COVER STORY, JANUARY 2007

ECONOMIC TIDES RISE
Months later, economic development agencies in Mississippi and Louisiana are overcoming Hurricane Katrina.
Lara Fuller

The new Hyatt Regency New Orleans and Porte Cochere (middle) will be situated between Entergy Tower (left) and the New Orleans Superdome.

Economic development agencies are constantly striving to bring new business and industries to their areas. After the devastating effects of Hurricane Katrina, economic development agencies on the Gulf Coast faced an enormous challenge. Not only did the agencies have to work to keep previously existing businesses open and running, they also had to focus on bringing new business and industry to the affected areas to help stimulate the economy and spur rebuilding efforts. The economic development agencies in Mississippi and Louisiana have faced many obstacles since the storm but have managed to go above and beyond initial expectations. Now, more than 16 months later, the areas affected by Hurricane Katrina are well on their way to becoming even better than before. Southeast Real Estate Business recently spoke with three economic development agencies to find out how they coped with the effects of Hurricane Katrina and what plans they have for their areas moving forward.

Mississippi Development Authority

The Mississippi Development Authority (MDA) is a state governmental agency that was created to develop and implement programs and services that improve the quality of life for the state’s citizens and enhance the economic growth of the entire state. After Hurricane Katrina hit the Mississippi Gulf Coast, the MDA worked quickly to implement new programs to benefit the businesses and residents of Mississippi. “Hurricane Katrina certainly devastated the Mississippi Gulf Coast and many other areas of the state,” says Becky Thompson, director of global business development for the Mississippi Development Authority. “With the strong leadership of Governor Haley Barbour, however, Mississippi is determined to turn the challenges of rebuilding the Gulf Coast into the opportunity for a statewide revitalization.”

The Mississippi Renewal Forum was one of the first programs created after the hurricane. The Mississippi Renewal Forum, held only 1 month after Katrina, was a charrette-style session that also included tours and town hall-style meetings. “Plans for neighborhoods, retail spaces, business parks and recreational venues were in the works before all of the debris was cleared,” Thompson says.

The renewal forum was instrumental in bringing people and business back to the affected areas not long after Katrina hit. SeverCorr, a steel company, decided to locate its newest plant in Lowndes County just weeks after the hurricane. Construction began in late 2005 and is expected to be completed by the end of 2007. “As a result, the Columbus-Lowndes County area has seen phenomenal growth with the arrival of suppliers,” Thompson says.

Other businesses that have chosen to locate within the state during the past year include the $42 million Rolls Royce aviation facility in Hancock County, Aurora Flight Service’s $7 million manufacturing facility in Lowndes County and the $140 million Tim Tek/Loblolly manufacturing plant in Lauderdale County.

The MDA hopes to continue to bring in new industry and help rebuild the areas affected by Katrina. “Under the guidance of the Governor’s Office of Recovery and Renewal, Mississippi continues to push forward in the rebuilding process,” Thompson says. “While administering several programs to support the recovery, MDA is also wholeheartedly committed to creating economic growth for the entire state. From tourism development to export opportunities and much more, MDA continues to work closely with local community leaders and corporate decision makers alike to ‘close the deal’ for Mississippi.”

Before Katrina, the aerospace and aviation, shipbuilding, and automotive manufacturing and supply industries were a hot sector in the state. During the next few years, the MDA hopes to continue to bring in more of these businesses, along with a number of other industries such as remote data centers, food processing, plastics/polymers/chemicals and shared services centers. “Mississippi is open to any industry and we have the resources to help any company be successful in our state,” Thompson says. “Of course, we do have particular strengths [in certain industries], but with a strong educational and training system, pro-business climate and attractive incentives, Mississippi is ready to welcome any variety of businesses to the state.”

Lousiana Economic Development

Because the Louisiana Economic Development (LED) agency serves all 64 Louisiana parishes, the organization has been uniquely affected by Hurricane Katrina. While much of the state was hard hit by the hurricane, there were also other areas that were not directly affected by the storm. “Hurricanes Katrina and Rita disrupted commerce and sent thousands of businesses into chaos across Southern Louisiana,” says Alicia Davidson, public information officer with Louisiana Economic Development. “However, more than half the state remained unscathed and continues to thrive. A little more than a year later, Louisiana’s economy and business community are moving forward—recovering and growing.”

Currently, more than 60,000 businesses have returned and are now operating in Southern Louisiana. The success of this return is due in part to several initiatives implemented by LED and its local, state and federal partners. The organization helped bring about a temporary worksite employee housing program; created a bridge loan program that provided a $40 million gap in funding; developed procurement and contracting workshops in impacted communities; established a network of six business counseling centers; and organized six Gulf Opportunity Zone workshops and a factory building systems symposium.

