Here is today's summary of economic development news, presented by the Economic Development Partnership of Alabama.
Seth Hammett: More details on Alabama economic development alliance coming
Published: Tuesday, August 09, 2011, 10:32 AM Updated: Tuesday, August 09, 2011, 10:38
ORANGE BEACH, Alabama -- Seth Hammett, chairman of the Alabama Economic Development Alliance, said this morning that the state's new master plan for economic development will be shared with local economic developers in a series of local meetings starting next month.
The former speaker of the Alabama House of Representatives and former
Alabama Development Office
director told state economic developers the alliance wants local feedback and input. The alliance pairs ADO and the
Economic Development Partnership of Alabama
in what is a restructured job-hunting effort.
"We've never done this before," he told members at the
Economic Development Association of Alabama
at the group's summer conference at the Perdido Beach Resort. "We think this is going to be a new day for economic development in Alabama. It's going to be a new and more effective way for us all to work together."
Although Hammett left the ADO job last month, he said Gov. Robert Bentley is keeping him on as chairman of the alliance until the state's new economic development plan is completed.
In an interview after his update to the audience, Hammett said the alliance board will meet Thursday and determine what cities will be visited and on which dates. He said he would release details after that meeting.
"Most of them will likely be in the month of September," he said.
Bill Taylor, the EDPA's chief executive, said the meetings are not just to tell local economic developers and public officials what is in the plan, but also represent a real desire for them to help shape that plan.
Alabama shares ties with Bremen, Germany, says official with trade firm
Published: Tuesday, August 09, 2011, 4:20 PM
ORANGE BEACH, Alabama -- Bremen, Germany and Alabama have a number of natural business connections, and Kirk Atkinson said those connections can grow.
Atkinson, U.S. director of Bremen Invest
, a firm that promotes trade and investment, said the Mercedes-Benz
vehicles built in Vance and shipped to Europe go through the port at Bremen, the 18th largest in the world. Mercedes has 13,500 employees in Bremen, producing the E-Class and the C-Class, among other vehicles.
The C-Class will be built in Vance starting in 2014.
Need more Bremen-Alabama connections?
How about BLG Logistics, which has built a 120,000-square-foot facility in Tuscaloosa that will be 75 percent full when it opens Nov. 4. BLG, which had a sequencing operation inside the Mercedes plant, had two employees in 2004; it now has 80, Atkinson told members of the Economic Development Association of Alabama
at the organization's summer conference at the Perdido Beach Resort.
Atkinson hopes there can be other connections between Alabama and Bremen.
RBC Capital Markets official: Be creative with financing on economic development projects
ORANGE BEACH -- Economic development entities are finding it increasingly necessary to have their own pool of financing to draw from to make deals happen, a municipal finance expert told members of the Economic Development Association of Alabama
Doug Draper, vice president of RBC Capital Markets' municipal finance group, said there are numerous examples of economic development authorities, cities, counties or even utilities and regional partnerships creating seed funds or other pots of money needed to fill in the financing gaps created when the money from traditional lending doesn't fully fund projects.
Draper pointed to one instance in Florida where a city purchased a building and then worked out a lease with a company that provided the funds to pay the debt service on the loan. In another other case, a major utility company put millions of dollars into a seed fund that was leveraged to bring in nearly five-times the investment from other smaller companies.
Draper said when developers are recruiting a company to their community, it's one thing to tout a worker training program or transportation infrastructure, but offering innovative financial assistance will go a long way in winning that company over.
Draper was speaking at the EDAA's summer conference at the Perdido Beach Resort in Orange Beach.
Mercedes supplier may expand
Published: Tuesday, August 09, 2011, 4:12 PM Updated: Tuesday, August 09, 2011, 4:16 PM
ORANGE BEACH, Alabama - A primary Mercedes-Benz supplier is planning a major expansion should it win a parts contract for the C-Class sedan the automaker is to begin producing in 2014.
Tuscaloosa's ZF Lemforder Corp., which now employs about 350, would add an undetermined number of jobs should it win the contract, officials said today.
"That would be a big expansion for us and additional employees," Jim Phillips, regional human resources director for ZF, told economic developers at the Economic Development Assoication of Alabama summer conference.
Phillips said the expansion would include a paint line for the first time.
The ZF plant in Tuscaloosa has a single customer in Mercedes-Benz, so any growth there has to be tied to growth at the automaker's Vance plant, he said.
Phillips was on a panel of manufacturers speaking about the various measures they took to reset their operations during the recent economic downturn.
Alabama tourism chief: Food will key 2012 campaign to bring in visitors
Published: Tuesday, August 09, 2011, 9:06 AM Updated: Tuesday, August 09, 2011, 9:16 AM
ORANGE BEACH, Alabama -- This year, it was music. Next year, it will be food. Again.
Lee Sentell, director of the Alabama Tourism Department
, says the state's 2012 tourism campaign will be "The Year of Alabama Food."
