Foxx, Women and Jobs

When Mayor Anthony Foxx strode Tuesday into Amelie’s, the popular French-style bakery and cafe in Noda, it didn’t take long for him to tap his feminine side. Greeted by a room a small group of female business owners, Foxx proudly declared himself a "hugger" and made a point of embracing all the ladies, one by one.

It was a light-hearted moment in an otherwise serious think-fest (not to mention campaign stop) about what Foxx should do to breathe life into Charlotte’s economy, where unemployment rose nearly a percentage point to 11.2 percent from 10.4 percent in May.

"This is a way for me to keep my ear to the ground," Foxx told the group, whose eclectic ranks included, among others, the owner of an adult care facility, a yoga studio, and a film production company. "Let’s face it: for the past two years, there’s been a headwind when it comes to job creation."

No dispute there - and Foxx couldn’t have picked a better audience for his message. According to a recent American Express survey of female-owned businesses, some 8.1 million women owned businesses operate in the U.S., and account for about 20 percent of all enterprises.

Even more, between 1997 and 2011 the number of female-owned firm grew by 50 percent, outpacing male-owned firms which grew by 25 percent during the same period, according to the study based on data from the three most recent U.S. census studies.

"It’s obvious you already know what you’re doing," Foxx quipped. “I don’t want to start giving prescriptions for problems you don’t have."

Instead, Foxx mostly listened as the nearly dozen women recited a litany of issues needing a bit of mayoral muscle. There were suggestions about tax credits and other incentives to encourage investing in small businesses, ideas for job training programs to improve the labor supply, prodding to bring more retail vitality into uptown Charlotte.

The consensus was this: Charlotte, known for lavishing its resources on big businesses, too often turns a blind - or suspicious - eye to its growing community of innovators and entrepreneurs.

"The good news is that I’m a pioneer," said Lynn Ivey, president of the Ivey Adult Day Care, a lodge-style facility which caters to families living with Alzheimer’s, Parkinson’s, and other long-term conditions. "And the bad news is that I’m a pioneer."

Over the past several months, Foxx has talked increasingly about the importance of small businesses. He has championed everything from the city’s new small business web portal, to cutting government red tape in licensing and permitting, to building trade relationships with China, Brazil and India.

But at Tuesday’s roundtable, Foxx conceded that progress has been slower than he had hoped. "We need get more engaged and lean forward," Foxx said. "When a city gets pegged as a place that’s good for small businesses and entrepreneurship, it only creates more activity."

Making `Noise' for Startups

Paul Solitario, investment banker and champion of Charlotte's entrepreneurial class, was sitting in his 24th-floor office at the Bank of America Plaza Building earlier this week reminiscing about the much hungrier days of local startups.

"It was lousy," said Solitario, managing partner of Cerium Capital, LLC, a private equity firm which focuses on U.S.-based information technology and business service companies with sales of between $5 million and $100 million. "There was just no real tradition of investing in startups."

Of course, it's still no cakewalk on Main Street. To that end, Solatario these days is plugging Innovare Capital, a new startup of his own which, he says, will help give area startups better shot at survival.

Launched last month, Innovare Capital offers an equity-like investment dubbed "revenue based purchase order financing." Simply put: the fund gives small businesses capital in exchange for a percentage of gross revenue over a defined period of time.

For owners, the upside is they get can access to capital without giving up ownership in their company. The funding is intended to assist companies that have secured a purchase order, yet need the funding to fulfill the order, said Solitario, who shares ownership with his partner at Cerium and Stephen Bollier, CEO of Innovare Capital.

The launch is a natural for Solitario, as it extends his passion for building out Charlotte's small business landscape. A former investment banker at First Union bank and later First Citizens Bank, Solitario began crusading for local entrepreneurs shortly after his own startup (he was able to raise $600,000 of a 1.2 million investment target) pharmaceutical marketing firm, failed in 2002 in the post-9/11 downturn.

"Great idea. Atrocious timing," he deadpans.
He adds: "The good thing is that I know what it feels like to be on the other side making a presentation investors."

