Former Kmart warehouse back in business
By Walter Jones | March 30, 2017
The Newnan Times-Herald
A huge warehouse that helped establish Newnan’s reputation as a distribution hub is
Art Pope, Chairman and CEO of Variety Wholesalers, speaks to company executives and county officials during the opening of a 1.4 million square foot distribution center in Coweta County, Georgia. Photo credits to Walter Jones/The Newnan Times-Herald.
nce again housing hundreds of jobs and acres of merchandise following Wednesday’s ribbon cutting for Variety Wholesalers Inc.
The Herring Road facility built for Kmart has been vacant since that company moved out in January 2015. Last August, Variety announced it had signed a lease with the building’s new owners for 1.4 million of the 1.9 million square feet of space.
The area Variety is using, equal to 29 football fields, has space for 80,000 pallets of goods that will be shipped to stock 180 stores of the Roses, Roses Express and Maxway brands. That includes a Roses Express store in Newnan’s Merchant’s Crossing, 50 Bullsboro Drive that recently opened.
It will also serve future stores the company has planned in Georgia and neighboring states, according to CEO Art Pope.
“We’re looking forward to a long, great partnership,” he told company executives and local civic leaders on hand for a ribbon-cutting ceremony choreographed by the Newnan-Coweta Chamber of Commerce.
The Newnan building is the 102-year-old company’s only distribution center outside of its headquarters in Henderson, N.C.
“This, for us, was a major undertaking,” said Variety President Wilson Sawyer.
The company was attracted to Newnan because of its location near major highways in all directions. But it was also considering other sites around the Southeast.
“I knew they had a lot of options available, but they chose us,” said Greg Wright, president of the Coweta County Development Authority.
The building’s size and readiness were major factors in the decision, as was use of the racks and conveyor systems that Kmart left in place, according to executives who say there are few buildings of that size available anywhere in the country. The equipment simply allowed Variety to move in faster and get up and running sooner than other sites.
Sawyer also gave credit to local and state officials for streamlining the processes for permits, hiring and training.
“Lots of communities like to say they are business-friendly,” he said. “But I’ll tell you most of them are not serious about it. The folks here are serious.”
With the help of two job fairs offered by the Georgia Department of Labor and training by the Georgia Technical College System’s QuickStart program, Variety has already hired 11 managers and 200 full-time employees, some who had worked at the same building for Kmart. And the company is still hiring, currently for truck drivers. It will eventually have 320 employees here.
Shipments begin this week to the first handful of stores from merchandise that has been arriving for six weeks.
In the years since Kmart built a warehouse here, other companies have followed suit, including PetSmart and SYGMA.
Former state budget director and businessman Art Pope has been added to a bi-partisan Hurricane Matthew recovery committee that includes former North Carolina Governor Beverly Perdue.
From the Gary D. Robertson, Associated Press on November 1, 2016
McCrory: Hurricane relief timetable includes special session
Gov. Pat McCrory said Tuesday he expects to call lawmakers to a special session next month on Hurricane Matthew relief for eastern North Carolina, looking to Congress for supplemental aid first and developing policy based on recommendations from committees his administration created.
Addressing the first meeting of one panel assigned to examine the damage and pinpoint unmet needs, McCrory and other administration officials told participants the actual recovery will be long and hard.
“It won’t be a sprint. It will be a marathon,” said McCrory Chief of Staff Thomas Stith, who is also the panel’s chairman.
The storm raked the eastern half of the state 3½ weeks ago, dumping up to 17 inches of rain and leading to record flooding along rivers and in the towns and cities adjoining them. Authorities said there were 28 storm-related deaths. While federal damage assessments are continuing, state officials earlier estimated $1.5 billion in damage to 100,000 homes, businesses and government buildings. That doesn’t count agricultural losses.
“Our state has gone through a very traumatic, violent and emotional disaster,” McCrory told the Hurricane Matthew Recovery Committee, but “now we need to reinvent ourselves on how do we recover from this.”
McCrory laid out a plan that in which the bipartisan committee — comprised of elected leaders, business people, government officials and citizens — would tour hard-hit areas. In early December the panel would fashion recommendations for recovery assistance that wouldn’t be covered with existing funds. A separate panel of emergency management officials would consider more technical issues related to federal and state assistance and address immediate needs.
