[piano intro] - Hello, I'm Nido Qubein.

Welcome to "Side By Side."

My guest today is a servant leader.

He currently serves as the chairman of the North Carolina Board of Transportation.

Right now, he's helping transform North Carolina into an economic powerhouse.

Today, we'll meet Michael Fox, the president of the Piedmont Triad Partnership.

- [Announcer] Funding for "Side By Side" with Nido Qubein is made possible by: - [Rep] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors locally, thanks to our teammates.

We are Coca-Cola Consolidated, your local bottler.

- [Announcer] The Budd Group has been serving the southeast for over 60 years.

Specializing in janitorial, landscape, and facility solutions, our trusted staff delivers exceptional customer satisfaction.

Comprehensive facility support with the Budd Group.

- [Rep 3] Truist, we are here to help people, communities, and businesses thrive in North Carolina and beyond.

The commitment of our teammates makes the difference every day.

Truist, leaders in banking, unwavering in care.

[inspiring music] - Mike, welcome to "Side by Side."

I know that you were born in Boone, North Carolina.

You are a Tar Heel citizen through and through, and you're dedicating your life now to help your home state to have economic growth, economic vibrancy, with people coming to our state from all over the country.

What drives you to give so much of your time and energy to economic development?

- Well, thank you for having me.

I think it was the way I was raised by my parents and my family.

We've always been involved in the community and have thought about the greater good over individual needs and such.

And really in North Carolina, we're a growing state, but our economy needs to continue to grow to provide good jobs for people, for the families that are here and the people that will be moving here.

So it is a critical priority.

When people have jobs, things are a lot better for everybody.

- Mm-hmm, and now you are an attorney, of course.

You're a distinguished attorney.

You were general counsel for Cone Mills for many years, and then you went into private practice.

You've been selected one of the best lawyers in America, and you are also the chairman of the board of the Department of Transportation.

- People say I can't have one job [laughs].

- What does tell us about the DOT?

I mean, we know that you have a huge budget, a lot of employees, and you are basically in charge of the highways and the byways of our state.

- It's an amazing organization.

Over 10,000 employees, about a $6 billion annual budget at this time.

And every day all of those employees wake up and go out to serve the citizens of North Carolina.

And it's not just when it's sunshine, and when it's snowing, when there's a severe weather.

And it's really an honor to be able to participate in such a great team.

And in addition to bridges and highways, we have ferries.

We have the second largest ferry fleet in the nation.

We work with airports, we have rail, buses and pedestrians.

We have walking trails and sidewalks.

So we cover all modes of transportation.

- So how much of that work is done internally with these 10,000 employees, and how much is outsourced?

Much of that big work is outsourced, right?

- Oh, probably 90% of it.

We rely on a very robust partnership with our contracting community in North Carolina.

And those folks are extensions of our DOT family.

And so almost every large construction project goes out for bid.

And so there's an outside contractor that does those, but we work very closely with them.

- Mike, why does it take what seems like forever to get a highway finished?

You know, whether you go on I-85 or I-40, they're working on something.

We're grateful for that.

More lanes, faster traffic and so on.

But it seems like it takes forever to get a project done.

- It's usually a three to five year process, and it starts with the design, then you have to have all the permitting, the environmental reviews and such.

And then you start buying if you need additional property.

And then you gotta move utility lines a lot of times.

And then you get to start the construction.

So the construction's usually a three-year phase.

The first two are a design and right away.

- So when I think of I-85, I think of I-40, these are national highways, right?

These are federal highways.

- Yes.

- Any work on those highways, is it done by DOT or is it done by federal government?

- It's done by the state DOTs, but a lot of the funds come from the federal government.

- Even though it's a interstate highway?

- [Michael] Yes.

- It is still done by that state.

That segment of that highway in the state is the responsibility of the state?

- Yes.

US DOT really administers programs and provides funding, but they don't do much actual construction themselves.

- So what challenges you the most with DOT?

I mean, you know, sometimes I hear some complaints from people that certain parts of the state get, you know, favoritism more than others.

Is it a political thing that if you have the right people on the board, they can push things better.

You know, I've heard some communities say, we gotta get some legislature from our area in Raleigh so they can help us push this project forward.

How true is that?

And to the extent that you can tell us how can these communities who don't get immediate attention, or priority maybe is a better word for it, can get up a little faster and better.

- Many years ago, it used to be very political, but about a decade ago, in 2012 through 2014, a bipartisan effort, both Governor Perdue and Governor McCrory and the legislature agreed on doing a different plan going forward, a prioritization process where numerical scores are entered in based on needs and congestion, safety, transportation alternatives, whether you have multiple routes to get somewhere.

And those are scored, and the scoring system was really one of the first in the nation.

And it is about as objective as you can make it.

