How is the Peach State emerging as the business location to beat? Capital investment projects and a commitment from state leaders to keep Georgia’s infrastructure in top shape, it seems.
Site Selection named Georgia the state with the best business climate in its annual ranking of attractiveness to corporate facility investors (November 2013). This issue of the magazine includes recognition of Georgia as the Top Competitive State (see page 82), up from second place last year. There’s more.
Georgia ranked sixth nationally in total qualifying projects in 2013, earning it a top-10 finish in the Governor’s Cup for total projects; it ranked ninth in projects per capita. Site Selection’s rankings are based heavily on new facility announcements and expansions, not predictions of how states are likely to do in the future. Project announcements today mean job growth tomorrow.
Georgia scored a 10-percent increase in job creation in 2013. Statistics from the Georgia Department of Economic Development (GDEcD) cited 389 company or expansion announcements, netting over $6 billion in investment and creating over 31,500 jobs. And the state had a record year for imports — over $75 billion, and exports of $37.6 billion. Georgia exports have grown 58 percent since 2009. “It’s a good start, but there’s work to be done” is the prevailing sentiment in state economic development and transportation circles.
Port-Deepening Plans Proceed
In the first four months of 2014, every corner of the state has garnered projects that cumulatively will add over 1,600 jobs to Georgia’s workforce. Georgia also showcases one of its best assets, a world-class transportation and logistics infrastructure, to great advantage. The state’s ports recorded an 8-percent growth in total tonnage from July through December 2013, the first six months of Fiscal Year 2014. Over 14 million tons of cargo moved through Georgia ports in Savannah and Brunswick.
“For the first eight months of our fiscal year, the ports are extremely healthy considering this anemic economic world we live in,” said Georgia Ports Authority Executive Director Curtis Foltz, at the Georgia Logistics Summit held in Atlanta in March. His statistics: The port exceeded 2 million 20-foot equivalent container units (TEUs) for the first eight months of fiscal year 2014, up 6.2 percent. Automobile and machinery business is up 5.6 percent. There’s 6.5-percent growth in intermodal activity and 20 percent on rail.
Given the impact of the Port of Savannah on the state’s economy — over 352,000 jobs have been created statewide — it was no surprise that the 2014 Georgia legislature unanimously passed the governor’s request for $35 million in additional port-deepening funds after federal funds for the project were omitted from the Obama administrations latest proposed budget. The measure brings the total allocation for port deepening to $266 million and fulfills the state’s share of the Savannah Harbor Expansion Project (SHEP). Like other ports, Savannah awaits passage of the federal Water Resources Redevelopment Act before it can move ahead with SHEP. In the meantime, the state continues to attract companies like Bainbridge Manufacturing, a privately held, Miami-based automotive supplier.
Setting Roots in Southwest Georgia
The company, which produces HVAC and cooling systems for automobiles, plans to add an additional 1.6 million sq. ft. (148,645 sq. m.) to an existing 118,000-sq.-ft. (10,620-sq.-m.) facility located in Decatur County in southwest Georgia. When completed, the headquarters will become the company’s primary manufacturing center. The project will create 100 jobs in the first year with a total of 240 jobs and $100 million investment over the next 10 years.
Gov. Nathan Deal and Bainbridge Manufacturing CEO, Abraham Levy. Bainbridge Manufacturing will invest $100 million over the next 10 years and create 240 new jobs in southwest Georgia.
Photo courtesy of Office of the Governor/Andrea Briscoe
According to Abraham Levy, CEO of Bainbridge Manufacturing, Georgia’s logistical strength played a significant role in the decision to locate in Bainbridge. “Georgia has a great rail system, extensive highways, the world’s busiest airport and the Port of Savannah,” says Levy. “Through our inland port in Bainbridge, we have access to the Gulf of Mexico. You can find many of the world’s largest shipping lines docking in the Port of Savannah. This allows us greater access to world markets and the ability to reach those markets quickly with direct sailings from the Port of Savannah.”
