Economic Development

NEWS - Economic Development

By Lou Phelps
SBJ Staff

1/13/2010 - A task force established by the Savannah City Council to study whether to establish an “International Cabinet” held its third meeting last week to hear from guest speaker Alexis Gordon, executive director of the City of Charlotte, North Carolina’s International Cabinet.

Charlotte, as well as other cities around the United States, uses the International Cabinet approach to promote itself as an international city, and serves as a resource for international companies located in their area.

City Alderman Larry Steuber, who is a proponent of the concept, is leading the task force study group and recently traveled to Charlotte with several members of the task force to learn from that city’s leaders. He wanted the full task force to hear from Gordon first hand.

In a more than hour long presentation, Gordon explained how the Charlotte Cabinet functions, who serves on the Cabinet, and the myriad of tasks and goals for the group.

“Our goal is to foster international relationships with residents and visitors to Charlotte, legal or illegal, and we’re also there to serve as the “City of Charlotte to the world,” explained Gordon, who summarized the Charlotte Cabinet’s “vision” as:

1.  Encourage educational, business and cultural exchanges and dialogue between the City of Charlotte, citizens and the international community.

2.  Develop informed citizens, civic and business leaders, to enhance Charlotte’s role as an international city.

3. Utilize Charlotte’s sister cities as catalysts for building further relationships between Charlotte and the world.

"The Charlotte International Cabinet is a member of The National League of Municipalities, and is actively seeking international city relationships that will benefit Charlotte,” she explained.

A primary activity of the Cabinet’s staff is the development and management of an annual resource guide that captures all international resources in the region, and all international organizations that are in existence. These resources are then provided to international companies in the area to help them feel welcomed in Charlotte, and used by economic development leaders to attract new industry.

Gordon said that Charlotte has approximately 300 international organizations in the area, and the Mecklenburg County public school system has students from 151 different countries. 

According to Gordon and Steuber, Charlotte now has 565 foreign owned firms, and 850 in the region, and growing dramatically. Just over a year ago, there were only 483 foreign companies there with 740 in the region. The Savannah area currently has only 80, even with the dynamic growth of the port, explained Steuber.

Charlotte is also focused on welcoming international students and green-card workers, as well as tourists, though the Charlotte Cabinet did not appear to be heavily involved in helping to attract international tourists.

More than 30 members of the Savannah task force were in attendance to hear Gordon, including most of the Savannah area college and university presidents, and all asked questions of Gordon ranging from what is being accomplished annually, the measurement devices Charlotte is using to determine effectiveness, the annual budget, and what mistakes occurred and lessons have been learned along the way? 

Gordon, who has been with the Charlotte Cabinet for three years, explained that the Cabinet is not an official department of the city, which she viewed as a mistake – she and other employees are not city employees.

They are operating on an annual budget of just over $149,000 year, with two paid employees and five unpaid interns that provide research assistance. The Cabinet also receives $48,000 a year in operating expenses support from the city budget for office space in a city building, office supplies and technology support, “but we’re in desperate need of a Web manager,” she added. These funds include an annual audit. “Everything we spend is carefully audited,” she said.

The Cabinet was started in 1993, and has 30 members; 10 appointed by the mayor and 20 appointed by the Charlotte city council. It is governed by a seven-person executive board; two of the seven come out of the mayor's 10 appointees, and the other five are chosen by Chairman of the Cabinet.  Cabinet members must be from one of five categories including industry, medicine, education, international diplomacy and the arts. Elected officials are not allowed to be members, though it can include regional or state employees.

The Charlotte Cabinet also relies on donations and corporate sponsorships which fund programs, publications and events they sponsor. “If we want to have a conference, if we want to bring a jazz band from France to perform in our schools, we have to raise funds for this,” she said, including the annual resource guide that is published. That project is overseen by the Charlotte Chamber of Commerce.

“We also have $6,000 a year for a Mayor’s Travel Fund, but it must be an official visit, such as signing an official sister city declaration,” said Gordon.

Charlotte began the Cabinet with a small grant from the U.S. State Department, which sent a junior trainee to help the effort get off the ground. “It’s grown as we needed to serve the community. It’s grown as there was something that someone saw was needed.

The international community in Charlotte was growing, and everyday people were coming to the mayor’s office with an international issue, whether it was refugees, different permits, visas and regulations,” Gordon explained.

