Current Situation At present, Franklin and Southampton County invest the following amounts annually in economic development:

o Southampton County $133,700 o City of Franklin $114,600 o City of Franklin/Main Street $86,600 o City of Franklin/Incubator $203,600

In addition, the Chamber of Commerce has a budget of $96,490, some of which is devoted to economic development activities. Thus, the city, county, and Chamber invest between $540,000 and $600,000 in direct economic development efforts. (This compares to between $800,000 to $1.5 million for the comparable communities whose examples we cite below.) These current community investments are distributed across five organizations, each with a modest budget. Viewed from the perspective of the community as a whole, the current arrangement does little to facilitate synergy or integration among these small-scale efforts. The proliferation of organizations and governance structures makes it hard for the community as a whole to initiate "big picture" development efforts or to marshal collective community action on behalf of economic development. While the current arrangement helps the city and county ensure that their investments will benefit their citizens, the current situation suggests that the economic interests of city and county are divergent, when in fact they are not. Franklin and Southampton are not competing against each other; they should be competing together against the rest of the world. Characteristics of a Successful Economic Development Structure Research by MDC and the Franklin/Southampton Alliance convinces us that a successful regional economic development apparatus needs to do the following:

1. Service the full continuum of business development – from entrepreneurship to business retention and expansion to recruitment.

2. Coordinate or provide key support services, such as marketing and research. 3. Address the strategic economic interests of the region, while also attending to the

needs of the jurisdictions that make up the region. 4. Emphasize accountability and return on investment. 5. Draw on the strengths and resources of the private and the public sector. 6. Invest in the highest quality staff available to compete with well-resourced

jurisdictions.

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Two examples – from Corinth, Mississippi, and Martinsville-Henry County, Virginia – reflect these characteristics and offer prototypes for Franklin/Southampton. Example: Corinth/Alcorn County, MS, Alliance Background: Established in 1994, the Corinth Alliance coordinates economic development, community development, downtown development, and tourism development for Corinth (a town of 10,000) and Alcorn County (35,000) in Northeast Mississippi. The Alliance represents a consolidation of the pre-existing Chamber of Commerce, county economic development, Main Street, and Tourism organizations and provides a comprehensive set of business development services to increase jobs and economic vitality in the region. Prior to the Alliance, Corinth and Alcorn were "shooting themselves in the foot" by pursuing economic development through a maze of separate organizations that Mac Holladay of Market Street Services termed "an organizational nightmare." Key Features: The Alliance is organized as a 501(c)(6) organization. It is a private, nonprofit institution chartered to serve public and community purposes.

o Staffing: Seven full- and one part-time staff. Charles Gulotta, the President and COO, supervises a Community Development Director, Main Street Director, and Tourism Director. Gulotta himself serves as the Economic Developer or, as he terms it, the "real estate agent" for the city and county, marketing available industrial sites and promoting the community's economic development. (The Alliance owns most of the community's industrial acreage.) Several of the staff positions were originally housed in separate organizations. Now the Alliance staffs the community's Main Street and Tourism programs under performance-based contracts from the Main Street and Tourism boards. Gulotta meets with public officials 2-3 times each month to report on progress. This "internal marketing" of the Alliance complements the "external marketing" of the community.

o Governance: An executive committee composed of chairs of the Main Street,

Tourism, and Business Development Boards serve as the core governance group for the Alliance. The Chair of the Alliance is a rotating position.

o Funding Structure: The Alliance has an annual budget of $1.2 million,

supported through county property tax revenues (2 mils, yielding $300,000 per year), $80,000 annually from the City of Corinth, a portion of receipts from the $650,000/year hotel and restaurant tax receipts, and private contributions and memberships. Annual fundraising supplements the public allotments. Not including money earmarked specifically for tourism and community promotion, the Alliance budget is $850,000 annually.

Achievements: The Alliance has successfully filled most of the community's licensed industrial sites and has significantly diversified the community's industrial and retail

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base. The Alliance is responsible for a new agreement with the National Park Service to establish a Civil War Park that will draw ad estimated 300,000 tourists annually to the area. Keys to Success:

o A private, nonprofit structure that facilitates entrepreneurial leadership and insulates the Alliance from undue political pressure.

o Government as a stakeholder and investor, along with the private sector. o Strong staffing and a well-paid chief executive. o A culture that stresses accountability for results through performance-based

contracts and a return-on-investment culture. Example: Martinsville/Henry County, VA Background: Prior to 2004, Martinsville and Henry County, VA (combined population 57,000) pursued separate economic development efforts, even though they constituted a single economy. The community had separate Chambers of Commerce and separate industry recruitment efforts. At one point city and county ran separate advertisements in the same issue of an economic development magazine. Instead of competing together against the world, Martinsville and Henry were competing against each other. Heavy job losses in the furniture industry and the prospect of slower future economic growth had caused frustration to mount about the quality and impact of the community's economic development efforts. With the help of Market Street Services (Mac Holladay) of Atlanta, the community has recently developed a joint Martinsville-Henry Economic Development Corporation to unify its economic development efforts. Key Features: The MHEDC is a 501(c)(6) nonprofit corporation, as in Corinth, MS. It is structured as a public-private partnership with respect to its governance and the sources of its funding. City and County have disbanded their economic development functions, folding them into the MHEDC.

o Staffing: The MHEDC has merged the staff from its predecessor organizations and plans a national search to hire a CEO to direct the new operation.

o Governance: A nine-person board, dominated by strong private sector

leadership, runs the MHEDC. The Mayor of Martinsville and Chair of the Board of Supervisors serve ex-officio.

o Funding: MHEDC is funded from public and private sources. MHEDC has

inherited the public funding of its predecessor organizations and has augmented this with a four-year commitment of private support from the local hospital conversion foundation, bringing the total budget of the new enterprise to $2 million per year for the next four years.

