Deal Of The Year
In a down economy, recruiting new businesses and industries takes on a heightened importance for Georgia’s professional economic developers, who must battle competition from other states while selling the virtues of their communities to total strangers.
When successful, these intrepid dealmakers can produce hundreds, even thousands, of jobs for their communities and generate multimillions of dollars in capital investment. No one appreciates their work more than Timothy Wang, chair of the six-member Special Services Award Committee of the Georgia Economic Developers Association (GEDA) and a former professional economic developer now serving as an attorney for Delta Air Lines. Wang is tasked with leading the search for GEDA’s Deal of the Year in three county population categories, as well as awards for multi-county efforts.
This year the GEDA awards committee looked at 12 entries and made five selections based on a list of criteria.
“We look at economic impact; degree of expertise needed to facilitate the deal; the challenges that arose in securing the deal and how the deal meets the community economic development goals; and how the community, in conjunction with the state and other entities, coordinates the support programs and incentives to secure the deal.”
The awards committee also secured help from three Georgia economic development and site selection experts, who were not affiliated with any of the candidates.
“It was good news to see all the positive news around the state, not only in capital investment and jobs creations, but also the cooperation among state officials and locally, especially in these regional deals across county lines,” Wang says. “It was an uplifting thing to see these folks working together for the common good.”
Awards were presented at the GEDA annual conference in Savannah in September.
At that ceremony, Al Hodge, president and CEO of the Greater Rome Chamber of Commerce, received the Rip Wiley Professional of the Year award; Morris Jordan, chairman of the Development of Walton County, was given the Volunteer of the Year award.
Following is a look at the 2012 Deal of the Year Award winning projects.
Starbucks To Augusta
Walter Sprouse has been in the economic development business for decades – long enough to admit he welcomes all the help he can get in landing a deal. That’s why he was delighted to involve internationally acclaimed Symphony Orchestra Augusta Music Director Shizuo Z. Kuwahara, along with country music stars Lady Antebellum, the local ballet company and 3,700 competitors in the annual Half Ironman event.
“We also have a pretty good golf tournament here each year,” jokes Sprouse, executive director of the Development Authority of Richmond County. Aside from the Masters, the area’s stellar quality of life helped attract the Starbucks soluble plant to his community, bringing a $200-million investment and 140 new jobs. “I think they saw all that stuff and put it all together and said, ‘This is a pretty good place to be.’”
It turns out one of the Starbucks site selection committee members was a big fan of Lady Antebellum, the seven-time Grammy Award-winning trio with two of the members from Augusta. “Quality of life was a big part of the deal,” Sprouse says.
Sprouse says the Starbucks site selection group looked at sites in North Carolina and South Carolina, as well as Augusta. “We worked with them for about a year,” he says. “One of the things they told us about the two other communities they visited was that they both had excellent industrial sites and Augusta had a very good site, but not an excellent one. ‘You guys have an excellent quality of life, but the other two have a good quality of life.”
Then, Sprouse says, the deal came down to one brief comment. “I said, ‘Give us three months and we can make our very good industrial site excellent, but they can’t make their quality of life excellent in three months.’”
Starbucks landed in Augusta/Richmond County, bringing jobs with salaries about 30 percent higher than the average pay there. For its expertise in putting the deal together using state and local tax breaks as well as donated office space for the Starbucks executives while their site was being prepared and for responding quickly to the prospect’s request for changes in the covenants and restrictions requirement at the chosen site, the Development Authority of Richmond Coun-ty was selected to receive the GEDA Deal of the Year Award in the large population category (more than 100,000).
Another GEDA large population category winner had far more moving parts and consisted of a partnership involving a county, a municipality, a city-county consolidated government, a private property owner and a company wanting the project on a fast track, including the installation of infrastructure on a site assembled from 55 parcels of land more than 20 years ago.
At stake: 1,400 jobs with better-than-average pay and a $200-million investment for the Caterpillar Building Con-struction Products Division straddling the Oconee-Clarke County line, with a portion of the project inside the town of Bogart.
The multi-jurisdictional project was also complicated by Caterpillar’s evolving site needs. The company altered the layout and boundaries of the site and facility on multiple occasions, says Rusty Haygood, economic development director for Oconee County. “The public perception was that the counties could not work together on a project of this scope,” he says, but that was actually not the case. “Our Intergovernmental Agreement basically spelled out the way we were going to work together through the process, and we also agreed on revenue- and cost-sharing terms, which was 50-50 throughout.”
What could have been a further complication was the fact that Clarke County is a Tier 1 County, with favorable tax credits for Caterpillar, while Oconee is a Tier 4 county with lesser benefits. With the site in both counties, there could have been some confusion over the distribution of the tax breaks, but the economic developers brought in state agencies as partners to help sort out the benefits to be offered.
Despite what seemed like a cast of thousands and the rise of everyday obstacles, there were no turf wars or ego battles, says Haygood. “In fact, from the first call to the [deal] announcement was just 64 days.”
From the moment that first phone call came from Caterpillar, the professional economic developers and their volunteers and government leaders had to adopt a code of silence to keep leaks from the media and public, he says. “We tried to impress on everyone involved that this was highly confidential, and they didn’t need to be the cause of this being leaked to the news media and the cause of this company going elsewhere.”
The effort was successful: According to Haygood, the company will begin setting production equipment in the building by January 2013, with the first line manufactured by the fall of next year.
Lowe’s To Rome
For Heather Seckman, director of economic development for the Greater Rome Chamber of Commerce, speed was not exactly the essence of efforts to land a Lowe’s distribution center with a $125-million investment and 600 jobs.