Since then, the 50-year-old Solitario has been ubiquitious on the startup scene, whether it was launching the popular WED3, a local "matchmaker" for young companies and interested investors, to serving as president of the nascent Charlotte Regional Technology Executives Council.

As Terry Cox, president of the Business Innovation and Growth (BIG) puts it: "Paul has been one of the people in Charlotte who will take ownership and start new things; he'll say, let's put a stake in the ground and let's do it. And frankly, I haven't always been so sure some of those ideas would work."

Solitario says: "All of this is about creating some noise for the entrepreneurs in this community. The entrepreneur almost never knows how it is they'll become successful. What's important, though, is that they believe they can."

Black Firms Look For Room Under DNC's Tent

The momentum – some have called it disillusionment – has been growing for a while now. Ever since former Bobcats owner Bob Johnson challenged Charlotte’s black business owners in 2010 to become more deliberate in their efforts to gain a bigger slice of the city’s economic pie, that goal has risen to the top of many to-do lists.

So, too, has the topic of economic inclusion. Once reserved for hushed tones and closed office doors around town, race and business have found their way into public discourse.
These days, academics hold court at Johnson C. Smith University about the barriers for black-owned startups in gaining access to capital. Business and political leaders mix it up at the Center for Intentional Leadership about the economic value of a racially diverse economy. And black business owners vent in focus groups about their struggle to reverse their fortunes in Charlotte.

Now, for better or worse, the 2012 Democratic National Convention is shaping up as a milestone in that critical dialogue. One reason: many black business owners see their success in gaining a piece of the economic opportunity brought here by the convention as a kind of proxy for whether Charlotte’s "inclusion-fest" is authentic or empty rhetoric.

How else, for example, to explain the 35 local black business vendors, from resturateurs to party planners to building contractors, gathering regularly for the sole purpose of getting a piece of the financial action the convention is bringing to town?

The group, which started out as informal, now goes by the name Carolina Regional Minority Partnership Coalition. Its mission: "to ensure that minority business owners are able to equally participate with the 2012 DNC Convention..."

The group’s chairman, Charlotte attorney James Ferguson II, declined to discuss details about the group’s specific plans, other than gaining competitive scale by partnering with larger mainstream companies. He said the group has already had a productive meeting with Dan Murrey, head of the Charlotte DNC Host Committee, and former Charlotte mayor Harvey Gantt, who has been researching "best practices" in other host cities.

"In several previous DNC conventions, the actual number of minority participants has been less than we’d like to see," said Ferguson, mentioning Denver and Boston. "I think Charlotte can be different. And the fact that we’re already organized puts us ahead in the game – or at least that’s what I’m told."

Let’s hope so, especially in light of the national party’s checkered past with minority businesses. For years, the Democratic National CommitteeÖ has faced complaints from party members that it awards too few contracts to African Americans. In April, the Huffington Post, in partnership with the Center for Responsive Politics, published an article titled "The DNC’s Family Feud Over Minority Contracting" that estimated campaign spending on firms with at least one African American senior principal was a mere 1.5 percent of the party’s total spending on contractors in 2010.

For its part, the DNC says that of the $64 million in discretionary contracts the party awarded during the 2009-10 election cycle, $19 million went to minority-run companies.
"Over the last two years, the DNC has taken unprecedented steps to address what has been a longstanding concern about minority contracting," Patrick Gaspard, executive director of the Democratic National Committee, wrote in his blog. "Already, those steps have yielded positive results, and we remain committed to taking additional concrete steps going forward."

It’s encouraging that Dan Murrey of the Charlotte host committee isn’t mincing words about his intentions: "We’re in the process of trying to create a convention with the broadest participation ever. It’s a top priority for us," he says. "Of course, we’ve got to be realistic about how much work there is out there... I can’t force them to chose one vendor over another, but I hope to make it hard for them not to use our local businesses and minority vendors."

Hard lessons from DNC host cities

The sentiment is surely flattering. Steve Kerrigan, convention planner for the Democratic National Committee, sat coolly before an expectant crowd Tuesday at Central Piedmont Community College and said: "The story of Charlotte is the story we want to tell at this convention."