The governor said he would turn in the state’s request for federal disaster assistance on Nov. 14 and wait for Congress to approve it. The state would have to provide matching funds and cover items not included in supplemental federal funds. McCrory said he envisioned calling a special legislative session for early December, although the date could move up depending on the speed of Congress.
“I am confident that we’ll be able to recover and rebuild even stronger than what we had before in many of these areas impacted,” he said.
The General Assembly likely would be asked to create state recovery programs and permit spending from the state’s reserve fund, now close to $1.6 billion. Laws also would be amended to exempt some schools from the required minimum number of days or instructional hours they must be open.
State Budget Director Drew Heath told the committee the state has enough disaster funds to meet immediate needs through January, when the legislature convenes its two-year session. But McCrory told reporters waiting until then to act would hamper long-term recovery planning.
The governor said he wanted the recovery committee to raise private and corporate funds to address permanent housing and small business aid. State officials said 250 people are still in shelters and more than 1,500 displaced households are still living in hotels.
The committee’s members include former Gov. Beverly Perdue, ex-McCrory budget director Art Pope and current University of North Carolina system President Margaret Spellings.
Original story: http://www.wral.com/mccrory-hurricane-relief-timetable-includes-special-session/16183762/
In a August 10, 2016 interview with Charlotte Business Journal’s Erik Spanberg, businessman Art Pope discussed a variety of issues facing North Carolina including HB2, Medicaid expansion, tax policy and the UNC system. The entire interview can be found below or online with Charlotte Business Journal.
Art Pope: Charlotte to blame for any HB2 economic losses
Charlotte Business Journal: August 10, 2016 | Erik Spanberg
A hero to Republicans and a bogeyman to Democrats, Art Pope remains a lightning rod in North Carolina politics. Pope, the 60-year-old CEO of Henderson-based Variety Wholesalers, a privately held company that runs 270 discount stores, most recently served as state budget director under Gov. Pat McCrory in 2013 and 2014.
McCrory, a Republican and former seven-term Charlotte mayor, counts Pope among his political allies. And it was Pope who helped back the coalition that led to GOP majorities in both chambers of the General Assembly during the 2010 midterms, the first time in a century Republicans wielded so much clout in state politics. Two years later, McCrory became governor, breaking a 20-year drought in that office. The previous Republican governor — another Charlottean, Jim Martin — hired Pope as his special counsel in 1985.
Pope has funded and contributed to various state and national Republican and right-leaning causes and counts himself as a longtime friend of the Koch brothers.
This week, he spoke to me about McCrory’s re-election bid and the impact of House Bill 2, the law that overrode a local ordinance extending nondiscrimination protections and rights to gay and transgender people. He didn’t rule out a return to public service, but said he’s happy running his family business. As for rumors Pope aspires to run the UNC System, he dismissed them as far-fetched.
A former four-term state lawmaker known for libertarian leanings and for being a budget and policy wonk, Pope discussed everything from what he sees as the danger of corporate incentives to the beauty of highway bonds. Below are excerpts from our conversation, edited for clarity:
What, if any, impact, do you see as a result of HB2?
First of all, the issue is not just House Bill 2. The original issue was a Charlotte city ordinance which sought to govern and have local laws applied to local businesses for employment and public accommodation that were different from not only North Carolina law, but from the United States Congress-enacted protections, such as Title IX.
What House Bill 2 made clear is that there was going to be a uniform law governing employment and public accommodation and it had equal protection language that protected individual citizens consistent with the federal equal protection clauses, the federal statutes. It made it clear that municipalities did not have the right to pass local laws, which probably could not have been enforced under the North Carolina constitution even without House Bill 2 being passed.
But it all started with the Charlotte ordinance. Before the Charlotte ordinance, North Carolina didn’t have any controversy over discrimination against (the) LGBT community or the use of bathrooms.
The North Carolina General Assembly did pass a law, though. The Human Rights Campaign, an LGBT advocacy group, sought to make an issue of it and gathered allies to attack North Carolina’s reputation, even though, again, North Carolina’s law was consistent with the federal law and most other states. So what’s hurt North Carolina’s reputation — and it has had some economic impact — is a smear campaign being conducted by Human Rights Campaign, encouraged by the Democratic party, to encourage boycotts of North Carolina. That’s unfortunate.
