Top Deals & Hot Markets

The American South's Hottest States and Markets for 2002

By Mike Randle

Each year we recognize outstanding achievements in economic development in the South in five different categories: state; mega-market (2,000,000 population or more); major market (750,000 to 1,999,999); mid-market (200,000-749,999); and small market (under 200,000). Points are added up in each category and the top three performers are recognized.

Points are earned in four categories. If a state or market lands a SB&D Job 100 deal (this year, it's 483 jobs or more) it earns 10 points. Just missed deals on the job side are deals with announced jobs of 200 to 482 jobs. They are worth five points. A SB&D Investment 100 deal (this year, all investment announcements $78 million or more made the I-100) earns 10 points, while an investment just missed deal ($30 million to $77.99 million) earns five points.

So, as you can see, there is nothing arbitrary about our SB&D 100 rankings. We simply count up the points in each category and reveal the winners. This year's winners are:

State Category

Florida: 2002 State of the Year (645 Points)

Last year, Florida led the nation per capita in net job gains. In fact, with 228,000 net new jobs, the Sunshine State's job generation came close to No. 1 Texas' total of 287,000 net new jobs. Regardless, if you read another popular economic development publications state rankings, Florida is nowhere to be found. That particular publications ranking cited Georgia (our figures show 2001 was Georgia's worst year in the last 10 years), Alabama (2001 was a dud year for Alabama), Kentucky (ditto), North Carolina (215 points represents a four-year slide), South Carolina (probably true), and Virginia (they've got to be in there) as some of its top states. Go figure.

Our figures show Florida with its second-best year in the 10-year history of the SB&D 100. It's been quite some time since we recognized the Sunshine State. In fact, the last time Florida won "State of the Year" in the annual SB&D 100, the Florida Department of Commerce was running the economic development show. That was in 1994. The last time Florida received any recognition in the SB&D 100 was in 1998, when it received an honorable mention in the state category. This year's State of the Year recognition is the second for the state in the 10-year history of the SB&D 100.

Calendar year 2001 was a good one for Florida. Most years, the state is a consistent job generator. But this year was different. Almost every region of the state saw major increases in job generation and capital investment. And that included the Northwest region (Florida Panhandle), where large job and investment deals have been scarce since the SB&D 100 was first published in 1993.

Yes, 2001 was a very good year for the Sunshine State. Tampa Bay topped all other mega-markets to win Mega-market of the Year with 185 points. Orlando, just over an hour east of Tampa, won Major Market of the Year with 135 points. And the extremely undeveloped and, until now, ignored northwestern region, which includes markets such as Tallahassee, Panama City, De Funiak Springs, Crestview and Pensacola, turned more big deals in 2001 than it did over the last nine years combined. In fact, the northwest region of Florida landed nine big deals this year compared to only six between 1993 and 2001.

But that's not all. Miami-Dade put up 70 points, its best effort in seven years. Broward County (Fort Lauderdale) earned 85 points, its best year ever, meaning the South Florida region totaled 155 points, good enough for third place in the mega-market category.

Since we've published the "100," South Florida has never earned recognition in the mega-market category. In addition, Pensacola, one of those northwest Florida markets, placed third in the mid-market category with 50 points. It's the first time that market has been recognized as well. And Jacksonville earned a solid 65 points in the major market category. While that total is only slightly better than average, it shows that few Florida regions did poorly last year. Only the southwest region of Florida, with a meager 15 points, didn't show in the state of Florida.

But the top Florida story is Tampa Bay and Orlando winning their respective categories in the same year. Why? The two rapidly growing markets adjoin each other, with Lakeland/Polk County at the point of convergence. If you add up Tampa Bay and Orlando's points, they would total 320. That's good enough this year to top all states in the South other than Florida, Texas and Virginia.

Cooperation among government and private economic development agencies in central Florida is remarkably strong. It's tough to band together the various markets, such as St. Pete, Sarasota and Tampa in Tampa Bay. But to add Orlando to the mix of a regional effort is extraordinary. But that's what leaders in the region have done. It might be the first time in Southern economic development history that two major markets -- two that are not separated by water, such as those in Tampa Bay and Hampton Roads -- have worked together at attracting industry.

