Economic Development

Introduction

It is important now more than ever to invest in the long-term sustainability of economic growth and prosperity of business and industry along the Mississippi Gulf Coast. Gulf Coast residents and businesses have struggled to overcome the effects of Hurricane Katrina, the decline of the national economy, and the BP Oil Spill. The RESTORE Act provides a unique opportunity to help rebuild communities and lives.

Economic Development can be broken into three primary areas: recruitment of new industry, retention and expansion of existing businesses, and entrepreneurial development. Each of these will play an important role in the long-term economic recovery from the oil spill. For economic development to thrive, the following must be in place:

Infrastructure – the “hard” infrastructure of roads, rail, ports, airports, and technology

Human Capital – this includes “soft” infrastructure that delivers support services geared toward technical assistance to businesses and start-ups, workforce development, and education

Marketable Locations – this includes project-ready sites, industrial and technology parks, and buildings, but also proactive community leadership and a business-friendly environment

Quality of Life and Place – the attractions, amenities, and civic pride of a community help in the recruitment and retention of businesses and talent and are directly dependent upon coordination between elected officials, business, and community leaders.

The Mississippi Gulf Coast is already home to some of the most exciting and dynamic job-creators in the country. A vibrant gaming and recreational industry, major shipbuilding and defense-related industries, manufacturing, health care, military, and retail sectors all add up to a diverse and sustainable coastal economy.

Please note that because the gaming and recreational sectors are covered under a specific Tourism GoTeam, the Economic Development Team focused primarily on other business sectors that benefit from traditional recruitment, expansion, or entrepreneurial assistance typical in the economic development profession.

The Economic Development GoTeam divided into three subcommittees: Retention and Expansion; Recruitment; and Entrepreneurship.

Priorities

Asset Development and Capacity
As stated above, there are investments that should be made in the coastal counties to  ensure that they are positioned for long-term growth and recovery. These investments should be made with job creation as a top priority, but not always as an immediate requirement for the project. The economic recovery requirements of the Mississippi Gulf Coast are longer term in nature and should be allowed to be justifiable prospective investments into future growth. For instance, investments in major infrastructure like a rail line may not have a direct job creation component, but will lead to regional economic growth by opening up transportation and access efficiencies for using businesses. In addition, the creation of a technology industrial park near Stennis Space Center could aid in the recruitment of aerospace and technology companies to the area, but that project would be prospective in nature.

Investments in infrastructure are critical to improving the economic competitiveness of  the Coast and fostering a long-term economic recovery. Projects should be judged on their impact to using businesses and the potential for increased job creation and new investment associated with the project.

Infrastructure is the backbone of economic development, but there must be marketable sites in order to recruit new industry or help existing businesses expand. Marketable sites require extensive preliminary activities to prepare a site to be ready for operations on Day One. These include but are not limited to: acquisition and development of sites, site preparation, storm water drainage structures, potable and fire protection water, wastewater collection and treatment, wetlands delineation, mitigation and permitting. This could also include Brownfield sites re-development to take advantage of what could otherwise be marketable space for new investment.

In addition to the physical improvements that can assist in economic development, the Coast must display a willingness at all levels of government and throughout the business and civic leadership to welcome new economic opportunities. States do not compete for economic development, communities do. It is vital that coastal leadership work cooperatively and professionally toward portraying the region as a business-friendly location that is willing to work with companies to see them locate in the area and provide jobs to their citizens. Having marketable sites and communities on the Mississippi Gulf Coast will position the area for increased economic activity and jobs. Long-term investments into those assets will drive the recovery for many years to come.

Enhancing Broadband Infrastructure
In order to effectively recruit new industries, retain and expand existing ones, and nurture and attract entrepreneurial ventures to the Mississippi Gulf Coast, a community must be armed with innovative technology infrastructure. For many businesses, broadband internet is as vital to its success as other infrastructure assets such as roads, rail, and ports. The Mississippi Gulf Coast currently has some of the highest levels of broadband access and adoption in the state, but through a concerted effort to make available very high-speed broadband and to market the Gulf Coast as a destination for information and computational-intensive companies, a high-tech economy can develop on the Coast.

