2003 SB&D 100

Top Deals & Hot Markets

By Mike Randle

By reading the first two sections of the 2003 SB&D 100, it's easy to see that the South's economy is changing. Case in point: Big job deals are at an all-time "100" low. Fact is, the top 100 job generating projects announced in the South in 2002 will produce but half the jobs of that produced by the top 100 job generating announcements announced in 1997. That's the bad news.

The good news is that manufacturing deals are back in the South. High-wage, high-end deals, especially those from foreign-owned manufacturers, are showing in the South like never before. The automotive industry is mostly responsible for that, however, other high-end manufacturing deals emerged with this SB&D 100 as well. Yes, 2002 may indeed be the first indicator that the passage of NAFTA will eventually be a good thing for the South's economy. Because up until now, the bleeding of low-wage manufacturing jobs as a result of NAFTA has slammed the South's economy.

Yet, one exceptional manufacturing year is not enough to declare the sector is back. But we believe the manufacturing sector will continue to thrive in this region. After all, execs running the growing automotive industry in the South have discovered labor costs are about half that of the Midwest and other high-end manufacturers are finding the same thing. It's our opinion that NAFTA has weeded out the low-wage manufacturing industries and has opened a new window to high-wage, high-end producers.

The changing economy has also brought a changing of the guard in the Top Deals and Hot Markets section of this year's SB&D 100. Never before in the 11-year history of the SB&D 100 have there been more markets or states cited for the first time as a result of their performance.

For example, on the state level, Texas, Virginia, Tennessee, Florida, North Carolina and Georgia are regulars in the state category. In fact, two or more -- out of three -- have always made our state recognitions every year since 1993 and the State of the Year has come from that list exclusively for 10 straight years.

But not only has the 2003 SB&D 100 eliminated any state from that list in the State of the Year category, not a single one earned an Honorable Mention for the first time ever. On the other hand, this year we find Alabama, Mississippi, Oklahoma and West Virginia, four states that are not even remotely comfortable sitting at the No. 1 table, being recognized in the state category. We have written time and time again that large states have dominated this region's economy for years. This year we can't write that. Small states dominated for the first time since we first published this ranking in 1993.

The same can be said for every other market category we honor, except for the Mega-Market division, where Tampa Bay won for the second straight year. This year you won't see Richmond, Hampton Roads, Charlotte, Austin or Nashville in the major market honors like you have almost every year.

And in the mid-market category, Tri-Cities, Tenn., McAllen, Tex., Biloxi/Gulfport/Pascagoula, Columbia, S.C., Tulsa, El Paso and Roanoke are nowhere to be found on this year's list. One or more of those markets are regularly cited in the SB&D 100. That's not the case this year.

In their place are Knoxville, Montgomery, Charleston, W.V., Charleston, S.C., Little Rock and Jackson, Miss. Only three times out of 33 possible recognitions has any market from that group showed in the SB&D 100 (Knoxville, Montgomery and Charleston, S.C., one each).

And the stranglehold by Aiken, S.C. and Martinsville, Va. on the small market division has finally come to an end. One or both of those markets have earned a first, second or third every year since 1995. This year they were shut out. Shut out also were small dynamo regulars such as Tupelo and Jackson, Tenn.

In their stead this year were breakout performances by first-timers DeSoto, Miss., Gadsden, Ala., Clarksville, Tenn., and Wood County, W.V.

State             Category

ALABAMA: 2003 STATE OF THE YEAR (280 POINTS)

No state in SB&D 100 history has garnered State of the Year and Deal of the Year in the same year. That string was broken with Alabama being named State of the Year and Hyundai's Montgomery, Ala. assembly plant winning Deal of the Year in the 2003 SB&D 100. By the way, Hyundai is Alabama's fourth Deal of the Year, which leads all Southern states. The others were Mercedes-Benz (1994), Boeing (1998) and Honda (2000).

Regarding Alabama's remarkable ability to turn the biggest of the big deals, we have written in the past that the state doesn't generate many deals. But when an Alabama official walks to the podium to announce a project, you had better hold onto your hat.

