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Fall 2007
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)
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.
State Percent Change
1. Alabama 23.10%
2. Louisiana 22.73%
3. Florida 20.52%
4. Arkansas 19.55%
5. Mississippi 18.75%
6. Virginia 18.66%
United States 17.80%
7. Tennessee 17.47%
8. North Carolina 17.18%
9. South Carolina 16.34%
10. Kentucky 15.55%
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.
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.
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.
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.
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.
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