And each two years, we do a new rolling 10 year plan in which those scores are considered.

And the communities get some participation in the regional and the local areas.

They get to say, we'd like this project versus this project.

But really, I'm very proud to say that politics has very little to do with any major highway construction.

- So lemme see if I can do the math on this.

So if the budget is $6 billion a year, and projects typically take three years, we'll say we have access to $18 billion over three year period.

How much of that is actual administration?

How much of that is actual projects that goes into the project itself?

- Our budget is split into really two different buckets.

One is, to simplify it, I'd call it construction.

And that's usually about 3.5 billion.

And the other is maintenance and administration.

And that's the remaining.

And so most of it is actually out there administering work.

And with the maintenance, I mean, you know, you see us resurfacing roads or repairing roads or mowing the side of the road to keep them clean.

That's what that is.

- So roughly $10 billion every three year cycle is available for construction?

- Correct.

- And what would you say is the total number of, shall I call 'em, requests or project considerations that you have at the moment?

- In the last round of prioritization, I think we had enough money for, you know, five years of projects, and we had enough project demand for 20 years of projects.

- I see.

So that's the challenge always.

That's where the prioritization comes into the game.

- Correct.

- And how long have you been chair of the DOT?

- Since 2017.

- Wow, so that's a long time.

- Yeah.

- What do you worry about the most?

- Really the future funding of transportation, because right now it's heavily dependent, both at the federal and the state level, on the motor fuel tax.

When you go, and if you have a gasoline-powered vehicle, you go to the pump, you fill up your tank, there's tax in there from both the state and the federal level.

And it's almost invisible.

I mean, people know it's there.

It's on the pump, but you don't think much about it.

But as vehicles, even traditional gas-powered vehicles, become more fuel efficient, we get less revenue.

And as there's a transition to hybrid or even all EV vehicles, then we don't get any revenue from that.

So we have to work going forward.

And we've been working on this for about, yeah, five to seven years of alternatives to make sure that we have the funding necessary to continue, you know, to maintain the infrastructure.

- Trucks have licenses, and they pay annual fees.

Does that go into DOT funding?

- It does, it does.

- And what about airport landing fees, for example?

- Those go to those airports, you know, for them to maintain their runways, improve their concourse.

- [Nido] Nothing to DOT itself?

- No, although we serve as a pass-through for federal money to all the local airports.

- So you've told me about one concern, which is the lessening of revenue because of efficiency of cars or electric cars and so on.

And as you look at those, because you have a comprehensive view of North Carolina's economy.

And when we think about the ports, or when we think about airports, when we think about rail, when we think about traffic on our highways, which has become quite heavy wherever you look, what is it that the chair of the DOT worries about?

These two or three things, that if we don't plan for them now, strategize for them now, an influx of people coming to North Carolina is gonna cause even bigger issues.

- One of the things I worry about is we're not thinking far enough ahead.

I think a lot of the growth that you've seen in a lot of North Carolina has been due to the foresight of people who served before me, you know, some 20, 30, 40 years ago who had the foresight to say- - Long-term planning.

- Correct, we might need an interstate here, or we might need more capacity here.

And that's really been a key economic advantage for us in competing for employers to locate here is, how good our road network is.

- When you go up and down the highways, let's say around Raleigh in both directions, you see a lot of residential facilities being built right there on the highway, right on the side of the highway.

First of all, this is amazing that anybody would want to live right there right on the side of the highway.

At the same time, balance that off with so many cities.

You see it in Charlotte, you see it in Winston-Salem, other places where the state has to build these big sound, what do you call 'em?

Soundproof walls.

- Noise walls.

- Noise walls, which most time don't look very good, although sometimes they look okay.

Is that not a, you know, talking about long term planning, is that not a sort of a contrast of ideas that doesn't balance out?

How long is it gonna be before all the people living on the highway say too much noise?

- Right, right.

We find that people often will trade, make trade offs in terms of where they live.

Sometimes they wanna live closer, and they're willing to have some noise.

And of course, if you've ever lived in a large city like New York or DC or Miami, you're used to noise all the time.

So it's all a matter of where you come from.

If you came from a farm, and you moved next to an interstate, you're gonna think that's a lot of noise.

If you lived off the, you know, a busy street in Manhattan, you might not think it's much noise at all.

- Yes.

This is probably not a fair question for you, Mike, but try to estimate for us anyway, if you look in the last 10 years, and the influx of people, migration of people from other places to North Carolina, we know why they do that.

Four seasons of the year, mountains to beaches, wonderful place to raise a family, great place to work, and all of that.

What percentage of North Carolina's population today is growing annually, and where are they coming from?

- We're finding a lot of growth from the Northeast for many of the reasons you just said.

We're more affordable.

We have a more moderate temperate climate.

