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- While things around business and economic activity have seemed to gel.

Welcome again to the most widely watched and the longest running program on Carolina business policy and public affairs seen across the region for more than three decades.

There was more uncertainty though heading into this year.

But now it does truly seem like the economy, and I'm careful to say this, is achieving, at least for now, (chuckles) a steady state.

Does that mean a soft landing though?

Maybe, but certainly it's not in fear of runaway inflation or a looming recession.

In a moment, we will unpack some of these issues that lead to that, and later on, one of the rising stars in rural higher education, Dr. Lee King from Lees-McRae in North Carolina's Mountains.

Stay with us.

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(upbeat music) On this edition of "Carolina Business Review," J. Brannen Edge, III, of Flagship Healthcare Properties.

Susie Shannon from the SC Competitiveness Council, and special guest, Dr. Lee King, President of Lees-McRae College.

(upbeat music) - Welcome again to our program.

Good to see you both.

And Susie, you were, I don't want to say personal things, but you were sick, and it's glad to see you back and welcome back.

- Yeah, thank you.

I missed the insiders panel in January.

You know, it's like getting the band back together again.

- (laughs) They missed you.

Brannen, that's not inside baseball, even though she said that.

And it's nice to have you back as well.

Brannen, we're gonna start with you.

So you are in healthcare real estate.

- That's right.

- And why that's important is because that is not just the hottest sector in commercial real estate.

It's one of the hottest sectors in the economy.

Does all of this, number one, is it as hot as it seems?

And number two, is it flowing because of the healthcare spending in hospitals?

- Yes, to both of those things, Chris, you know, healthcare is a huge driver obviously.

We've got, you know, over 90% of Americans have insurance now.

And so going to the doctor is a right that people are expecting and demanding.

And so there's huge investment.

And it is been hot.

- Yeah.

- Yeah, yeah.

- [Chris] What could slow it down?

- Well, interest rates have slowed it down.

So we've seen, you know, a meteoric rise in interest rates that makes, you know, the cost of funding that much more expensive.

And so deal volume, activity volume, has slowed in the last 18 months, but a very, very different type of slowdown than what you're seeing in the general office sector, which is got a kind of a world of hurt.

- Yeah.

Susie, so you look at the centers in South Carolina and the centers would be the upstate, of course, Greenville, Midlands, Columbia, and of course MUSC, and all the spending in healthcare going on down along the low country.

Is that, I mean, do you see that slowing down at all?

- No.

- Ever?

- No.

(laughs) - I mean, I know that's is hyperbole, but... - And definitely not in even the near to midterm, right?

Because we, the southeast region is one of the fastest growing regions in the country.

South Carolina and to include North Carolina the fastest growing states within the country.

And so as we see more of that in net migration, particularly when some of those age bands are a little bit higher, and we all know that once we get to a certain chronological juncture, we're gonna need more access to healthcare, more access to quality healthcare.

We're gonna demand and expect access to quality healthcare.

We're certainly seeing in South Carolina a lot more investment, financial and infrastructure wise into our rural health systems, because it's desperately needed.

And that's just gonna continue to grow as we see higher populations.

- You know, you're both thoughtful and you don't need me to tell you this, but you're both thoughtful, you think about policy, you think about practice, your leaders, et cetera, et cetera.

Do you ever, I mean, you're trying to get down the road a little bit to say, "All right, if it does, when it does slow down, what's our plan?"

Do you strategically think about when a slowdown comes, let's say in healthcare or healthcare spending, or healthcare real estate, what that looks like and how you make sure you bake that into your strategic plan?

- Sure.

I mean, we're always thinking about how do we plan for the future?

But as Susie said, population growth is not slowing in the Southeast.

And it's not just the young professionals that are moving to the Carolinas, it's seniors.

Those that are 65 and older are moving at a faster pace to the southeast and the Carolinas than the overall population.

So it's not gonna slow down.

Susie said it, when you get 65 and above, you're using healthcare at twice the rate, four times the rate, eight times the rate, of the average American.

And people are continuing to wanna move to the Southeast.

