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Rise of Truist, Wake Forest Baptist-Atrium collaboration top business stories for 2019

The stunning news of BB&T Corp. moving its corporate headquarters from Winston-Salem to Charlotte as part of forming the nation’s sixth-largest bank landed at the top of the Winston-Salem Journal’s ranking of the Top 10 area business stories for 2019.

BB&T announced Feb. 7 its plans to acquire SunTrust Banks Inc. in a deal valued at $30.4 billion when it was completed Dec. 6. BB&T shareholders own a 57% stake in Truist Financial Corp.

Another Winston-Salem and Charlotte connection — Wake Forest Baptist Medical Center’s agreement to open a medical school in the Queen City as part of a likely larger collaboration — was the runner-up.

As has been the case in recent years, potential developments competed with actual transactions in the final rankings. The Journal again put more emphasis on results than on possibilities.

However, the confirmation of an Amazon distribution center in Kernersville and opening of a delivery facility in Guilford County was enough to gain a prominent ranking.

Goodbye BB&T, hello Truist

Winston-Salem and the Triad awoke Feb. 7 to the news that BB&T and SunTrust were planning to combine into a bank with $464.7 billion in total assets (as of Sept. 30), serving more than 10 million households with a branch presence in 17 Southeast, mid-Atlantic and Midwest states.

BB&T chairman and chief executive Kelly King had been warning since early 2017, including in civic events, about the bank’s need to plunge headfirst into its “disrupt or die/thrive” mantra of embracing digital banking technology, reducing its branch footprint, increasing spending on its community bank unit, and relying on organic growth and flat expenses.

King affirmed when the SunTrust megadeal was announced that it represented the “ultimate rollout,” saying “this is not a loss for anybody; it is a win for everybody. If we had not made this decision, this would have been bad for everybody.” King is serving in the same roles with Truist.

The bank unveiled Truist as its corporate name and brand to mixed reviews June 12. King said Dec. 8 that the logo, color scheme and signage may not be disclosed until January or February.

Even though Truist debuted Dec. 6, the bank has not provided an estimate of how many jobs it will have in its community/retail hub in Winston-Salem and within the Triad.

BB&T had 2,134 employees in Forsyth County, according to a 2018 workforce report to Forsyth commissioners. It also had 1,700 employees at its Triad Corporate Center complex near Piedmont Triad International Airport in Greensboro.

It is clear that Winston-Salem is losing corporate headquarters jobs to Charlotte and wholesale banking jobs to Atlanta, but gaining community banking jobs.

However, it may take until the end of 2021 to get a firm count of the eventual workforce impact.

Stitching Wake Forest Baptist-Atrium?

A major level of local nervousness and uncertainty also surrounds the No. 2 business story, a memorandum of understanding signed April 10 by Wake Forest Baptist Medical Center and Atrium Health of Charlotte.

The official message is that the two not-for-profits are jointly “creating a next-generation academic health-care system” headlined by a Charlotte medical school campus debuting in 2021 or 2022.

The systems told bondholders in a November notice that their proposed strategic combination is projected to be complete by March 31. The regulatory review process “is expected to be complete by or before early 2020.”

In November, the systems pledged to build a multi-faceted tower and an eye institute in Winston-Salem.

The tower would house the emergency department, operating rooms and intensive care unit services and will be built on the main Ardmore campus atop an existing parking deck. It will feature new operating rooms with adult intensive care units, along with radiology, pathology and other related services.

The systems said in a question-and-answer post April 10 “the goal is that, upon signing a definitive agreement together, Atrium Health, Wake Forest Baptist Health and Wake Forest University will immediately convene a team to start the work of bringing a modern, innovative, cost-effective and sustainable top-20 school of medicine to the Charlotte area.”

However, they have not ruled out a much larger collaboration during their period of exclusive negotiations.

The open-ended nature of negotiating a potential medical partnership between Wake Forest University and Atrium has raised concerns about the future of Wake Forest Baptist and its medical school in Winston-Salem.

The local concern about the Charlotte campus is that it could eventually draw resources from the Winston-Salem campus or even lure the medical school itself from Winston-Salem. Wake Forest Baptist is the largest employer in Forsyth County with more than 13,000 workers.

Dr. Julie Ann Freischlag, chief executive of Wake Forest Baptist and medical school dean, said April 10 that she and the majority of the existing medical school faculty would remain in Winston-Salem and that the Charlotte medical school would gain new faculty and utilize providers within the Atrium hospital system.