The Cabinet coordinates all Honorary Consuls – representatives of foreign governments to Charlotte, such as those from Atlanta – who come to visit the city. “In many cases, they have their own groups, the Consular Corps and the Chiefs of Protocol, that we work with,” Gordon explained.

“For example, there is a new honorary consul for France in Atlanta, and we had him come to Charlotte for a dinner. We made sure the mayor knew everything about French companies in our area, leading citizens from France that live in Charlotte, the best French bistro in Charlotte, etc,” she explained.

It was a timely lesson.  On Tuesday, the chef of the Westin was honored by France with the equivalent of a lifetime achievement award.  The Honorary French Consul from Atlanta was in Savannah for only his second visit ever, along with the French Consul’s representative from its Miami office. No one from city government was  in attendance.

A task force representative from the Savannah Hilton Head International Airport asked if the Cabinet had helped with the airport.  Gordon explained an issue that had come to their attention last year about the lack of foreign language signage at the Charlotte airport for business travelers and tourists.

“We realized that we needed to put out public transportation information at the airport in several foreign languages. We realized we had a lot of information put out at the airport in Spanish, but not in Portuguese, and that was a big problem, based on their research of who lived in the area,” she said.

“We want to be sure that someone in Charlotte doesn’t do something foolish that would hurt the city, if it has to do with international business. For example, an international business traveler in Clover S.C. is using our Charlotte airport, so we are aware of what is going on around us, to best serve that traveler,” she added.

“Public safety is also an issue,” when it comes to the international community, she added. “The second most-popular language in Charlotte is Vietnamese, so we have to have police officers who are fluent in Vietnamese,” and emergency planning in the area now involves the Cabinet. 

She pointed to the success the Cabinet had in assisting with the 2002 ice storm. “There were many deaths in 2002 due to the critical ice storm. The media was bringing out plenty of information, but not accessible to the Spanish community. Most of the deaths were in the Spanish community. Communicating in a crisis to people is a big problem. What if Charlotte became a terrorist target?  What if there’s another (Hurrican) Hugo that wipes us out?” she added. 


New Projects for the Charlotte Cabinet
“We do a lot of cultural exchanges internationally, but they want us to start looking at business and educational relationships, civic and government,” she said. “One of the biggest things on everyone’s mind in Charlotte is energy,” and they are working on a relationship with what she termed “a very green city in Germany.” 

They have added an international section to the Chamber of Commerce’s Newcomers Guide, and are now asking ex-patriots living in Charlotte to get involved and help with new residents to Charlotte.

They’ve been asked to help get the international community interested in the new Nascar Museum which will be opening in May.

“We want to get people out of the airport. Because it’s a hub, we have a lot of people who never leave the airport.  So Visit Charlotte is involved with that,” Gordon said.

“We would set up a task force for whatever we are tasked to do, such as work to insure the city is well positioned to attract Japanese tourists,” she explained. The Cabinet’s employees would not undertake to do all the work themselves, for this type of effort, but would organize people to work on a special focus area. 

“Workforce development is an issue right now. They stopped teaching German in the high schools, and that became a BIG issue to the German consul and local industry here,” Gordon said.

For the Census 2010 effort, Charlotte has set up the “Complete Count Committee” and has several subcommittees that the Cabinet employees are involved with, helping to bring resources to the challenge of communicating with all of the different language communities there.

In summary, “When international companies come to look at the Charlotte market for possible expansion, the Cabinet is a resource used by economic development leaders,” Gordon said.

“We might be asked to help connect people with the German Chamber of Commerce in the U.S, or the German Embassy representatives in the South,” she said. “They don’t have to be located in Charlotte, but we know who they are.”

“It’s all about relationships.  That’s what keeps them there.  We have a lot of resident aliens, because otherwise they’ll move, and it’s great when they stay in Charlotte and are spending their money there,” Gordon concluded.

CUTLINE:

(L to R)  Alexis Gordon, from the City of Charlotte, NC's International Cabinet, City Alderman Larry Steuber, and Savannah International Cabinet task force member Richmond Fergerson talk after Gordon's presentation in Savannah last week.

NEWS - Economic Development

12/21/2009 - An appropriations bill signed by President Barack Obama last week included $125 million to continue through Feb. 28 the enhancements made possible through the American Recovery and Reinvestment Act or stimulus bill.