If that sounds familiar, it's because 2005 carried the same theme and each year since the campaigns have had a component of that in them.
Sentell told the members of the Economic Development Association of Alabama
at that organization's summer conference at the Perdido Beach Resort that food defines the state so much and its lists of "things you must eat before you die" resonate with tourists.
Food won't be the only point of the state's 2012 tourism push, he said. Continuing efforts to bring tourists to the state's beaches will be a key component, as will be pushing events like the races at the Talladega Superspeedway
and the Indy Grand Prix of Alabama at the Barber Motorsports Park
Of special significance this year will be the 20th anniversary of the Robert Trent Jones Golf Trail
, Sentell said.
Tourism was a $9 billion industry in Alabama in 2010, a year where the Gulf of Mexico oil spill kept many tourists away from the beaches. Nearly 6.8 million visitors stopped at Alabama's "Welcome Centers" on its interstate connections in neighboring states. Tourism put $550 million in state and local tax coffers last year.
Experts: Boeing union fight in South Carolina could spill into Alabama
Published: Tuesday, August 09, 2011, 9:00 AM
ORANGE BEACH, Alabama -- Economic developers in Alabama shouldn't look at a fight between Boeing Co. and its labor union over a new airplane assembly operation in South Carolina as an isolated case with no spillover, officials said Monday.
A panel said the attempt by the National Labor Relations Board to prevent Boeing from building its new 787 Dreamliner in South Carolina could have ramifications for Alabama because it calls into question whether a company with operations in an open union state can set up operations in a right-to-work state.
"Alabama is not that different from South Carolina," Marcel Debruge, partner with the Burr & Forman law firm, told members of the Economic Development Association of Alabama at the organization's summer conference Monday at the Perdido Beach Resort.
The NLRB and labor unions allege in a complaint in Washington state that Boeing's decision to move Dreamliner production to a $750 million plant in North Charleston, S.C., was a blatant attempt to avoid the unions at its plant in
Seattle and retaliation for years of labor strikes at those plants. The workforce at the South Carolina plant, which was unionized under a previous manufacturer, voted to decertify the union under Boeing's ownership, sparking the lawsuit.
Debruge said what makes the legal challenge so unusual is the remedy the NLRB and labor unions are seeking: the forced move of airplane production back to Washington state.
If the NLRB and the union are successful in getting that decision, it could have a chilling effect on companies with operations in open union states moving to set up operations in right-to-work states, Debruge said.
Baldwin County industrial megasite debate continues
Published: Tuesday, August 09, 2011, 8:15 AM
BAY MINETTE, Alabama - Commissioners this week continued the 2-2 face-off on borrowing $25 million to buy a certified megasite for industrial development with the chairman questioning a proposal to sell Magnolia Landfill and the finance chairman calling the industrial property purchase "speculation."
The debate continues even though officials said last week they had struck a deal to extend options on the certified site beyond the Aug. 31 deadline at a cost of $2.17 million for 1 year.
Commissioner Tucker Dorsey, who pushed for the option extension to give recruiters time to secure a tenant for the 3,000- acre tract northeast of Bay Minette, said the payment includes some funding for the Baldwin County Economic Development Alliance. Part of the option payment will apply to the purchase price, Dorsey said.
Commission Chairman Frank Burt has been a stalwart proponent of buying the tract that lies very near his home and some acreage. He has repeatedly said the county's long-range strategic plan includes development of an industrial center in the north end of the county to help diversify the local tourism-based economy.
Commissioner Charles "Skip" Gruber also said he favors the warrant issue and purchase, noting the positive impact of an interstate interchange at Interstate 65 that would link the land to a new expressway to the Gulf.
Dorsey has said he favors buying the megasite, but not at the risk of borrowing money. Commissioner Bob James did not respond to requests for comment, but has said publicly he believes the county could borrow itself "into bankruptcy" while taking funds from needed highway projects.
Former paper mill appears bound for scrap heap after AbitibiBowater sells it for $7 million
Published: Tuesday, August 09, 2011, 6:00 AM
has sold its former newsprint mill in Monroe County for $7 million to MLR Ventures LLC, an Oregon firm that plans to sell the plant for scrap.
Deeds were filed July 25 in Monroeville transferring the mills to MLR, which AbitibiBowater said is controlled by Tim Ralston, a Portland, Ore., developer. The buyer then mortgaged the property for $6.62 million to two lenders including Schnitzer Southeast, an arm of Portland scrap metal firm Schnitzer Steel Industries.
"We've already met with them, and they're going to scrap it," Monroe County Probate Judge Greg Norris said. "We're hoping when they get through with it, they'll let us market it as an industrial site."
Norris said he hoped Ralston would leave the plant's office building and at least part of its warehouse space. He said he expected demolition to take as long as a year.
Ralston did not respond to an email or phone calls last week. Chip Koplin, manager of government and public affairs for Schnitzer Southeast, confirmed that the scrap metal firm is involved in the project, but declined further comment. He said Schnitzer does not directly engage in demolition.