That statement is only half true this year. Along with the deal of the year were many smaller announcements that made our lists. And the majority of them were automotive-related.

The automotive industry has found this state like no other in the South since Tennessee saw its own automotive heyday in the 1980s and early 1990s (Tennessee remains a strong player as evidenced by the recent announcement by Toyota to build an engine plant in Jackson). But Alabama has already exceeded Tennessee's two assembly plants and is now piling up the suppliers. We would not be surprised if Alabama landed its fourth OEM plant this year.

In a year when small Southern states made huge strides in competing with their larger neighbors, Alabama is the first small Southern state (under five million residents) to win State of the Year. If the economic indicators of 2002 are sustainable, Alabama won't be the first or last small state to win State of the Year in the SB&D 100.

MISSISSIPPI: 2003 PER CAPITA STATE OF THE YEAR (205 POINTS)

Continuing this year's small state trend is Mississippi. It's the second consecutive year the Magnolia State has earned the important No. 1 Per Capita designation. In other words, no state in the South turned more big deals per million residents in 2002 than Mississippi. If you really want to level the playing field, that's the way to do it.

While Alabama's automotive industry is more mature by a decade and Tennessee's by two decades, Mississippi's automotive industry is helping drive the state's economy. Nissan's announced expansion, prior to the plant even opening, was a huge deal for the central part of the state. There were also big deals that came from the Mississippi Gulf Coast and DeSoto County, located in the northern part of the state. In fact, DeSoto County is our Small Market of the Year. In north Mississippi, where DeSoto is located, distribution is carving a huge niche.

WEST VIRGINIA: 2003 STATE HONORABLE MENTION (120 POINTS)

The Year of the Small States cannot be complete without the South's smallest state. Normally, we cite only three states each year in the SB&D 100. But this year we had to make an exception.

West Virginia almost doubled its 2002 points and the state saw individual markets earn recognition for the first time ever. While we have recognized West Virginia once before (2000), when it won Per Capita State of the Year, never before have we cited any of its markets. We do this year with Wood County earning a Small Market Honorable Mention and Charleston gaining an Honorable Mention in the mid-market category.

OKLAHOMA: 2003 STATE HONORABLE MENTION (175 POINTS)

One of only five Southern states to increase its SB&D 100 point totals from last year, Oklahoma is the fourth small Southern state being recognized this year. The good thing about Oklahoma's year was a nice mix of large deals announced in rural regions and metros. Speaking of metros, Oklahoma City's significant investment in its downtown over the last five or six years is paying off. OKC is now a fixture in the major market division, joining Richmond, Hampton Roads, Charlotte, Memphis, Austin and Orlando as majors in the South that perform well almost every year.

Mega-Market Category

TAMPA BAY: MEGA-MARKET OF THE YEAR (130 POINTS)

Other than 2000 and 2001, when Baltimore/Washington/Northern Virginia won two straight Mega-Market of the Year awards (2 million or more in population), this category has been owned by either Dallas/Fort Worth or Tampa Bay. Atlanta, St. Louis, Miami/Fort Lauderdale or Houston, which make up the rest of the mega-market crew in the South, have never won Mega-Market of the Year. Atlanta was close in 2000, but none of the others have even sniffed the top of the heap in this category. This is the second consecutive Mega-Market of the Year for Tampa Bay and it's the third overall. Dallas/Fort Worth won it six straight times in the 1990s.

Tampa Bay continues to impress us with the financial services sector leading the way again. Citigroup's expansions in Tampa seem to make the Job 100 every year. They did again this year. But other industries contributed this year in Tampa Bay, a region that includes Clearwater, St. Petersburg, Lakeland, Sarasota, Tampa and numerous other mid-size and small markets. Industry sectors contributing points in Tampa Bay this year include distribution, call centers, headquarters, pharmaceuticals, electronics and media services. Even in a down economy, Tampa Bay remains a job generation machine.

