Classic City Gaining
The Athens metropolitan statistical area will enjoy solid economic expansion this year. But, like both the nation and the state, it will see a modest slowdown in the pace of economic growth.
For example, employment in Athens should increase by about 1.7 percent, or some 1,400 jobs. That’s a solid gain; but last year, the job count rose by 2.3 percent, or around 1,700 jobs. Athens’ 1.7 percent gain will be on par with the 1.6 percent gain that I expect for the state; but both Savannah and Brunswick – Georgia’s boomtowns – will enjoy significantly faster growth.
Athens’ primary economic drivers will be the University of Georgia, the hospitality industry and retiree-based development. It also looks like Athens is poised to benefit from a rising tide of life sciences jobs.
On the downside, I see three problems. First, the Navy School’s closing definitely lessens the prospects for growth over the next few years. Even though the base offers good redevelopment potential, that process is uncertain and will take a while. Second, Athens has considerable exposure to additional job losses in manufacturing. Although renowned as a quintessential college town, Athens is very much a part of blue collar America. The area is more dependent on manufacturing jobs than either the state or the nation. Third, I expect the housing recession to deepen.
The prospects for retiree-based development have never been better for Athens. That’s partly due to the strengths of its college town economy – in particular, the presence of a rich cultural scene and an abundance of leisure opportunities. Stellar prospects also partly reflect the basic fact that baby boomers are reaching retirement age in huge numbers. But what changed recently is the extreme rise in home prices in many states that have traditionally attracted retirees in large numbers.
Suddenly, retiring to Florida or Arizona is much less affordable. In just five years, home prices in these traditional retirement “meccas” have doubled. And, by the way, it isn’t just Florida’s beachfront communities, or glitzy places such as Orlando, that are no longer affordable. Much of central Florida also saw home prices double. Prices rose by 99 percent in Ocala and 94 percent in Lakeland.
The timing of Florida’s affordability crisis couldn’t be better for Athens. Just as baby boomers begin to retire in huge numbers, the largest and most immediate cost associated with relocating to Florida has gone through the roof.
That’s a real factor if you’re targeting retirees from the Midwest, where home prices rose only modestly. And it’s not just the price of the house that’s gone through the roof. Property taxes in Florida are soaring; and because assessed values tend to lag market values, that trend will worsen over the next few years. Florida’s private-sector home insurance market is in chaos.
The bottom line is that I expect a wave of incoming retirees to boost demand for real estate, high-end goods and services such as healthcare and entertainment. This influx not only creates jobs, it also raises the overall standard of living. In turn, this makes Athens more attractive to knowledge-based businesses and professionals, for whom quality of life is an extremely important consideration.
After several years of building momentum, Athens has numerous opportunities to solidify its mark as one of the Southeast’s premier bioscience centers. Recent developments and prospects include:
• The establishment of a College of Public Health.
• The Coverdell Center for Biomedical and Health Sciences.
• The opening of a satellite campus of the Medical College of Georgia in Athens.
• Biotechnology business and research activity centered in the Animal Health Research Center.
• Proposed funding for new buildings for the Southeastern Poultry Research Lab.
• The possibility of landing the National Bio and Agro-Defense facility.
Even if these developments don’t all pan out, it appears that a critical mass of bioscience activity is developing in this area.
Biopharmaceutical firms show ongoing interest in Athens, and though none has chosen to locate there so far, the attention is helping to establish the city as a potential site for such businesses. Pharmaceutical manufacturing jobs are among the best paid in the state.