What, if anything, do you think should be done, needs to be done, to repair that damage?
Well, the Charlotte ordinance overreached and House Bill 2 overreacted. So there were changes that needed to be done to House Bill 2 to try and reach a solution.
Because there are some genuine concerns by the LGBT community that could and should have been addressed. And some of the overreach in House Bill 2 could have been corrected. One overreach was removing the state’s law that allowed an individual employee to sue their employer for discharge in violation of public policy, but it really had nothing to do about LGBT issues. It’s more of a plaintiff’s attorneys versus defense attorneys issue. That part did get restored.
There were efforts by many, and I was one of those, to try and reach one solution to rescind the Charlotte ordinance, then repeal House Bill 2 and go back to the status quo where there were no issues.
The Human Rights Campaign and Mayor Jennifer Roberts of Charlotte vehemently opposed that. They wanted the repeal of House Bill 2 in its entirety or nothing and, unfortunately, that meant they ended up with nothing after the General Assembly adjourned(last month).
A couple of other changes, which were discussed, and at points in time did have legislation being proposed to discuss, was to change the term biological sex in North Carolina’s equal protection clause to simply sex (and) more closely mirror the federal statues. And let the issue of whether sex means the same thing as gender or not be litigated out in the courts. (Federal interpretations of sex have, under the Obama administration, included gender identity.)
Another solution was if you have transgender individuals using bathrooms, to go ahead and try and define it better because the Charlotte ordinance had no definition of it. So define it … as a medical definition, which states like Utah and Connecticut have adopted, which would have (addressed) a lot of the concern about any biological male using the excuse of identifying as a female to go into a women’s bathroom. That was a legitimate concern that could have been addressed. And whether or not to have that done by certification or driver’s license rather than by the change on your birth certificate.
But, given how complex these legal issues are — part of the proposal also was to have a blue-ribbon study commission to address these issues in a calm and reasoned manner and hear from all sides of the debate. Those were proposed solutions but unfortunately the Human Rights Campaign and, according to WBTV news, Roy Cooper himself lobbied against those changes, against those solutions, and discouraged Democrats from participating in a bipartisan bill at the end of the session. So those changes were dropped and nothing passed.
So, Roy Cooper and Human Rights Campaign have a political issue for an election year rather than a solution that addressed real concerns by all sides.
What did you think of the suggestion by the Charlotte Chamber to let the cities and towns have the authority to pass local ordinances?
Totally apart from the LGBT issues and the original Charlotte ordinance controversy, I think it is best for businesses and employers in North Carolina to operate under one single uniform state law. … Having 100 counties and however many municipalities all having different employment laws, public accommodation laws for businesses and people to try and figure out what the law is wouldn’t be very good for the North Carolina economy and is not a very good justice system. One uniform state law would be best in all regards.
What did you think about the NBA decision to remove the 2017 All-Star Game from Charlotte and what do you think the ultimate impact of that decision will be?
It’s unfortunate. The NBA is entitled, like any businesses or individual, to lobby for what they think is good public policy. I think it’s unfortunate, if not outright wrong, that the NBA engages in a boycott if it doesn’t get its way. It’s also hypocritical.
Using the Human Rights Campaign’s list of states that have laws enact their agenda, that provide the LGBT protection they are seeking, only 12 NBA franchises are in states where the LGBT agenda has been enacted. Four of those are in California. So 16 (NBA franchises) are not in compliance. (Editor’s note: There are 30 NBA teams.)
There’s been discussion that the NBA All-Star Game that’s not going to be held in Charlotte will be held in New Orleans instead. Well, New Orleans and the state of Louisiana do not have the LGBT agenda enacted into law. And it is absolutely correct that the NBA is a hypocrite when they have exhibition games in China, which does have a horrific human-rights record, including the imprisonment of those who are identified as homosexual. So it’s purely politics — very disappointing that the NBA chooses to play that way. I’m concerned and fearful that now people are going to respond in turn and start boycotting the NBA and their advertisers.