If you go further south, sometimes it gets a little hot.

And we still have four seasons most of the time.

And it's a high quality affordable place to live with a good educational system, one of the finest public and private university systems in the country, if not the world.

And, you know, our local governments have been good about dedicating resources to K through 12 education.

So you can come here, you can get a good job, your children can go to a good school and have great choices of where to go to, you know, secondary education if they choose.

We have a great healthcare system, and as you mentioned with the mountains to the beach, and, you know, professional sports in every direction.

It's a pretty good place to live.

- It is, it's a very good place to live.

Let's shift a little bit about your present, present almost full-time job, being president of the Piedmont Triad Partnership.

First, tell us what it is and what it does.

- So the Piedmont Triad Partnership is a private, non-profit organization, which is, you know, essentially membership is a lot of the leading businesses in this area, who their leaders decided years ago to band together to create an organization that would promote economic development in the entire region, not just in their particular city or county.

And the motto over the years have developed to be a win for one is a win for all.

And the thought being that economic development is really a team sport.

It doesn't work so well if you have, for example, in this area, Greensboro competing against Winston-Salem, competing against High Point and having, you know, acrimony or bitterness over, you know, where an employer decides to locate their facility.

Because when you interview these CEOs, they don't care about a city boundary or a county line.

They just want a great site for their employees, where their employees can afford to live, where they can get to work easily, 'cause the highways aren't congested, and where they have access to, you know, all the amenities that anyone would want.

- And access to workforce.

- Exactly, exactly.

And so years ago, my predecessor Stan Kelly got all the local economic developers together and started working on this teamwork effort, and they really act on it now.

We act as a region.

When we go places to recruit, the national consultants who help these large companies decide where they wanna be, they say, "A lot of people talk about regionalism.

Y'all really live that."

- You coined a statement.

What is it?

Good for one?

- For a win for one is a win for all.

- A win for one is a win for all.

And you define the region as what?

Carolina Core, what is Carolina Core?

- The Carolina Core is roughly an 18-county swath through the central part of North Carolina, essentially most things between Raleigh and Charlotte.

And it starts, you know, primarily along 4-21 in the Wilkesboro area, North Wilkesboro, and goes all the way through the heart of the triad, Winston-Greensboro-High Point and down 4-21 to Fayetteville.

And that's our core area.

- So Mike, what attracts people to North Carolina besides climate and workforce and so on?

I mean, there are other states that would compete with North Carolina.

Why in the end, do they pick North Carolina versus other states that might also have four seasons, might also have, you know, a good place to raise a family and so on?

What is so distinctive about us that makes us stand out and grow the way we've grown in the last decade?

- You know, a couple things.

I think we have, we're reliable and steady.

We're pretty moderate state.

You can come here, and your views are accepted.

The old joke used to be years ago that North Carolina, between South Carolina and Virginia was a valley of humility between two mountains of conceit.

- Oh, I've never heard that, that's interesting.

- You can come here, you can get a job, you can get an education.

It, again, the climate is great, and it's a big state with a lot of, you have a lot of choices of where you wanna live.

You can live in an urban area, you can live in a suburban area, you can live in a small town, or you can live on 40 acres and, you know, out in the middle of nowhere.

- I don't know how big North Carolina is.

How many, would someone estimated by, not by acreage, right?

How?

- Yeah, I don't know what the square miles is.

- Yeah, this is square miles is the way you'd look at it.

- I do know we're second to Texas than the number of road miles that the state maintains at 80,000.

- Really?

- Yeah.

- Wow, one wouldn't think that.

Texas being such a big state.

And we are long, so it takes a long time from, what, Duck, North Carolina to Canton, North Carolina.

- Yes.

- Six hours, seven hours.

- Probably eight.

- Eight hours.

- So many people wanna live in Charlotte, right?

So many people wanna live in Raleigh.

Why is that?

- It depends on, again, what you're looking for.

Those areas have done very well in terms of creating a great downtown environment.

There's a lot of growth there, a lot of activity, and some of the younger people like that, and even some folks- - Quality of life.

- Exactly.

You can be close to work, you can walk to work, you can walk to get, you know, a meal after work.

You can walk to entertainment.

- But trade that off with a lot of traffic and, you know, a lot of people, and it's become more expensive.

- It has.

- Mike, you know, the Piedmont region, you correct me if I'm misstating the geographical location, suffered immensely, what, two decades ago with NAFTA and so on.

Many jobs were lost, and are we on the way back?

- Absolutely.

You mentioned my previous experience working for Cone Mills, which is a very large textile manufacturer, at one point, one of the largest in the country, the largest producer of denim in the world.

And this area regionally typically relied on textiles, furniture, and tobacco.

And all of those industries are a shadow of what they used to be, largely because the production went overseas.