So we're not gonna see a slow down in healthcare.

- Is there a strategic plan about when and if it does slow down, if economic development slows down?

And by the way, it looks like it is a little bit in South Carolina, but probably not to the degree that we've seen in the past, but is there some kind of thinking that's going on to say, "All right, at some point we're gonna level out, at least for a while?"

- With respect to the healthcare system and the infrastructure- - Or in general.

- Or in general, we're still continuing to see record announcements in South Carolina and in the Southeast.

I mean, we're breaking our own records and sometimes within the same year or sometimes within the same quarter.

And with that comes jobs, jobs, jobs.

It's gonna be the evergreen issue.

Jobs in healthcare, jobs in technology, particularly tech adjacent to advanced manufacturing, which is a robust economic engine within the state, but also energy systems jobs.

When you look at, you know, last year, I think over 6,000 jobs and 7.2 billion CapEx announced related to energy systems.

That's a lot of economic development activity.

There's gonna have to be attached a lot of education workforce training programs that come with it.

- Yeah.

Brannen, can you find the talent for the jobs that you have posted or can your colleagues or your cohorts find it?

- We've been fortunate and some of that's a focus on, you know, culture and flexibility, and all the things that are buzzwords now in terms of the post covid environment.

But we've been fortunate to be able to grow, and fill those positions.

I think we grew about 10% in terms of employment last year.

- The folks you talked to, can they find the bodies for the jobs?

- It's difficult.

It's difficult.

It is, despite the population growth, it's hard to fill those roles.

- Susie, in South Carolina, Scout has sucked all the oxygen out of the room with their announcement.

That's a good thing.

But are they gonna be able to find 4,000 people?

- Well, you know, if they've sucked the oxygen out of the room, they're replacing it with some good air that's coming in, right?

Because attached to the Scout package was a lot of education workforce training dollars to be invested.

Things like readySC, which can act, you know, almost imminently as well as future investments into that human capital infrastructure pieces.

But, you know, those jobs won't come all at once or be needed or required all at once.

So those will be staged over time as they begin to, you know, construct out and ramp up operations.

- So, what do you think, and I'm gonna stay with you, and I am gonna ask you this question.

So be thinking about this, Brannen.

What do you worry about most then?

- Still worry about making sure that there is an understanding within our populace that whether it's AI or Quantum or other emerging technologies won't necessarily displace all the jobs.

It may transplace some of the jobs into where we can see augmentation to being more productive in the job, or replacing those manual tasks that nobody wants to do, or is less safe to do.

And so I think gonna be a lot built around how can we deploy and accelerate emerging technologies to backfill some of those positions that are gonna be needed.

- Short term or long term concern for you?

The big one.

- It's not our industry.

It's not, you know, the economy.

Again, healthcare is gonna continue to grow.

For me, the biggest thing that I worry about is how do we preserve culture in our organization?

It's just how as we grow and get bigger, how do we make sure that we keep the environment that we want to have at our company.

- Wow, I should have asked you that one first, because we gotta unpack that one.

Probably gone down some rabbit holes.

Okay.

Thank you.

Stay with us.

We're gonna bring our guest on in just a moment.

Before we do that, coming up on the show, always interesting stuff.

We will have Jimmy Stanton, that's a name you may know, may not, he has been on this program before.

He is the Chief Executive Officer of Charleston based Santee Cooper.

It is an, of course, an energy company, and they have had their challenges, but also had their wins.

Jimmy will be joining us again, and also they are the single largest HBCU in this country.

And we will have the chancellor on.

It is North Carolina A&T Chancellor, Dr. Harold Martin joins us, and he will be joining us on this program as well.

We are careful not to be or sound patronizing, but our guest leads a school that seems a little bit like, and again, this is not patronizing, "The Little Engine That Could," and in fact, it is comparatively of course, to much larger cousins like Duke, North Carolina, South Carolina, Clemson, Wake, et cetera, et cetera.

This school is excelling in growth of both the physical plant for sure, students and also some burgeoning sectors like outdoor recreation in sports.