I think public policy issues should be debated in public policy debates and campaigns and legislatures, not be forced through economic boycotts.
What do you think of Donald Trump?
I do not support Donald Trump or Hillary Clinton for president.
You have known the Kochs for a long time and one of the things they have been supportive of in the past couple of years is sentencing reform in criminal justice. Do you share that viewpoint?
I very much support criminal justice reform and sentencing reform. And in fact, I’ve discussed (that issue) with the Kochs and the organization they work with. North Carolina is actually a leader of the nation in that. It’s called the Community Justice Investment Act, where the state legislature and — started by Gov. (Bev) Perdue and continued by Gov. McCrory — have tried to divert offenders for misdemeanors and even low-level felonies, where there’s no violence involved, into alternative sentencing, probation and parole. But to ensure that those who are on probation do not pose a further threat, they actually beefed up funding for supervision by probation.
The overall effect has been that our prison population has dramatically dropped. We’ve been able to close prisons and save money for the North Carolina taxpayers and put those (funds) to higher and better uses, like education. There’s been no increase in crime and, better yet, those individuals who are on probation can be self-supporting, and support their families, rather than being a burden on their family and a burden on the taxpayer.
Within our own company, we have revised our application process so those who have committed misdemeanors or even low-level felonies that have served their time and are good citizens now will not be put at a disadvantage for employment opportunities.
Let me ask you about what has happened with the economy and, particularly, tax policy in North Carolina since the Republican majority came in in 2011. In North Carolina, there have been a number of income tax cuts both for corporations and for individuals. And there have been surpluses. In Kansas, which has cut taxes fairly aggressively under Republican leadership, they have had a number of budget problems with deficits. Why is it proving to be much less troublesome or much more successful in North Carolina than in Kansas?
Well, first of all, being a fiscal conservative means you have balanced budgets. And for Gov. McCrory, when I served as his state budget director, he was very concerned that tax cuts not lead to budget shortfalls the way we had in 2001 and in 1991 and in 1982 and numerous times beforehand.
So a good deal of work by the fiscal research staff in the General Assembly, by the state budget office and the executive branch and negotiation between legislators and the governor (all contributed). We wanted to do responsible tax reform that simplified the tax code, lowered the rate, but still had sufficient revenue coming in to fund state services. And we did that.
On one point, we did on the corporate rate reductions — because there was concern that the overall tax reduction may be too much — we put in a trigger so only if state revenues achieve a certain level would the corporate income tax rate go down. And in the end, I’m glad to say that the state revenue did grow as the economy grew. We reached those triggers, so the corporate rates continue to go down. But at the same time the corporate rate went down, the personal income tax rate went down, revenue has in fact grown. We have generated budget surpluses both from excess revenue collections in recent years but also from managing the budget well, so more money reverted from the state agencies that saved and returned into the general fund rather than having a spend-it-or-lose-it mentality.
So a lot of work went in to make sure we did the budgeting and the estimates on the tax revenue right overall.
Kansas, as I understand it, just very aggressively passed cuts. Tax cuts cost more than they thought, but they did not control their level of spending. So they collected less revenue, spent more and that’s a classic case for a budget shortfall.
I’m sure you’ve heard this critique on the left. There have been those who have said that while it is prudent to build up your rainy-day fund, the balance has gotten out of whack and some of these surpluses should be put towards infrastructure, education and social programs. What is the appropriate balance?
I was one of the authors and proponents of a rainy day fund when I was in the state legislature back in 1990, 1991, and it was adopted in 1991 by bipartisan support in response to the 1991 shortfall. The goal back then was to increase at least 5% of the general fund. Thank goodness we did have a rainy-day fund — we had a literal horrible rainy day with Hurricane Fran and then Hurricane Floyd where the rainy-day fund was used. It was also for economic disasters. And, again, thank goodness we had a rainy-day fund at the end of the Great Recession in 2008 and 2009. The rainy-day fund was then back to zero.