This "super regionalism," if that's what you want to call it, started in 1996 when the Florida High Tech Corridor Council was formed to help those areas in and around Interstate 4 (I-4 begins in Tampa Bay, runs through Orlando and on to the East Coast of the state) become a more attractive location for high tech industries. The High Tech Corridor Council, led by University of South Florida (Tampa) President Judy Genshaft and University of Central Florida (Orlando) President John Hitt, promotes economic development in the region, which is the home of more than 7 million people. With Orlando and Tampa Bay placing No. 1 in their respective categories, it's readily apparent that the council is doing its job, as are all of the economic development agencies in the region.

Florida's High Tech Corridor Council President Randy Berridge said, "The strength of the Corridor region is that we understand the new paradigm of regionalism . . . when one city or county wins we all win. It is with this mindset that we congratulate the Metro Orlando and Tampa Bay region in being recognized as the top communities in their respective categories."

Florida's largest job generation deals were announced by an array of well-known companies. Some of those include major hires by Merck Medco, Home Depot, Capital One, Cingular Wireless, BellSouth, Nextel, Siemens, Mitsubishi and AT&T.

Industries making major capital commitments in Florida include Internet data centers, pharmaceuticals, software developers, financial services and turbine engine and aircraft manufacturers, among others.

As mentioned, Florida posted 645 points, its second-highest point total ever and ranked eighth per capita in the South in the number of big deal done per million people. But more impressively, there were 94 deals over 200 jobs and/or $30 million in investment made in Florida in 2001. That topped Texas' 89 deals, only the second time in "100" history that Texas has been not turned the most big deals of any other state in the South.

Virginia: Honorable Mention (465 Points)

My human heart is in conflict with itself on the state honorable mention decision. I was leaning toward South Carolina for this spot. After all, the Palmetto State raised its point total for the first time in several years during a recession. In addition to raising its big deal totals in tough economic times, for almost all of 2001, the South Carolina Department of Commerce was in the midst of a political struggle never before seen involving Commerce, its former director, the legislature, its governor and governor wannabees. While South Carolina's numbers were strong, I just could not give them the second position. But I almost did. South Carolina had a better than average year under incredibly bad circumstances as evidenced by its third-place finish in the per capita category. Possibly, with a few more points, we would have handed the Honorable Mention to South Carolina.

This year we chose Virginia for the second state spot based on its points and its second place finish in the per capita race. We've used many superlatives on Virginia in the last four or five years. During that time we've named them "State of the Year" twice. In the 10-year history of the SB&D 100, Virginia has now won honorable mention twice and State of the Year twice. No other Southern state has been recognized more in the history of the SB&D 100.

While 2001 wasn't the best year in Virginia's SB&D 100 history (last year was, when the Old Dominion racked up 650 points), it was a year that defined exactly how far the state has come in the last 10 years. What this year's "100" indicates is that Virginia is a strong and attractive location in economic times that can buckle the deal numbers and SB&D 100 points of other Southern states (see Georgia, Kentucky, Maryland, North Carolina and others, page 56 and 57). That alone supports our decision to give Virginia second place in the state category this year.

It's important to know that northern Virginia, especially Fairfax and Loudoun counties, was hip-deep in the dot-com craze as it emerged and grew over the last few years. The last two years of the SB&D 100 were affected by dot-coms in a huge way, especially on the job side of the ledger. More specifically, Virginia's point totals in the 2000 and 2001 SB&D 100s were driven to the top in the South by Internet-related deals. After the meltdown of that industry, we assumed Virginia would be a no show in this year's "100." We were wrong.

Virginia's big job deals included an array of industries such as information technology, telecommunications, shipbuilding, distribution centers, call centers, electronics and Internet providers. Their big investment deals included automotive, headquarters, Internet providers, food products, electronics, financial services and insurance.

As for locations, officials in Virginia have an uncanny ability to spread the wealth. In each of the last four years, Virginia has turned a nice mix of deals in a variety of locations. Those include major markets, mid-markets and many of the state's most rural regions.

For example, recent SB&D 100 history includes Richmond winning major market of the year twice, rural Martinsville/Henry County winning small market of the year twice, Hampton Roads winning Major Market of the Year once and honorable mention twice and Northern Virginia being recognized as well. This year, Hampton Roads, with 110 points, came in second in the major market category and Northern Virginia, part of the Baltimore/Washington MSA, came in second in the mega-market category.