BALTIMORE/WASHINGTON/NORTHERN VIRGINIA: SECOND PLACE MEGA-MARKET (120 POINTS)

It's difficult to compete with the South's largest market. The D.C. region holds over seven million people, or the size of Tampa Bay, Orlando and the rest of central Florida combined. Baltimore/Washington/Northern Virginia is also close to double the size of Houston and Dallas/Fort Worth, and it dwarfs South Florida, Atlanta and St. Louis.

But with what this region has gone through the last two years, from the 9/11 attacks, to the sniper incidents to the melt down of the telecom and dot-com industries, two huge industries in the region, it's a wonder this place earned 120 points. But let's not forget this is also the home of the defense industry in addition to the federal government.

The D.C. region earns our praise for its creation of jobs and investment at a time of very difficult circumstances. Sure, this year Tampa Bay won the mega-market division, but the D.C. region won our hearts.

DALLAS/FORT WORTH: MEGA-MARKET THIRD PLACE (70 POINTS)

You'd think that the year Texas posted its worst point total ever, Dallas/Fort Worth would leave the door open for other mega-markets in the South, especially for the third-place position. Nope. D/FW earned a spot in the money, albeit the show position, for the eleventh time in 11 years. But it earned its spot just barely, as it topped St. Louis, which posted its best year ever, by 10 points.

Other Mega-Market scores: St. Louis (60 points); Atlanta (45 points); Houston (40 points); Miami (20 points).

Major Market Category

MEMPHIS: MAJOR MARKET OF THE YEAR (120 POINTS)

We kidded new Memphis buffalo hunter Jim Apple that it was DeSoto County, Miss., which is located just across the state line, that drove Memphis to Major Market of the Year in 2003. Our statement to Apple made perfect sense. After all, DeSoto County, Miss., part of the Memphis MSA, put 50 points in Memphis' pocket. Yet, not a single point from DeSoto earned a single dollar for Memphis' tax rolls. After all, we're talking about another state. But even without DeSoto's 50 points, most of which came from distribution deals, Memphis would have topped second place Jacksonville by five points.

Deals that propelled Memphis to Major Market of the Year include a variety of industries such as health care, general manufacturing, financial services, and paper products. Well-known corporate names earning points for Memphis include Carrier Corp., Solectron, Williams Sonoma and Sharp.

JACKSONVILLE: MAJOR MARKET SECOND PLACE (70 POINTS)

This is the first year Jacksonville has broken into the top two in the major market category. We predict it won't be the last. Not unlike Tampa Bay, the financial services sector drives this north Florida economy. But if you look closely, you'll find one deal earning points for Jacksonville that we believe is a sign of things to come. Italy-based C F Gomma USA moved its headquarters from Indiana to Jacksonville in the fourth quarter of last year. The company is a global supplier to the automotive industry.

We predict that Jacksonville will be one of the few markets in Florida that has a good chance at not only landing a large number of automotive suppliers in coming years, but an OEM as well. If Jacksonville does indeed fulfill its wishes to be a major market automotive player in the South, then it will have an distinct advantage at competing with other Florida markets in the SB&D 100 each year.

ORLANDO: MAJOR MARKET THIRD PLACE (65 POINTS)

Last year's Major Market of the Year fell to third place this year. But as always, Orlando's point-making deals always seem to be sexier than deals coming from other markets. Earning points for Orlando were AOL, Optium and Crystal Photonics. There aren't many markets in the South today turning big deals in the Internet and optical elements industries. Furthermore, there isn't a single market that earned points from a company like Crystal Photonics, which makes ultraviolet resonant cavity light-emitting diodes grown by molecular beam epitaxy on non-polar gallium nitride substrates.

MAJOR MARKETS WITH 50 POINTS OR MORE: Raleigh-Durham (65 points); Oklahoma City (55 points).