There is already high-speed broadband infrastructure running along the Gulf Coast, including the National Lambda Rail which is dedicated for research institutions. Tapping into this infrastructure to bring very high-speed capacity to the Gulf Coast could help recruit technology-based companies and grow local innovative potential. Many options exist, but one model that has been tried in other places is to develop a high-tech park or innovation complex where speeds up to 10 gigabits per second are possible. That would be a difference-maker for the Gulf Coast and could lead to increased economic growth.

Educate and Train a Productive Workforce
Workforce development and training is a critical component in the successful economic recovery of the Mississippi Gulf Coast. In Mississippi, workforce development, job skills training, and work placement are provided through a collaboration of the community college system, the Mississippi Department of Employment Security, and the Mississippi Development Authority.

The Entrepreneurship Subcommittee identified a need to establish programs designed to educate, train, and prepare youth interested in developing ideas for new products and services – the tools necessary for successful new ventures. At least one program, the Southern Entrepreneur Program which is an educational outreach initiative housed within USM’s Center for Economic and Entrepreneurship Education, appears to be working well in the Gulfport and Biloxi School Districts at the high school level. Other resources are available through the state’s universities as well as local non-profits that should be examined for expansion along the Gulf Coast.

Enhance the Quality of Life/Place and Business Environment
The Mississippi Gulf Coast is already home to some of the most diverse amenities and activities in the region. Quality of life is of great importance to Economic Development, and the Coast provides incredible opportunities that continue to grow and improve. After Hurricane Katrina, many communities were devastated, but the resiliency of the people of the Coast brought those communities back stronger than ever. Public spaces, green spaces, walking trails, and a restored beachfront run along all three counties. The Creative Economy, which is the collection of the artist, literary, musical, culinary, and creative professions, is alive and well. Ocean Springs and Bay St. Louis may be the best known, but the Coast is bursting at the seams with creative people and places that represent a cultural heritage that attract visitors and companies to Mississippi from all over the world.

Building on this existing high quality of life and place was identified as a key factor in all aspects of economic development as well as for the recruitment and retention of key talent. Advances in quality of life and place are directly related to the community, business, and political leadership of an area. The whole community has to support the concept and work together to create the best and most attractive community possible to market to the world.

Incubators and Accelerators
Business incubators are programs that help startups and early stage companies grow by providing business support services, technical assistance, and mentoring. Accelerators are slightly different in that they are time-limited programs geared toward intensive mentoring and concept development for early stage companies seeking rapid growth and access to investors. Both concepts can play a role in creating a high impact entrepreneurial environment based on the incredible assets and talent on the Gulf Coast to spark some home-grown economic development.

The Coast currently has two operational incubators and one under development. Each incubator fills a need for entrepreneurial specialties and successfully graduates new ventures all along the Coast. However, there appears to be a lack of affordable incubator programs and space in some coastal counties. Also, many would-be entrepreneurs are not aware of existing incubator opportunities. Recovery funds could be leveraged to fill those gaps and help promote the opportunities on the Coast to small entrepreneurs.

There are currently no accelerators on the Gulf Coast. However, the presence of Stennis Space Center, high-tech aerospace companies, defense industries, advanced manufacturing, and strong academic institutions provide ample opportunities for entrepreneurs to develop and grow cutting edge concepts, technology, and businesses on the Coast. An accelerator program, fueled by very high capacity broadband and in partnership with some of the institutions mentioned previously, could help position the Coast as a destination for creative minds.

Incubators and accelerators each can and should serve important needs. Entrepreneurship Subcommittee members recognized that in order to be successful in the entrepreneurial arena, adequate space for entrepreneurs should be provided in specialized innovative technology parks, perhaps in concert with business accelerators.

Funding Programs
While certain capital assets (broadband access, technology parks, etc.) can give a community a competitive edge in entrepreneurial recruitment, one of the most formidable impediments to entrepreneurial growth is capital or the lack thereof. Although generally available, loans for entrepreneurial activities are typically high risk, high cost. In order to create a nurturing environment for entrepreneurial opportunities, programs to fund these gaps must be explored to provide affordable, direct lending.

