Top 10 Economic Development Stories in the South the Last 10 Years

By Mike Randle

#1 Texas Dominates Southern Economic Development 1993-1997, then Fizzles

During calendar year 1996, Texas dominated the South's economic development landscape. In fact, the 1997 SB&D 100 (from 1996 numbers), showed that of the 100-largest job announcements that year, 53 came from Texas. Furthermore, cities in the Dallas/Fort Worth Metroplex were responsible for 27 of the largest corporate job announcements made in the South in 1996. That's dominance.

But the South's most populated state has been on a perplexing free-fall since. Each year, the SB&D 100 gives points to markets and states for deals making its rankings. In 1997 Texas rung up an astounding 1,320 points. In 1998, the Lone Star State's totals fell slightly to 1,295. Subsequent years went like this: 1,010 points in '99; 825 points in '00; 675 points in '01; and 610 points in this year's SB&D 100 (from 2001 data).

# 2 Virginia Comes from Nowhere to Take on All Takers

When SB&D was founded, Doug Wilder was the governor of Virginia. Back then, the state's economic development arm was combined with the tourism division. All it took was one trip to Richmond in 1993 to make me realize that under Gov. Wilder's leadership, much more was being done on the tourism side of the ledger than on the economic development side.

Then George Allen became governor of Virginia in 1995 and shortly after that, the development and implementation of the Virginia Economic Development Partnership, a quasi-privatized state economic development group. Immediately, Virginia went from economic development patsy to economic development bully. In fact, in just a couple of short years (1996-1997), Virginia vaulted over its competitors such as economic development legend North Carolina, which always beat Virginia to the deal in the early 1990s. It's almost four years after Allen's term and Virginia continues to turn more impressive corporate deals consistently than any other Southern state other than Texas.

# 3 Alabama Becomes Center of Southern Automotive Corridor

Yes, Tennessee and Kentucky were "modern day" forerunners setting up the Southern Automotive Corridor, which really should be renamed the Southern Foreign Automotive Corridor. Granted, Louisiana, Texas, Georgia, Oklahoma, Virginia and Missouri attracted domestic assembly plants. But that was years ago. Some of those plants are over 60-years-old.

No, it all really started with Kentucky (Toyota) and Tennessee (Nissan and Saturn) in the 1970s and '80s. Then South Carolina lured BMW in 1992. Yet, the real Southern automotive bombshell announcement didn't occur until prestigious German automaker Mercedes-Benz chose a rural site between Birmingham and Tuscaloosa for its first North American assembly plant in 1993. Alabama? The critics howled. "They bought the deal," opponents and the media would explain shortly after the announcement.

Since then, two automakers, Honda and Hyundai, have announced they have chosen to invest in Alabama in bigger ways initially than Mercedes. Today, Honda and Mercedes have announced they are doubling production and employment since bringing their Alabama plants on line and Hyundai is grading its Montgomery-area site. No state in the South has attracted three automotive assembly plants in the last 10 years, except for Alabama. Look for another foreign automaker to announce in Alabama in the next two years. Yes, currently, Alabama is the heart of the Southern Automotive Corridor.

# 4 North Carolina's Economic Development Roller Coaster

In the early days of Southern Business & Development, 90 percent of our leads from execs looking at the South to expand or relocate came from execs and consultants from outside the South and most of those came from the Northeast. I would examine those reader service cards (you can fill out the one in this edition if you want more information about sites in the South) and about 90 percent of the time, the state of North Carolina was checked by the reader as a state he or she was interested in setting up shop. No state in the South created as much interest with our readers in the early 1990s.

That's changed over the last 10 years. North Carolina's reputation as an economic development powerhouse began in the 1960s with the development of Research Triangle Park. Apparently, the creation of RTP created a huge reputation nationwide, especially in the Northeast, that lasted more than three decades.

Today, North Carolina is checked on our reader service card about 50 percent of the time (which is still higher than most Southern states) as opposed to 90 percent of the time eight or nine years ago. In late 1995, we featured our first and only special section on North Carolina. I must have visited over 60 markets, both large and small, throughout the Tar Heel State that quarter. I came back to report to then N.C. Dept. of Commerce Secretary Watts Carr that his state is a tough sell for my product. I told him no state in the South is more skeptical to my magazine's idea. It was the only state section that basically failed in the history of this magazine.

In defense of North Carolina economic developers, I had picked a poor time to feature the state. At the time, a lawyer from the Piedmont Triad was threatening to file suit against the state over the use of public tax dollars as incentives for locating companies. The phrase "corporate welfare" was born and skeptics were at an all time high.

Leaders and citizens alike in the Tar Heel State remained skeptical of new economic development practices throughout the 1990s. All the while, they saw big deal after big deal -- deals that have economically transformed other Southern states such as Alabama and Virginia -- go elsewhere.