In the early 1990s, Virginia's economic development department was unfocused and unorganized. In fact, it handled both tourism and economic development for the state, a dual role that is a tough to pull off. In the mid-1990s, the public/private Virginia Economic Development Partnership was formed and the state immediately became an economic development powerhouse. Now it is apparent to us that the Virginia Economic Development Partnership is indeed the most well rounded, most consistent deal-making economic development organization in the South right now.

Mississippi: Per Capita State of the Year (240 Points)

With 240 points and not quite 2.9 million people living in the state, Mississippi is your 2002 Per Capita State of the Year. Mississippi officials attracted 12.4 deals with 200 jobs or more and/or $30 million in investment per million people. With 10.3 big deals per million people, Virginia placed second in the per capita contest.

Much of Mississippi's Investment 100 points came from new power plant announcements. We frown on those because they create so few jobs. Fortunately for Mississippi though, power plants do put a charge into local and state tax collections.

Power plants were not the only deals to drive up Mississippi's point total for the 2002 SB&D 100. They had excellent representation in the job just missed category and did well in the just missed investment department. None of the JMDs included power plants.

Mississippi had one market earn recognition as well. The Biloxi/Gulfport/Pascagoula MSA is this year's No. 2 mid-market. It's the third time we've recognized the Mississippi Coast. In 1997, the area won Mid-Market of the Year and in 1995 got an honorable mention.

Automotive, plastics, wood products, call centers, distribution centers, agribusiness, health care, packaging and gaming industries accounted for most of the big job announcements in the Magnolia State in 2001. Look for more automotive deals coming from Mississippi in next year's SB&D 100.

Mega-Market Category

Tampa Bay: Mega-Market of the Year (185 Points)

Man, this place is hopping. For that matter, almost all of Florida is red hot. But it's Tampa Bay that's driving the Sunshine State's economy right now. With 185 points in calendar year 2001, Tampa Bay topped eight out of 17 Southern states in points. They also dethroned Baltimore/Washington/Northern Virginia, a market twice Tampa Bay's size, as the Mega-Market of the Year in the South for 2002.

Deals making our four lists (SB&D Job 100, Investment 100 and Job JMDs and Investment JMDs) from Tampa Bay included Merck Medco's two big pharmaceutical-related expansions, another Capital One expansion, the Raymond James (financial services) expansion, and several large, high-quality customer service centers among many other deals.

Why are there so many large expansions in Tampa Bay when the country was in recession? Well, to get the correct answer you have to ask company officials. But from what we have heard, it's because Tampa Bay is one of the most attractive places to operate a business in this country right now.

On the investment side, Tampa Bay collected points from two power plants and of all things, a desalinization plant. Desalinization plants are cutting edge utilities and you're going to see more of them in decades to come. In fact, in just a few years, factors in site selection and development in general in the South will hinge on water quality, capacity and availability. And it looks as if Tampa Bay is thinking ahead and dealing with that issue.

Mega-Market Category

Market Points

Tampa Bay 185
Balt/D.C./NVA 165
Miami/Ft Laud 155
Dallas/Ft Worth 95
Houston 75
St. Louis 40
Atlanta 25

Baltimore/Washington/Northern Virginia: Second Place Mega-Market (165 Points)

With nearly 8 million people (by far the largest market in the South), it would be difficult for this region not to make it in the top three each year in the mega-market category. Yet, if not for Northern Virginia, primarily Fairfax and Loudoun counties, this behemoth would have struck out in 2001 in a big way. Northern Virginia's contribution to the success of this mega-market in 2001 was huge. In fact, Northern Virginia was responsible for 135 of the 165 points coming from the market. That means only 30 points came from Washington, D.C. and the Maryland side of the region.

Yet, Maryland did contribute. In fact, at build-out, the Human Genome Sciences project could be one of the South's most impressive deals ever. And with Maryland being such a major center for biotech, look for more deals in that sector in years to come in the state.

As for D.C., look for a dramatic pullout, including many federal agencies. Right now there are several departments, such as the CIA, the White House (staff), Treasury and State looking for space in Northern Virginia and Maryland. That tells me the government is concerned about its safety in D.C. That's frightening.