Joining us now from the plus 100-year-old institution, from Avery County in the North Carolina mountains, is the President of Lees-McRae College, we welcome again Dr. Lee King.

Dr. King, welcome to the program.

- Thank you, Chris.

It's great to be here.

- Gotta start with a social question, President King.

When you see some of the debate that goes on, and I'm going to say some things like the antisemitism house, the house testimony that went on near the end of last year, and not so much antisemitism, but what should colleges and universities be a place for?

What goes on or what would you like to see public debate and dialogue happen there?

- It's a great question.

First and foremost, I think colleges and universities are places where our very mission is about the free exchange of ideas, freedoms of perspectives, freedoms of educational viewpoint, and most importantly freedoms of speech.

But, and those freedoms need to be protected.

Those freedoms and those dialogues under campus need to be encouraged.

And it should always be discouraged when it crosses the line.

Like has happened to many times around the antisemitic debates that are happening on college and university campuses, like there is no question antisemitism is wrong.

University leaders, college leaders, faculty and staff, others need to confront those things, but also make sure that there is an environment on their campus that is welcoming, that's warm, that encourages people to share their differences and learn and grow from each other.

- Has that come up?

Have you had these dialogues in the last few months internally and with students and with the community?

- At Lees-McRae we really have not.

Our campus community is one that is very focused internally.

There, even though we're paying attention to world issues, our campus is not one where there is a culture of radicalism or a culture of where such polarizing views are shared.

Interestingly, we had an event on our campus with one of our students who is Israeli, and he shared a wonderful story about how the events of October 7th impacted him and his family.

And I was thrilled to see how our community came together to support him, to love him.

We had a large turnout of the local synagogue that came out to be part of that.

And it reflects, I think, who we are at Lees-McRae, where we love you no matter your background.

And we're gonna support you and stand behind you.

- [Chris] Brannen, question.

- Inflation has been a topic that obviously all of America is looking at in the Federal Reserve, wondering when will inflation come under control to begin to ease the rates down.

In my sector healthcare, in your sector education.

Fortunately, they're not looking at just those two.

If they were, they'd never lower interest rates.

What do you think, how does education address some of that runaway cost increase that's going on that really out, you know, far surpasses other inflationary items in the economy?

- Right.

Higher education, especially the small private college like Lees-McRae, we are very much a business, just like the business you run, just like the business that many of our viewers are running today.

So we're affected by inflation, we're affected by high labor costs.

All of the things that are pressuring your business pressure ours.

Where we have to be extra vigilant is ensuring that we are first and foremost, very lean and that we are being very, very efficient in our operations.

But also I think it's important with the debate, especially in higher ed, about is it worth the cost of higher education?

Institutions like Lees-McRae, I can confidently speak we do this, we focus on the value that you receive, ensuring that our outcomes are strong, that our educational programs are what the marketplace needs.

They're distinctive and they're a niche program.

And then I think if you're focused consistently on your distinctiveness, you are focusing on your value, but also being lean and transparent in your costs.

It makes it an easier dialogue in the public sphere.

But it's, you know, some of the criticisms that are there toward higher education and the cost of it are justified.

But we are a business much in the same way.

Every other business is.

- [Chris] Susie.

- You know, so we're seeing transformations in the economy, and, you know, some of that was accelerated by Covid.

I think it would've happened probably eventually anyway.

And then you're also seeing transformations inside of the higher ed institutions, and parents are fearful of what's coming next.

Students are fearful, transitioning workers are fearful what's coming next.

Have you had, let's say, a recent conversation with a student?

'Cause I can only imagine your daily interaction and entanglement with students.

Have you had a recent conversation where it, that really stood out, that affords an opportunity for you to think that there's hope and optimism for these students in what lies ahead for them?

- Yes.

- Given all of the transformation and turmoil.

- Sure.

So, our students are, you know, very concerned about the world that they're gonna go into.

Am I gonna be prepared?

And while I can't reflect on a particular conversation with a particular student of Lees-McRae over the last few weeks, I can say with confidence that our young people that are students at the college care very deeply about, am I being trained to be ready for the workforce that I'm gonna be going into?

