While the nation concerns itself with talks of recession, North Carolina and Durham hold strong as places of growth, continuously racking up accolades as one of the best places to live and do business in the country
By James Dupree | Photography by John Michael Simpson
Despite talks of staff shortages, recession and increasing interest rates affecting the United States, Durham’s continued development growth, low business costs and close proximity to a resilient high tech industry has made it one of the top-ranking cities to start a business. Owners and CEOs of companies across the city are finding creative ways to battle economic hardships, from diversification of products and services to taking advantage of new and innovative opportunities.
Mechanics and Farmers Bank, the only African American owned bank in North Carolina and the second oldest African American-owned bank in the U.S., has supported Durham community members and small to midsized businesses for 115 years. “M&F Bank has been fortunate over the past eight years that the economy in the Triangle has been strong with growth and expansion,” said M&F CEO James Sills. “We have achieved all-time highs in total assets [and] earnings per share, and our share price is at a 17-year high.”
M&F reported its first net loss since the bank’s inception in 2017, but support from the community and new investors like Raleigh-based tech companies Global Data Consortium and Pendo brought renewed strength. M&F Bank received an $80 million investment from the U.S. Treasury Emergency Capital Investment Program earlier this year, bringing its capital to more than $119 million. “[This] funding will allow us to underwrite larger loans, expand our market share and provide a greater ability to bridge the wealth gap for the communities served,” Sills said. “We plan to lend approximately $30 million a year for the next 10 years to minority borrowers who have been deeply impacted by the pandemic to help drive the recovery. Small businesses owned by minority borrowers that have annual revenues of less than $1 million will be our primary targets. Further, we plan to participate in various affordable housing programs and provide financing related to community serving facilities.”
Real Estate Moves
As development projects across the country are challenged by rising prices of goods and services – data from the National Association of Home Builders shows an overall increase of 40.4% since January 2020 – supply chain issues and long shipping delays, growth in Durham isn’t slowing down. While some effects of those nationwide problems can be felt, Durham – and the Triangle at large – is a hot spot for commercial real estate. The relocation and expansion of pharmaceutical, life science and technology companies have kept the local market active.
“Some of the highest demand that we’re seeing in commercial real estate is with industrial, warehouse or flex space,” said Emilee Collins, a broker with Pickett Sprouse Commercial Real Estate. “We are receiving calls weekly from companies that are outgrowing their current spaces or would like to have an additional location. The questions center around square footage, ceiling heights, loading dock access and proximity to major interstates. The average need is 8,000 to 10,000 square feet, 18-foot ceiling heights and at least one loading dock.”
While the need for multifamily dwellings is driving demand for land, regional and national developers have built vertically on smaller sites downtown. Developer Trinsic Residential Group has continued construction on its two current Durham-based apartment complexes: Aura 509, an eight-story, 182-unit complex on North Mangum Street; and Aura Farrington 54, a four-story, 250-unit complex on Farrington Road in southwest Durham. Aura 509 is set to open next spring, while Farrington 54 is estimated to open in September 2023.
“Every sector has its own limitations. PVC pipe (polyvinyl chloride), or anything plastic or rubber, has raw good input constraints that are creating issues,” said Ryan Stewart, a Durham native and managing director for Trinsic’s Carolinas office. “A day we lose at the beginning of the project is not nearly as bad as a day at the end of the project. We’ve mitigated [that risk] by having a professional staff that focuses on early procurement of goods. We have not signed a lease yet, but we’re looking at a 60,000-square-foot warehouse to store goods in a three-year lease term,” he said. The warehouse would allow the storage of important appliances, including refrigerators, washers, dryers and even windows, for the nearly 1,500 units currently under construction or in development, thus tempering the possibility of supply shortage or shipping issues in the future.
