Winter 2007

QUIZ

This Southern state elected the nation's first African-American governor, was where -- most likely -- the first African-American stepped foot on what would become U.S. soil and a state that was recently in the headlines for officially apologizing for its role in slavery. Which Southern state are we writing about?

(a)Maryland (b) Louisiana (c) South Carolina (d) Virginia

(Scroll down for answer)

QUIZ ANSWER

Virginia elected Doug Wilder as Governor of Virginia in 1989, the first black governor in the U.S. Jamestown, Va., in 1619, was where the first African slaves arrived on this continent and in the Winter quarter, Virginia's Assembly issued a public apology for the state's role in slavery from the 1600s to the mid-1800s. So, the answer is (d) Virginia.

Editorial

Memo to Officials in the Great Lakes and Ontario

Folks in the Southern Auto Corridor were shocked when Honda picked Indiana for a new assembly plant last year. It wasn't enough for officials in Indiana to simply celebrate. Leaders there took shots at the South, directing their banter on Indiana's and the Midwest's "superior labor force" when compared to the South's. 

When Toyota picked Ontario for a small assembly plant in 2005, one important automotive industry executive in Canada said on the day of the announcement, "The educational level and skill level of people down there (the South) is so much lower than it is in Ontario." That same person claimed automakers in Mississippi and Alabama had to resort to using "pictorials" to train their workers. Puuuuuleeeze!

Memo to those same folks up north who apparently are developing a tic every time the South lands another automotive plant: Toyota chose Tupelo, Miss. for its newest assembly plant. After examining 20 states and almost 100 locations, the Japanese automaker ended up with a short list of Chattanooga, Marion, Ark. and Tupelo, all located in the Southern Automotive Corridor, the only place in North America where the automotive industry is growing.

It should be noted that of the three sites that made Toyota's short list, Tupelo has the smallest labor shed to draw from. We have nothing else to add, certainly no shots at labor quality issues up north. But we will end this editorial with this comment: Deal with it or at least get over it.

Mike Randle
mike@SB-D.com

Work Never Stops for Economic Developers in the South

According to new data provided by the Census Bureau, there are approximately 7.5 million people in the South that are described as "severely poor." The figure represents the largest number of severely poor residents of any U.S. region. That obviously makes sense, considering the South is by far the nation's most populated region, with 119 million residents, or roughly the total number of people living in the Northeast and Midwest combined. According to the Census, areas in the South that need attention at job generation include the Texas/Mexico border, parts of Appalachia in all Southern states and much of the Mississippi River Delta. We can say without doubt that many of the South's rural regions in general require assistance in increased incomes, job generation and infrastructure improvements.

Another East Coast Port to be built in the South

Following North Carolina's announcement last year that it is constructing a new deep-water port, South Carolina Gov. Mark Sanford and Georgia Gov. Sonny Perdue announced in mid-March the two states will jointly build a new port in Jasper, S.C. The new project will sit on 1,800 acres that fronts the Savannah River. The new port will be operated by both South Carolina and Georgia. But first, negotiations between the two states must begin to determine how much each state will invest in the deal, which ultimately will cost billions of dollars. The idea of the new port has been met with tremendous controversy, in that both states already operate large ports, particularly the facilities in Charleston, S.C. and Savannah, Ga.

Korean Automakers Building Engine Plant, Expanding in Alabama

Near the end of the winter quarter (March 12, 2007), Hyundai announced it is building a new $270 million engine manufacturing center near its plant in Montgomery, Ala. The deal, the second major one to be announced in the Southern Automotive Corridor in the last two weeks, is expected to add 522 jobs to the 3,100 already employed at Hyundai's assembly plant in Montgomery. The new engine plant will produce 2.4-liter, 4-cylinder engines that will be used in Hyundai and Kia models. Kia's new $1 billion plant is currently under construction in West Point, Ga., which is located just across the Alabama border near LaGrange. Hyundai already produces 6-cylinder engines at its facilities in Montgomery. The Hyundai expansion, which will also include a 533,000-square-foot consolidation center and a container yard, is being done on property already owned by Hyundai. For more information on the automotive industry in the South, go to www.SouthernAutoCorridor.com or turn to page 17 in this edition.

Texas Governor Increasing Education Funding by $1 Billion

Texas Gov. Rick Perry proposed in the winter quarter that the state of Texas increase funding for higher education by $711 million, or a total of $1.7 billion. Perry also proposed that Texas add $362 million in financial aid for students attending colleges in the Lone Star State. The allocations represent the largest annual increase in education funding in the South's history.

Arkansas Delta Gets Funding

The U.S. Department of Labor is partly funding a $5.1 million labor initiative in the Arkansas Delta region. Called the Arkansas Delta Workforce Innovation in Regional Economic Development (ADWIRED), the program is comprised of Mid-South Community College, Arkansas Northeastern College, East Arkansas Community College, Phillips Community College and Arkansas State University. The five community colleges serve 17 counties in the Arkansas Delta.

