Centene’s pullback in NC conjures new priorities for economic developers
By Alexis Muellner
Tampa Bay Business Journal
Published: Aug 22, 2022

At first, news out of Charlotte, North Carolina, Thursday that Centene had backed out of its commitment to bring 3,200 jobs to a nearly finished headquarters was a shock that resonated here.

Tampa was a distant No. 3 on the shortlist for the "Project Big Boy" prize in mid-2020, dangling $50 million in incentives, a situation that accentuated the region's weaknesses in fighting for such projects without viable state incentives.

But if you think deeper, it's not so unexpected.

Centene cited employee preferences for remote work as the lead rationale for its decisions in Charlotte. Likely other factors are at work in a decision-making process that began after Centene announced its plans in summer 2020. Covid-19 brought new concerns that are now old news: Will a company tie up a lease that is too big for its near-term needs?

The news raises broader issues around headquarters recruitment. Economic developers won't stop chasing headquarter relocations — it has been the gold standard of the discipline for years. And the rationale for spending time and money to land those big fish remains valid: Regions want more C-suite executives because they get involved civically, endow higher education chairs and become corporate philanthropists, among other reasons.

But in discussions with economic developers, some of the luster of those deals is wearing off because some regional stakeholders increasingly see the big offices as fluff.

"The whole aspect of headquarters for the sake of headquarters has been slowly going away because a lot of shareholders for companies just see it as an ivory tower with a lot of overhead associated with the C-level executives," Pasco EDC CEO Bill Cronin told me. "A lot of people don't stomach that well."

That means there's a shift in play.

Almost every headquarters deal now tends to have an operational unit with its sales unit, customer service, or other vertical attached to help justify that operation. It also makes more sense if that company already has an existing presence in a market to build on — sort of like what Centene had in Tampa Bay with its WellCare presence.

As companies find some units more compatible with remote work, large groups of employees will no longer need a corporate workspace, adding more stressors to developers' calculations.

The lesson for economic developers working with potential candidates for relocation is to make sure they're adding more to their deals and vision than just seating the C-suite. It also suggests more attention to retention is needed.

"Focusing on the existing operations and industry that you have in place will help you to recruit that headquarters if you're taking care of the business units that they already have," Cronin said. "There is a need to highlight retention and focus on what you've got in that business unit and then expanding those business units to include other things."

Also, the Tampa Bay region and others will face new competition for big users because of the move-in-ready campus in Charlotte. It will be in the back of the minds of every economic developer paying attention, Cronin said. Charlotte's economic development community now has a building they can put on the table immediately.

"They're going to do everything they can to get somebody in there as fast as they can," Cronin said.