Reviving Whitaker Park

Fears of an empty, underutilized Whitaker Park, which contains a massive former R.J. Reynolds Tobacco Co. plant, eased considerably in October when developer Chris Harrison unveiled plans to convert part of the campus into a high-end apartment complex with 314 units, retail space and a hotel.

Harrison, a former NFL player, said the first of a four-phase project would be kicked off by 164 loft apartments at 951 Reynolds Blvd., across from Woodland cemetery. The goal with renovating the two historic buildings is beginning work by March 31 and a completion date by the end of 2020.

Harrison estimates the overall cost of his project to be in a range of $80 million to $100 million, and take four to five years to complete.

The rest of the project, in planned order, will be: 25,000 square feet of retail space featuring two to three restaurants and other service-industry groups; a 125-room hotel that Harrison expects to attract visitors to Wake Forest University, in particular visiting athletic teams; and another 150 residential units.

Harrison said he has had preliminary talks with Marriott about the project. The final three phrases will represent new construction on the Whitaker Park campus, along with 50 indoor parking spaces.

Harrison has committed to making at least 20% of the housing units affordable to working people — a key to gaining support from Winston-Salem elected officials.

In January, Cook Medical committed to keeping its regional manufacturing and office operations and 650 employees in Winston-Salem by shifting to an 850,000-square-foot space on the Whitaker Park campus with a goal of beginning operations by the end of 2022, about a year later than originally discussed.

Hanesbrands is leasing space in the 426,800-square-foot 601-11 manufacturing building for distribution needs with between 10 and 15 employees there.

What’s in a name?

The June 12 announcement of Truist as the corporate and brand name for a combined BB&T and SunTrust yielded an unexpected, pull-no-punches trademark infringement lawsuit from Truliant Federal Credit Union.

Truliant has claimed the Truist brand would create “digital marketplace confusion,” particularly in the Triad and Charlotte, producing “irreparable harm,” and that the banks were acting “with the reckless disregard of Truliant’s rights.”

Truliant requests that Truist be prevented from moving forward with marketing Truist at retail or online sites, including applying for Truist trademarks. Truliant wants any Truist-branded products to be destroyed. Truliant also wants to be awarded any profits made via the Truist brand as compensatory monetary damages, as well as requesting punitive damages.

Truist said in its formal response Dec. 18 that Truliant filed its lawsuit before Truist had unveiled its logo, signage and color scheme.

“The marks — as actually used in the marketplace — could not be more dissimilar, not only in terms of appearance, sound and meaning, but also logo, color scheme, design and stylization,” Truist said. “There is no risk that anyone would confuse these marks in context in actual marketplace use.”

Amazon arrives in Triad

After more than a year of speculation amid site maps and substantial landscaping preparations, Amazon confirmed May 29 plans to open a fulfillment center in the Kernersville section of Guilford County in 2020 with about 1,000 full-time and full-time-equivalent employees. Amazon has signed a lease for up to 40 years.

John H. Boyd, a national site-selection expert based in New Jersey, has estimated the Kernersville fulfillment center could represent a $150 million capital investment.

Rachael Lighty, regional manager of external communications for Amazon Operations, has said the company withholds opening date information until it is within weeks of launching operations. Lighty said Amazon would roll out a hiring and marketing blitz at that time.

In October, Amazon opened its first Triad delivery station in a 66,000-square-foot building with “hundreds of part- and full-time” workers already in place. The delivery facility at 7929 National Service Road “empowers the last mile of our network,” an Amazon spokeswoman said. The property has a Colfax address but is in the High Point city limits.

The delivery station is not directly connected to the Amazon Prime Now one-day delivery program, the spokeswoman said, but “does help with delivering products as quickly as possible to customers.”

Another megadeal on its way

BB&T and Truist had competition for biggest corporate megadeal to affect the Triad.

United Technologies Corp. and Raytheon announced plans June 9 in which UTC shareholders would own 57% of the combined company that would be named Raytheon Technologies Corp. The deal has been valued at $170.87 billion.

The companies continue to project closing the megadeal in the first half of 2020, though analysts say it is likely to face significant U.S. and global regulatory headwinds.

The Winston-Salem operations of Collins Aerospace Systems and its 1,500 employees aren’t likely to be affected much if the merger of UTC, its parent company, and Raytheon goes through, according to analysts. UTC has not commented directly on how the proposed deal might affect its Winston-Salem facilities.

Greg Hayes, UTC’s’ chairman and chief executive, told analysts in June that he refers to the megadeal as “integrational-lite” because there is little overlap between the companies besides their corporate headquarters.

