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When Gov. Pat McCrory signed House Bill 2 into law in March, opponents of the so-called “bathroom bill” predicted it would do immediate and long-lasting damage to both the reputation and economy of North Carolina.

Supporters of the bill, particularly Republican legislators and national right-leaning think tanks, almost uniformly ignored those arguments, criticized the businesses, executives and intellectuals that voiced opposition to the law and instead focused on making their point that HB2 addressed privacy and safety issues.

Reputation and safety might not be easily quantifiable, despite strong opinions on the issue and national attention. Evidence that transgender individuals are sexual predators lurking in public restrooms to assault someone or expose themselves to minors doesn’t seem to exist. There have been cases of non-transgender predators staging attacks from public restrooms, and in theory such people could have tried to use anti-discrimination laws as a shield for their behavior. But such cases are rare nationally and nonexistent in North Carolina.

There are, however, some economic markers that can be evaluated.

For Western North Carolina specifically, the true large-scale impact of HB2 is more difficult to ascertain. The region might feel the ripples of the NBA’s move to cancel Charlotte’s hosting duties for the league’s All-Star Game in 2017. It might also feel a slight sting from PayPal or Deutsche Bank choosing to not expand in Charlotte or Cary.

But there haven’t been any similarly high-profile job cancellation announcements for Buncombe County or any of the other counties in the region. Parts of the regional economy are as thriving as ever. Whether those parts of the regional economy would be doing even better without HB2 is up for debate.

Opponents of HB2 who spoke with Carolina Public Press also said that what can’t be measured are the number of jobs lost from companies that won’t even consider expanding to North Carolina now, or conventions that don’t see the state as a host option.

The first cut

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The months immediately after the passage of the Public Facilities Privacy and Security Act saw a loss of more than $1 million in hotel bookings in Buncombe County alone, according to Stephanie Pace Brown, the executive director of the Asheville Convention and Visitor’s Bureau and a senior vice president with the Asheville Area Chamber of Commerce. A large part of that loss was tied to the announcement that the W.K. Kellogg Foundation, a nonprofit organization linked with the Kellogg cereal company, was canceling a four-day conference at the Grove Park Inn in Asheville because of HB2. WLOS reported at the time that the conference would have brought 500 people to Asheville and had a $1.5-million economic impact.

Several authors and musical acts, including the rock group Boston, canceled Asheville appearances shortly after the passage of the law. Other entertainment figures performed in the area but donated money to pro-LGBT organizations.

Brown said hotel room demand, or the total number of rooms sold, is a good indicator of the strength of the tourism economy as a whole. That number has steadily increased each month compared to the same months in 2015, even after the passage of HB2. The Convention and Visitor’s Bureau also launched a high-profile advertising campaign designed to keep the tourism dollars flowing.

“The other thing that I think is important is how we did against our competitive set in non-North Carolina markets,” she said. “Our growth rates have been better than our competitive set. When we look at markets in other states, Asheville has outperformed those other places.”

A tarnished reputation

There’s been little reported about economic development projects in WNC being canceled as a result of HB2 but, according to Dr. Patrick McHugh, an economic analyst with the left-leaning North Carolina Budget and Tax Center, “the reality of the economic development world is that the majority of deals that you lose are deals that you don’t even hear about.”

“You get taken off the table before you even get to the point of reaching out local elected leaders or economic developers,” he said. “Some pretty good evidence coming out of Charlotte (shows) that when they reported the change in the number of inquiries and site visits they’ve received since HB2 passed, it was a pretty substantial drop-off in the amount of interest they’re getting from companies.”

State. Sen. Terry Van Duyn, a Buncombe County Democrat, cited a statement from Asheville Chamber President Kit Cramer that the community had been in the race to be the new home for the corporate headquarters of an unnamed tech company but that those plans had been canceled.

“HB2 is absolutely having a deleterious effect on the North Carolina economy,” McHugh said.

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“Some of the biggest hits do seem to be happening in the western part of the state. It does appear, at least based on the reporting, that a great number of the lost tourism and conference activity is happening in the Asheville area. It’s certainly not limited to Asheville … but a lot of those reports are coming out of Asheville. That, in some ways, makes sense, given Asheville’s reputation as an open and inclusive place.”

Van Duyn said she had been contacted by an architect who had a client cancel plans to build a house after the passage of HB2. She said she’d also heard from restaurant owners who had had small weddings cancel private dinner plans.

“If you’re one of those small restaurants downtown, that’s the difference between a profitable month and an unprofitable month,” she said.

CPP reported last month on a Black Mountain town hall at which Van Duyn and state Rep. John Ager, D-Buncombe, described a negative economic impact for the region after HB2’s passage.

The McCrory administration challenged those claims after reading the article. Despite the convention, concert and hotel cancellations, the administration insists that all is well, pointing to plans from German-owned Demmel Inc., a maker of automotive decorative trim, in placing a facility in Henderson County with 50 jobs and an investment of some $4.3 million in East Flat Rock as an example.

Michael Gebelein

Michael Gebelein was an investigative reporter with Carolina Public Press. To contact Carolina Public Press, email info@carolinapublicpress.org or call 828-774-5290.

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