Flanked by Mayor Anthony Foxx, former Mayor Harvey Gantt, and Dan Murrey, executive director of the Charlotte in 2012 host committee, Kerrigan gushed over the Queen City's remarkable gift for reinvention and resilience and predicted that, during these rough economic times, the world will be inspired by our city's fortitude.

That's not hard to imagine. What's tougher is Kerrigan's prediction of a windfall between $200 and $300 million based on the previous two DNC conventions - Boston in 2004 and Denver in 2008. "The short and long-term benefit of hosting a convention is staggering," he told a standing-room only crowd, many of which were small business owners.

In Denver and Boston, there are some valuable lessons to be learned about sorting hype and hubris from reality. After Beantown's convention, for example, Suffolk University's Beacon Hill Institute released a study called "The Economic Impact of the Democratic National Convention
on the Boston Economy: The Final Tally".

Alas, the report characterized the much-ballyhooed event as having marginal economic impact on the city. While Mayor Thomas Menino predicted that the convention would rake in $154 million, the actual yield was substantially less, the study said.

Among the reasons: normal workday productivity was halted due to road closures, other revenue generating non-DNC events were canceled, and spending among delegates and non-delegates in Boston's restaurants and shops was less than projected as attendees gathered instead at corporate parties and receptions.

In fact, many local businesses wound up saddled with "extra inventory and empty seats and cash registers." In the end, the BHI survey of one hundred local businesses concluded that only 11% reported an expected increase in patronage.

Similarly, while Denver officials calculated that the DNC generated an regional economic benefit of $266 million in direct and indirect spending, and $133.5 million in direct spending in Denver, those estimates didn't fully account for lost or displaced business due to the convention, some business leaders have argued.

Harvey Gantt said it best when he warned the crowd: "Everybody might be excited. But we've got to manage the expectations, too. Some folks will be fortunate enough to get it (a DNC-induced payday), but some of you won't."

DNC's Donkey to Charlotte: "Time to Pony Up!"

It's taken a while, but city leaders are finally running out of superlatives to express their joy and pride in hosting a national political convention. The new obsession: money, or more specifically raising the $36 million the Democratic National Committee will need to pull off the September 2012 event.

Speaking at a breakfast gathering Wednesday morning at the Levine Museum of the New South, Mayor Anthony Foxx and Duke Energy CEO Jim Rogers, who is spearheading the fund-raising efforts for the convention, traded a few memories of the long, nail-biting journey traveled to bring the convention to Charlotte - and civic and economic boost we'll get from it.

When it's all over, Foxx said, "it will be a transformational event", "...the world will know this is not just Anywhere, U.S.A." Chimed Rogers: "It will elevate us on a national and international stage. People will be saying, `We want to move to Charlotte.'"

Meanwhile, though, Foxx and Rogers also conceded that hitting the DNC's $36 million target will be quite a challenge. The reason: new rules that prohibit corporate cash and individual contributions over $100,000.

"It's not going to be easy," Rogers said. "There was a time when I could have just called 50 CEOs."

The $36.6 million to be raised by DNC host committee would, among other things, cover the millions in expenses for upfitting Time Warner Cable Arena, as well as other production costs and transportation for an expected 30,000 delegates and media members.

While Democratic leaders have said the measures put in place to ensure "a people's convention," the changes (a model that was, Foxx said, successfully deployed during President Obama's inauguration) represent a dramatic departure from the way other party conventions have been financed.

In 2008, for example, some companies gave $1 million or more to help Democrats and Republicans stage conventions in Denver and St. Paul.

"That was wholesale," Rogers quipped, "and now it's retail." He added: "Imagine trying to get 360 people to write a check for a $100,000."

To cushion against slower-than-normal fund-raising and potential cash flow problems, Fifth Third Bank has extended the host committee a $10 million line of credit.

Rogers said he expects many contributions will come from individual and organizations outside of Charlotte, and has begun meeting with wealthy party donors.