North Carolina's vanilla incentive packages, which, ironically were being hammered by local media, politicos, voters and one particular attorney as being too excessive, were, more accurately, way too cheap to attract large deals. I truly believe that leaders in North Carolina believed their state didn't have to lure companies with large incentive packages. For example, read this quote from North Carolina Department of Commerce Assistant Director David Sheehan in the Winter 1994 edition of SB&D. "We prefer to market North Carolina's inherent advantages. We are committed to being competitive, but we won't give away the store. In a time of limited resources, it doesn't make sense to spend as much as Alabama has to attract an industrial recruit. They're counting way too much on the multiplier effect. They're never going to get the kind of payback they're projecting."

Of course Sheehan was commenting on Alabama landing Mercedes Benz in 1993. In hindsight, I would say Sheehan was wrong, considering the thousands of "multiplier" jobs Mercedes and two other massive assembly plants have created in Alabama.

As this magazine entered the publishing world with North Carolina on top, it observed the state drop to deal levels comparable to smaller states such as Alabama, Kentucky and Mississippi and surpassed by key competitors such as Tennessee and Virginia over the last six or seven years. But wait, in the last few months, we've received information that Tar Heel State officials are finally seeing the light. Watts Carr, the gentleman I vented my frustration to way back in 1995, is currently heading a committee that is trying to convince lawmakers that a more lucrative incentive package for companies is the correct method to right the ship. Watts' committee is right. Watts' N.C. Dept. of Commerce stance in the 1990s was wrong. If anything, North Carolina is the roller coaster story in the South the last 10 years. It would be refreshing to see North Carolina officials remove the word "doubt" from their reputation and become more open in future economic development initiatives.

#5 Tennessee's Emergence

While North Carolina was fading in the late 1990s, Tennessee was emerging. Nashville and Memphis were quickly becoming destination markets in the mid-and-late 1990s (note that the NFL, NHL and NBA landed in Tennessee in the '90s). Yet, like North Carolina, Tennessee's incentive programs for much of the 1990s to today can best described as wimpy. So, with similar lame incentives, why did Tennessee outpoint North Carolina every year but one since 1996? I've been asked that question dozens of times. The only thing I can point to is Tennessee's leaders are not skeptical. Furthermore, they work harder than any other state.

#6 Tampa Bay's March to Mega-Market Prowess

Late one night in the summer of 1973, my father and I drove through downtown Tampa after a 10-hour drive from Birmingham. Other than streetlights, there were no other lights on that night. Downtown Tampa back then was a ghost town at night. I told my father, as we were headed for a late night hotel check-in prior to registering the next morning with the University of Tampa for my freshman year of college, that Tampa was a tiny town. I said, "Dad, this town looks like Montgomery."

Both Montgomery and Tampa have come a long way since. Tampa Bay, one of only seven mega-markets in the South (population 2 million or more), has supplanted Dallas/Fort Worth over the last few years as the second-most dynamic mega in the South (No. 1 would be Baltimore/Washington/N VA).

# 7 Dallas/Fort Worth's Year to Remember

As mentioned in the No. 1 story, D/FW had a year to remember in 1996. That year saw the Metroplex turn 27 of the South's 100-largest job deals. No market has even come close to that remarkable total. In fact, in 10 years no state other than Texas has topped the 27 SB&D 100 deals D/FW companies announced in 1996. Dallas/Fort Worth big deal total surpassed the second-place state by 15 deals that year. Florida turned 12 SB&D 100 deals in 1996.

# 8 Olympics Come to the Deep South

The world did visit Atlanta in 1996. It also visited Birmingham, Columbus, Ga., south central Tennessee and other Southern locales where Olympic events were held in 1996. The Olympics didn't put Atlanta on the world stage, however. It was already there, firmly entrenched as a World Market. If anything, one of the world's greatest events being held in the Deep South was a confirmation that the South had arrived.

# 9 Rural Arkansas-Born Dude Becomes President

The year SB&D was launched, President Clinton had won the election for President of the U.S. Say what you want about Clinton, but the born-and-raised Southerner was as dominating a figure as this nation has ever seen over the last 10 years. His election and presidency certainly rank as one of the top 10 economic development stories of the last decade. The American South had never experienced such prosperity than what it saw during the Clinton administration. Whether that is attributable to him remains a topic of debate.

# 10 Last Place Mississippi, Bows Up

For years, states in the South found comfort in Mississippi. Why? "Thank God for Mississippi" was the general rule of thought, because it was Mississippi that usually came in last place in any number of rankings of Southern states. Over the last 10 years, that's changed. In 1992, Mississippi passed gaming laws allowing casinos to operate. Ten years later, planeload after planeload of tourists from Chicago, Detroit, Cleveland and the like arrive in Mississippi every day. No Southern state has economically transformed itself more than Mississippi in the last 10 years.