FAA Awards Charlotte Airport $124 Million

The Federal Aviation Administration awarded the Charlotte/Douglas International Airport $124 million for the construction of a new 9,000-foot-long runway. The expansion will allow the airport to land three planes simultaneously in bad weather, which few airports in the U.S. can do.

Virginia Gov. Kaine and West Virginia Gov. Manchin Reach Out

In the winter quarter, West Virginia Gov. Joe Manchin shared the spotlight with Virginia Gov. Tim Kaine in Bluefield, W.Va., for a town hall meeting about the two Virginias, the first time for such a discussion in 84 years. Local officials from Bluefield, Va., and Bluefield, W.Va., joined area residents to express the need for cooperation across state borders. They discussed economic development, education, infrastructure and modern communications and called for regional cooperation.

Billions on the Table for ThyssenKrupp

Counting federal dollars available as a result of hurricane Katrina and Rita Go-Zone funds, we've heard Alabama's and Louisiana's incentive proposals top $1 billion for the prospective ThyssenKrupp steel plant. The $2.9 billion, 3,000-employee facility is the largest steel plant to ever be built in the South and one of the largest capital investment projects in the region's history.

Information obtained by Southern Business & Development as well as www.SouthernAutoCorridor.com indicate that Louisiana's incentive package to the Germany-based is currently about $400 million more than what is being offered by Alabama. That could make Louisiana's total package an estimated $1.6 billion.

What's in Store for the State that Doesn't Land ThyssenKrupp?

Whichever state lands ThyssenKrupp will shell out at least a billion dollars in tax breaks and other incentives to the German steelmaker to land the $3 billion plant that will produce automotive-grade steel and other metal products. Reports received by Southern Business & Development show that Alabama officials have frozen about $700 million in various incentives that could currently be going to other projects in the state. That $700 million is being frozen in order for it to be used for ThyssenKrupp if the deal does indeed go to Alabama.

Some of that money comes from federal sources as a result of the the initiative called the Gulf Opportunity Zone, signed by President Bush in late 2005. Go Zone incentives include tax exempt bonds and bonus depreciations. However, there are Sunset clauses on the money and time is running out for Louisiana, Mississippi and Alabama in terms of how long the money is available to them.

While the state that wins the project will score one of the biggest buffalo projects of all time, the state that doesn't get picked by ThyssenKrupp will still have hundreds of millions in incentives available for a short period of time to help lure other prospective deals. It will be interesting to see how the state that does not land ThyssenKrupp fares over the next 18 months and how those hundreds of millions saved by missing out on the deal will be spent on other deals.

Augusta, Ga., on a Roll

For years, Augusta, Ga., was relegated to second-tier economic development status to a member of its own metro area across the border in South Carolina. Aiken, S.C., a part of the Augusta metropolitan area, was and continues to be a shining star in economic development in the South. Aiken has been ranked No.1 in the small market category at least three times in the last 15 years in our annual SB&D 100 edition, which ranks all sizes of markets in the South in their ability to perform in this business. Augusta, on the other hand, has never been ranked in its category, Mid-Markets. In fact, it has not even come close. But watch the results that come out in our next SB&D 100 edition (June) and particularly 2008's ranking. We have a strong feeling Augusta is going to be right up there at the top of their peer group.

In the latest in a string of deals turned in Augusta, T-Mobile announced in mid-March it is bringing 750 jobs to the east Georgia market. The wireless carrier will establish a new customer service center in Augusta. Also in March, BizJournals.com ranked Augusta as the most affordable city for housing in the United States.

Columbia, S.C. CBD Undergoing Major Transformation

South Carolina's capital city's central business district is on the verge of experiencing a true renaissance with the creation of a master plan of its urban innovation district. The previously undeveloped area of approximately 500 acres in the heart of Columbia's downtown area will link the University of South Carolina's Innovation District with a planned waterfront district. An existing entertainment section of downtown Columbia called The Vista will also be linked to the new downtown development. The development is being called Innovista and the first company, Duck Creek Technologies, announced in the Winter quarter it will locate in the area and create about 200 new jobs. The development plans to integrate public and private sector research companies in and among high and medium-density workplaces, waterfront retail and housing, along with plenty of green space. 

Editorial

Chattanooga May simply be "Next”

As you may know, we made our pick that the next new automotive assembly plant to call the Southern Automotive Corridor home would be Toyota and we believed the location of choice for the Japanese automaker was Marion, Ark. We were wrong. Toyota chose Tupelo, Miss., on February 27 for its latest plant in the Southern Auto Corridor (www.SouthernAutoCorridor.com).

Yet, unlike some of our other predictions (we are now six of eight since BMW announced in South Carolina in 1992, not seven for eight) -- it should be noted what we wrote about this latest auto assembly plant site pick. "If we are going to be wrong, this is the one we will be wrong on." So, we were right in one sense. 

