Fall 2007

Around the South

QUIZ

This is the second of a four-part series celebrating Southern Business & Development's 15th Anniversary. In this issue we are looking back to events that occurred in economic development in the years of 1998-2002. Our quarterly quiz is this: Between 1998 and 2002, which Southern State earned "State of the Year" honors in the SB&D 100 two of the five years?

(a) Florida (b) Tennessee (c) Virginia (d) Texas

(Scroll down for answer)

Low Income Student Ratio Rises in South's Public Schools

A recent report done by the Southern Education Foundation (SEF) showed that the ratio of low income students in the South's public school systems grew to 54 percent during the 2006/2007 school year, topping the Western region of the U.S., which has a rate of 47 percent. Low income students are defined as those who qualify for free or reduced cost meal programs. SEF's annual report points to an increase in Latino children and high birth rates among African-American families as the two biggest reasons for the increase in low income students in the South's public schools.

Six Southern Markets Make Top 10 in Job Growth Study

American Cities Business Journals published a study in the fall quarter that identified the top 10 U.S. markets in job growth over the last year. Wichita, Kan., Austin, Tex., Charleston, S.C., New Orleans, Oklahoma City and Houston all made American Cities' top 10 list. Cape Coral, Fla., Orlando, Lakeland, Fla., and Sarasota-Bradenton, Fla., were the only markets in the South to make the top 10 U.S. markets in job growth over the last five years.

Charlotte's Central Business District: One Hot Market

If you haven't visited downtown Charlotte (locals call it "uptown") then you have not witnessed what is most likely the hottest central business district in all the South. High-rise condominiums are going up at breakneck speed, many of which are sold out before the front door opens. One other indication that uptown Charlotte has transformed its central business district like no other market, regardless of size, is its office vacancy rate. In November, the office vacancy rate dipped below one percent. That's right, below one percent. Growth in the financial services sector is the primary reason for the tight office market in uptown Charlotte. And the vacancy rate in uptown is expected to remain tight. No new significant office space is expected to come online in downtown Charlotte until two of a half dozen large office towers -- planned or under construction -- open in mid-2009. Those are the 20-story NASCAR Plaza and the 15-story 440 South Church building. There is available space in the suburbs of Charlotte, where the overall office vacancy rate is 12 percent.

South Lands Nine-of-10 on Best State Biz Climate List

Site Selection magazine came out with its best state business climate survey in the fall quarter and nine of the top 10 states were located in the South. North Carolina topped the list, followed by Georgia, Texas, Virginia and Alabama, giving the South a clean sweep of the top five. Tennessee, Kentucky, Florida, and South Carolina also made the magazine's top 10 list. Site Selection bases its annual rankings of best state business climates on a survey of corporate real estate decision makers and data on deals announced.

Editorial

Our Early Choice for President: John Edwards

As of this writing (12/26/07), the real presidential nomination process for each party hasn't even begun. But, by the time this article is published that process will have fully commenced. 

Our favorite presidential hopeful might be toast by the time you read this. Regardless, I am going to go ahead and reveal to you who I would like to see as the next President of the United States. My personal favorite is former North Carolina senator John Edwards. What gives me the qualifications to pick one candidate over another? Well, I am an American citizen. Furthermore, I have known, still know and have become friends with many politicians in the South. Some like me, some don't. And the feeling is mutual usually. Some I like, some I don't.

I have stated in these pages before over the last 15 years that I am not a Republican nor am I a Democrat. I don't look at the party. I focus my vote on who I think is the most capable of the lot. And even though he might not win his party's nomination, I believe John Edwards is the most capable considering what this country needs right now.

I also believe that whoever is the next President, that person will be perceived by voters as the most centrist or moderate candidate of them all. It is my feeling that the power of the far-right and the far-left are gone, for now. We've been there and done that. So the middle is now where I believe this country is headed, if it is not there already.

So, who are the candidates that are perceived to be the most centrist of all who are running? I would venture to say that Hillary Clinton (that's right), Rudi Giuliani, Bill Richardson, Joe Biden and John Edwards are the five candidates that are perceived to be more moderate than the others.

One of the reasons I like Edwards, other than his moderate political views, is that his kind is a good fit for the country right now. He understands the widening gap of family economics in this country. We are losing our middle class, folks. Those in poverty are increasing in numbers. Edwards will fight for the largest voter group in this country and that is the middle class. His "I got your back" stance on the poor is also well known.

Edwards does have some important things going for him. For one, he is from the South and a Democrat has got to win one or more Southern states to win the Presidency. In fact, John Kerry would be our President today had he won just one Southern state in 2004. If nominated, Edwards would win one or more Southern states in the general election. Of course Hillary would win one or more as well.