Am I getting a good education that's technologically sound, but more importantly that is pedagogically sound.

And am I gonna be taught, and am I ready from the critical thinking skills, the experiential skills, to be ready to work in the workforce.

One of the things we do exceptionally well at Lees-McRae is experiential learning.

In fact, one of the ways that we've begun to talk about ourselves is perhaps America's experiential college.

As an institution, we have a great programs in, for example, our wildlife rehabilitation program.

Our students are participating in surgeries on animals.

Our students are providing anesthesia to animals and then their care to be released back into the wild.

Our ski industry business program, that's a joint venture with Beach Mountain Ski Resort.

Are teaching students not just to be good skiers and ski patrol members, but the business aspects of running marketing, running the safety environments that happen on the mountain.

So we are looking, and I think all of higher education right now is looking at, what are the distinctive niche that you have and how do you make sure that you are preparing students in ways that they're gonna have the skills to be able to live and work in a changing workforce environment.

Because the workforce environment is absolutely changing.

You all were talking earlier about the impact of artificial intelligence.

It's gonna affect everything that we do as a society.

And the colleges that will do the best jobs are producing students that are able to think creatively, but also be flexible in working as the world changes.

- How do you, and not, I don't wanna keep asking you questions Dr. King, that you have to have to defend the higher ed, but there are things going on.

In North Carolina, the UNC system is under pressure about funding from the general assembly, public confidence is falling in some higher ed, in general, things are getting stingier and revenue needs to grow.

And higher ed is almost become, and this is not fair, but there is this body that says higher ed is becoming a, and especially private universities are becoming a place that are more of a private club than they are anything else.

And it's getting harder to reach the bar to get into a school and to be able to pay.

So you talk about it as in very great terms.

But when you're in this, sorry for this long question, - It's okay.

- but how do you defend Lees-McRae in higher ed when you want it to be of value?

Do people see the value and does that work for you?

- I think absolutely people see Lees-McRae specifically as a value.

Our enrollment is increasing, our retention is increasing.

We now have retention rates among the best private colleges here in North Carolina.

The questions that the public asks about the value of higher education are all very valid, very important questions to ask.

And as they see some of the things that are happening in the news, it makes those questions even more valid.

I like to frequently say the world of higher ed because of the external change that's being imposed upon us or forcing upon us with the fewer numbers of high school students that are graduating from college.

The pressures from the legislatures and other things.

For institutions to thrive, they have to be distinct.

And they have to be able to go and prove to their constituents that we are a great value, and that we are producing workforce ready graduates, but also that we have distinctiveness in the marketplace.

And that's one of the things that I can be very proud of at Lees-McRae is through our academic programs, we have some distinctive niche programs, and we'll be building more, that further differentiate ourselves from the higher education crowd.

And I think the community is seeing that.

We're having larger and larger number, we have a record number of applications this year.

We have a record number of acceptances this year.

We have more students and families that are coming and visiting our open houses, and our opportunities for students to come and see.

And I think they're seeing that we're different, and that we are distinctive, and that we're not like everybody else - Just a quick follow up, and I'm sorry guys, but I wanna follow up.

You talked about the students coming in.

Is the academic rigor of the students that are coming out of post covid now, given the educational attainment challenges, do you see it being hard?

Is it as low as many people feared it would be?

- I think, interesting, what's happened at Lees-McRae in the post covid world at Lees-McRae, our student body's academic strength has gotten stronger.

Our students that are coming to the college have higher high school GPAs.

They have higher high school SAT scores.

But honestly, Chris, I think for us, that's a function of our renewed distinctiveness of the college, and how we are really focusing on that across the sector.

Yes, there's no doubt, students that are coming into college today from the post covid world are struggling with their writing skills or struggling with their math skills.

We have to do much more at the higher ed level of rehabilitation, remediation to overcome some of those things that happened during the covid time.

- [Chris] Okay.

Brannen question.

- Lees-McRae's motto, or at least it's described as the motto, "In the mountains, of the mountains, for the mountains."