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Achievements: While the MHEDC is a new entity, its establishment represents a significant achievement, given the divisions that had previously defined economic development in the community. Keys to Success:

o Public-private partnership with governance and funding tipped in favor of the private/philanthropic sector.

o Four years of "patient funding" from local foundation. o Government as an investor and stakeholder. o Strong CEO model. National search for CEO.

Options for Franklin/Southampton The Corinth Model (a public-private partnership). Create an umbrella 501(c)(6) organization with a CEO focused on integration of all economic development efforts, securing "breakthrough" opportunities for the whole community, and leading community promotion efforts. The organization would be responsible for the full spectrum of core economic development activities:

o Recruitment. o Retention and support for existing businesses. o Entrepreneurship o Community development, including Main Street, Tourism Promotion,

Heritage and Environment Tourism. Governance: The board structure would be modeled on the Corinth Alliance, with seats for the major investors and/or organizations that have joined to form the public-private partnership. The composition of the board would be primarily private sector. Funding would come from a mix of local governments and private sources. City and County funds would support the CEO position as well as each jurisdiction's respective economic development manager, ensuring transparency and accountability for taxpayers. Assuming the current level of annual city and county expenditure for economic development – $540,000 – and assuming that all current public economic development functions were brought under the aegis of the new organization, the organization would initially require an additional outside investment to complete its plan.

Pluses: o Independent structure with public and private investor-stakeholders;

501(c)(6) structure allows executive to be paid at market rates for this kind of job (a major issue in attracting an excellent candidate).

o Both jurisdictions benefit from a strong Economic Development Executive while retaining staff to advance their respective interests.

o Opportunity to align disparate efforts under one structure. o Could be attractive to private investors interested in supporting city-

county cooperation.

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Minuses: o Represents a departure from the status quo.

The Joint Authority Model (A Public Corporation): Organize economic development under a city-county Economic Development Authority, headed by a City-County Economic Development director. Staff of the Authority would be organized functionally to reflect the continuum of economic development needs: Recruitment, Retention, Entrepreneurship, and Community Development. The Authority Board would be appointed by the jurisdictions. Budget would be supported by annual city and county appropriations, supplemented by contracts to support special functions, such as tourism. The Authority could also accept contributions from private donors who are willing to support public enterprises.

Pluses: o Resembles what has been tried in the past/familiar model.

Minuses

o Limited role for private sector. o Little or no insulation from political influences. o Hard to allocate costs and benefits between city and county. o Less likely to attract investors interested in city-county cooperation.

Bottom Line • The gap between Franklin/Southampton's current public expenditure on economic

development and Corinth's is nearly $300,000 ($825,000 versus $540,000).

• The gap between Franklin/Southampton's current public expenditure and the proposal for Martinsville/Henry County is nearly $1.5 million ($2 million versus $540,000).

Strategic Question o Does this community need to reorganize Economic Development in order to close the

competitive gap?

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Appendix C Proposed Timeline for Implementation

2004-06 We recommend phasing in the implementation of the strategies recommended in this report over a period of two or more years. Early priorities include establishment of two new community organizations: Franklin-Southampton Futures and a new city-county economic development organization. Other strategies targeted for early implementation are those that existing organizations in the community are already poised to lead and/or strategies that are fairly easy and inexpensive to implement and could give a quick boost to the community. The new Franklin-Southampton Futures organization will take responsibility for overseeing implementation of the Alliance's recommended strategies. It will set further priorities for implementation, taking into consideration which strategies are the most urgent, which are most feasible, and which have strongest community support. Recommended priorities for first six months: November 2004-April 2005 Leadership

• Establish Franklin-Southampton Futures as a nonprofit organization to lead and monitor implementation of the Alliance plan.

Economic Development

• With help from Market Street Services/Mac Holladay, explore options for a new city-county economic development organization. Secure city and county endorsement for the concept in November 2004. Choose a structure, secure city and county funding commitments, and establish the new organization by May 2005. (Strategy 1A)

• Begin relationship management program to serve major local employers. (Strategy 2A)

• Plan to make the incubator fully functional. (Strategy 3A) Education & Workforce

• Offer Career Readiness Certificates. (Strategy 4A) Heritage & Environment

• Create city-county citizens mobilization committee on land use planning. (Strategy 7A)

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Recommended priorities for second six months: May-October 2005 Economic Development

• Establish new city-county economic development organization. (Strategy 1A) • Identify business sectors that will strengthen the Cycle of Development and for

which we can be competitive and make plans for targeting them in recruitment efforts. (Strategy 2B)

• Explore gaps in capital access and technical assistance for entrepreneurs. (Strategy 3B)

Education & Workforce

• Explore options for Career Pathway programs. (Strategy 4B) • Apply for state funding for Middle College. (Strategy 4C) • Explore new training programs for high-wage occupations. (Strategy 4D) • Plan biennial workforce survey. (Strategy 4E) • Commission study of whether two separate school divisions are the most effective

way to provide public education for our community. (Strategy 6A) Year Two: Fall 2005-Fall 2006 Priorities to be set by Franklin-Southampton Futures.