The states of the Southeast U.S. have transformed themselves into economic development powerhouses, thanks in large part to low costs of land and labor; generous incentives that offset the cost of an expansion or relocation, including some of the finest workforce training programs in the country; high quality of life; right-to-work laws in the majority of states; and multimodal transportation that puts companies within a day’s distance of most of the country.

These and other factors have led to widespread economic development expansion involving manufacturers and other companies—both U.S.- and foreign-based—in a diverse range of industries.

Whenever a company is considering a major expansion project, its list of site location finalists usually includes several Southeast U.S. metro areas.

 

Port Manatee stays on course

Port Manatee, on Florida’s Tampa Bay, has not let the economic downturn of the past several years interfere with its plan to expand operations. The port is in the final stages of dredging the last berth under construction.

When complete, the port’s capacity will have grown by 50 percent during the downturn and will include creating container yards and purchasing two container cranes and more dock and warehouse space.

“We’re looking to expand our marketplace going forward,” says David McDonald, executive director of Port Manatee. “We want to [be ready] once the economy is running again. We wanted to continue developing facilities, because we felt we would be at full capacity once the economy is better.”

Aside from a turnaround in the economy, Port Manatee, like other Gulf Coast and Atlantic ports, is anticipating an increase in business as a result of the Panama Canal expansion, slated for 2014. Port Manatee is the closest U.S. deepwater seaport to the canal and shares a strategic alliance with the Panama Canal Authority.

Port Manatee expects the Canal expansion will increase transship ports in the Caribbean, such as to Panama, the Dominican Republic, and Colombia. “We would be recipients of feeder vessels coming into the Gulf of Mexico,” McDonald points out. “We are positioned to take advantage of the Canal expansion.”

As for the long-term future, McDonald says a $750 million expansion project is already approved in Port Manatee’s master plan on the port’s north side. The project will begin once capacity is reached at Southport.

Unlike many ports, Manatee is unobstructed by encroaching urban growth. With plenty of green space at its disposal, the port has created the 5,000-acre Encouragement Zone, an initiative to attract shippers and port-related businesses to expand operations across from the port.

The Encouragement Zone offers numerous incentives that can be advantageous for companies that do business with the port, including impact fee reductions, expedited permit approvals and rezoning options, an extension of the Foreign Trade Zone, and a Tax Increment Finance District.

The incentives could save companies millions of dollars in costs if they decide to expand in the Encouragement Zone, McDonald says. International Salt and Mayo Fertilizers, two bulk commodity companies, have established operations in the Encouragement Zone, and McDonald says the port hopes to attract warehouses and distribution centers to the complex as well.

 

Growth at Port of Tampa

The Port of Tampa has joined forces with the ports of Houston and Mobile to create The Gulf Coast Advantage to jointly market to global container carriers. The goal of the initiative is to attract a new all-water service from Asia via the Panama Canal.

The approach taken by The Gulf Coast Advantage is for the three ports to jointly present a complete itinerary for three strong, complementary markets that are currently underserved, with a strong cargo profile of both exports and imports, says Richard Wainio, director and CEO of the Port of Tampa.

“The competitive advantage for carriers is hitting multiple ports and greater utilization of their vessels,” Wainio says. “This allows them to offer lower transportation costs, thanks to higher utilization and faster service.”

The fastest growing component of the Port of Tampa is its container trade, driven primarily by Zim Integrated Shipping Services providing connections across the globe. In November 2010, Zim expanded its South American Express service from Brazil and Venezuela to Tampa. Wainio describes this as an important development in the continued expansion of the port’s container business.

In February 2011, Zim launched a new, direct container service between Mexico and Tampa, the Mexico-Tampa Express Service (MTX), utilizing two Zim-chartered ships, on the following rotation: Kingston – Veracruz – Altamira – Tampa – Kingston. There is a significant volume of business moving between Mexico and Florida and beyond, to markets in the Southeast U.S. The MTX is of major benefit to this trade, which previously moved primarily by circuitous and congested overland routes. The inclusion of a direct Tampa – Kingston route also assists exporters with faster transit times to connect to Zim’s global network, including markets in Asia, the Caribbean, and the Mediterranean.

The port has an ongoing capital investment program that averages about $60 million a year. Upgrades include helping to enhance the container terminal, which increased in size to 40 acres in 2010. The container terminal’s refrigeration cargo capability has been improved as part of the investment. Wainio says the improvement has been done with an eye toward the north-south trade routes and more refrigerated cargo imported from Latin America.

