How do infrastructure improvements impact commercial real estate developments? Tremendously, say business leaders.
“Simply stated, without sanitary systems, businesses can’t flush their toilets,” said Michael Olivier, executive director of Harrison County Development Commission. “Without roadway development to move the traffic, businesses don’t have traffic counts and can’t make sales because there is no access. Without infrastructure improvements, there’s no economic development. New technology infrastructure that has recently been introduced to this part of the world – fiber optics and/or other telephone technologies – are becoming more important to business and commercial developments.”
Because infrastructure improvements are required in commercial and industrial real estate developments, “problem pockets” have popped up in rapidly expanding major metropolitan areas, said Sonny McDonald, executive director of the Hinds County Economic Development District.
“Population centers are growing as more and more people are leaving the rural areas of their respective states, and it’s putting tremendous pressure on municipalities in metropolitan areas,” he said. “For example, the city of Clinton is growing ahead of the curve in Mississippi, but they’ve fortunately planned for the growth and have a big advantage with infrastructure in place to sustain that growth. They can now plan for additional growth because it’s going to happen whether they prepare for it or not. I’m sure they will prepare rather than react.”
Dick Hall, central district highway commissioner for the Mississippi Department of Transportation, who supervises highways, rails, airports and other transportation services in a 22-county area, said infrastructure improvements help – and hinder – commercial development.
“We (MDOT) seem to be more interested in building highways from point A to point B so we can move traffic through faster rather than stopping to consider how it affects communities economically,” Hall said. “An example of how infrastructure can hurt economic development is going on in Port Gibson right now. MDOT is suggesting we put a four-laned, Highway 61 bypass around Port Gibson. If we went through the middle of this beautiful little town, we would mess it all up by trying to expand and deal with additional liens. But, we’re putting in the bypass where the Natchez Trace is going to be (situated) between the town and the bypass. The Natchez Trace has a tremendous width of right-of-way, so a primary fear of business leaders, and I’m afraid it’s well-founded, is that it will prevent economic development and that it will prevent growth.”
Typically, when a town has a bypass, the town grows toward the bypass, Hall said.
“That’s the normal growth pattern,” he said.
“Businesses build up along the bypass and the gap between the town and the bypass is closed. In Port Gibson, the Natchez Trace is going to stop that.”
Bob Ridgway, president of Ridgway Management Inc. of Jackson, said while new traffic infrastructure tends to create an immediate euphoria, commercial Realtors plan ahead.
“People are going to the point of least resistance, and when new transportation infrastructure frees up a lot of excess capacity by having more lanes on Lakeland, more people will come that way,” he said. “But when the High Street bridge goes over that, it will shift traffic. I’m looking more forward to that than I am to Lakeland finishing up. The High Street bridge should have been done 20 years ago, but wasn’t because of territorial turf-type issues that had nothing to do with reality. Building a wall between two municipalities hurts both.”
Transportation infrastructure improvements are not limited to highways, Hall said.
“Cities first started out being built along the waterway, then railroads,” he said. “In the 1940s and 1950s, it was interstate highways. Now major cities are being built around airports. For example, Greenville has an underutilized airport. Transportation is an absolute necessity for economic development and we need to do a little better job of looking through the glass bowl and guess where we will be 20 years from now and plan accordingly. The negative is, you’re talking about building infrastructure, which costs money. But it’s like a business. If you’re not willing to invest in that infrastructure, the other guy is.”
Increased traffic on railroads brings problems, but also opportunities, Hall said.
“We are the only place in the U.S. with a railroad that runs from Canada to Mexico and crosses with a railroad that runs from east to west,” he said. “It crosses in metro Jackson. The railroad folks tell me that traffic, particularly east-west traffic, is getting ready to increase over 50% in the next two to three years. I don’t know where in that lies economic opportunity, but I guarantee you it’s there if we’re smart enough to figure it out.”
Infrastructure improvements around waterways would have a bigger impact on real estate development if Mississippi businesses had more products to export, Hall said.
“We have one of the finest waterway systems, yet we rank No. 38 in exports,” he said. “Landlocked Iowa exports more agricultural products than we do. Think what they would give for the Mississippi River, the Gulf of Mexico and the Tenn-Tom. If we’re not growing the right thing, we should start growing whatever Central and South America and other markets need. We either lack the vision or the political courage to enact it. We’ve got to do a better job on both.”
Maintenance remains one of the biggest problems in infrastructure improvements, said McDonald.
“We just don’t maintain what we’ve got until we get into a crisis,” he said. “That’s a hindrance because then it takes too much money in one lump sum to try to replace too many things at once.”
Contact MBJ contributing writer Lynne Wilbanks Jeter at email@example.com or firstname.lastname@example.org.