Levy led his company through a four-year site selection process that considered locations throughout North America and overseas, paying close attention to quality of life, available workforce and the ease and cost of doing business. In the end, Bainbridge and Decatur County won the project.
“Georgia and Decatur County listened to what we were trying to accomplish, and they understood our vision,” he says. “We said for us to be a successful manufacturer in the US we have to go from Point A to Point B, and here is a list of obstacles on our path to Point B. Everyone then focused on eliminating those obstacles. Decatur County officials worked very hard, and without their efforts we would not be here. We are proud to be in Georgia. It’s a very pro-business and welcoming community.”
Bainbridge Manufacturing intends to put down deep roots in the community through a workforce-development program that includes a summer internship program for high school students facilitated by Georgia Quick Start and Bainbridge State College. “The investment is substantial, but the impact it will have on the community and region will be much greater and more rewarding,” says Levy. “It’s not just about creating jobs, it’s about creating opportunities that will enrich people’s lives and maximize their potential.”
The company is also developing an R&D center that will focus on heat transfer and its components. Levy hopes this will be the beginning of a trend.
“I believe you will see more companies locating in this area and establishing R&D centers due to the rapidly changing industrial landscape,” he says. “We are now surrounded by a number of important automotive, aerospace and military-shipbuilding companies that are an hour or two from southwest Georgia.”
How To Not Lose a Project
Cherokee County, almost 300 miles (483 km.) north of Bainbridge, relies heavily on the state’s transportation and logistics infrastructure to attract companies. One of the northernmost counties in the Atlanta metropolitan region, Cherokee County snatched victory from the jaws of near defeat when it won, then lost, then won a project that will ultimately bring 400 jobs to the community.
Netherlands-based Inalfa Roof Systems, a leading global provider of vehicle roof systems, narrowed its search to a building in Nashville, Tenn., and another 188,000-sq.-ft. (17,465-sq.-m.) building in an office park on the Interstate-75 corridor in the southwest corner of Cherokee County. Inalfa was attracted by the site’s proximity to the Interstate, the county’s workforce and access to customers, primarily Ford and BMW. But in the middle of negotiations, the building owner leased to another customer.
“Having access to I-75 is an opportunity we hadn’t had for development that will be really good for us. We’ll see a great deal of jobs there at that interchange and Highway 92 corridor.”
— Misti Martin, President, Cherokee Office of Economic Development
It looked as though Inalfa and those 400 jobs were Nashville-bound.
“We were devastated,” says Misti Martin, president of the Cherokee Office of Economic Development. Rather than giving in to what appeared inevitable, the county called Inalfa to offer a build-to-suit at another nearby site. “It was still in the Opportunity Zone, still served by Chattahoochee Tech, just two miles down the street,” says Martin. “We had to really commit to an accelerated time frame.”
Inalfa agreed and in January moved into a 165,000-sq.-ft. (15,329-sq.-m.) building. One month later, the company announced it would expand the building to 200,000 sq. ft. (18,580 sq. m.) and add an additional 100 jobs to the 300 previously announced jobs. As icing on the cake, the project earned the county the 2013 Deal of the Year by the Georgia Economic Developers Association in the Large Community Category.
“I can’t think of anything that sets the tone better for our new park than a strong, high-end development,” says Martin, tipping her cap to the power of transportation logistics in creating jobs and investment. “Having access to I-75 is an opportunity we hadn’t had for development that will be really good for us. We’ll see a great deal of jobs there at that interchange and Highway 92 corridor.”
“Georgia and Decatur County listened to what we were trying to accomplish, and they understood our vision.”
— Abraham Levy, CEO, Bainbridge Manufacturing
The statistics bear out Martin’s assertion. Thus far in 2014, 75 percent of total prospects inquiring about the county have been in southwest Cherokee and the Southwest Cherokee Opportunity Zone; 65 percent of total prospects have been for the Cherokee 75 Corporate Park, where Inalfa is located.