The port is also modernizing and expanding its petroleum terminals in a $45 million project. The new facility will allow larger vessels to use the port.

 

Companies find low costs in Atlanta

The metro Atlanta area has many of the necessary ingredients that companies need to consider when they contemplate an expansion or relocation project. Those ingredients include:

Business climate– It is among the best in the nation, with low costs of labor, land, housing, and taxes. Atlanta offers the lowest business costs in the ten largest U.S. metro areas with a population of more than 4.5 million, according to KPMG’s 2010 edition of “Competitive Alternatives: Guide to International Business Location.”
   “We will do all we can to keep those costs down,” says Hans Gant, senior vice president of economic development for the Metro Atlanta Chamber.

Workforce-ready talent – Nearly 50 colleges and universities produce more than 30,000 graduates a year; technical schools produce additional graduates; and the metro area attracts a young, educated workforce from elsewhere. There are more than 220,000 students annually enrolled in institutions of higher learning in the Atlanta metro area.

Global connections– Hartsfield-Jackson Atlanta International Airport connects the metro area to practically every point of the globe. It has the second-highest concentration of direct flights of U.S. airports to foreign destinations and is the world’s busiest airport.

Multimodal logistics– Between the airport, railroads, interstate highways, and the Port of Savannah (located about 200 miles away and the fastest-growing container port in the country), metro Atlanta has the logistical infrastructure to move product quickly and efficiently at the lowest possible cost, Gant says.

These business strengths are among the reasons why companies in a wide range of industries choose to have site expansion and relocation projects in metro Atlanta. In addition, the state of Georgia boasts one of the best business climates in the country, with low corporate taxes and its status as a right-to-work state.

International companies are a big part of business recruitment for metro Atlanta. In fact, 25 to 30 percent of companies locating to the metro area are foreign-based.

One foreign-based company that already has a presence in the metro area is expanding operations and committing to Atlanta for the long term. Porsche Cars North America announced in May that it will build a new headquarters there, creating about 100 jobs over the next three years in a $100 million project.

Porsche is the first major company to commit to the Aerotropolis Atlanta development, which will be located in Hapeville, adjacent to Hartsfield-Jackson. Aerotropolis Atlanta, which sits on the site of a shuttered Ford assembly plant, will serve as an entrance to the new international terminal at Hartsfield-Jackson. The site is zoned for 6.5 million square feet of space, including for class-A office, data center, and business park use.

Porsche, like many other companies locating or expanding to the state of Georgia, will use Quick Start workforce training. Quick Start customizes a program for the individual company because of the need for a fast turnaround on employee training.

Porsche, like many companies already with a presence in Georgia, continues to take advantage of Quick Start. But the workforce training program is a key factor in many company decisions to locate a project in the state.

“When it comes down to a decision between two states, Quick Start usually pushes the decision in [Georgia’s] favor,” says Chris Cummiskey, commissioner of the Georgia Department of Economic Development. “Companies that launch new operations have to be sure their workforce is fully trained, working at 100 percent efficiency when the plant opens. Quick Start gives them that ability if they select Georgia.”

 

Long-term planning
spurs Nashville

About 20 years ago, officials in Nashville surveyed ways to increase economic development. The decision to create a regional approach to recruiting and attracting companies—where cities don’t cannibalize each other in attempt to land a big project—has been substantial. At the same time, private-sector and public officials set out on a series of five-year plans to grow economic development.

The thinking has paid off handsomely for the metro Nashville area.

“The leadership [in the community] said, ‘We’re not going to win unless we’re regional,’ ” says Ralph Schulz, president of the Nashville Area Chamber of Commerce. “There are too many attributes that exist in different places within this region for us to be anything but regional.”

The result is a ten-county region that is among the most aggressive and successful in attracting economic development.

Thanks in part to 18 institutions of higher education, the metro area attracts and keeps a young workforce, helping to fuel companies in entertainment, healthcare, corporate operations, supply chain management, and advanced manufacturing.

“We’re typically a top-performing city for college graduates,” Schulz says. “We retain a lot of college graduates. There is a high concentration of educated people ready to be placed in advanced positions.”

The metro Nashville area is also home to an entrepreneurial economy, according to Schulz. Nearly one-quarter of jobs come from sole proprietors.

“There is a creative workforce here,” Schulz says. “The economy is creative and adaptive.” wt