And so we've had to really pick ourselves up by our bootstraps and reinvent ourselves.

And we've done a great job of that.

We're now a hub of advanced manufacturing.

We have that manufacturing background, it's sort of in our DNA.

The people who live here view it as a good job, not as something someone else wants to do.

And these jobs pay well these days.

We recently landed the Toyota battery manufacturing plant in the region, and they'll employ several thousand people when they're fully up and running.

And we've seen that type of industry, that new modern advanced manufacturer really thrive here.

And we've become a hub for that.

- Honda, Supersonic, all of those.

That's also gonna create a tension for the capacity of the area to build enough residential facilities for rent or for purchase, and with the prices so high in construction.

What is it you see as you look, you know, over the next 3, 4, 5 years in terms of affordability of housing?

I mean, you mentioned the Toyota battery, for example.

Those 7 or 8,000 people, some of those we think would come from other places too, and they're gonna need places to live and so on.

And how does construction of residential facilities enter into the strategic thinking of DOT on the one hand, Piedmont Triad Partnership on the other hand?

- So from the Piedmont Triad Partnership perspective, it's all about teamwork.

In order to have enough housing units, which is critical, because no one's gonna locate a manufacturing facility here that employs 3000 people if there's nowhere for them to live.

You've gotta have a team approach.

You've gotta start with local government.

They've gotta be supportive of it.

They've gotta be able to provide the infrastructure like the water and sewer to be able to make that happen.

And then you've got to work with your builders.

And we've got a great group of builders, both, you know, local and national in this region.

They view it as a very thriving area.

So there are, you know, tens of thousands of single-family housing units, and tens of thousands of multifamily housing units that are in the pipeline right now.

So I feel good about that.

We don't need to slow down, but we recently did a housing study that shows there is, you know, there are tens of thousands of units short.

But I think we have a good plan to get there.

- And I read where there's some concern among the population, not just in North Carolina, but across the country, that a lot of this housing now is owned by mega corporations.

And that's good in the sense they have the capacity financially to come in quickly and develop large areas.

That's not so good in the sense that this could be some monopoly in terms of pricing.

What is your opinion on that?

- I've heard that concern, but I haven't seen it in effect here in this region.

There's a large number of different builders who, you know, come in here.

And the single family for rent is a relatively new concept across- - Single family?

- For rent.

- What does that mean?

- That's where you have a traditional neighborhood, but instead of it being owned by individual homeowners, it's owned by a corporate entity, which then manages it much like they would an apartment community except it's a single-family home.

- It's a self-standing home that you rent it.

- Right, and those have been very popular because a lot of people, you know, they don't know how long they're gonna be somewhere.

So they don't want necessarily purchase home.

They wanna come into an area, but they've got a family.

So they might not wanna be in a traditional walkup apartment.

Maybe they have a dog, you know, kids that want a little backyard, but they wanna come into the area and figure out where they ultimately would like to buy a home.

And this gives them a different option.

- Yeah, well, it's all fascinating to me, to study the strategic economic thought process about what is and what can be and what is gonna take us from now to then.

It takes a lot of genius thinking and planning and accurate forecasting and all the rest.

I suspect that the tax flexibility in North Carolina has also helped these companies to come here, yes?

- Yeah, absolutely.

We are generally viewed by most business organizations that rate states in terms of, you know, good places to do business is doing very well in the tax categories.

As a matter of fact, two years in a row, we were the number one state in the country to do business.

We were number two this past year.

I think there's some scoring errors there, but we're just barely behind Virginia.

But three years in a row to be either number one or number two is pretty good.

- What about this whole issue that some people don't feel, feel strongly about, which is the incentives issues that the state and local government would issue incentives?

- Now, I think, our incentive policy is a very responsible one.

It's tied to the number of jobs created.

It's tied to the amount invested, and there's a clawback provision if the companies don't meet that.

So I think it's a responsible public policy.

- Mike, thank you very much for being with me on "Side By Side."

It's fascinating to talk about all these areas that affect the citizens of North Carolina and affects generations yet to come.

I, for one, appreciate your servant leadership very much.

Thank you for being here and best wishes in all that you do.

- Thank you very much.

[inspiring music] [inspiring music continues] - [Announcer] Funding for "Side By Side" with Nido Qubein is made possible by: - [Rep] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors locally, thanks to our teammates.

We are Coca-Cola Consolidated, your local bottler.

- [Announcer] The Budd Group has been serving the southeast for over 60 years.

Specializing in janitorial, landscape, and facility solutions, our trusted staff delivers exceptional customer satisfaction.

Comprehensive facility support with the Budd Group.

- [Rep 3] Truist, we are here to help people, communities, and businesses thrive in North Carolina and beyond.

The commitment of our teammates makes the difference every day.

Truist, leaders in banking, unwavering in care.