Around the South Summer 2004

QUIZ

Which of these companies employs the most workers from a single location in the South? HINT: The number of employees totals almost 50,000. (a) FedEx in the Memphis area (b) Wal-Mart at and around its headquarters in Northwest Arkansas or (c) Disney in the Orlando area (d)

(Scroll down for answer)

New Steel Maker Might Choose Rural Arkansas

SteelCorr, a new company headed by the former CEO of steelmaker Nucor, is looking at sites in Arkansas, Louisiana and Missouri for a $700 million, 450-employee plant that would supply steel to the South's growing automotive industry. Apparently SteelCorr's preferred site is near Osceola, Ark. That site is a 970-acre tract on the Mississippi River that is near a plant Nucor operates in Bytheville, Ark.

Mississippi Passes Tort Reform Act

In the summer quarter the state of Mississippi passed a new bill limiting damages incurred by individuals, business, industry and the medical profession. Caps on punitive damages in the new law are based on the defendant's net worth beginning with a two percent cap for a net worth between $0 and $50 million.

Texas to Implement "Cluster" Strategy

A few years ago, the Louisiana Department of Economic Development launched a new economic development strategy that involved the creation of cluster directors and teams. These individuals would focus on their individual cluster industry exclusively, such as automotive, biotech and information technology. Texas Gov. Rick Perry will announce in the fall a similar strategy for the Lone Star State in its efforts to create jobs. Perry has identified six industries that he will apply to the cluster concept. Those industries are the life sciences, energy, information technology, petrochemicals, advanced manufacturing and aviation/aerospace/defense.

Wiring of Rural Virginia Begins

In the summer quarter, Virginia Gov. Mark Warner announced a $12 million investment in broadband technology that will result in the installation of 700 miles of fiber-optic cable connecting 20 counties and five cities in southern Virginia. In addition to the cities and counties, over 50 industrial parks in south Virginia's rural regions will be connected to broadband service.

Southern Markets Make List of Least Taxed

Houston, Jacksonville and Memphis were the three Southern markets that made Kiplinger's top 10 for U.S. markets with the lowest tax burden. Other markets of note placing in the top 10 outside the South included Las Vegas, Manchester, N.H., Phoenix and Seattle.

Textile Leaders Plead Case

In the summer, U.S. textile industry officials formally asked the federal government to place temporary quotas on sock exports from China. China has increased its sock exports to the U.S. by over 2,000 percent in the last two years, from 462,000 dozen pairs to 22 million. Since 1999, U.S. sock makers' share of the domestic market has dropped from 75 percent to almost 40 percent. Four U.S. textile associations petitioned the Department of Commerce in an effort to save the nation's sock industry, much of which is located in the American South.

Carolina's Textile Industry Holding On

You've read about North and South Carolina's job losses in the textile industry. Those losses have been compounded by others in states in the South, specifically Virginia, Alabama and Georgia. With all of the job losses announced by the textile industry in the Carolinas, one might think they have no textile industry left. Nothing could be further from the truth. Textiles still represent the largest employment sector in North Carolina at 15 percent. South Carolina's percentage is even higher with nearly 20 percent of the work force in textiles.

National Center for Hydrogen Research Breaks Ground in South Carolina

In mid-August, government, university and industry officials broke ground on Aiken County, S.C.'s National Center for Hydrogen Research. The unique 60,000-square-foot facility is dedicated to hydrogen technology research, development and commercialization. The $9.2 million center, located in Aiken County's Savannah River Research Campus, will bring together scientists, industries and universities to develop hydrogen fuel technology to its full potential.

The nearby Savannah River National Laboratory has 50 years of experience at producing, handling and storing hydrogen for stationary and automotive purposes. SRNL will work with the University of South Carolina's National Science Foundation Fuel Center of Excellence in helping establish South Carolina and Aiken County as one of the world's centers for hydrogen fuel technologies.

Scheduled to open in 2005, the center will contain more than 50,000 square feet of lab space. Approximately 50 researchers and technicians will form the initial staff at the center. Plans include adding 40 more researchers within two years.

The center's structure will allow for technology transfer between researchers and industry, paving the way for other hydrogen-related industry to locate in the Aiken area. At the groundbreaking ceremony, officials estimated that the new hydrogen center will help create nearly 40,000 jobs in South Carolina by 2020.

Houston, Atlanta Near Top of Fortune 500 Ranking

Houston and Atlanta are home to more Fortune 500 headquarters now than any other U.S. market other than New York. Houston is second, followed by Atlanta, which is tied with Chicago for third place.

