Commentary by John Howell Sr.

Published 12:00 am Thursday, January 28, 2010

By John Howell Sr.

Wednesday’s meeting between Panola business and elected leaders should become the watershed moment that further hones the county’s industrial recruiting efforts in a market never more competitive than today.

The players were there: All five county supervisors and their attorney, four Batesville aldermen and the mayor, Panola Partnership directors and its executive, representatives of the Panola Industrial Development Authority, the chancery clerk, county administrator, and representatives of TVA’s economic development team and the industrial site engineering firm.

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The immediate concern is the lack of “a site that’s ready of significant size to be built on,” Partnership CEO Sonny Simmons told the group. The county already owns the site — the property adjacent to the Panola County Airport — that is “one of the better sites that my team has looked at from a site development standpoint,” Tennessee Valley Authority economic developer Chris Berryman said.

Now needed on the property is infrastructure — streets, gas, water and sewer lines. “We need something virtually deal ready. Anything that communities can do now to put a little money up front into a deal up from to help shrink that timeline for a project helps us tremendously,” Berryman told the group.

The estimated cost for the needed infrastructure construction and other improvements at the airport industrial site is $1.45 million, Simmons said.

The civic leaders Wednesday night hashed out how much the three parties — the City of Batesville, The Panola Partnership and Panola County — should contribute toward the project. The discussion brought differences of opinion into the open where they belong instead of festering among different board members. People talked to each other and asked and answered questions within hearing of the whole group.

One issue is the Partnership’s assets and how they are to be used. The Partnership has received about $3 million from LS Power since its completion ten years ago, Simmons said. That’s money the company agreed to pay the county in lieu of taxes. At the outset the Panola Industrial Development Authority (IDA), which owned the industrial park property that was sold to LS Power for the site, decided that the annual lieu money should go to the Panola Partnership instead of the Industrial Development Authority, IDA president Gary Kornegay said, so it could be spent for projects anywhere in Panola County.

Had the money been funneled each year to the IDA, Kornegay continued, it could only have been spent on projects in the Second Judicial District where the IDA was established. Restrictions on use of the money exclude its expenditure for Partnership operating expenses.

(Another criticism of the Partnership that was well aired during the meeting was the organization’s investment several years ago of $1.2 million of the lieu money into mutual funds.  Sadly, the value of those funds dropped along with everyone else’s mutual funds when the stock market went belly up.

The value of those funds dropped to about $700,000 until the decline reversed. They have now grown back to about $900,000 Simmons said. The Partnership plans to allow them to fully recover their value and then transfer the money into guaranteed investments, Simmons said.

Criticism of the Partnership directors’ investment decision comes from the 20/20 hindsight always so abundant among us, but at the time the decision was made, stock market returns were so high that the directors — since it was not prohibited by law — felt like they would not be the best stewards of our money by settling for lower returns.)

Back to the $1.5 million needed for the airport industrial park infrastructure: At the start of Wednesday’s meeting, the Partnership had agreed to pay $250,000, the city had agreed to extension of its services valued at almost $500,000. That left from $750,000 to $1 million needed from the county and sparked more questions, mainly about why shouldn’t the Partnership use more of its money.

“I don’t think we need to spend everything that’s available to us out of that fund to go toward this park because we use it as a rainy day fund, basically,” Simmons said.

“When GE came here that’s what put it over the top was the (Partnership’s) $300,000 contribution … as opposed to, like most communities, to have to go to the board of supervisors or the board of aldermen or whoever to get that money,” Simmons continued.

Simmons said the Partnership had also spent $55,000 to match state funds for a highway crossover at the GE Aviation plant and $200,000 paid to Toyoda Gosei to help with relocation expenses.

(Toyoda Gosei is the Tier One supplier to the Toyota Blue Springs facility that signed to locate in the old Moog Automotive facility at Batesville’s W. M. Harmon Industrial Park. According to state economic development officials, resumption of work to complete the Toyota project at Blue Springs is not a question of if, but when. And an announcement of when may is likely in a few months.)

“If we have another project of a major degree come up, which very well may happen, … more than likely to make us competitive, we’re going to have put something in there along with the state,” Simmons said.

That’s when Batesville Mayor Jerry Autrey asked Simmons if the Partnership board could increase its funding for the airport park infrastructure to $500,000. “Maybe if they do that then the county could see if they could come up with $500,000,” Autrey said. “And the city can move ahead with our utilities,” he added.

“I feel like the board (the Panola County Board of Supervisors) is in favor of doing anything we can do to move forward as long as we don’t put too big a burden on the taxpayers,” Board of Supervisors President Gary Thompson said. “To me it’s kind of a balancing act,” Thompson continued, stating his concerns for “jobs and the burden on the taxpayer.”

That seemed to the consensus. The need for the balance Thompson described may seem like a no-brainer, but municipal, county and Partnership officials need to remain in close communication to keep this in focus.

The local government representatives should keep in mind the pending need in the near future for industrial locations that the economic development people described at the meeting. Large tracts of property suitable for industrial development south of Memphis near Interstate 55 have become scarce north of Panola County, the TVA’s Berryman said.

Industrial planners are now poised for the economic recovery, scouting hard in northwest Mississippi for sites suitable to locate additional automotive manufacturing, food processing and data storage industries.

The balance that our local business and government leaders arrive at should leave the Partnership with enough money to allow it to move quickly when an incentive is needed to clinch a deal to attract an industry. In today’s competitive industry recruiting market, the time needed for county government to meet and agree — a process that might require a public hearing — to fund a similar deal-clinching incentive will put Panola County at a competitive disadvantage.

Leaders of local government should resist tinkering with a program that has been as remarkably successful as the Panola Partnership has been, locating new industry and expanding existing industry even during this current economic downturn.

The other part that equation is the need for the Partnership to better communicate its stewardship of this public money to city and county government. And to the taxpayers. Last Wednesday’s meeting was a good start.