Miami/Fort Lauderdale: Third Place Mega-Market (155 Points)

It's good to see a new face near the top of the mega-market rankings. South Florida, which includes Dade and Broward counties, put up 155 points, the most ever for the region. Internet-related deals showed strongly in South Florida last year, two of which saw investments of more than $100 million each. Industries also expanding and locating in South Florida in big ways in 2001 were software designers, pharmaceutical manufacturers, telecom services and headquarters.

To give you an idea of how good a year it was for South Florida, all you need to do is compare it to the region's previous best year. That was last year when economic developers in the region turned deals that totaled 90 points. Other years have seen South Florida put up 25, 45, 70 and 65 points. Clearly, this was South Florida's strongest SB&D 100 year.

Major Markets

Orlando: Major Market of the Year (135 Points)

Another coup for Florida is Orlando winning the Major Market of the Year for the first time. Last year Orlando didn't make the top 10 in the major market category. This year it swept past the likes of consistent deal producing majors such as Richmond, Austin, Charlotte, Hampton Roads, Raleigh-Durham, Nashville and Memphis. In fact, with 135 points, Orlando performed better than last year's No. 1 major, Richmond, which tallied 120 points.

Orlando produced a nice mix of deals, including five Job 100s, nine Job JMDs, one Investment 100 and six Investment JMDs. Some notable deals in the Orlando MSA included RF Micro Devices' circuits facility, FiServ-CBS Worldwide's software development operations, Cessna's aircraft facility, Siemen's large back office operation and Mitsubishi's gas turbine facility. There were Internet-related deals from the Orlando area making our lists as well. And, yes, there was one power plant.

With what many believe is the nation's best airport, Orlando should be a market that is at the top of the major's category each and every year. With a No. 1 finish this year, they are certainly off and running.

Major Market Category: Top 10

Market Points

Orlando 135
Hampton Roads 110
Charlotte 90
Memphis 90
Richmond 80
Jacksonville 65
Austin 55
Nashville 35
Oklahoma City 35
New Orleans 35

Hampton Roads: Second Place Major Market (110 Points)

I didn't realize it, but Hampton Roads, which includes the cities of Virginia Beach, Norfolk and Newport News, among others, as well as a variety of counties, is in very familiar territory in this spot. This is the second time Hampton Roads has placed second in the major market division, the first time being in 1999.

It was named by Southern Business & Development as the Major Market of the Year for its performance in 1995. In fact, Richmond, which is located less than 100 miles from Hampton Roads, has won Major Market of the Year twice and No.2 once. That means Richmond and Hampton Roads have accounted for three out of 10 major market No. 1s and three out of 10 second place honorable mentions.

Deals of note made in Hampton Roads last year included the $375 million Ford truck plant expansion, EDS' network data center, Northrop Grumman's expansion at the Newport News port, Raytheon's information technology center and Zim-American's headquarters.

Charlotte and Memphis: Tie for Third Place Major Market (90 Points)

These two growing Southern metros have become regulars at the top of the major market category. Charlotte won Major Market of the Year in 2000 with 105 points and Memphis came in second with 80 points that year. Last year, both Charlotte and Memphis rung up 75 points. That total wasn't good enough for third place recognition, but it was good enough for fourth place in the major division. Both markets have placed second one other time.

This year, they mirror one another again, earning 90 points each, a 15-point increase from last year. There doesn't seem to be much difference between these two major metros. The only one we can see is one is loosing an NBA team and another just gained one.

Mid-Markets

Johnson City/Kingsport/Bristol: Mid-Market of the Year (60 Points)

The Northeast Tennessee Valley just keeps on rolling on. This market of about 500,000 people created a net gain of almost 10,000 jobs last year. It was first recognized as Mid-Market of the Year in 1995. In 1999, it earned enough points to receive honorable mention and last year it came in No. 2 in the mid-market category. And this year, it took top honors again, beating Biloxi/Gulfport/Pascagoula by five points.
So, in the 10 years of the SB&D 100, Northeast Tennessee has been recognized four times. To date, only one other market in the South has been recognized more in the history of the SB&D 100 and that's Aiken, S.C.

One of the reasons the Tri-Cities does so well most years is the economic diversity found in the region. You have just about every kind of employer imaginable there. Automotive, biotech, customer service, general manufacturing, electronics and chemical clusters are easily identifiable in the Northeast Tennessee Valley.