No. 2, Edward's policies are attractive to the majority of those who live in the Northeast and particularly to those who live in the Midwest. He would do well there, too. And of course the West is usually dominated by Democrats. The negative against Edwards is that Hillary's support comes from the same camps.

And finally, Edwards is a smart dude. In my book, that has a lot to do with how capable you are as a politician. And on the arrogance and skepticism meter, he barely registers. That's something else important to me. After the last 16 years, the public is done with arrogance and skepticism from leaders of this country.

And here's another thing Edwards has going for him -- even though, again, by the the time you read this, he might be done. Others know the guy is smart and capable. While the media has painted a picture that the Democratic nomination is about two people -- New York's Clinton and Illinois' Obama -- I say, not so fast. Under caucus rules, Democratic candidates such as Bill Richardson, Joe Biden, Chris Dodd, Dennis Kucinich and Mike Gravel, or those who do not receive 15 percent of the vote, can shift their support to another candidate. We believe that would be to Edwards, not to Clinton or Obama.

If Edwards is not chosen as the nominee for his party, we will endorse a candidate officially at some point before the election. In the meantime, we feel strongly that this nation is moving to the center because we have lost our center. We will get it back with Edwards. John Edwards, more than anyone in my opinion, is the best person to help us find our center again.

Michael C. Randle
mike@sb-d.com

Southern Major Markets Dominate "2008 Top 10 Markets to Watch" Study

Sperry Van Ness, a California-based commercial real estate firm, named its Top 10 U.S. "Markets to Watch" in regards to industrial real estate activity in the fall quarter and Austin, Charlotte, Nashville, Fort Worth, Fort Lauderdale and Northern Virginia all made the company's top 10. The three other markets to rank in the top 10 were located in California.

South Carolina, Georgia Agree to Build the Jasper Ocean Terminal Together

In the fall quarter, Georgia Gov. Sonny Perdue and South Carolina Gov. Mark Sanford announced a bi-state partnership to jointly construct a major deep water port in Jasper, S.C. While the 1,400-acre site is in South Carolina, the land is actually owned by the state of Georgia, which currently uses the site to dump earthen material. The new port is being built while ports in Charleston and Savannah are undergoing huge expansions. Trade from Asia, which is at an all-time high, yet is expected to increase dramatically over the years, is the motivation behind the new port facility. Georgia and South Carolina will be co-tenants of the new port, which is expected to be operational by 2020.

Alabama Leads Region in Rise in Personal Income

Since 2002, we have named Alabama "State of the Year" four times in our annual SB&D 100. No Southern state has ever earned that designation four times over the last 15 years, much less four years in a row. New data has come out from the U.S. Commerce Department's Bureau of Economic Analysis that supports our claim that since 2002, Alabama's economy has been at or near the top in the South. Alabama leads all Southern states in the percent change in per capita personal income with an increase of 23.10 percent since 2002. The following chart ranks the South's top 10 states in increases in per capita personal income between 2002 and 2006. Note that the second-place state is Louisiana, which is the reigning "State of the Year" from the 2007 SB&D 100.

VW at it Again -- Is it Real this Time?

Germany-based Volkswagen AG, which includes the Audi brand, is at it again. Officials with the automaker said in the fall quarter that the company will decide by the spring of 2008 whether or not to add a new assembly facility in North America. The Detroit Free Press reported in the fall that VW officials have already decided to add a plant in the U.S. Other reports have indicated that South Carolina and Alabama were preferred states for the proposed facility. Since the late 1980s, rumors of a VW and/or Audi plant in the Southern Auto Corridor have surfaced every five years or so, even though the German automaker has not built a new facility in the U.S. during that time. Go to www.SouthernAutoCorridor.com for more information on the South's automotive industry.

Dallas Logistics Hub Breaks Ground on First Buildings

The new, 6,000-acre Dallas Logistics Hub, the largest new logistics hub in North America, broke ground on its first two industrial buildings. The two new buildings will provide over 827,000 square feet of industrial space for lease in the southern Dallas County market. The hub is a master-planned development that is expected to eventually include up to 60 million square feet of manufacturing, office, distribution and retail space.

First Liquefied Natural Gas Terminal in 30 Years to Open in Louisiana

The first new onshore liquefied natural gas terminal built in the U.S. in more than 30 years will open next year in Cameron Parish, located in southwest Louisiana. The Sabine Pass terminal will be one of the largest natural gas terminals in the world in regasification capacity. One interesting note regarding the deal: Cameron Parish was devastated by Hurricane Rita in 2005. Cheniere Energy, which is building the plant, has opted out of the parish's 10-year ad valorem tax abatement that was part of Louisiana's incentive package. Instead, the Houston-based company has decided to start paying property taxes right away to help rebuild the area.