Mid-Market Category

KNOXVILLE: MID-MARKET OF THE YEAR (45 POINTS)

Officials in Knoxville have been working hard for this recognition. Not too long ago, Knoxville's economic development initiatives were fragmented like few other mid-markets anywhere in the South. Their performance at turning big deals for much of the 1990s showed. But in 1998, Knoxville put its first blip on the SB&D 100 screen. That blip has grown each and every year until this year's Mid-Market of the Year honors.

Deals propelling Knoxville to the top of the mid-market division include a wide range of industries including boats, call centers, manufactured homes, office products and nuclear medicine.

MONTGOMERY: MID-MARKET SECOND PLACE (35 POINTS)

The last time Montgomery found itself in this position was in 1995. That was the first and last time Montgomery garnered an Honorable Mention in the mid-market category. But the second time is the charm for this charming Alabama capital city. Montgomery is home of the Deal of the Year in the South for 2003. Hyundai's decision to build its first North American automotive assembly plant has put this market on the international map.

CHARLESTON, S.C.: MID-MARKET SECOND PLACE (35 POINTS)

Here's another market that has earned an Honorable Mention in the past, yet has not won a Mid-Market of the Year to date. Like Jacksonville, though, Charleston is making a name for itself in the automotive industry sector.

CHARLESTON, W.V.: MID-MARKET SECOND PLACE (35 POINTS)

A first-timer Honorable Mention, Charleston earned points from the banking, electric power, chemicals and telecom industries.

LITTLE ROCK: MID-MARKET THIRD PLACE (30 POINTS)

This is Little Rock's first Honorable Mention as well.

JACKSON, MISS.: MID-MARKET THIRD PLACE (30 POINTS)

It wasn't just Nissan's expansion that earned Jackson's first Honorable Mention. Johnson Controls and Red Penguin Ice Cream added 10 points to Jackson's total.

MID-MARKETS WITH 25 POINTS OR MORE: Huntsville, Ala. (25 points); Johnson City/Kingsport/Bristol, Tenn. (25 points).

Small Market Category

DESOTO COUNTY, MISS: SMALL MARKET OF THE YEAR (50 POINTS)

Well, it's about time a small market in the South unseated Martinsville, Va. and Aiken, S.C. Those two small markets have jockeyed for the top spot every year in this category its seems. But this year, DeSoto County, located in the northwest portion of the state of Mississippi, just south of Memphis, won Small Market of the Year for the first time.

Driving DeSoto County's economy is the distribution industry. But other deals in the general manufacturing sector added points this year as well. Cities where points were earned in DeSoto County included Olive Branch, Hernando and Southaven. Companies that drove DeSoto to the top of its category include Future Electronics, Cogentrix, Williams Sonoma and Hart & Cooley.

GADSDEN/ETOWAH COUNTY, ALA.: SMALL MARKET SECOND PLACE (25 POINTS)

It's the first time Gadsden/Etowah County has ever been recognized. The automotive and steel industries did enough to earn Gadsden a second place tie in the small market division.

CLARKSVILLE/MONTGOMERY COUNTY, TENN.: SMALL MARKET SECOND PLACE (25 POINTS)

Ditto Clarksville. Never before has this small market, located just northwest of Nashville, been recognized in the SB&D 100. Clarksville's points came from the call center, paper products and healthcare industries.

PARKERSBURG/WOOD COUNTY, W.V.: SMALL MARKET SECOND PLACE (25 POINTS)

Another first-timer, Wood County saw its points come from the food processing and distribution industries.

THIRD PLACE SMALL MARKETS (20 POINTS): Winfield, Kan.; Bartlesville, Ok.; Lancaster, S.C.; Odessa, Tex.; Moore County, Tex.; Cape Gerardeau, Mo.; Mecklenburg County, Va.; Henry County/Martinsville, Va.; Warren County, Va.

SMALL MARKETS WITH 15 POINTS OR MORE: Lincoln, Ala.; Cullman, Ala.; Fort Smith, Ark.; Auburndale, Fla.; Murray, Ky.; Westlake, La.; Oakland, Miss.; BERKELEY, MO.; Durant, Okla.: Lawton, Okla.