This past spring, the Durham residential market was in a frenzy, with homes going under contract within one to two days and selling substantially over listing price. “There is no doubt that the housing market is experiencing a reset, but we don’t look at this as a bad thing,” said West & Woodall Real Estate co-owner Kirk West. “ … Now we’re coming back to reality. While higher interest rates are proving to be a barrier for some would-be buyers, and supply still isn’t keeping up with demand, buyers are regaining some of their power. This is evident in the fact that we’re back to talking about days on the market for homes as opposed to hours; appropriately priced homes are still getting asking for the most part, but it’s not way over as we were seeing; and due diligence fees are lower.”
Even with the market slowing down due to increased interest rates (the Federal Reserve raised its key interest rate by three quarters of a point in July as a means to fight inflation, and did so again at its September meeting for the third time this year.) and supply struggling to keep up with demand, residential real estate seems to be in no danger. According to Stacy Slone, a Realtor with West & Woodall Real Estate, “Because we’re in a thriving area with top universities and a high number of medical and research jobs, I’ve seen from experience that the real estate market here in Durham isn’t as reactive to economic pressures as many other parts of the country.”
The real estate boom has kept moving companies busy, too, but staff shortages and inflated operating costs can spell trouble. Elevated gas prices eat up profits, especially for long-distance moves. “Though it feels at times all we can do is grin and bear it, we have made an effort to negotiate expenses where we can to shift dollars from other ‘buckets’ in an effort to adjust margins,” said Brooke Wilson, franchise owner of Two Men and a Truck’s Chapel Hill and Durham locations. “Offering customers more cost-effective, long-distance move solutions, like our new ‘less than truckload’ (or LTL) Interstate Moving option, helps.” The company adopted this service earlier this year, partnering with freight shippers to expedite small container loads out of town for their customers. This offered a more affordable option for long-distance moving and kept valued front-line teams in town to service more customers.
With staff shortages plaguing small businesses nationwide, Wilson has made employee retention her goal. “We have always invested in our employees, and I think it’s the only thing that’s kept our growth steady,” she said. “We’ve created dedicated space for teams to hang out with locker rooms and showers. We provide snacks and breakfasts. Flexibility in work schedules and genuine care for work-life balance is important. Happy employees create happy customers.” When hiring new employees, Wilson said she sets clear expectations and communicates regularly. “In 2022, we have become more amenable to recruiting from out of the Triangle area, offering relocation packages when it makes sense,” she said. “It’s most important for us to make the right investment up front, to ensure long-term retention.”
While the pandemic and the current economic climate forced many restaurants and eateries across the country to shut down or left them struggling, Durham’s celebrated food scene found creative and innovative ways to drive success.
On West Main Street, Ethiopian restaurant Goorsha expanded its demographic by utilizing a back building on its current lot to introduce a new coffee shop and lounge, Gojo by Goorsha. Cozy, and in keeping with Goorsha’s Ethiopian influence, the shop serves locally roasted coffee beans, teas and local pastries along with a filling lunch menu.
Next door, Maverick’s Smokehouse and Taproom maximized space and diversified its offerings by including a porchfront ice cream shop called Scoop Local. The shop provides fresh French Pot-style ice cream mixed in-house. Its menu sports classic flavors like chocolate and vanilla, as well as sundaes, sorbets and mochi.
Elsewhere downtown, local businesses and organizations are collaborating to strengthen and support its vibrant ecosystem. Every Thursday evening since February, restaurants within the Downtown Loop, including COPA, Queeny’s and M Pocha, host a Small Plates Crawl. Appetizer portions of food and drinks are prepared for customers to try, and they are encouraged to hop from one establishment to the next on a culinary adventure of sorts.
In August, artists, musical performers, food trucks and more came together and took part in the Foster Street Block Party, hosted in part by Durham Central Park, Cecy’s Gallery, The Glass Jug Beer Lab and Durham Food Hall.