Other Important Issues

The Economic Development GoTeam discussed other challenges and opportunities on the Coast. Although these issues may or may not be appropriate for RESTORE Act funding, the Team wanted to acknowledge their role in economic development strategic planning:

Health Care
The Mississippi Gulf Coast has a large health care infrastructure, with many hospitals in Hancock, Harrison, and Jackson counties, but the opportunity for growth still remains. Governor Phil Bryant recognized that the delivery of health care services can be a strong tool for economic development. That is why he championed the Mississippi Health Care Industry Zone Act, which includes incentives for companies that provide new healthcare-related projects within the State of Mississippi. This is a potentially important growth area for the Coast, considering the large population of retirees and military veterans on the Coast. MDA and local developers are focused on that opportunity.

Real and Personal Property Insurance
While not an exclusively Mississippi issue, insurance costs across the Gulf Coast are a serious issue for those individuals and businesses that work and live near the Gulf. There are many efforts underway at the federal and state levels to address this issue.

Gulfport-Biloxi International Airport
Additional affordable air service options into and out of Gulfport-Biloxi International Airport to a variety of destinations is essential to generating more tourists and business travelers. There is a need to stimulate the overall Coast economy by adding new air service utilizing an infusion of public and private resources. Expansion of the Gulport-Biloxi International Airport could be enhanced through land acquisition, helping to increase future development and alleviate potential encroachment.

Proposed Criteria and Ranking
The Business and Industry Recruitment Subcommittee recommends the following criteria against which potential projects should be ranked for funding priority:

• Leveraging of other funding sources
• Demonstrated return on investment in terms of leveraging jobs, capital investment, or financial return
• Compelling reasons for how improvements will position sites, airports, ports, etc. for
new locations, job creation, expansion, and/or new capital investment
• Demonstrated value relative to target sector and competitive advantage
• Demonstrated project feasibility/necessity validated by third party expert
• Projects should not be eligible for funding from the eco-restoration source of funds,
where improvements are proposed for industrial, technology, or aviation parks

Leveraging Resources
RESTORE Act funds should leverage the resources and expertise of the private sector, including private nonprofit development organizations through public-private partnerships.

There are multiple sources of local, state, federal, and private resources and programs which can be leveraged to achieve the priorities for new, existing, and expanding business and industry. Identification of funding sources is a constant component of the long-range capital projects planning process. Most industrial parks, aerospace parks, port facilities, airports, and related infrastructure are publically owned. As such, the following sources have the potential to leverage RESTORE Act funding: bond issues; port multi-modal funding; several low-interest loan programs and grants for public infrastructure available through the Mississippi Development Authority; Electric Cooperatives (Rural Development); USDA Rural Development Tax Credit program; New Market Tax Credits; grant sources with specific match requirements include Economic Development Administration Funding; additionally, development agencies have reserve funds that are programmed for these projects.

Also, it is clear that many of the GoCoast 2020 teams’ efforts and priorities overlap with those of the Economic Development team. Infrastructure, including water, wastewater facilities, and roads are all required for business and industry to operate and succeed. The priorities defined by the Small Business, Infrastructure, and Workforce Development Teams have a major impact on the focused priorities of the Economic Development Team. In order for business and industry to expand and grow, a larger skilled labor pool will be required, which is also being addressed by the Workforce Development Team. The preparation and availability of sufficient infrastructure allows the region to compete for both new and expanding manufacturing and related technology projects. Circumstances also exist where tourism-related infrastructure could also better position those aspects of the Coast’s economy for new and/or expanded investment. The combination provides a diverse and stable economic structure.

Present vs. Future

The Present
There are multiple existing strategic plans and outreach programs that are working to address the priorities of the Economic Development GoTeam. Below is a list of existing programs currently in place to assist in all aspects of economic development. Most are public entities, and some are private. It is not intended to be a comprehensive list, but serves as a snapshot of programs available to develop and nurture economic growth.

Mississippi Development Authority (MDA)
MDA is responsible for promoting and fostering economic and community development statewide. MDA awards both state and federal funds to support the recruitment and retention of businesses, the promotion of the state’s tourism economy, and the development of public assets in communities around the state.

Harrison County Development Commission, Hancock County Development Commission, and the Jackson County Economic Development Foundation, Inc.
Charged with promoting and fostering economic development in their respective counties.