Small Business Administration estimates the additional funding will support $4.5 billion in small business lending.

New approvals of loans with the higher guarantee and reduced fees made possible by the stimulus bill were expected to begin by Dec. 28.  Loan applications from borrowers who chose to be placed in the SBA’s Recovery Loan Queue will be funded first, followed by new loan approvals beginning on or before Dec. 28.

NEWS - Economic Development

12/07/2009 - In 2009, consumers are less pessimistic than they were a year ago.  Eighteen percent (18 percent) of survey respondents see the economy as better than last year; this is up from a six-year low last year of only 3 percent.  These increases in positive feelings are a clear sign that we are starting the recovery process. However, we are not back to the 2004-2007 levels. This year 56 percent of respondents stated that the economy is worst than last year.  This is down from an all-time high in negative feelings about the economy of 84 percent last year.  Again, this is a positive sign about the recovery process.

Next, consumers were asked how they were doing financially when compared to last year.  This year 33 percent of respondents answered that they felt worse off, 51 percent were about the same and 15 percent answered that they were doing better.  Again, we are seeing improvement from last year’s sentiments.  In 2008, 43 percent of respondents answered that they were worse off, 44 percent felt about the same and 12 percent answered that they were better off than the previous year.

Although there is a definite increase in positive feeling from 2008 to 2009, participants are still not back at the same level as they were in 2006 when 17 percent of respondents answered that they were worse off, 50 percent felt about the same and 32 percent answered that they were better off.  Now the question is; what impact will this improving economic environment have on holiday shopping?

NEWS - Economic Development

12/07/2009 - Friday’s stunning announcement that the United States shed just 11,000 jobs in November left Armstrong Atlantic State University economist Michael Toma feeling good about his assessment that the region is near an economic recovery.

In the third quarter “Economic Monitor,” the director of Armstrong’s Center for Regional Analysis noted weakness in the region’s job market but emphasized that “green chutes” appearing in tourism and at the Port of Savannah. The importance of the chutes, the Monitor noted, lies in their connection to broad factors such as overall economic activity in the United States and Georgia, consumer confidence and consumer expenditures, all of which “are beginning to firm up.”

Why the increase in container traffic at the port?

The Monitor attributes the rise to depreciation of the dollar and strengthening economic activity overseas.

In a key assessment made before last Friday’s low jobless numbers report, Toma’s Monitor noted that factors contributing to the downward trend are beginning to coalesce and “critical mass for the economic foundation required for regional job growth is expected to emerge during 2010.”

Momentum for any sustained job growth in the region will have to come from the grass-roots level with the kind of increased consumer confidence that generates stronger retail sales and overall consumer activity, Toma said in an interview Friday.

The job creation programs President Obama is proposing may give a short-term “bump up” but could carry unwanted consequences later on, he said.

Government-created jobs programs hold some promise for getting the economy moving, but the danger lies in the costs and the likelihood that government borrowing to support the programs could squeeze out businesses looking to borrow for expansion, according to Toma.

When the dust settles, we could expect higher interest rates, he said.

“I take a very limited perspective on this,” Toma said of the jobs effort. “If the government is to issue debt to pay for these jobs, our elected leaders will eventually create upward pressure on interest rates.”

He said the third quarter Economic Monitor report concluded that port cargo volume improved from July through October and signs are it will sustain the higher volume.

During fiscal 2009, which concluded June 30, Georgia Ports Authority showed a 10.5 percent decrease in total containerized cargo tonnage and a 12.4 percent decline in total tonnage for all terminal facilities, including Bainbridge, Brunswick, Columbus and Savannah.

But those numbers out-performed the nation’s ports as a whole, according to the Port Import Export Reporting Service. The service reported that total containerized trade to the United States declined 30 percent for the first six months of fiscal 2009.

The Savannah port’s current upswing is unrelated to holiday retail orders, Toma said, noting those shipments arrived at the port during the summer.

He related the cargo trends to a wide consensus that “the world economy is going to improve.”

Toma said the “green chutes” he spied in the hospitality sector spring largely from Savannah’s success at marketing itself as a visitor destination.

“After a fairly dismal second quarter, tourism picked up substantially during the third quarter, erasing nearly half the year-to-date losses recorded in the second quarter,” the Monitor reported.

Room occupancies rose 7.4 percent from the second to third quarters. Room sales year-to-date ended the third quarter slightly ahead of last year, according to the Monitor.