Kontoor spin-off maintains Triad presence

The Triad’s newest publicly traded company — Kontoor Brands Inc. — is counting on an uptick in consumer interest in its iconic Lee and Wrangler brands to give it time to gain its independent footing.

Kontoor spun out of VF Corp. in May with 800 employees in Greensboro, 360 in a major distribution center in Mocksville and 17,000 globally.

Scott Baxter, Kontoor’s president and chief executive, said the company “deliberately chose Kontoor” for its name “because we didn’t want to pigeon-hole ourselves as just jeans even though that’s what we do best.”

Analysts say Kontoor will be challenged to attract long-term value independent investors at the outset.

Baxter said he believes that “we have a historic opportunity ahead of us” with a focus on attracting “new and younger consumers into our brands with product innovations, targeted marketing campaigns and potential acquisitions of denim companies and complementary apparel products.”

Breathing life into downtown tower

The rebirth of the 500 W. 5th tower in downtown Winston-Salem represents a remarkable comeback given that the former GMAC Insurance Building had been vacant for nearly four years until early 2018.

Flow Companies is the anchor tenant, taking floors 14 to 18 and about 90,000 square feet of space for its workforce of about 140 people.

Local business leader and entrepreneur Don Flow is the visionary for the entire renovation project. Flow said up to 225 new jobs will be located in the tower during the first phase of development, counting the 140 from Flow. Eventually, Flow said, the tower could have 400 to 500 workers.

The diversity of the tower’s tenant base brings added stability and confidence of its long-term success.

Those include: Flywheel, a co-networking space provider; private-equity firm Teall Capital Partners; and Winston Starts, a nonprofit group that aims to accelerate the growth of startup businesses.

Other tenants include Salem College’s Center for Women in Entrepreneurship and Business, Wake Forest University’s Center for Private Business, UNC School of the Arts’ Kenan Institute and Forsyth Country Day School on the third floor, and co-developer Grubb Properties on the second floor.

Apartment complex buying spree

Forsyth County has experienced a significant wave of apartment complex sales, with at least 33 existing properties being sold over the past 16 months for a combined $348 million.

The biggest, completed Dec. 11, involved the luxury 229-unit West End Station apartment complex near downtown Winston-Salem being bought by an Alabama multi-family residential group for $52.5 million.

On Dec. 4, a New York City real estate investment and asset management company spent a combined $44.06 million on three Winston-Salem apartment complexes it views as viable fixer-uppers. Affiliates of Arch Cos. paid $15.94 million for the 189 unit Chesterfield Apartments, $15.45 million for the 312 unit Twin City Apartments and $12.67 million for the 228 unit Silas Creek Apartments.

Mark Vitner, a senior economist for Wells Fargo Securities, said investors “are trying to find what few pockets of value there are left in the apartment market. Winston-Salem and Greensboro are at the top of the list of overlooked markets.”

Dogs and cats back in breweries

Dogs and cats became welcome again in breweries locally and statewide in September following the passage of a bill by the state legislature.

Since late 2018, the Forsyth Department of Public Health had stepped up enforcement — primarily because of customer complaints — of a state food code that bars pets from craft breweries and taprooms. The law had been on the books for several years but was largely unenforced.

Even though they often don’t have kitchens, craft breweries, taprooms, public bars and ale houses have been included in the food-services code that applies to restaurants, meaning the same rules apply to both.

Neither dogs nor cats were allowed inside any establishment that is required to get a permit from its local health department or that serves drinks in glasses that are washed and reused. In order to allow dogs and cats inside, disposable cups have to be used.

However, the General Assembly combined Senate Bill 290 and House Bill 536, which deal with alcoholic-beverage regulations, to create an exemption for breweries if the brewery “is not engaged in the preparation of food on the premises. ... The term ‘food’ does not include beverages.”


Columnists
Laundry can be a big obstacle for those in need

A handful of men were playing cards in a common area at Samaritan Ministries. Though it was dark outside, 8:30 p.m. is still too early to hit the rack.

Up a flight of stairs, a couple dozen others lay on cots spread out in a large and brightly lit dormitory. Some draped their arms or shirts over their eyes; lights out wasn’t for an hour or so. A few steps away behind a thin door, a bank of four stacked washer-dryer units sloshed and gurgled through a couple of heavy loads.

It wasn’t the easiest place to try and grab some shut eye. But the near-nightly cacophony is a necessary and often overlooked ritual.

Of all the obstacles and challenges facing guests at Samaritan Ministries, who would consider among the most formidable the simple act of doing laundry?

