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Bigger question: Will East Mississippi-West Alabama partnership bear profitable deals?

Regional development or political ploy?

MERIDIAN — On April 1, Gov. Ronnie Musgrove announced the creation of an East Mississippi-West Alabama regional economic development cooperative agreement. It was no April Fool-ery that the two states agreed to work together on a mutually beneficial alliance. But whether or not the strategically timed pact can live up to the hype is questionable.

When Hyundai announced last year it would build a new automotive plant near Montgomery instead of East Mississippi, Musgrove took a lot of heat for the loss of the multi-billion dollar project, in particular for allegedly pushing Pelahatchie as a potential site over other Mississippi locales. Musgrove is seeking re-election this fall in a heated contest against top Republican gubernatorial contender Haley Barbour.

“I do think there are people in East Mississippi and the Meridian area who are miffed about the position they thought they were in and the approach the governor took to it, and there’s a wide gap in what they think ought to be done,” said Marty Wiseman, political science professor and director of the John C. Stennis Institute of Government at Mississippi State University. “ So yeah, I think anything that takes place from now on will have a very definite political angle to it. And there probably is some makeup there.”

Gubernatorial spokesperson John Sewell insisted that Musgrove has been working on this issue for more than a year, along with representatives from the Mississippi Development Authority (MDA) and Wade Jones from the East Mississippi Business Development Corporation (EMBDC). Riley, a Republican, took office in January

2003 as Alabama’s governor.

“Gov. Musgrove and Gov. Riley discussed it at the National Governors Association meeting in Washington in February 2003,” said Sewell. “Bob Rohrlack and Neal Wade, director of the Alabama Development Office, have been conducting strategic discussions in recent weeks on this project.”

Barbour said he initiated talks with Riley at the Republican Governors Conference in California last November, when he and Riley discussed extending Interstate 85 from Montgomery to Interstate 20/59 east of Meridian. Alabama Republican Senator Richard Shelby had garnered congressional approval — but no appropriations — to extend I-85 from Montgomery to I-20/59. Having all four-lane interstate traffic between Montgomery and Meridian would expedite travel and potentially lure big business, said Barbour.

If Kewanee, the last Mississippi community nearest the Alabama state line on U.S. Highway 11/80, had been proposed to Hyundai officials, Mississippi could have landed the Hyundai project, Barbour said.

“It’s true that we were not willing to pay over $117,000 per job,” said Rohrlack. “Alabama was and that’s that. We have documentation showing that Gov. Musgrove did propose and offer the Kewanee site to Hyundai. Hyundai walked the site, and in three separate conversations — here and in Korea — the head of the Hyundai project discussed with me in a group or one-on-one that he didn’t want us to consider that site. They had their own reasons.

“We have a letter that Gov. Musgrove and Sen. Trent Lott co-signed offering the Kewanee site, so anyone who’s saying the site wasn’t offered is completely out of the loop. That’s the politics of it. Unfortunately, when you’re trying to do things during an election year, if it’s something good, someone’s going to say you’re doing it for ulterior motives. If you breathe, you’re doing it wrong. It’s aggravating to see politics come into issues, like the site was never offered when I know it was because I was there. So was the client. The ones completely uninvolved are the ones who are making comment and that’s interesting because they were nowhere to be found when the project was going on.”

Barbour responded: “Economic development is a team sport. If it’s going to be successful, we must involve local businesses, local officials and local leaders. It can’t be a one-man show. Additionally, we must remember that attracting businesses to our state should not be a one-size-fits-all strategy. Playing politics with economic development issues is bad policy because short-term political gain does not help the long-term success for our communities.”

The Advantage Mississippi Initiative, which passed in 2000, authorized the Mississippi Regional Alliance Development Program, which promotes the development of alliances at the local governmental level between government units, including government units from another state. The program authorizes local government units to issue bonds for the purpose of sharing in the costs and revenues connected with projects, said Rohrlack.

“We’ve been looking at this since that legislation was passed,” said Rohrlack. “Gov. Riley has an interest in doing it for that part of the state in Alabama, so it was a perfect time to sit down and see what we could do. This is a way that both states can focus on an area where they’re wanting to see economic development success happen to both their benefits, and it’s a way to do a deal without it having too big of an impact on either budget. If we’re splitting the costs and the benefits, it’s good for both of us.”

EMBDC chairman Tommy Delaney said he hopes the joint state initiative will perpetuate the development of the area.

“East Mississippi is centrally located in what has become known as the Southern Automotive Corridor anchored by BMW in Greer, S.C., and stretching to Toyota’s latest announcement of a plant in San Antonio, Texas,” he said. “The EMBDC has been and continues to actively pursue automotive suppliers to serve the needs of this growing number of assembly plants in the region. The potential of a large supersite in the vicinity enhances our location advantage for current suppliers while setting the stage for an anchor assembly plant hopefully in the future. By combining the resources of both states, we recognize that we can do more together than we can on our own.”

Rohrlack and his Alabama counterpart are looking at incentive packages to jointly offer prospective mutual clients.

“My speculation is that we’ll probably set up a template for an automotive project,” said Rohrlack. “They’ve been successful with automotive projects. So have we. Then we’ll go out and see what we can do.”

Other details are still being worked out, said Rohrlack.

“We’ll have joint sites straddling the state line,” he said. “As we come to terms on how to split cost/benefits, depending on which side of the line the actual facility is on, and hopefully it will be a big enough site for lots of suppliers on the site as well, we’ll work out details. Right now, we’re determining various issues, and whether we’ll have a governing type board over it, or whether the two states will handle it on their own. It’s all the little stuff you deal with now when there’s not a project so it doesn’t become a big deal when there is a project.”

Wiseman is hopeful the collaboration will bear fruit.

“The first time I saw it mentioned, I thought it would be a good idea,” he said. “Now, since it’s being talked a little more, it seems like more of a real possibility. You don’t see states genuinely get into arrangements like that all that often. Usually, they get on such a competitive edge that they’re reluctant to risk any dollars or prestige or anything else by joining up with the next state.”

Both states could reap benefits, especially with University of Alabama chancellor Mack Portera, former president of Mississippi State University, as a key player, said Wiseman.

“Another day, another time, you might h
a different set of actors,” he said.

Contact MBJ contributing writer Lynne W. Jeter at mbj@thewritingdesk.com.


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