Houston Adds 18,700 Jobs in September

The Houston-Sugar Land-Baytown MSA added over 18,700 jobs in September, a very impressive total. For example, Missouri, which has been on a job-generating roll of late, added just under 3,000 jobs in September and Austin, Tex., which ranks near the top in job growth for markets its size, added just under 30,000 jobs in the past year. So, Houston's 18,700 new jobs in September is a month to remember. Texas companies created about 217,000 jobs between September of 2006 and September of 2007.

Lenovo Gives Back Incentives Given by N.C. in 2004

We have written many times about how controversial the incentive game is in North Carolina and how the media there seems to be so skeptical about the practice of using incentives to create jobs. One item that caught our interest in the fall quarter was that Lenovo agreed to give back more than $8 million to the state of North Carolina that it received to expand its facilities in Morrisville, N.C. The growing China-based computer maker admitted it could not meet the timetable set forth by North Carolina economic development officials to create 400 new jobs by 2011. Here is a word the media in North Carolina needs to know about: Claw backs. They work.

Half of Fortune Magazine's Top 10 Ranking Features Southern States

In the fall quarter, Fortune Magazine published its Best States to Start a Business ranking and half of the top 10 states came from the South. South Dakota topped Fortune's list, with Nevada, Wyoming, Washington and Florida rounding out the top five. Michigan, Texas, South Carolina, Virginia and Alabama made up the rest of the top 10. 

Florida keeping up with Job Creation

In the 12-month period that ended in July, 181,400 new jobs were created in the state of Florida. That is an incredible figure, but one that must be done considering how many people continue to migrate to the Sunshine State virtually on an hourly basis. We have predicted that the vast migration to Florida each year will eventually stop. We have been writing that off and on for 15 years and we've been wrong each year. Yet, at some point, surely the fragile environment that is present in Florida and other growth management issues there will slow population growth in the Sunshine State. But, then again, everyone loves the beach!

Governors Lobby for Mobile, Ala. Tanker Project

The Air Force is expected to announce early next year on two bids for a proposed $40 billion contract to begin replacing its KC-135 aerial refueling tankers. The project is expected to create thousands of jobs in either Everett, Wash., and Wichita, Kan. -- if Boeing gets the bid -- or in Mobile, Ala., if Northrop Grumman gets the nod. There is a possibility both companies could split the work. In the fall quarter, Alabama Gov. Bob Riley, Mississippi Gov. Haley Barbour, Tennessee Gov. Phil Bredesen, Virginia Gov. Tim Kaine and West Virginia Gov. Joe Manchin all signed a letter sent to the White House recommending Mobile as the site for the massive project.

N.C. Legislative Panel Will Study State’s Development Incentives
A state legislative commission has picked the University of North Carolina Center for Competitive Economics to assist with the lawmakers’ study of the state’s economic development incentives, including tax credits, worker training and outright grants.

Southern Business & Development on the Move in the Fall Quarter

The fall 2007 quarter was not a particularly heavy travel time for employees of SB&D, but it wasn't without its unique days and weeks, either. Jay Ostrowski traveled to the Dallas/Fort Worth region several times putting together the section on D/FW earning the No. 1 market in the South based on deals turned over the last 15 years. Jay is a Texas native, who lives in Columbia, S.C. and is the husband of Trisha Ostrowski, the senior member of our staff. Trisha has worked for SB&D for more than 10 years.

Morgan Holladay, Michael Randle's incredibly talented personal assistant, niece and bouncer, traveled to SEDC's annual conference (Southern Economic Development Council) in Little Rock with fellow worker Shelly Jo Jacobs. The two met Randle in Little Rock at the Peabody Hotel, where the conference was held.

The Elf, Shelly Jo Jacobs, took part in a great work/play trip in the fall. She was invited by the Lubbock (Texas) Economic Development Alliance for a pheasant hunt. The Elf toted a 20-gauge shotgun for a couple of days and killed a bunch of birds. She attended the hunt with 37 men and was, we believe, the only female in the bunch. Good job, Shelly Jo. Go to www.SB-D.com/seminar to see what she and Morgan are doing with our first seminar event. It will take place in mid-February and it will be fantastic. The seminar will feature some of the most talented economic developers on the planet.  

In the fall quarter, my trips led me to Mississippi, Atlanta, Little Rock, New Orleans and North Carolina.

Michael C. Randle
mike@sb-d.com

QUIZ ANSWER

The answer is (c), Virginia. Virginia won "State of the Year" from Southern Business & Development in 1999 and 2001. The Old Dominion State also won its first "State of the Year" in 1996, giving it three, tying North Carolina for second place for the most "State of the Year" honors. Alabama has won "State of the Year" four times. Texas and Florida have both been cited twice since 1993, with Louisiana and Tennessee earning the honor a single time over the last 15 years.