This is final story in a six-part series examining the history and economic effects of industry in Newton County. This final part discusses the county’s continuing efforts to attract new business.
“Hi, my name is Bob.”
That’s not his real name, and the people gathered at the airport to meet him have no idea who he is or where he works. All they know is that Bob is a top executive with a leading manufacturing company. And that’s all they’ll know until Bob’s company decides whether to relocate to their community.
Economic development is a tight-lipped, highly competitive business where the stakes are measured in millions of dollars. Industries can bring what communities badly want: jobs, taxes and prestige. And both sides know it.
For decades Newton County attracted large industry after large industry, building relationships and making deals man to man. The strong leadership and innovative visions of mayors Walker Harris and Bill Dobbs, chairmen Roy Varner and Jack and Davis Morgan and local chamber of commerce officials put Newton County on the map. That’s why around 20 percent of Newton County’s more than 20,000 workers are employed by manufacturers — double the state average.
Over the years the economic development landscape has become much more complicated and infinitely more competitive. Strong leadership and an ability to build relationships are still the building blocks, but authority is more diluted and the business requires an ever larger number of relationships to be cultivated.
The worst economic downturn since the Great Depression has only intensified competition. Meanwhile, political stability is more difficult to achieve in an increasingly large and diverse county and the chamber itself has experienced fluctuating leadership - the result is a county stuck in a dry spell.
But public officials are showing renewed commitment to attracting industry, through increased chamber support, a comprehensive economic development strategy and time spent educating themselves about the process, while the chamber simultaneously undergoes a significant restructuring. The goal is once again to establish Newton County as the place to be.
Why Industry Matters - A Recap
Part two of this series examined the importance of industry, but here are some additional numbers that illustrate what a successful industrial park can mean to a county. Lochridge Industrial Park is a 545-acre site with more than 3 million square feet of building floor space.
According to former Pattillo employee Jerry Silvio, who was instrumental in the development of the park, the companies in Lochridge employ 3,000 workers, nearly 15 percent of the county's total workforce. Those employees probably make an average of at least $40,000 per year, which means more than $120 million in payroll is generated by the park.
According to economic studies, every dollar of payroll generated is spent approximately five times in a community or region, which means Lochridge is responsible for about $600 million of economic activity every year.
The total capital investment - land, buildings and equipment - of those companies is more than $150 million. That investment deposits $2.25 million tax dollars into local government coffers.
"That's why industrial and commercial development is so valuable and sought after by communities all over the world. A lot of money is generated," Silvio said.
Industry has to be valuable, because attracting it is a long, involved process with a very low success rate. On the other hand, landing just one large industry can make up years of misses.
Let's say Company Bob, a large manufacturer, is looking to expand its production ability and at the same time better serve its southeastern U.S. market.
Working with specialized consultants, the executives decide Alabama, Georgia and Tennessee would be the most efficient location for a southeastern arm and all three have historical track records of accommodating industries.
Company execs decide the plant will need to be at least 250,000 square feet and they'd prefer to have about 30 acres of land, to satisfy parking and a recreation area and to allow for the possibility of future expansions. In addition, they specify that they want to be one hour from an airport, one hour from a city with a population greater than 500,000 and have an available workforce of at least one million, typically within a 30-minute driving radius.
In the vast majority of cases the execs and consultants will go to each state's economic development office first. The state has the resources to deal with specialized company needs, while having knowledge of strengths and weaknesses of every county in their state.
The Georgia Department of Economic Development handles Company Bob's request, and is immediately able to weed out any communities that don't fit the company's basic needs. The state has an electronic database of potential industrial sites with nearly every statistic imaginable, just for this case.
Several communities make this first cut, though they don't even know it. Newton County is one of them. Company Bob is given detailed profiles of each community, which are kept updated by local economic development officials, such as local chamber Economic Development Director Shannon Davis.
Company Bob further weeds out the initial cut and then creates a detailed list of information they want from each community, a request for proposal (RFP). A state project manager calls Davis and gives her the basic details, like number of potential jobs and the company's parameters. That's it - no names, no non-essential information.
The RFPs can range anywhere from simple one page queries to in-depth 30-page manuscripts and Davis can have anywhere from two days to two weeks to complete them.
Any number of details can be asked, including distance and rating of nearest hospital, fire insurance rating, closest fire station to the local industrial property, details about the school system, the number of high school seniors, water and electricity capacity, proximity of the municipal airport, closest technical college, tourist attractions, traffic counts, recreational facilities and programs, information about the police department and local jail, nearby shopping, available housing for managers and employees, conference facilities and demographic information.
The companies also ask about possible incentives, the cost of impact and tap fees, and average regional wage of manufacturing jobs and tax rates.
"They want to know the full cost of starting up a plant in your community," Davis said. Multimillion decisions are not taken lightly.
Each RFP creates a firestorm of activity. If the company needs school information, Davis puts in a call to James Woodard, the school system's director of career, technical and agricultural education. If it needs information about water lines, Davis calls the city of Covington or the Newton County Water and Sewer Authority. Officials there tell her which lines run in the area, how much capacity they have and whether they're gravity fed or force flow.
Davis puts all of the information together, includes a map and a cover letter and sends it back to the state.
Company Bob and its consultants may spend up to a month reviewing the proposals and choosing a few finalists based on their own internal valuation matrix. Then the companies schedule site visits.
"It's all about customer service," Davis emphasized repeatedly. "We have to be on call the entire day of the visit. The better we are at customer service the more the state trusts us to follow their directions to a ‘T' ... it's all about staying in the game, making the next cut."
Make no mistake - it's the communities that are courting the companies, not the other way around. However, every community has a threshold of what it can offer and may have to back out at any time.