“A lot of things out there are not that simple,” said Aaron Gemmill, a guest who takes advantage of the washer and dryer as often as he can. “How are you going to get it there (to a laundromat)? And where are you going to keep it once it’s clean?

“Little things around here are very important. It matters.”

What’s the catch?

A simple announcement in a church bulletin started the wheels turning.

“Laundry Love,” a ministry led here by James Franklin, an Episcopal priest at Wake Forest University, Ginny Wilder, the rector at St. Anne’s Episcopal Church, needed a few extra hands for an event they hold at a local laundromat.

The concept is simple, and so is the execution. Franklin, Wilder and others post up at Fresh Spin on North Point Boulevard, on a Tuesday night. They bring with them food, drink, books and games for kids and rolls of quarters.

Anybody in need of a reprieve from an expensive and deeply repetitive chore is offered one. $20 is $20, and a Jackson (Andrew, the dead president on a $20 bill) is at the top end of the buy-in for clean, dry clothes for a family of four.

“There are lots of feeding ministries out there,” Franklin explained recently. “Don’t hear me wrong; they’re needed. But laundry is an overlooked expense.”

Indeed. When’s the last time you put any thought into your wash? Perhaps the last time the dryer went on the fritz.

Fill the washer, add soap and move on to another chore or take a seat in front of the tube. When a buzzer sounds, toddle back down the hall and stuff it in the dryer. Another buzz, unload and fold. It’s easy.

Not so much if you have to lug it all out into the cold, stuff it in the car and drive somewhere.

Or worse, carry it on your back everywhere you go while also worrying about a next meal or a safe place to sleep.

The local Laundry Love group borrowed from a national organization of the same name eager for others to copy and share it. “They have a few guidelines for how to conduct it, but otherwise, have at it,” Franklin said.

Things were slow initially earlier this month. Only a handful of people were in the Fresh Spin when volunteers were setting up. A young father occupied two small children with a book while mom hurried to fold.

Six volunteers circled up for a prayer as other customers trickled in. They scattered around the room offering hot pizza — and to fill the machine with quarters.

“It’s the faces of people and how appreciative they are for something so simple,” said Debbie Clark, a volunteer. “It’s amazing how much healing can be done in a laundromat.”

Still, it takes a minute for the offer to sink in. More than one person looked back quizzically when a total stranger offers to pay for a load. OK, but what’s the catch?

“I didn’t really believe what they were saying at first. ‘We’re going to pay for your laundry’,” said Tondra Conner, who came in with several hampers and a couple kids. “But $20 is $20 that I can use for something else.”

Tired, old stereotype

Managing a household chore is one thing if you have access to a car; $10 or $20 a pop adds up quickly and eats into the monthly budget.

But imagine what that must be like for a woman (or a man) with no regular place to lay their head. That just-out-of-the-dryer warm and freshness is fleeting (or non-existent) for someone who totes most of their worldly possessions in a small backpack.

“God bless them, but a lot of people are naive to homelessness and its challenges,” said Steve Stover, the shelter manager at Samaritan Ministries. “A lot of people never even think about it. They just expect (homeless) people to be dirty.

“Some people think, ‘But they don’t look like they’re homeless’ when they see somebody in a clean shirt or pressed pants. But what does homelessness look like?”

Fair or not, many people make judgments by first appearances. The image of an unshaven, unkempt man wearing soiled clothes is a common stereotype. And that’s what Stover was trying to dispel a few nights before Christmas.

To be sure, there are people on the street who struggle with mental-health or substance abuse issues. Or both.

But for every person who may fit that tired, old image there may be five or 10 or 20 who come to the shelter and sign up to use the washers and dryers.

There are rules, of course. Only those with no income may use the laundry, and can only use it every seven to 10 days. And they must sign up. Others on disability or who have other sources of income are encouraged to use public laundromats.

“If we didn’t, you’d have the same guys washing all the time,” Stover said. “We can’t have washing machines going 24/7.”

Even Stover, who knows well what guests are up against, hadn’t fully considered the importance of laundry in a while.

“I was thinking about that after you asked,” he said. “We only had the one machine in the old building and it broke down all the time.”

Now, in the new-ish Samaritan facility — it opened in 2014 — the four units are available to those who need them.

“How important is it?” Gemmill asked repeating the question at hand. He rose from the table and slowly turned around to show a splotch on his clean t-shirt.

“Shampoo leaked in my backpack and got all over the place,” he said. “Somebody walking behind me, they’re not going to know that’s soap. But it is what it is.”