Toma conceded double-digit dips in room rates have hurt local hotels but noted the level of visitors has provided some punch to the Savannah-area economy, as meals are sold in restaurants, drinks in lounges and tours aboard buses and trolleys.

In fact, bus and trolley tours rose 20 percent over the previous quarter and stand year-to-date 10 percent over the previous year, the Monitor said.

The visitor industry has showed some staying power throughout the recession, Toma said. He noted the sector’s job losses have been limited to between 400 and 500 since the economic downturn began in third quarter 2007.

Meanwhile, home foreclosures have not hammered the region’s economy in the way they have other localities, according to Toma.

Foreclosures have been such a non factor in the region’s economy that they did not merit a mention in the latest Economic Monitor.

Their damage has been limited because the region did not see a huge and rapid rise in residential values that eventually culminated in a burst bubble, Toma said. “We didn’t go up more than 10 percent on an annual basis.”

Thus, Toma said, “The housing market is not affecting the overall economy.”

But signs are that residential real estate activity is making somewhat of a comeback in the starter-home category, according to the Monitor, which noted “the housing tax credit clearly provided a spark in residential home construction during the quarter.”

Building permits for single-family homes in the three-county Savannah metro area rose nearly 10 percent from the previous quarter on a seasonally adjusted basis.

Further, the average value of the single-family homes totaled $156,000, a 1.6 percent gain over the previous quarter.
“The challenge will be to sustain the growth and broaden the base beyond starter homes,” The Monitor said.

Help could come in that regard from recent passage of federal legislation to expand the scope of the hosing tax credits, the economic report said.

NEWS - Economic Development

SBJ Staff

The most wonderful time of the year might be another one of lackluster sales for retailers in the Coastal Empire and South Carolina Lowcountry, a new Georgia Southern University holiday shopping survey shows.

In fact, according to the survey, a record number of shoppers polled will spend less this year than last.

Consumers seem not to be taking signs of an economic recovery as a signal to spend this season, said the annual survey of more than 500 households by the Bureau of Business Research and Economic Development (BBRED) in Georgia Southern University’s College of Business Administration.

On the positive side, shoppers aren’t as pessimistic as last year, but 42 percent of the ones polled said they won’t be spending as much as last year. Forty-seven percent plan to spend more, the survey found.

The 42 percent figure for shopping who plan to decrease spending is the highest number ever recorded by the poll. Last year, 38 percent of consumers in the survey said they would cut back on spending from previous year levels. The year-ago survey also found that 51 percent planned to spend about the same as the previous year.

“This will be a somewhat slower holiday shopping season, as consumers are looking for good values even as they see the economy being better than it was last year. Consumers are taking a wait-and-see approach and keeping holiday spending in check,” said Ed Sibbald, director of GSU’s Bureau of Business Research and Economic Development.
Fifty-two percent of surveyed shoppers plan to leave their credit cards at home on trips to the mall or outlet centers.

GSU interprets this as an indication that consumers are trying to keep household spending in check.

A further sign of this is that each shopper plans to spend no more than $75 on gifts, compared to last year’s figure of $101. “This is not even close to the high of $132 average per person in 2006,” the survey said.

More than half won’t be pulling out their credit cards, the survey found.

“People are looking to spend cash; they want to spend the money they have in their pockets,” said Ben McKay, Bureau of Business Research and Economic Development research associate.

“Consumers want to believe they will be more responsible with their credit.”

In a further bit of unwelcome news for the region’s retailers, bricks and mortar stores will be sacrificing a big chunk of business to their cyber counterparts this season.

When the dust settles, local stores could find that online retailers hijacked substantial sales volume this season, according to the survey, which reported that 54 percent of survey respondents plan to shop on the Web.

“This is the highest level of online shopping ever recorded by the survey,” GSU said.

On the upside for local retailers, for many consumers online shopping will not comprise their entire holiday list.

“Forty-one percent of respondents planning to shop online will do less than half of their shopping online this year,” the surveyors said.

When they do go out to shop, shoppers will be looking for discounts, with 85 percent of them heading for bargain destinations Wal-Mart and Target. Mid-range retailers such as Macy’s and Belk can expect to draw 70 percent of the shoppers surveyed, while dollar discount stores can expect 39 percent.

The message?

“Discounts are going to be a key part of this holiday season,” the survey said.