“Small, local businesses make our downtown the lively, cool place that it is,” said Nicole J. Thompson, president and CEO of Downtown Durham Inc. “They create the culture and buzz that draw the major employers, residential developments and visitors that bring critical jobs and revenue to our entire region. … Customers need to shop their values and buy local. They need to visit restaurants for lunch and during the week so that those restaurants can be confident in hiring the staff they need to open their doors for longer hours. As consumers, we should all continue to support the places we love with our dollars, our presence and our patience as businesses staff up and as we come out of the pandemic.”
Meanwhile over at Raleigh-Durham International Airport, a recent partnership between REEF Technology and HUBB Kitchens called getREEF has changed the game with a virtual kitchen. The “ghost kitchen,” which allows customers to order and pick up their food all without interacting with another human being, was installed in July in RDU’s Terminal 2 behind a wall in Concourse C. Customers use kiosks or the getREEF phone app to order. A QR code is then sent to customers to open a locker near the kiosks and take their meal when it’s ready.
The kitchen staff are taught to prepare a streamlined menu consisting of food and beverages from nine different brands, including Pei Wei and Rebel Wings, as well as local brands Beyu Caffe and American Meltdown. If one brand doesn’t sell well, the menu can easily be updated with substitutions rather than endure the long process of replacing an entire restaurant. “This has been an enjoyable partnership with REEF Technology and HUBB Kitchens,” said Beyu Caffe owner Dorian Bolden. “Currently, we focus on providing our coffee beans and specialty coffee beverages [but are looking] at pastries or breakfast sandwiches in the near future.”
Always adapting to the economic climate, Bolden also launched an online service through Beyu’s website in 2020 to accommodate pickup and delivery orders, expanded into providing Beyu’s signature coffees for wholesale and retail sales in 2021, and has recently introduced a new breakfast program featuring in-house baked pastries and breakfast sandwiches. To help frontline and essential workers, Bolden partnered with Durham County during the pandemic to launch the Beyu Food Project (formerly EATNC), a meal delivery program. In less than a year, the project supplied almost 300,000 meals. Today, it’s focused on giving support to older adults and food-insecure families in Durham.
Bolden additionally raised the wages and salaries of his employees to stay competitive and to lessen financial pressures on his workers, but he recognizes that there is more that can be done. “We still have over 650,000 jobs unfulfilled in the restaurant industry,” he said. Bolden elaborated his views on an episode of Caffeinate Your Career, a YouTube series produced by Frontier RTP. “The goal is to develop a workforce development program that [follows Beyu Food Project],” he said. “That’s the stuff I’m really excited about. It’s creating a foundation and a business model that we can then [use] to really help tackle food insecurity. Tackling food insecurity is tackling poverty. … We want to figure out another path where we collaborate with our local community colleges to provide training and education, and then we can provide the workforce development piece to go with it.”
A Common Thread
Bolden isn’t the only one shifting focus to these types of programs. “All the focus is on [the] workforce,” said Ryan Regan, vice president of economic development for the Greater Durham Chamber of Commerce. “We see great appetite from local employers to forge new public-private partnerships with local institutions of higher education that can help companies meet ever-evolving talent needs. The Building Up Local Life Sciences (BULLS) initiative is an example of a promising local public-private workforce development partnership.” The BULLS program aims to create a system of equitable pathways to promising employment opportunities in local life sciences companies for underrepresented Durham students and workers between the ages of 18 and 24. The long-term goal is “to harness [Durham’s] dominant industry to create access for the city’s communities of color to the high-earning jobs that are the foundation for sustained wealth creation.”
The Chamber has routinely worked with workforce development partners like Durham Technical Community College, North Carolina Central University and the Durham Workforce Development Board to ensure an alignment among the needs of local employers, job training services and local workforce development partners. “Since 2020, the Chamber has assisted with 18 economic development projects involving a new company relocation to Durham or the expansion of an existing company,” Regan said. “These projects collectively represent over 7,600 new announced jobs for our community and over $2.1 billion in newly announced capital investment.” Indeed, Durham’s economic future looks bright, thanks in no small part to the creative and spirited efforts of these organizations that call the Bull City home.