Survey Cites Kansas

A new survey shows that Kansas is the most business-friendly state in the nation. The Pacific Institute for Public Policy, based in San Francisco, conducted the survey for Forbes magazine. Kansas' No. 1 ranking is based on a comparison of 143 variables, including tax rates, state spending, income redistribution, tort laws, right-to-work and wage laws, occupational licensing, environmental regulations and the number of government agencies.

Atlanta Metro Will Top 7 Million in 25 Years

Officials with the Atlanta Regional Commission predict Atlanta's population will top 7 million within 25 years. It currently stands at around 4.5 million. To deal with the expected growth, the ARC has proposed a $50 billion transportation plan over the next 25 years called Mobility 2030. The plan calls for some expanded roads, an enhanced rapid transit system, new high-occupancy vehicle lanes and better synchronization of traffic lights.

Six Southern States Earn S&P "AAA" Rating

Virginia, North Carolina, Georgia, South Carolina, Missouri and Maryland earned Standard & Poor's "AAA" credit rating this year, the agency's highest rating it gives out. The six Southern states were joined this year by Minnesota, Delaware and Utah as the nine states in the U.S. with S&P's highest credit rating.

Kansas Restructures Work Force Development

For the first time in more than 30 years, Kansas is implementing a major restructuring of its work force development system to make it more responsive to the needs of employers and job seekers. The new system is called Kansas 1st. It combines business-related programs with programs directed at job seekers to create a seamless system serving employers, job seekers and educational institutions. As partners in Kansas 1st, approximately 240 employees of the Employment and Training Division of the Kansas Department of Human Resources, plus 40 other support positions, officially became Kansas Department of Commerce employees on July 1. The creation of the new work force development system is part of Kansas' Economic Revitalization Plan.

Austin Named "Coolest" City

Forbes magazine has named Austin America's "coolest" city. Other Southern markets making Forbes' list include Atlanta, Washington D.C., and Miami.

Austin Best for Hispanics

Austin, Tex., was recently named the best place for Hispanics to live and work in the U.S. according to Hispanic magazine. Austin was followed by Miami, San Diego, San Antonio and El Paso.

EDITORIAL

When it comes to Economic Development and Site Selection, Ignorance Abounds in the Media

Note to Newspaper and Magazine Writers: Stop Comparing Your Personal Lives with Real Economic Development

A few years ago, a writer for Time magazine got on the "corporate welfare" bandwagon so strongly that he just had to write a story about it. His premise was that since "he paid his taxes" and "he and his family helped provide jobs by purchasing products in his community," then he, more specifically his home, should receive a reduced power bill. The writer was complaining about utility rate incentives given to some company that landed somewhere in the South. The utility breaks given the company helped provide new jobs and investment for that community. I thought the story was a new ignorance low for Time, lauded near and far as a pretty good magazine.

This summer I read an editorial written by the managing editor of a business journal in North Carolina, the South's most skeptical state when it comes to economic development. The title of the editorial was "Should I stay or should I go? I'm leaving it up to Easley." The Easley he was referring to is North Carolina Gov. Mike Easely.

The writer, like the one with Time, tried to make a comparison of his life and the recruitment or retaining of industry. In this case, "Gov. Easley," the writer states, "is contemplating $15 million in incentives from the state to assist in the building of a facility that will help retain many of the tens of thousands of jobs that NASCAR currently employs and supports in North Carolina." By the way, South Carolina and Virginia have come up with new incentives for relocating NASCAR industries, which currently and for the most part, operate in North Carolina.

So, that being the case, the writer, tongue-in-cheek or not, threatened to move from North Carolina unless Easley provided him incentives to keep him. The motivation behind this centered on the writer's comment that "Gov. Easley is ready to do whatever has to be done to keep folks from moving outside the state." The mistake the writer made was using the word "folks." Folks I know don't run payrolls exceeding $1 billion per year. No, big-time corporations do that.

I've written this more than a dozen times over the years and I have said it to thousands of people over the phone individually or at some podium; the economic development community must do a better job at educating everyone that has their hands in their business -- especially the media -- about how economic development works and the role of incentives during negotiations between the prospect and the government.

All I can say to the writer who wants a reduced utility rate for his home because "he pays his taxes." Do everything you can to try stuffing 300 new jobs into that home and we can arrange that utility break. In fact, with 300 jobs, we might arrange a tax abatement so that you don't have to pay those "taxes" for awhile. But you're going to have to sign a contract where you agree to pay those 300 new employees decent wages for three years minimum. That would be tough to do on a writer's salary, even if your employer is Time magazine.