It's not clear whether the mill has any environmental contamination that could complicate its demolition or the reuse of the site.
Bon Secour Fisheries executive: Ask where your seafood comes from
Published: Monday, August 08, 2011, 5:07 PM Updated: Monday, August 08, 2011, 5:15 PM
ORANGE BEACH, Alabama -- An executive with a large Alabama commercial fishing company said Monday that diners need to ask restaurants where there seafood comes from and demand it be from the Alabama Gulf Coast.
Chris Nelson, vice president of Bon Secour Fisheries Inc., told members of the Economic Development Association of Alabama that there is a one-in-three chance the shrimp they are eating while attending this week's summer conference at the Perdido Beach Resort did not come from Alabama waters.
"Nationally, there is only a one-in-10 chance," he said.
Nelson said the Alabama seafood industry is still trying to rebound from the losses caused by last year's Deep Horizon oil spill, which sent oil spewing into Gulf waters.
In Alabama, the seafood industry accounts for $196 million in annual economic impact and employs 8,759 workers. The BP oil spill caused customers to seek their seafood elsewhere, and health concerns created a perception that remains hard to overcome, he said. He pointed to polls that show 75 percent of the U.S. population has some level of concern over the safety of Gulf seafood.
Nelson said advertising campaigns like the "Serve the Gulf" campaign is helping. He said the new Alabama Seafood Marketing Commission is developing strategies to help the industry, and hopes to work with other states as part of the Gulf of Mexico Seafood Marketing Coalition to pool resources and boost the safety of Gulf seafood.
Nelson believes the oil spill can have a positive, lasting change on the industry and the Gulf Coast because it has caused people to question where their seafood comes from. He said customers need to keep that concern, but not for safety reasons but economic ones because demanding Gulf Coast seafood will force restaurant owners to be discerning about the origin of their seafood. It also will boost the industry in the state.
Signal to build second ship for Kirby Transport
Published: Monday, August 08, 2011, 4:52 PM Updated: Monday, August 08, 2011, 4:55 PM
MOBILE, Ala. -- Houston-based Kirby Ocean Transport Co. today exercised an option to have Mobile-based Signal International build a second offshore tug-and-barge vessel.
Signal will build the ship in Orange, Texas.
Earlier this year, Kirby ordered an articulated tug-barge from Signal for $47 million. The option brings Signal's backlog at the Texas yard to about $100 million, company officials said.
Signal is partly owned by the Retirement Systems of Alabama and its headquarters is in the RSA Tower in downtown Mobile. It employs about 700 people in Pascagoula and 250 in Mobile, mostly doing repair work on ships and offshore oil equipment.
Engineering, planning and material purchase has already begun on Kirby's first ship, the company said. When construction begins this fall, employment at the Orange shipyard will have increased from 100 to 500.
The barges will be 480 feet long and able to hold 20,000 tons. The 6,000-horsepower tugs will be 125 feet long. Kirby will use the vessels for domestic shipping of dry-bulk commodities such as coal, grain or gravel.
Signal is hoping to build on the momentum of the two orders, said Dick Marler, Signal's chief executive officer.
Spanish Fort Town Center: What went wrong to hurt development sporting big-draw Bass Pro?
Published: Monday, August 08, 2011, 11:45 AM Updated: Monday, August 08, 2011, 12:02 PM
SPANISH FORT, Alabama -- As they considered a Dallas developer's proposal to create a shopping center anchored by a Bass Pro Shops, Spanish Fort leaders envisioned a no-lose proposition that would provide millions of dollars for their city.
Under initial projections, sales tax revenue within 2 years would exceed the city's entire budget. The picture painted by developers looked so rosy that local restaurateur Joe Bonner threatened in June 2004 to try to unseat Spanish Fort's elected leaders if they opposed a rezoning necessary for the project.
"If you don't vote for it, I'm going to run against all of you," said Bonner, who ended up challenging and defeating Mayor Greg Kuhlmann despite the incumbent's support for the project. (Bonner ultimately abstained from votes on the development because he owns a house across from it on U.S. 98.)
But Spanish Fort Town Center never came close to the $423 million in revenue that it was projected to deliver by fiscal
2008, suffering from hurricanes, leases that failed to materialize, and a prolonged U.S. recession.
Developers and the city wound up changing the terms of the deal at least 10 times.
"You had (Hurricane) Katrina, which caused people to question the Gulf Coast economy," said Spanish Fort City Attorney David Conner. "And then you had the downturn in the national economy."
Now, a court-appointed receiver has taken control of the Town Center amid a lawsuit by Bank of America against developer Cypress Equities.
Moreover, the bondholder that owns the debt on money borrowed by a quasi-government board to help finance Town Center is suing to force a sizeable increase in fees added to sales taxes paid by Town Center shoppers. Current fees are not producing enough money to pay the bonds.
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