While Toyota was deciding, I visited Chattanooga to talk to officials there about the situation with the Japanese automaker on Thursday (2/8/07). I brought along a business associate with me (a wannabe karate black belt) just in case I needed to be separated from Chattanooga officials, since the week before I had made Marion my pick. 

Charlie Giffen, Director of Business Development for the Chattanooga Area Chamber of Commerce -- Chattanooga's primary economic development agency -- who I have known since 1993, hosted us and he couldn't have been more gracious.

Charlie took us up to a scenic overlook to see the site almost in its entirety. Enterprise South is an incredible piece of property and any potential brownfield problems have apparently been eliminated, much of which are naturally done by the site's typography. There is a large ridge separating the site where an automaker would be located and where the Army manufactured ammunition (TNT) at the old depot.

Let's just say, we were educated even further about the potential of Enterprise South as a home for an automaker. We were not only impressed, we were blown away. And I must write this: I know plenty of economic developers in the South, literally hundreds of them. Charlie Giffen is simply one of those, but he has never blown smoke at me in 15 years. When he told us, "I would be shocked if Toyota didn't pick this site," well, we had to listen and take that into account. While Charlie and I were both wrong about Toyota, it may be that Chattanooga is simply the next site for another automaker in the South.

Mike Randle

mike@SB-D.com

Arkansas Names New Economic Development Boss

Gov. Mike Beebe appointed former Clinton-administration official Maria Haley as chief of the Arkansas Department of Economic Development. When Clinton was governor, Haley, 66, oversaw the state’s former Industrial Development Commission’s international and marketing divisions, and later served in the Clinton administration as a director of the Export-Import Bank of the U. S.

Louisiana Sees Increase in Film Industry

A recent report on Louisiana's entertainment industry shows significant growth, particularly in film making, in the Bayou State. The report, done by Economics Research Associates, shows that Louisiana has seen a 23 percent increase in employment and a 31 percent increase in wages in the film sector.  

Houston Chooses Earthlink for Citywide Wi-Fi Network

EarthLink Inc. has been chosen to build a wireless network for Houston. City officials said the system would serve a 600-square-mile area, making it the largest Wi-Fi operation in North America. The deal is subject to final contract negotiations. Atlanta-based EarthLink has won Wi-Fi network contracts in Philadelphia, Anaheim, Calif.; Milpitas, Calif.; Alexandria, Va., and New Orleans. It is waiting for approval to build one in Atlanta.

Raleigh No. 1 on Forbes List for "Best Cities for Jobs"

In the Winter quarter, Forbes published its annual Best Cities for Jobs ranking and the Raleigh-Cary, N.C. region topped the business magazine's list.

Atlanta Airport "Busiest" for Second Straight Year

Atlanta's Hartsfield-Jackson International Airport served 84.8 million passengers in calendar year 2006, more than any airport in the world for the second consecutive year. The total number of passengers easily topped Chicago's O'Hare, which saw 76.2 million passengers last year. London's Heathrow, Tokyo's Haneda and Los Angeles International rounded out the five-busiest airports in the world in 2006.

New Hampshire Boarding School Students Help Out in the South

A New York Times front page article on February 22, examined the "slow pace" of homes built in areas affected by Hurricanes Katrina and Rita by Habitat for Humanity International. The article revealed that Habitat for Humanity has built or repaired about 8,500 homes in Indonesia, India, Sri Lanka and Thailand since the tsunami struck those countries in December of 2004.

Since the summer storms that hit the South's Gulf Coast in late August and early September of 2005, Leslie Eaton and Stephanie Strom, writers of the New York Time's piece, reported that only 416 homes have been repaired or rebuilt on the Gulf Coast. Of those, only 10 have been built in heavily damaged areas of the Mississippi Gulf Coast and just 36 in New Orleans.

The article, in part, focused on the more complex houses that Habitat builds in the U.S., compared to those in the Pacific and Indian Ocean countries, particularly on or near the Gulf Coast. Regardless of the more complex construction techniques required, we can say without doubt that there are many other issues that prevent or slow rebuilding on the Gulf Coast areas affected by the hurricanes of 2005. Insurance cost increases, government regulations (local, state and federal), and the fact that so many people simply left and never came back are also factors slowing Habitat from building or repairing more structures.

That annoyance didn't keep a small but growing boarding school located in northern New Hampshire from coming down to the Mississippi Gulf Coast and New Orleans to complete its annual "Intersession" community service work. The Oliverian School, a boarding school located near Dartmouth College, in Pike, N.H., sent several students in the winter quarter to areas affected by the hurricanes to assist Habitat for Humanity. The students helped rebuild homes in heavily damaged neighborhoods in New Orleans and on the Mississippi Gulf Coast.

Barclay Mackinnon, Head of School at Oliverian said, "Selfless service, assisting others, while expecting nothing in return can and is an experience that cannot be measured in any easy way. One Oliverian student said about his experience, "Being out in that area you could really see the destruction and I really got a lot out of building the houses." Thanks for your help New Hampshire!