As for the guy who wants Easley to pay him or he's leaving North Carolina. Well, puleeeeeeeeeeze go ahead and leave 'cause we aren't paying you squat. The reason is you don't understand economic development. In fact, you wouldn't understand it if it jumped up and bit you on the knee.

For you execs who have future projects targeting a site in the South, I promise you we will do everything we can to educate those who have their hands in this business who are not Southern economic developers. We certainly don't need to educate them. They are the best in the country. Unfortunately though, there have been too many well intended Southern projects that have been cancelled due to media ignorance.

Mike Randle, Editor

Dell Set Sights on NC

Newspapers in North Carolina have reported that Dell Inc. is searching the state for a manufacturing and assembly plant that would house up to 2,000 workers. According to the News & Observer in Raleigh the North Carolina Department of Commerce, officials with the North Carolina community college system and economic developers in the Piedmont Triad region of the state are working on a package to lure the plant to the Greensboro-Winston-Salem-High Point area. The Piedmont Triad International Airport, which serves the markets of Winston-Salem, Greensboro and High Point, is where FedEx chose to build a large air packaging hub. The proposed hub is a critical factor in Dell's site search plans. Dell's investment in the proposed plant is estimated to be close to $250 million.

Money Cites Southern Markets

Money Magazine has named Jacksonville, El Paso, Raleigh and Atlanta as four of the top seven retirement markets in the U.S. The magazine used cost of living, weather, crime rates and the environment as factors in its ranking.

Top Markets for African-Americans are in the South

According to Black Enterprise magazine, nine of the top 10 cities for African-American to live and work are in the South. The magazine's top 10 from one to 10 are Atlanta, Washington, D.C., Dallas, Nashville, Houston, Charlotte, Birmingham, Memphis, Columbus, Ohio and Baltimore.

Maryland's Rural Legacy Program Buys More Land

The Maryland Board of Public Works recently approved the spending of over $8 million to purchase land for preservation in 15 counties in the state. The land purchase is part of a program where the state acquires land to protect watersheds, habitats and other landscapes, including Civil War battlefields in rural areas of Maryland.

Missouri Job Growth

The state of Missouri created more jobs in the first six months of 2004 than any other state in the South and was second only to Oregon in the U.S., according to a report prepared by the Missouri Dept. of Economic Development. The report showed that Missouri added almost 60,000 new jobs during the first six months of 2004.

Rural South Carolina Initiative Launches New Web Site

The Rural Crossroads Institute (RCI), an economic development initiative created to empower South Carolina's rural areas, has launched a new Web site (www.ruralcrossroads.org). RCI has received national recognition for its work in the area of work force development in rural South Carolina.

Study Shows Vehicle Congestion Rising Rapidly in South's Metros

In the early 1990s, this magazine did a case study that included a comparison on hours of vehicular delay between major metros in the South and major metros outside the region. We selected 25 metros in the South and 25 others in the Northeast, Midwest and West. Our study, first published in 1994, showed that, on average, the South enjoyed five times less hours of vehicular delay than markets in the other three U.S. regions. But that was over 10 years ago.

A new study done by Bert Sperling, a noted researcher, shows that of the nation's 25 worst markets to navigate -- somewhat different criteria than what we included in our old study -- 11 are in the South. Worse yet, of the 50 worst markets to navigate, exactly half are located in the South. And of Sperling's total of the 75 worst markets to navigate in the U.S., 33 are located in the South.

According to Sperling, the worst markets in the South to navigate by car or truck are Washington, Baltimore, Fort Lauderdale, Norfolk and Charleston, S.C. According to the study, Boston is the most difficult market to get around in the U.S.

Bert Sperling's Hardest Markets to Navigate in the South

2. Washington
4. Baltimore
6. Fort Lauderdale
10. Norfolk
11. Charleston, S.C.
14. Jacksonville
15. Orlando
17. Atlanta
19. Houston
20. Miami
23. Charlotte
26. Louisville
27. Fort Myers
31. Tampa
32. Dallas/Fort Worth
33. Austin
34. Memphis
39. West Palm Beach
40. New Orleans
41. Nashville
42. Birmingham
44. Richmond
45. St. Louis
46. Pensacola
47. El Paso
53. Kansas City
54. Brownsville
60. Corpus Christi
63. Tulsa
64. San Antonio
67. Oklahoma City
69. Beaumont
71. Laredo

Note: Based on Sperling's 75 Worst Markets to Navigate in the U.S.

QUIZ ANSWER

Disney employs almost 50,000 workers in the Orlando area, making it the largest single-site employer in the South as well as in the nation. So the answer is (c) Orlando.