Floyd County’s economic development community learned of Lowe’s interest in the area four years earlier, when the Georgia Department of Economic Development brought “Project Purple Rain,” a code name for the recruitment of the giant home im-provement and building products company, to the Greater Rome Chamber of Commerce back in 2008, just after the state’s economy began a downward slide.
Years before, local leaders sensed a need for a large tract of land to attract a company with big needs and a big payroll. “We were able to present that need before the Citizens Advisory Committee to the SPLOST [referendum]. It went on the ballot in 2009, and the citizens voted for it. Our citizens became our [economic development] partners.” But, says Seckman, the project “didn’t exactly zip along.”
Although Lowe’s put Project Purple Rain on hold in the fall of 2009, the community’s economic developers proceeded with plans to welcome the company to Rome anyway and began readying a site for their distribution center.
“We did not put the site development on hold,” she says. “We continued to move forward on extending water and sewer lines and proceeding with securing various permits. When the project came back to life in March 2011, we were ready to move fast.”
The groundbreaking took place in September 2011, and doors are set to open in April 2013. “Even during that 18 months when we were on hold with Lowe’s and didn’t know if it would ever come back,” Seckman says, “we continued on with permitting, wetlands delineation, working with the Corps of Engineers and prepped and readied the site for whomever, though we were hoping Lowe’s would come through. And they did, with 600 jobs.”
Help in landing the deal came from the Lowe’s distribution center’s being located on a Less Developed Census Tract (LDCT), a designation eagerly sought by Rome’s economic developers, one that provides tax credits of $3,500 for the jobs created by the company. The credits last up to five years. “This is our largest distribution project so far, with 1.4 million square feet of warehouse,” says Seckman.
Rome’s stick-to-it professionalism earned the community the GEDA 2012 Deal of the Year Award for counties of under 50,000 population.
Dinex To Dublin
Ask Cal Wray how’s business, and you get a list of woes and blessings almost in one breath. “Since 2007, we have had a couple of very significant losses,” says Wray, president of the Dublin-Laurens County Develop-ment Authority.
“One was Mohawk’s Dublin plant, which lost almost 800 employees and was broken up, and those jobs distributed to four other facilities, a huge blow to the eastern side of the county,” Wray says, as he lists hit after hit his community has suffered. “We had carpet-related, textile-related industries that have had a very hard time; we also lost a couple of companies that decided to move to Mexico. New Holland closed a facility here that impacted about 75 jobs. Rockwell Automation, which had been here many, many years, took 150 jobs to Mexico.”
Then his voice becomes more upbeat. “Then, within a span of 45 days we announced $53 million in investments and over 400 new jobs,” he says, warming to his good news. “Then Dinex, after two visits to a Dublin site – an abandoned manufacturing building – and visits to 17 states and 48 buildings, the Denmark-based company announced it had chosen Dublin as the location for its first U.S. facility, bringing 250 jobs to the community,” Wray says of the company his community recruited.
Dinex Group is making a $15-million investment in Laurens County, which will generate an average annual payroll of $7.1 million, a healthy development in the best of times and one most warmly welcomed in today’s economy. Dinex makes automotive emissions control and exhaust systems, some of which will be exported, making Dublin’s easy access to the Port of Savannah a valuable selling point.
Once Dinex officials made the announcement they had chosen Dublin for their plant, local economic developers went into action. “Within 45 days we had their building renovated, and they began installing their product lines,” Wray says. “We put a very aggressive incentive package in front of them, including $600,000 in upfront costs for the building improvements, and because of the shape the building was in, the state put up $150,000 of that. We think Dinex will attract suppliers, and that will bring more jobs and revenue into the community.”
The Dinex project in Dublin/Laurens County is the recipient of the Deal of the Year award in the small community category.
The Baxter Project
In show business lingo, it was the blockbuster hit of the year and one that proved the Boy Scouts were right when they said, “Be Prepared.” The star of the production is Baxter International, a pharmaceutical and biotechnology company based outside Chicago in Deerfield, Ill. Its new bio-pharmaceutical manufacturing facility will be coming soon to Georgia’s Stanton Springs Industrial Park, ushered in by the Joint Development Authority of Jasper, Morgan, Newton and Walton Counties (JDA).
With $1 billion budgeted for a facility and 1,500 employees projected at full build-out, the project seems to be the logical conclusion of plans set in motion in the 1990s. “We were very eager to put something together to prepare for when something like a Baxter came along,” says Danny Stone, manager of economic development for the JDA, and an eyewitness to the birth of the four-county partnership. “I was a Newton County commissioner at the time,” Stone says. “Back in the ‘90s when this four-county authority was formed, it wasn’t the easiest thing to get your own local county commissioners to agree. To pull three additional counties into the mix and try to get agreements was a challenge, but it worked.”
Stone says it took four years to bring the project to life, but the four-county approach had its benefits in nailing down the deal. “From a regional perspective, it gives us a bigger [employee] draw area,” he says. “And it gives us a better opportunity to participate in providing services like water and sewer.”
Under the JDA arrangement, the four counties share in the front-end costs, like the purchase of the 1,500 acres or improvements on the land. “The backside of that, the future benefits, is that everybody would reap tax benefits no matter which county held the location of the project,” Stone says.
For its work in landing the Baxter International project and for its foresight in developing the four-county JDA and the Stanton Springs Industrial Park, the Joint Development Authority of Jasper, Morgan, Newton and Walton Counties is the recipient of the 2012 GEDA Deal of the Year Award for a multi-county project.