Sometimes a whole group of company executives come; sometimes a single consultant could come. Sometimes Davis is the only who will be asked to greet the company reps; sometimes a whole team of local utility and planning experts will participate.
Usually site visits that take a company to an existing building will be simpler, as opposed to visits that take a person to a vacant field, where utilities and road infrastructure may not yet be completely existent. The visits can range from half an hour to a half day or more, particularly if the representatives want to have a community tour.
"If we get them to spend a meal here, that's a good thing. Outside of the golf course, the dinner table is the most non-threatening place to do business," Davis said.
Another month or two of evaluations later, Company Bob chooses its finalists and begins negotiations. Davis said by this point the company and community usually have a good rapport and can have more open discussions.
Industries are inclined to ask for the moon because, frankly, they can. The two sides will do their best to reach common ground as they discuss everything including site preparations, utility expansion, fast tracking planning permits, tax incentives, gifting land, waiving impact and tap fees, and building roads.
New chamber President Hunter Hall said he's learned in his few weeks on the job that incentives are the biggest part of the modern game.
"They want free things, especially land. If you don't have free land, you're not in the game," said Hall, referencing some conversations with project managers and economic development officials at the state level.
Unfortunately for Newton County, large tracts of industrial land are something it's lacking.
Fixing Competitive Disadvantages
Those who live in Newton County love it. Whether they were born in the county or moved here, to them Newton County is place that evokes pride and passion.
To industry executives, Newton County is simply one out of 159 counties in Georgia, one of nearly a thousand in the southeast and one of more than 3,000 in the country.
Newton County has many assets including proximity to Atlanta, access to a major interstate, a municipal airport, available utilities and nearby colleges. So do many other counties.
Officials can try to market the fact that Newton County is removed from the hustle and bustle of Atlanta; but companies may want that. At the same time, the county is growing tremendously.
Where Newton County struggles to compete against metro counties is in its less well educated workforce, the absence of a young professional class, lack of nearby amenities and entertainment options, and a dearth of private schools. Any of these things can cut Newton County from consideration, even before anyone local is contacted
"Those subtleties are important in prospect's minds," Davis said. "We're very competitive in our cost of doing business, so if you take that out of the equation, what else do you have to differentiate yourself?"
The county is working to improve all of those deficiencies, particularly work-force education, whether through the creation of career academies, expansion of technical school opportunities or participation in the Georgia Work Ready program.
At the same time the county has some unique attributes. Hall said some of the candidates being interviewed for the senior vice president have really emphasized the advantage of the Leadership Collaborative - the grouping of officials from all of the county's governments and groups like the chamber and various authorities.
Most communities within a county rarely speak to each other, let alone converse so effectively on such a regular basis. That kind of cooperation enables the development of a comprehensive economic development strategy and planning for the future, like what's been seen in the recent 2050 plan.
We Need Land
Hall said many candidates also continue to point to Stanton Springs as a special opportunity. Although the four-county 1,530 acre industrial park has become a source of some criticism, Hall said economic development professionals have said they can sell it.
While Stanton Springs provides abundant land, industrial space in Covington is scarce. The thing that industries need a lot of is infrastructure, land, buildings, water, electricity and gas. They tend to locate in cities because that's where the infrastructure already exists.
"It's the most cost-effective to have land in the city ... there aren't many places in the city to expand land," Davis said. "We have pockets of 60 acres here, 20 acres there, land around the airport. But nowhere do we have 400 acres in the city."
Bill Dobbs, Mayor Dobbs' son and the director of Georgia's Aerospace, Defense & Advanced Manufacturing Team, echoed the fact.
"The community needs to place some significant effort and resources in locating and acquiring 250 to 500 acres or so of industrial property to market," Dobbs said in an e-mail.
The most popular sites currently are a 45,000 square-foot spec building in Lochridge Industrial park and the old Amada building off Alcovy Road. Large enough for many uses, but too small for the SKCs of the world.
However, the county still has its history of success and an established manufacturing base to lean on, including the continued services of experienced industry recruiters like Jerry Silvio. While the game has changed, some of the older players haven't lost a step.
Silvio recently helped get a 167 acre-property along Hazelbrand Road annexed into the city of Covington and rezoned from Agricultural Residential to Heavy Industrial.
Chip Mitchell, a state senior project manager, said Newton County certainly remains a favorable location for existing industry, and is known for it's communicative leadership. While it hasn't landed any new industries lately, it has seen some existing expansions.
"In the past two years, our department has worked with expansions of existing industries representing more than 200 jobs and more than $35,000,000 in capital investment," he said in an e-mail.
Mitchell said Newton County has also been successful in attracting entertainment ventures, including the latest venture The Vampire Diaries television show. Although these aren't industries, they are still classified as economic development.
Restructuring the Future
The city of Covington and Newton County recently pledged to double their spending on economic development through the chamber. For its part, chamber officials recently decided they were going to change significantly how it functions. Hall is the new president and he has been placed in charge of meeting local businesses' needs.
The chamber is still in the process of looking for that game-changing economic development person, and when he comes, he'll have the freedom to pursue new industry and other business 100 percent of the time.
"Economic development is a very specialized, relational network where business is done at a high level. It's not your grandma's economic development," Hall said. "So much work is done at the state today; we need a person to spend time with people there and build those relationships every day."
Davis will still handle the RFPs and help with recruitment, but she'll intensify her efforts on satisfying existing industry.
"If you're not taking care of existing industry, somebody else will," Davis said.
The chamber hopes the senior vice president will be in position soon, in preparation for an economic recovery.
Davis said she's already had around 25 industry inquiries in the first quarter of 2010, up from only five in last year's first quarter.
That's a good sign. Leaders hope their efforts will turn more of those inquiries into closed deals - that Newton County will once again be the place to be.
Continue to read The Covington News for more in-depth industry profiles later this year.