What are some of the unique challenges and opportunities that Lees-McRae faces being located in the North Carolina mountains as opposed to being in a more urban environment?

- Sure.

People think Avery County may be, you know, even though it's one of the most beautiful places I've ever been, it's remote and it's rural.

And if you don't like cold weather this time of the year it's tough.

But it's one of the best places to be, certainly in the spring and the summer and the fall.

But you mentioned our motto, "In the mountains, of the mountains, for the mountains."

I think it's the best motto in American higher ed.

And it was coined by our founder, who was a Presbyterian minister in missionary in 1900.

And I told our faculty and staff when I came to Lees-McRae six years ago, if we let our motto be our guide, that will be the thing that continues to help the college thrive.

So unpacking that, if you look at many of our distinct academic programs, wildlife biology, wildlife rehabilitation, outdoor recreation management, ski industry business and instruction, wilderness medicine, those reflect our motto "In the mountains, of the mountains, for the mountains."

And I think in the post covid world, I think it's one of the reasons that Lees-McRae has really thrived post covid is that the mountains were seen as a safe place to be, and a place where it's more of an idyllic and an ideal setting for you to go to school.

- [Chris] Did you all coordinate that question and answer?

(all laugh) - I tell you, I'm gonna slip him a 20 after this is over, because that was a great question.

- [Chris] About two minutes left.

Quick question.

- So you mentioned work-based learning, and making sure that the graduates are ready for the workforce.

And you know, and I'm so heartened to hear that, because we hear from businesses all the time, it's skills over paper.

It is experiential learning work-based learning, that's where potential job candidates, where they really shine and where they can demonstrate to a prospective employer if they've got enough, you know, have to do the job and do the job well that they're being screened for.

How do you entangle yourself with the business community to make sure that those work based learning opportunities are being offered, and those experiential opportunities are available?

- Sure.

- And you've got about a minute.

- Okay.

So that's an area where we're working to grow.

Colleges like Lees-McRae, and I'll speak on behalf of all the other private and public institutions in North Carolina and South Carolina.

We welcome industry partnerships for internships, for experiential learning opportunities.

We are all hungry to find those business relationships that we can plug our students into while they are students to begin to work in your industries so that they are even more workforce ready when they come out.

- You know, I wanna say it, so a mountain school like Lees-McRae has a loyal core.

I mean, obviously people love the school.

And the way you talk about it, you can tell, is there some competitiveness that you have with Boone and App?

Both mountain schools, both like to say they're in the mountains of the mountains, maybe a little differently.

- You know, I can say I don't know that that App State thinks of us as a competitor, but I love nothing more to say we're doing this better than App State, we're doing, you know, the number of whether it's an academic program we have that they don't have, or whether it's a sport program that's excelling that they don't have.

I'm a competitive person by nature and I love to compete against them.

'Cause I think we offer more value.

And I think we offer a deeper and a better educational experience on our campus.

- So, I'm sorry, very quickly, 30 seconds.

The biking program and the Ironman program got mashed together and what is it called?

- So we have a cycling studies program at Lees-McRae.

And you're talking cycle, the discipline of Cyclocross.

- [Chris] Cyclocross.

- Cyclocross is a discipline we have with our cycling program at Lees-McRae that's a combination of mountain biking and cross country running.

- Okay.

- And it's really fun to watch.

- Yeah.

Oh, I bet.

Dr. King, thank you.

Thanks.

- Thank you.

- I know we've gone back and forth on a lot of things.

Appreciate you being here again.

Best of luck.

- Thank you for having me.

Thank you so much.

- Hope it warms up, up there for you too.

- I'm ready.

- [Chris] (laughs) I know everybody is.

Susie, glad to see you again.

Thanks for being on the program.

- Thank you.

- Thank you.

Brennan, always nice to have you.

Welcome.

- Thank you, Chris.

- Thank you for watching our program.

If you'd like to re-watch this program or you have any other programs you'd like to watch, carolinabusinessreview.org.

It's pretty easy.

Thank you for watching.

Happy weekend.

Stay warm, stay safe.

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