Partnerships Advance Transport Projects
Toby Carr, planning director, Georgia Department of Transportation, presents at the Georgia Logistics Summit held in Atlanta in March 2014
Photo courtesy of Georgia Logistics Saummit
Creating jobs is crucial in a county where 78 percent of the population leaves to go to work each day. In fact, congestion created on Interstates 75 and 575 is about to be addressed by one of the largest transportation infrastructure projects in state history, the 29.7-mile (48-km.) I-75 Northwest Corridor Project. The $833.7 million project is a public-private partnership (P3) that will utilize managed tolled lanes with electronic tolling.
“We didn’t have the resources to build four new lanes, so we’re building two, and making them reversible,” explains Toby Carr, planning director of the Georgia Department of Transportation (GDOT). Funding comes from several sources including private investors, GDOT program funds, state motor fuel taxes and a healthy dose of federal funds in the form of a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan.
Carr says such P3 arrangements in transportation infrastructure are becoming more popular thanks to the ability to advance the project more quickly. He highlighted several P3 projects on the horizon.
Perimeter Community Improvement District (CID) has pledged $10.5 million toward the reconstruction of the interchange at Ga. 400 and I-285 in Atlanta, a project that is in the environmental approval and design phase. Carr anticipates environmental approvals coming in 2015.
The Town Center CID leveraged relationships with higher education and healthcare partners in the Kennesaw State University area in northwest Atlanta to advance the Skip Spann connector over I-75. The $17.8-million project will create a bridge between Frey Road and Busbee Drive over I-75 and is expected to open by mid-2015.
Bryan County, the city of Richmond Hill and land owner Rayonier are preparing for construction of an interchange at I-95 and Belfast-Keller Rd, about 20 miles (32 km.) from Savannah. The GDOT is also moving forward on a major project in central Georgia, the interchange at I-75 at I-16 in Macon.
“The size and scope of the project is also pretty substantial, in the $300-million range, so the project has been broken up into about six phases in order to make each one achievable,” says Carr. “That interchange is vital, because when there’s an incident there you really impact the reliability of freight flow; you add to that truck delay, the inventory and obsolescence costs that come with that. This project is in our action plan for the 2012 to 2020 time frame, and we want to move as many phases as we can ahead of it. We have that first phase in 2016, and we’re looking to see what we can put in behind it.”
Funding Flexibility
Much of the state’s ability in moving forward on transportation projects is due to House Bill 202, a key policy emerging from the 2013 legislative session.
“That bill allowed the state-designated freight corridors to be created, lifting those series of roads which are most strategic and critical to achieving the state’s goals, in terms of moving people and things, to the top of the list,” says Carr. “They become state priorities.”
The bill also exempts funding of Interstate projects from congressional balancing. “We’re going to develop the project, and as the money comes available we’ll move forward,” Carr adds. “That adjustment to the congressional district balancing law gives the right kind of flexibility for the state to say, ‘Here are our priorities, and we’re going to move those priorities as quickly as we can.’ The fact is we’ve built up our first-class transportation network with balancing in place. This enhancement allows us to make even better use of limited resources by getting those projects going and delivering them even quicker.”
After dipping below the $1-billion mark during the recession, state gas taxes once again rose over $1 billion. The federal transportation authorization bill, MAP 21, expires September 30th and a reauthorization bill has yet to be passed. There is also concern that the highway trust fund will run out before the expiration date.
“The fact is we’ve built up our first class transportation network with balancing in place. This enhancement allows us to make even better use of limited resources by getting those projects going and delivering them even quicker.”
— Toby Carr, planning director, Georgia Dept. of Transportation
“From the state perspective we are able to fund more projects, but from the federal perspective there’s more uncertainty,” Carr says.
“There is no doubt that we have to stay sharp in transportation infrastructure,” he adds. “We need to pay attention to the good things we’ve inherited, the good things we’re doing and the wins we’re making. We have to look where we have opportunities to improve and where things aren’t working as well and tailor our investment strategy the right way. We want to make sure that we work those partnerships between state, local and federal partners and those with the private sector so that we can continue to run a lean, responsive state government. 2013 was a reflection of doing a lot of things right, but we need to continue to go after those improvements that keep us poised to do the exact same thing in 2014.”