Mississippi Power Company, Economic Development Department
The Economic Development Department is responsible for promoting and fostering economic development and community development in their twenty-three county area.

Coast Electric Power Association and Singing River Electric Power Association
The Economic Development Departments are responsible for promoting and fostering economic development in their respective service territories on the Coast.

Harrison, Hancock, and Jackson County Chambers of Commerce
Promote community and economic development on the Mississippi Gulf Coast while improving the business climate through facilitating, advocating, and providing information on behalf of the region.

Gulf Coast Business Council
The Gulf Coast Business Council is the united voice of business on public policy issues of importance to the Mississippi Gulf Coast region. Through leadership and collaboration on targeted strategic issues, it promotes and advances the economic vitality and quality of life in the region.

Small Business Alliance (SBA)
Among other services, the SBA provides guaranty loans to finance start-up and existing small businesses.

Southern Mississippi Planning and Development District (SMPDD)
Serving the 15-county region in south central and southeastern Mississippi, the SMPDD operates various direct loan programs designed to finance new and expanding businesses that otherwise would not be able to obtain conventional financing.

Magnolia Business Alliance (MBA)
The Magnolia Business Alliance is a not-for-profit corporation acting as a support organization and forum for the advancement of small- and medium-sized businesses in the southeastern U.S. MBA manages the Enterprise for Innovative Geospatial Solutions which supports the growth of the geospatial technology enterprise cluster at Stennis Space Center. MBA also runs the Waveland Business Center, which serves as a small business incubator.

Mississippi Enterprise for Technology (MSET)
The Mississippi Enterprise for Technology is a private, non-profit organization that facilitates regional economic development by leveraging the resources of Stennis Space Center, the state, and the region to foster business opportunities among public and private entities.

The Southern Entrepreneur Program (SEP)
The Southern Entrepreneur Program is an educational outreach initiative housed within USM’s Center for Economic and Entrepreneurship Education, which sponsors forums for young entrepreneurs throughout Mississippi and provides a pilot training and educational experience for high school students in the Gulfport and Biloxi school systems.

Conclusion

MDA’s Priority One Survey revealed several positive indicators: 85 percent of existing businesses surveyed on the Coast would recommend the area to another company and 90 percent responded that their current footprint allows for growth and expansion. It is important to capitalize on these positive survey results through marketing efforts. Ways to improve and foster a sustainable economic development environment on the Mississippi Gulf Coast must be identified. The preparation and availability of sufficient infrastructure allows the region to compete for both new and expanding manufacturing and related technology projects. Economic Development organizations in the three county area are addressing priorities through long range capital project planning.

Mississippi Power Company’s Project Ready, with their certificated, “shovel ready” program, has the potential to create immediate and long-term employment opportunities. To effectively expand job creation along the Coast, target industry assets must be in place or available within a reasonable timeframe at a reasonable cost. A publicly-owned wetlands mitigation bank would be an effective and integral part of this effort. The development of a revenue source with sustainability is needed to finance the identified priorities necessary to attract, expand, and retain jobs in the business, industry, and entrepreneurial sectors. Resources are limited, and the use of RESTORE Act funds would ensure that priority assets are built and sites developed in order to compete with other communities and locations, while protecting and rebuilding the Coast’s natural resources. The following table demonstrates the current established jobs located in the three coastal counties of Mississippi:

Economic Development GoTeam

Co-Chair      Ed Day, Mississippi Power Company
Co-Chair      Brent Christensen, Mississippi Development Authority

Chris Anderson, Singing River Health Systems
Rep. Charles Busby (District 111)
Rep. Scott Delano (District 117)
Dave Estorge, Memorial Hospital Foundation
George Freeland, Jackson County Economic Development Foundation
John Harral, Butler, Snow, O’Mara, Stevens and Cannada
Billy Hewes, Hewes Insurance
Tom Kovar, Chevron
Jack Norris, Gulf Coast Business Council
Bob Occhi, Coast Electric Power Association
Supervisor Kim Savant, Harrison County
Patrick Scheuermann, Stennis Space Center
Sen. Tony Smith (District 47)
Shorty Sneed, Stewart, Sneed, Hewes
Clay Wagner, Hancock Bank
Clay Williams, Gulfport-Biloxi International Airport