Once the economy is recovering, then yes, you should build back up your rainy-day fund for the next natural disaster or economic disaster. The way the rainy-day fund is built up is what’s now end-of-the-year surpluses have been prudently set aside for that. I’m glad to say it’s a positive that we had achieved 5% of the general fund, and this year, we were able to (reach) 7.5%. Local governments generally keep one-twelfth, or about 8% of their funds in a reserve, so the state government should reach that same level. And believe me, if we ever have a natural disaster, a humanitarian disaster or an economic recession again, I think everyone, including even the left, liberal progressives, will be glad the rainy-day fund was there.
Why do you think Pat McCrory should be elected for a second term as governor?
I think he’s earned it by helping and serving the people of North Carolina (with) much-needed regulatory reform, tax reform, (which) benefited all the citizens of North Carolina, helped our economy grow faster than the rest of the country and, at the same time, increased key long-term investments, including funding in public education and still having leftover reserves, building the rainy-day fund. He’s done all of the above.
Roy Cooper, his opponent, has been critical in a number of areas, but particularly on Medicaid expansion. He has said expanding Medicaid would help people and create tens of thousands of jobs. Where do you think that argument breaks down?
First off, is the assumption that Medicaid expansion is needed in North Carolina. What Medicaid expansion at this point in time means (is) people who are individuals who are working, do not have children and often already have private health insurance need to go on Medicaid. Those who are poor, women and children, they’re already eligible for Medicaid.
Second is (to assume that) you’ll get healthier, better results from Medicaid expansion for those individuals. That is very well disputed from other states who have had pilot programs where they had some individuals who are eligible for state-level, Medicaid-like programs but other people in the same circumstance did not have healthier outcomes.
Third, is that there’s no cost to Medicaid expansion (because the federal government pledged to pay 100% of those costs for the first three years after the Affordable Care Act passed and at least 90% afterwards). Right now, our (federal) government’s in debt and growing in debt, so to expand Medicaid, especially when it supplants private insurance and people who choose not to have insurance, we’re increasing the national debt, which means the debt we’re leaving our children. So it may, quote, be free to the states, but it’s in fact increasing the debt to our children.
But, finally, it’s not free to the state. From the very beginning, even the first year, there still would have been a 5% cost to the state for the administration. Then the federal share was to decrease and the state share was to increase (over the years) so that we would have an overall growing Medicaid budget, which is one of the fastest-growing items in the state. And Gov. McCrory was open to the consideration of Medicaid expansion with reforms if they could get waivers and exceptions from the Obama administration. Just as other governors sought those waivers, like Gov. (Mike) Pence in Indiana, but the Obama administration was not giving waivers, so there was no opportunity to reform it.
So Gov. McCrory and the General Assembly’s policies were, first, let’s reform Medicaid that already exists in North Carolina before we consider an expansion. Originally, the hope was with a Republican president and a Republican Congress then you could get waivers so the state can do Medicaid or provide health services in a more cost-effective manner.
On the issue of incentives, last year there was some disagreement between the administration and legislative leadership on the appropriate level of incentives. How is North Carolina doing right now with incentives?
Both Gov. McCrory and the General Assembly have been far more cautious about the use of incentives than prior administrations and prior legislators. I think Gov. McCrory has said, “I’m not going to give away the farm.”
And very often times, businesses who already plan to come to North Carolina will try and milk us for all the incentives and grants and taxpayer money they can get. I call it crony capitalism and corporate welfare. And it’s really not a cause and effect because they’re already coming here.
Or some times they’re using North Carolina as the bait. They’re really planning to go to Georgia or South Carolina already, but they’ll say, “Well, we’re going to go to North Carolina,” when they really didn’t intend to. And then the news media write North Carolina lost something (and the other state) already had them. So you’ve seen a reduction and elimination of some specialized tax credits in incentives, and I think you’ve seen a more prudent use of what’s called the Job Development Investment Grants.
Some incentives that were clearly a loss to the state, such as the film incentives, have been completely reformed to a flat grant program. So I think you’ve seen a tremendous improvement.
But the good news is, even with a reduction in the level of incentives, you’ve seen North Carolina have one of the fastest-growing economies in the country because of our overall quality of life, our investments in education, our better tax climate, our better regulatory climate — those benefit all employers including those who have been in North Carolina for decades creating new jobs rather than just rewarding the out-of-state company with the highest-paid and best lawyers and lobbyists getting a special deal for themselves at the expense of the taxpayers and the other employers and companies in North Carolina.
