RENEE MONTAGNE, HOST:
Businesses in North Carolina say they're beginning to deal with the economic fallout from House Bill 2. That's the law that blocked new protections locally for lesbian, gay, bisexual and transgender people. Some restaurants say they've had a reduction in business. Hotels have seen conference organizers cancel conventions to protest the law. And startups say some investors are steering clear of North Carolina. Jorge Valencia from member station WUNC reports on how businesses are coping.
JORGE VALENCIA, BYLINE: Here's how North Carolina's new law has played out across the country.
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UNIDENTIFIED WOMAN #1: The line has been drawn in North Carolina on the use of public bathrooms for transgender individuals...
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UNIDENTIFIED WOMAN #2: ...That threatens billions of federal school dollars.
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UNIDENTIFIED MAN: The U.S. Justice Department and the state of North Carolina sued each other.
VALENCIA: Or perhaps more telling, here's some satire from the website Funny or Die.
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UNIDENTIFIED WOMAN #3: Ah, North Carolina, home of beaches, mountains and an extremely homophobic governor. Now you can experience the beautiful outdoor cityscapes and incredible ignorance by hang-gliding backwards in time.
VALENCIA: The law, best known as HB 2, restricts the bathrooms that transgender people can use. It also prohibits someone from suing in state court if they believe they were discriminated against and fired from a job. In addition, it prevents cities from surpassing their own nondiscrimination ordinances.
All of this has been a headache for North Carolina's tourism industry. Many businesses are worried, especially marketers. Take, for example, New Media Campaigns, a startup near Chapel Hill that helps companies manage their public image.
CLAY SCHOSSOW: No doubt. I mean, sometimes literally that. We're creating their identity and their logo.
VALENCIA: Clay Schossow is one of the co-founders, and he knew the law was a public relations problem. So his company made a website and a logo people could print out and put up outside their shops.
SCHOSSOW: So at first, we had businesses against HB 2, and the subhead was everyone is welcome here. And then we decided we wanted to put out more of a positive message, and also, we're hoping that HB 2 wouldn't become this thing that everyone knows. So we thought well, why lead with that?
VALENCIA: The design says in big bold letters everyone is welcome here. Dozens of businesses are using it now. But HB2 has definitely become its own brand. One estimate says the law has gotten more than $31 million worth of negative PR.
MATT WILLIAMSON: Well, I'll tell you what makes me more mad.
VALENCIA: Matt Williamson is co-founder of the software company Windsor Circle. He and others have long worked to make the research triangle of Raleigh, Durham and Chapel Hill welcoming to people from different backgrounds, not to mention highly-skilled workers and investors. Williamson says even venture capitalists and AOL co-founder Steve Case canceled a visit to North Carolina.
WILLIAMSON: And there's some level of which, like, if I've got to lose a contract or if I've got to not have Steve Case coming to Durham and people feel the pain of that, let's feel that pain.
VALENCIA: The bad press is something that came up at a recent meeting of advertising professionals close to the capital in Raleigh.
Vernessa Roberts is the diversity chair of the Triangle Advertising Federation, and she organized a workshop about HB2. She says it has marred the state's reputation.
VERNESSA ROBERTS: And it's not an easy fix. You know, there's not a way to spin your way out it. There's not a way to kind of buy your way out of it.
VALENCIA: A state lawmaker tried to do just that by repealing the law and setting aside $2 million to market North Carolina around the country. But the House speaker wouldn't let him. For NPR News, I'm Jorge Valencia in Raleigh. Transcript provided by NPR, Copyright NPR.
