2007 Top Deals and Hot Markets
There are Changes in the Wind
By Michael Randle
In the 14-year history of the SB&D 100, only six states have been awarded the coveted "State of the Year." Those are Alabama (four times), Florida (twice), North Carolina (three times), Tennessee (once), Texas (twice) and Virginia (three times). I know that adds up to 15 winners in 14 years. Well, North Carolina and Alabama shared "State of the Year" honors in 2005 and 2006 and you haven't read yet who won "State of the Year" this year, but let's just say that you can add a seventh Southern state to that list.
The results of the 2007 SB&D 100 clearly indicate that there are changes in the wind when it comes to economic development in the South. States that typically do not generate as many large job generating and capital investment deals as the "regulars" are now challenging the elite like never before. Case in point: Missouri has averaged 159 points in the SB&D 100 since 1994. There's no question that's an underperforming average during that time for a state with nearly 6 million residents.
But, Missouri is a border-South state and all of those except for Kentucky (Kansas, Missouri, West Virginia and Maryland), struggle to keep up with non-border states in the South when it comes to economic development in general. History has shown they just do not turn as many deals as other states in the South. It's not their fault. It's simply because they must play both sides of the fence when other states in the South do not have to play that game. Maryland and West Virginia are uniquely linked with the South and the Northeast. Missouri and Kansas must play the economic development game with Southern states and with Midwestern states. I've always thought that was a disadvantage for border-South states.
Regardless of those possible disadvantages, out of the blue, Missouri puts up 355 points on this year's SB&D 100 board. We strongly considered giving the honor of "State of the Year" to Missouri this year, considering their 159 point average over the last 13 years. But no, we decided to pick another Southern state this year that has never been recognized as "State of the Year" in the South. Yet, we are very impressed with what Missouri Gov. Matt Blunt has done as well as his economic development team. Now let's see if they can keep it up.
In addition to Missouri's great performance, Alabama's (for the fifth straight year) and Texas' efforts should be given special emphasis in this year's SB&D 100. Secondarily, North Carolina, Georgia, Kentucky, Mississippi and South Carolina should be mentioned as well for their performances in calendar year 2006. Of course, none of those states include our "State of the Year" (read on).
Alabama has earned "State of the Year" honors the last four consecutive years. Should we have given it to them again this year? Probably. They are at the top, again, of the PPM (Points Per Million) ranking. But Alabama is going to have to settle with a "Honorable Mention." This year's SB&D 100 had too many "gray" areas running through it and Alabama's point total dropped for the first time since we named them "State of the Year" way back in 2003.
Texas is back with a vengeance, posting over 900 points. I know, other economic development magazines are giving it up to Texas like never before. "Hold on, there," we say. We remember the go-go '90s. Texas' performance in the 2007 SB&D 100 is very good, but it is not great compared to what the Lone Star State did in the mid-to-late 1990s. So, even with an incredible total, Texas ranked just 7th in the South in our critically important PPM category (Points Per Million residents), a factor that we take very seriously in our state ranking. Seventh in PPM won't get you "State of the Year," but it might get you an "Honorable Mention," which we are giving to Texas.
In the market category rankings (Mega-Markets, Major Markets, Mid-Markets, Small Markets and Micro Markets), the following states had markets that earned recognition based on the points they earned. It should be noted that we recognize the top three in each market peer group unless there is a tie in points earned.
Alabama: Four markets recognized
Georgia: Three markets recognized
Kentucky: One market recognized
Louisiana: Two markets recognized
Missouri: Four markets recognized
North Carolina: One market recognized
Texas: Four markets recognized
How We Rank States and Markets
It should be noted that the SB&D 100 is not a survey of executives who choose which markets they believe are the most attractive in the South. The Hot Markets report ranks states, mega-markets (over 2 million in population), major markets (750,000-1.99 million), mid-markets (250,000-749,999), small markets (100,000-249,999) and micropolitan markets (10,000-99,999), based on the number of corporate and industrial job and investment announcements they successfully attract that feature 200 or more jobs and/or $30 million or more in investment. We simply count how many deals each state or market turns and each deal is given five or 10 points, depending on the size of the project. If the project ranks as one of the 100-largest job or investment deals announced in the South during the year, it earns 10 points for that state and/or market. If the deal is 200 jobs or more, and/or $30 million or more in investment, but does not make either "100," then five points is awarded.
State of the Year
You might be wondering why Louisiana is our choice of "State of the Year" when they earned 220 points, huh? Let us go to the "gray" area of economic development (see Southbound column, page 4). In 2003 we named Alabama "State of the Year" for the first time ever and that state put up just 280 points. We knew Alabama was just getting started back in 2002 (the year numbers were used for the 2003 SB&D 100). Two years later, economic development and general-reach business magazines were giving Alabama all kinds of awards and such. In other words, we knew two years before anyone else did that Alabama was "hot" and would get even hotter, as evidenced by "State of the Year" honors in 2003, 2004, 2005 and 2006.