And just how steep must the discounts be?

Thirty-six percent of shoppers polled want to see price cuts of a quarter to a half, the surveyors said, noting that 36 percent want discounts of up to 75 percent.

Most of the 527 households surveyed by phone in the first week of November had annual incomes of from $35,000 to $200,000. Sixty-eight percent of respondents were married, and one-third of them had children under 18 living at home.

NEWS - Economic Development

11/09/2009 - The U.S. Small Business Administration will expand the Emerging 200 (e200), an executive-level training initiative for small-business owners, in 2010.  The initiative will continue in 10 cities, including Atlanta and Jacksonville, Fla.

“Over the last few years e200 has been a catalyst for expanding opportunities for many promising small businesses in underserved communities – in particular those who have been most impacted by these tough economic times,” SBA Administrator Karen Mills said. “Graduates of the program have increased their revenue, created jobs and helped drive local economic growth in their communities. SBA’s commitment to not only continue but expand the program, will build on this success and provide even more entrepreneurs in underserved communities with the support, resources and skills to succeed.”

Since its inception, e200 has identified business owners across the country who show a high potential for growth in underserved markets—and provided them with the training, networking, resources and motivation required to expand operations and create jobs.
So far, more than half of the businesses that participated in e200 have seen an increase in revenue, and nearly two-thirds have created new jobs.  Entrepreneurs who have completed the training have secured over $9 million in new financing for their businesses.

NEWS - Economic Development

To bolster the efforts to grow Fort Stewart and Hunter Army Air Field, the board of the Liberty County Development Authority (LCDA) agreed to formally support the Friends of Fort Stewart and Hunter, a group formed to enhance the overall value of Fort Stewart and Hunter and the benefits to surrounding communities through a progressive regional partnership.

By committing to its most supportive platinum membership of $1,000 per month and providing a special one-time lump sum contribution of $50,000 to help boost several efforts of the organization, the LCDA board affirmed its support of the group’s immediate and long-term efforts to grow Fort Stewart and Hunter.

Allen Brown, chairman of the LCDA, stated, “The growth of Fort Stewart and Hunter tremendously benefits our entire economy in southeast Georgia from contractors and small businesses to increased retail sales tax revenues and additional retirees who settle in the area and pay local property taxes and support community efforts.”

“The LCDA views our actions on behalf of the growth of Fort Stewart and Hunter as that of helping one of the largest employers in the region not only retain existing employees, but also further their growth and the resultant increase in overall benefits in our region.  We are proud to take this action and encourage other authorities, chambers and local businesses to join the effort to grow Fort Stewart and Hunter as well,” said Brown.

NEWS - Economic Development

10/21/2009 - The U.S. Small Business Administration issued a statement today by SBA Administrator Karen Mills on President Barack Obama’s proposal to the maximum loan size for SBA-backed loans to small business. 

“America’s 29 million small businesses have been hard hit in this recession.  Nine months ago, President Obama sent small businesses a life line – the American Recovery and Reinvestment Act.  Since then, the SBA has supported more than 33,000 loans for a total of almost $13 billion in small business lending.  This has helped save or create tens of thousands of jobs. 

“But there is much more work to be done, which is why President Obama today pledged his support for legislation that would increase the maximum size of some SBA loans.  Increasing maximum loan sizes will allow the SBA to ensure that more small business owners and entrepreneurs can get access to the credit they need to expand their operations and create jobs.

“The President also announced additional support from the Treasury Department for smaller community lenders that are committed to increasing their lending to small businesses."

Specifically, President Obama called for:

• Increasing the size of SBA’s 7(a) loan from $2 million to $5 million.

• Increasing the size of SBA’s 504 loan from $2 million to $5 million for standard borrowers (supporting a total project of $12.5 million) and from $4 million to $5.5 million for manufacturers (supporting a total project of $13.75 million).

• Increasing the size of SBA’s Microloan from $35,000 to $50,000.

A copy of the President’s remarks and a fact sheet on the announcement can be found <i><a href="http://www.sba.gov/idc/groups/public/documents/sba_homepage/sba_rcvry_obama_evnt_remrks09.pdf"> here </a></i>. 

A fact sheet on the proposal can be found <i><a href="http://www.sba.gov/idc/groups/public/documents/sba_homepage/sba_rcvry_new_effort_credit_sb.pdf"> here</a></i>