Deals driving the Valley to the top of the heap this year were Cingular Wireless (1,000 jobs), Atlantic Beverage (200 jobs), GlaxoSmithKline ($52 million), Gordon Garment (200 jobs), Mahle ($32 million), Nuclear Fuel Services ($42 million), Otics ($30 million), Bush Brothers and Wellmont Healthcare ($56 million), among others.

Mid-Market Category: Top 10

Market Points

Johnson City/Kingsport/Bristol 60
Biloxi/Gulfport/Pascagoula 55
Pensacola 50
Beaumont 40
Columbia SC 35
McAllen/Pharr TX 35
Tulsa 30
Jackson MS 30
El Paso 25
Augusta 25

Biloxi/Gulfport/Pascagoula: Second Place Mid-Market (55 Points)

Here's another mid-market that has been recognized more than once. The Mississippi Coast, which includes Hancock, Harrison and Jackson counties, won the Mid-Market of the Year in 1997. It earned honorable mention in 1995 and second place honorable mention this year.

There may not be another metro in the South that has been transformed like Biloxi/Gulfport/Pascagoula has in the last 10 years. The first time I visited the area was in 1992. Then, the region was a sleepy coastal market with shipbuilding, marine services, tourism and fishing as its primary industries. In just 10 short years, the area has been transformed into an economy that is quite diverse. Of course, the gaming industry has pumped millions into the Coast's economy. Some of the finest casinos in the world now call the Mississippi Coast home. But so do a variety of other industries including high-end call centers, large polymer companies and oil, gas and chemical refiners and manufacturers.

A new regional effort is now in place on the Mississippi Coast. The Mississippi Gulf Coast Alliance for Economic Development joins six South Mississippi counties. In addition to Harrison, Hancock and Jackson counties, which are located on the coast, George, Pearl River and Stone counties, which are located just north of the coast, are part of the new alliance.

Pensacola: Third Place Mid Market (50 Points)

As mentioned in the article on Florida winning State of the Year, this is the first time a city in Northwest Florida has been recognized. Pensacola had a superb year, with one of the largest job announcements made in the South last year in West Corporation's 1,400-employee call center. But that wasn't all. GE Generators invested $33 million in Pensacola, Wayne Dalton, a manufacturer of garage doors, hired 350 new workers at its plant and Metrocall, a call center operation hired 350 as well. Also, AmSouth expanded its banking service operations by 250 jobs.

Pensacola is one of the most beautiful markets in the South if you like the beach. Over the years tourism and the military have been supporting its economy more than anything else. It looks as if that's changing.

Small Markets

Plaquemine Parish, Louisiana: Small Market of the Year (30 Points)

Plaquemine Parish, located south of Baton Rouge on the Mississippi River, placed three deals on the SB&D Investment 100, giving that market 30 points. Granted, two of the big deals were power plants. The other was a $315 million expansion of Dow Chemical Company's chlor-alkali plant in Plaquemine.

Camden/Kershaw County, South Carolina: Second Place Small Market (25 Points)

It's about time a market in South Carolina (other than Aiken) got recognition in the Southern Business & Development 100. The last time a Palmetto State city or county placed first, second or third in any of the divisions other than Aiken (small market) was in 1996 when Columbia was named Mid-Market of the Year and Charleston finished second.

Camden, located on Interstate 20 east of Columbia, had an excellent year for a market its size. Target Corp. chose Camden for its newest distribution center, an $85 million, 1,000-employee facility. And, in the same year, Oak-Mitsui announced it would invest $80 million to expand its copper foil plant in Kershaw County. That's 25 points and good enough for second place in the small market division.

Third Place Small Market

Eleven Southern small markets earned 20 points in this year's SB&D 100. They are: Lincoln, Ala., Jonesboro, Ark., Port Hudson, La., St. Francisville, La., Craven Co., N.C., Nash Co., N.C., Northampton Co., N.C., Port Arthur, Tex., San Patricio, Tex., Winchester, Va., and Putnam Co., W.V.

It should be noted that Craven County and Nash County, N.C. are part of the Eastern region of the state. That region, one of the most rural in North Carolina, led the state in jobs created in 2001.