We feel the same way, to an extent, about Louisiana. More importantly, though, we are honoring Louisiana with "State of the Year" this year because they almost doubled their point total from the year before, jumped from 13th to 3rd in PPM in one year and they did it under very difficult conditions.
Unless you've lived in a cave since the summer of 2005, you know what has happened to much of south Louisiana and the state as a whole. The leadership there has overcome so much and to put 220 points on the board the year after hurricanes Rita and Katrina, well, that is just outstanding. Nope, it is even more than that. Louisiana has done the impossible and they did it when they were backed in a corner in a big way.
While there were many communities that helped Louisiana win its first State of the Year award, we do want to mention that New Orleans came in second in the Major Market division and Baton Rouge won Mid-Market of the Year in the 2007 SB&D 100.
Missouri: 355 Points, 2nd in *PPM
Alabama: 305 Points, 1st in *PPM
Texas: 915 Points, 7th in *PPM
* Points per million residents
St Louis: Mega-Market of the Year
Houston: Mega-Market of the Year
This a first for both St. Louis and Houston. Almost every year, Dallas/Fort Worth or Baltimore/Washington/D.C. takes this prize. St. Louis had its best year by far with several notable deals making this year's SB&D 100 lists. World Wide Technology, McCormick Scientific, Jambo Kenya Coffee, CDM Electronics, Ungerboeck Systems, Chemir, Procter and Gamble, Momentum NA, American Healthways, Thayer Aerospace, LaBarge and Express Scripts are several of the companies that made either large investments in capital or labor, or both, in the St. Louis mega-market in calendar year 2006.
As for Houston, it too, has won Mega-Market of the Year for the first time. Lockheed Martin, Enterprise Products, Hewlett-Packard, Kinder Morgan, Kaneka, AAA Furniture, Dianal America and Englehard/BASF, were some of the companies that took Houston's point total to the top in the mega-market category.
Dallas/Fort Worth: 160 Points
Atlanta: 125 Points
Kansas City: Major Market of the Year
As we've written, there are changes in the wind. While St. Louis tied with Houston, and won its first Mega-Market of the Year, Kansas City has now won its first Major Market of the Year award. Kansas City just had a monster year. In fact, Kansas City's 195 points topped eight other Southern STATES in this year's "100" ranking.
Some of the companies that helped launch Kansas City to the top of the Major Market list include Eastern Isotopes, Bank Midwest, Triad Media, Fujifilm Sericol, Synbiotics Corp., Folger Coffee, International Paper, Proteon Therapeutics, Farmland Foods, Matrix Medical, E.T. Archer, MMG Worldwide, Walsworth Publishing and Chicago Metal.
New Orleans: 120 Points
Charlotte: 100 Points
San Antonio: 100 Points
Baton Rouge: Mid-Market of the Year
This is another first. Baton Rouge has never won Mid-Market of the Year either, until now. Baton Rouge's 75 point easily topped Huntsville's 60 in the Mid-Market category. Huntsville has been on a roll, earning Mid-Market of the Year last year and in 2005. That being the case, topping Huntsville is a huge accomplishment for the Baton Rouge MSA.
A few companies that helped Baton Rouge get to the top of the mid-market category included Celtic Media, Formosa Plastics, and two huge bio-diesel and ethanol projects being built by Shaw across the river in Port Allen.
Huntsville: 60 Points
Port Arthur/Beaumont: 50 Points
Gulfport/Biloxi: 40 Points
Anniston-Oxford, AL: Small Market of the Year
Tuscaloosa, AL: Small Market of the Year
Decatur, AL: Small Market of the Year
St. Joseph, MO: Small Market of the Year
Since there are four small markets tied at the top in the small market division, there are obviously four Small Markets of the Year this year. Note that three are located in Alabama.
A deal to build Army tanks in Anniston and a huge investment by NGC Industries in Oxford, gave that market 25 points. Tuscaloosa earned its way to the top with deals from USG, Hunt Refining and U.S. Energy and Decatur received 25 points from deals made by 3M, Wayne Farms and Toray Carbon Fibers. St. Joseph, Mo., landed projects from Lifeline Foods, USA 800, Albaugh, BMS Warehousing and Boehringer Ingelheim.
Lagrange/Troup County, GA: Micro-Market of the Year
Cape Girardeau, MO: Micro-Market of the Year
Richmond, KY: Micro-Market of the Year
Lagrange/Troup County earned all of its 20 points from the Kia Motors assembly plant that is being built in West Point, Ga. Cape Girardeau landed deals from Procter & Gamble, National Asset Recovery, Spartech Plastics and CPAC. Richmond, Ky., earned its points from GSI Commerce Solutions and the Blue Grass Chemical Agent Destruction facility.
Dublin, GA: 15 Points