Why do you think North Carolina has, so far, been unable to attract a major auto manufacturer and how important is that?
One, I don’t think it’s important. I’d rather have broad-based growth. It’d be great to have an automobile manufacturer — I’m not going to discourage it — but I’d rather have broad-based, diverse growth, which is what North Carolina has right now. In specific cases, it’s things totally beyond the control of politicians, of government.
Volvo primarily chose South Carolina because of the port of Charleston, its proximity to the sea lanes, which Wilmington does not have. Wilmington has hard rock that limits the depth of its channel which Charleston didn’t have, so (Charleston was) able to deepen and widen their channel over time.
I think it was Toyota that chose to locate in Texas because Dallas-Fort Worth had direct air connections to Japan, which Raleigh, Durham and Charlotte did not have. So you have to look at the individual factors. Most businesses choose their locations based on proximity to the quality of the workforce, which North Carolina has, quality of education, but also (proximity) to their customers and suppliers and logistics. The logistics for Volvo were in South Carolina and the port of Charleston, and logistics for Toyota was going to be the international airport, which Dallas-Fort Worth had and North Carolina did not.
In the past year, Gov. McCrory wanted to include about $1 billion worth of road projects in the bond package that ultimately passed this spring — but without the roads money included and instead focusing only on education, parks and non-transportation infrastructure. The legislature preferred a pay-as-you-go funding approach. Which would do you think would be better?
Actually, I have a personal record on that. When I was in the legislature in 1989 and we had legislation for the Highway Trust Fund, I sent forth an amendment for a $1 billion bond component for the Highway Trust Fund.
The reason I proposed that then and the reason I think Gov. McCrory is correct in wanting bond funding for highways this past year is that you should pay for highways as they are used. So rather than asking this year’s taxpayers to pay up front for new highways, take out a bond that’s repaid over the 20, 30 years that a highway is used, then the users in the future will be paying back that bond.
It is cheaper to have a bond and pay the low interest rates that state government bonds get than pay as you go. It would have allowed us to do more construction and more acquisition, early, at a lower cost.
One aspect of higher education I wanted to ask you about: Because of the three centers that were closed at UNC and former UNC System President Tom Ross being forced out, there is a feeling on the left that Republicans had some sort of vendetta or opposition to what was happening in Chapel Hill. What can you say to people who subscribe to that theory?
The motivation by the left of the Democratic Party is to create a wedge issue so people will vote against Republicans, even if there’s no truth to it or it’s a highly biased, distorted truth. It was under Gov. Perdue’s administration and the 2009-11 budget passed by the Democrat majority that reduced the university spending on centers by one-third. But there was no outcry when that was done because it would have been Democrats and liberals criticizing their own Democratic governor and their own Democratic majority.
In Gov. McCrory’s budget in 2014, we did propose a much more modest reduction in the spending on education centers and left it to the university to review which of those centers should be funded and which are not. Some of the centers were very much integrated into the academic mission of the university; others had no relationship to it. And, by the way, Gene Nichols’ poverty center, which was a political entity to start with by (former U.S. Senator and Democratic presidential candidate) John Edwards, was not on that list because it no longer received public funding, though it had earlier on.
For the overall university funding — and it was out of necessity of the Great Recession — that the biggest reduction in university funding came under Gov. Perdue and the budget enacted by the Democrat majority in 2009-10. … There’s been no sharp reduction under Gov. McCrory. Instead, overall spending has increased; it’s just not true that there’s ill will towards the university leading to harmful budget cuts. That’s just not true.
There has been a lot of speculation about you becoming UNC president — what’s your interest?
I’ve laughed at that. I have no interest in it. Tom Ross and I are personal friends. We disagree on budgeting policy; that’s to be expected. When I first heard my name on a blog or a talk radio show being mentioned for university president, I told Tom, I have absolutely no interest in it. I find it amusing. I care very much about the university. I’ve been a big supporter, and through our foundation, of North Carolina State University, Chapel Hill, other universities, but I have plenty to do right now without seeking to be president of the university myself.
Erik Spanberg covers government, sports business, hospitality and airlines for the Charlotte Business Journal.