Exactly how does Alabama draw industry? Answer: Cash

Orginally Published by the Pensacola News Journal


By: Carlton Proctor
September 30, 2007

It's hard enough for Panhandle counties to compete with other regions in Florida for top quality, high-paying jobs.But for Escambia and Santa Rosa counties, the task is even tougher.

Both counties often find themselves going head-to-head with Alabama border counties, backed by the aggressive Alabama Development Office.Armed with a banquet of tax incentives, road development funds and lots of cash, Alabama can simply outspend Florida when wooing mega-prospects like multibillion-dollar auto assembly plants and steel mills.

"I do think that Northwest Florida is at a huge disadvantage when competing with Georgia or Alabama," said Santa Rosa County Commissioner Don Salter. "They have huge state incentive packages, including money to build buildings, for relocation costs and road construction.

"Salter, a long-time proponent of economic development in the Pensacola Bay Area, said Santa Rosa and Escambia have lost several major prospects to Alabama because the state had ready access to funds to upgrade roads to and from industrial sites.

"We lost a new Ace Hardware distribution center that had been narrowed down to Santa Rosa and Baldwin County," said Salter. "It went to Loxley (in Baldwin County) because Alabama came in, bought a site at Interstate 10, gave them free land and then committed to widening Highway 59 from Loxley to I-65 north.

"With enormous economic development resources like those of Alabama, Florida oftentimes finds itself out of the running before the race even begins.

Mike Frey with the Pensacola Bay Area Chamber of Commerce, agrees that Florida is no match for big-spending Alabama when it comes to economic development."Alabama offer grants for clearing of sites for industry and we have nothing like that," said Frey, vice president of economic development. "Alabama is much more aggressive in how they apply the incentives they have available. They will call a special session of the Legislature to pass an economic incentive package on short notice. Florida doesn't tend to work well in that area.

"Frey said Florida does have the ability to forgive some property taxes and corporate income taxes. But that does little good in the hard-hitting recruiting game if companies are not looking at any immediate tax liability.While few argue Alabama's recruiting dominance, Robert Ingram, who heads Baldwin County's Economic Development Alliance, said the two states rarely compete for the same type of industry.

"We don't recruit out of Pensacola and they don't recruit out of Baldwin," said Ingram. "We would never come into Pensacola and recruit for companies. We consider you all neighbors.

"Ingram said Baldwin works hard at attracting aviation industries and also targets big box stores.

"We pitch our quality of life, but that's not really a big factor on the front end," said Ingram. "But when you narrow it down to three or four cities, Alabama does have some leverage with property tax exemptions... And Alabama cities and counties do seem to have more authority than Florida to make individual decisions."Charles Wood, senior vice president at the Pensacola chamber, puts it more bluntly: "Economic development in Alabama is a religion. Even with the incentives Florida does offer, we're just not competitive for large capital projects with Alabama.

They not only offer rebates, but they can just sit down and write a big check.

"Despite Alabama's advantages, Ingram and other economic development experts say the two states tend to look to completely different companies for economic development.Alabama is at the top of its game when going after large industrial plants, like the recently announced $3.4 billion Thiessen-Krupp steel mill being constructed in Mount Vernon in Mobile County. That plant is expected to employ some 3,000 skilled workers.Steel mills and auto assembly plants are not really Florida's thing, said Frey. But big gains are being made in recruitment and expansion of bio-tech, life sciences companies.

"Florida definitely has gotten more aggressive in life sciences," said Frey. "Florida has an innovation fund that provides refunds to attract big bio-tech labs.

"Frey said Florida is not without other arrows in its economic quiver.For example, the governor has a discretionary closing fund that can be used if Florida is at a disadvantage to Alabama or Georgia when going after the same type of company.

"If everything else is the same, the funds can be made available," said Frey, "but it comes with very strict qualifications and is targeted toward higher-paying jobs.

" Wood contends Florida is doing a good job attracting life sciences and high-tech companies, and stacks up with any state in the Southeast.He cites Pensacola's recent success in convincing Pall Corporation to green light a $27 million expansion of its bio-medical filtration systems plant at Ellyson Industrial Park.

"Pall is a great project and a great company," said Wood. " We don't have a whole lot of life sciences in Pensacola, but the ones we do have here are doing really well."