“In the wake of hurricanes Katrina and Rita, LED developed an integrated marketing campaign designed to focus business leaders around the globe on the unprecedented opportunity for investment in Louisiana,” Davidson says. “The campaign, dubbed ‘clean sheet,’ features the most aggressive business incentives package in U.S. history, now available to businesses expanding, rebuilding or relocating to Louisiana.” Because of this campaign, more than $1 billion in new projects and more than 2,200 jobs have been created in the Katrina impact area since August 2005. Some of these include 84 Lumber Company’s $9 million new components factory in Hammond; the $715 million, 20-acre multi-use center and park redevelopment by Hyatt Regency Downtown Revitalization in New Orleans parish; the $200 million Trump Tower luxury residences in New Orleans; ABSI/Emmedue’s new $6 million building systems factory in Jefferson Parish; and Dow Chemical’s $65 million plant expansion in St. John the Baptist Parish.

Because the LED covers the entire state, the organization has had to make sure to not only focus on helping areas affected by Katrina, but to also maintain and grow business in other areas of the state. At the moment, the organization’s biggest initiatives are the Far East Mission and the New York Mission. “Recently, Louisiana Governor Kathleen Babineaux Blanco and Michael Olivier, secretary of Louisiana Economic Development, traveled to New York and the Far East to promote Louisiana business opportunities,” Davidson says.

The Far East Mission involved a two-week marketing mission in which Blanco and Olivier met with industry leaders, government officials and diplomats in China and Japan to discuss Louisiana’s viability as a business location and the immediacy of the Gulf Opportunity Zone incentives, some of which expire in 2008.

On the New York trip, Blanco, along with LED staff and a delegation of Louisiana business leaders, met with the media, site selection consultants, investment bankers and area business leaders to promote Louisiana resources and opportunities.

These missions, along with other programs that LED is currently involved in, have brought more than $6 billion in potential new investments and more than 20,000 jobs to the state. “In addition to the powerful ensemble of federal incentives—Gulf Opportunity Zone, New Markets Tax Credits and Renewal Communities—that cover a large portion of the state, Louisiana also offers a robust suite of state incentives,” Davidson says. Some of these include the Major Projects Development Authority, Governor’s Rapid Response Fund, Industrial Property Tax Exemption program, Louisiana Economic Development Award program and the Research and Development Credit.

Harrison County Development Commission

The Harrison County Development Commission (HCDC) was first created in 1958 by state legislators to help bring balance to the area’s economy, which up until that point was primarily driven by seasonal industries such as tourism, seafood and timber. The HCDC, which includes the cities of Pass Christian, Long Beach, Gulfport, Biloxi and D’Iberville, helped build the growing defense industry and helped develop other industries that would benefit the area all year round.

Since that time, HCDC has worked to bring a diverse group of industries and businesses to the area. Some of these include shipbuilding, aerospace, pharmaceuticals, composite technology and retail manufacturing. The group also oversees the Gulf Coast Business Technology Center, Harrison County’s small business incubator, and also helps recruit retirees to live on the Mississippi Gulf Coast through the Mississippi Gulf Coast Retiree Partnership. After the destruction of Hurricane Katrina, however, the HCDC turned its focus to making the Mississippi Coast even better than it was before.

“Although Hurricane Katrina did present some obvious challenges, like damage and destruction of businesses, the Mississippi Gulf Coast is quickly coming back,” says Larry Barnett, executive director with the Harrison County Development Commission. “Many businesses have rebuilt or are in the process, and many new businesses have opened.”

Several new companies have chosen to locate in the area since Hurricane Katrina. This is due in part to incentives offered by both the federal and local government. The HCDC is currently working to develop a new industrial park in the area with large site availability to accommodate more industries wishing to locate in Harrison County. “Through marketing efforts, they constantly work to attract new companies and they are available to assist existing businesses with their needs,” Barnett says. “Their work through the Gulf Coast Business Technology Center provides new and small businesses with resources for their success.”

In February 2006, Gulf Ship, a commercial shipbuilder, purchased 31.2 acres in HCDC’s existing industrial development, the Bernard Bayou Industrial Park, to develop a new shipyard. In March 2006, Soprema, a major producer of roofing and waterproofing materials with seven plant locations in Europe and one other in the United States, purchased 23 acres, also in the industrial park. “Soprema plans an immediate estimated investment of $14 million and the creation of 50 new jobs,” Barnett says. In addition to these new businesses, the efforts of the Harrison County Development Commission have also helped retain existing companies such as Dupont, Northrop Grumman and Trinity Yachts.

Despite the setbacks the area faced in the aftermath of Hurricane Katrina, Harrison County plans to promote what the area has to offer for industry and business. “Located on the Gulf of Mexico, Harrison County offers numerous amenities for businesses,” Barnett says. “It has an excellent intermodal transportation system, which includes deep water ports, an international airport, north/south and east/west rail service and excellent interstate highway accessibility. In addition, there is a Foreign Trade Zone and fully developed industrial property. There are generous tax and financing incentives available to assist businesses with these incentives. A sub-tropical climate and outstanding quality of life also make the area a great place to live.”

The economic development agencies in both Mississippi and Louisiana hope that the programs and incentives offered at both a federal and local level help to not only restore each state to what it was before Hurricane Katrina, but to continue to expand the economies of each state and provide a high quality of life for all residents.