Op-Ed: The shared fortunes of Jackson and its suburbs

By: Matthew D. Bolian

Since 2011, a fight has been brewing in the state capitol over where the Department of Revenue (DOR) and its 500 plus workers are going to relocate. In one corner is Sen. David Blount, D-Jackson, and in the other is Speaker of the House Philip Gunn, R-Clinton.

Sen. Blount represents those who want to house the DOR in the 385,200 square-foot Landmark Center located in downtown Jackson in an effort to consolidate state agencies into one building. Two independent studies — one produced in 2011 by Cushman and Wakefield and and the other in 2013 by Millsaps College’s Else School of Management — prove that moving the DOR into the former regional headquarters of AT&T will save taxpayers millions of dollars compared to all other viable options. Based on this evidence, three influential, Mississippi businessmen — Jim Barksdale, John Palmer, and Leland Speed — publicly sided with Sen. Blount in the Clarion Ledger on Feb. 19, 2013.

In the opposing corner, Speaker Gunn advocates moving the DOR into the old WorldCom building in Clinton. His rationale is not financially based; rather, it is politically motivated. “I haven’t seen (Blount’s) plan or details … But I represent the people of Clinton, and they sent me here to look out for their interests. We believe it’s in the best interests of my constituents for it to be in Clinton, for those jobs to stay in the area,” Gunn said Feb. 4, 2013.

Despite good intentions, Speaker Philip Gunn’s logic is flawed. For suburbs to be successful, like Clinton, they must have a vibrant central city. In other words, it would be in the best interest of Clinton (and all suburbs in the metropolitan area) for DOR to move to downtown Jackson. Please, allow me to explain.

Mountains of academic literature support that the future of cities and their suburbs are intimately related. In a 2002 study, Dr. Andrew Haughwout, a senior analyst for the Federal Reserve of New York, and Dr. Robert Inman, a professor of Finance and Economics at the University of Pennsylvania, plainly state, “There is no question that there is a tight connection between cities and suburban economic fortunes.” What does this mean?

Throughout most of the 20th century, the suburban portion of the United States grew at expense of the city portion. But in 2005, Dr. Jordan Rappaport, a senior economist at the Federal Reserve Bank of Kansas City, demonstrated cities and their surrounding suburbs tended to grow or decline together as their metro areas prospered or struggled. How does this work?

First, let’s look closely the characteristics of a city as it declines. A declining city is marked by a concentration of lower income people and an inability to fund needed investments in education and infrastructure, which leads to additional problems such as high crime, poor health, and unproductive workers.

There are both short-term and long-term consequences of this process. Initially, central city decline reduces city amenities, providing further impetus to move to the suburbs. Thus in the short run, urban decline is associated with suburban growth. However, spillovers from central city decline adversely affect the entire region, causing people and businesses to move to more desirable regions.

This decline is not a fast affair. It is a long, gradual one that is many times disguised by slow-growing suburbs. Nonetheless, central city decline is a long-run, slow drain on the economic and social vitality of the region.

In his 1998 study, Dr. Richard Voith, a professor of Urban Real Estate Economics at the Wharton Business School concludes, “…suburban communities may not be able to isolate themselves from the consequences of central-city decline and, in fact, that suburban communities may benefit substantially from a growing central city.”

A clear example of a declining central city is Detroit. To quote The Economist, “Nowhere is the separation of [the city and suburbs] so destructive — as in Detroit; It is becoming obvious that Detroit’s troubles cannot be contained. Company headhunters, even in the distant suburbs, find it difficult to lure top-notch talent to a place with such a negative image.”

You may say, “So, I get it. The core city is important, but will moving a state agency to downtown Jackson really help revitalize the city? The answer is yes.

In his celebrated 2003 study, “Public Buildings Keep Town Centers Alive,” Philip Landon explains the importance of having governmental offices downtown. One of his most important arguments shows that each government worker injects $2,500 to $5,000 into the local economy. In Jackson’s case, moving the 500+ DOR workers translates into $1.25 to $2.25 million injected into downtown businesses. And if the state uses the Landmark Center to consolidate more state agencies, the additional employees will further enhance the downtown economy.

Mississippi would not be the first to systematically move government offices downtown because they generate significant economic activity. A precedent already exists. National policy requires federal agencies to consider downtown areas first when looking for new space, and they can only locate somewhere else when there are “compelling reasons to the contrary.

Dating back to 1994, a number of states have adopted this strategy, mandating that government offices have to move to downtown whenever possible. According to Torn Torti, Vermont’s Commissioner of Department of Buildings says, “No doubt about it; the policy helps to sustain downtown.”

During Mayor Mick Cornett’s speech at the GJCP Annual Meeting, he said that it was imperative for the success of Oklahoma City to “convince suburbanites that their quality of life is directly related to the intensity of the core.”

As a Brandon resident and Jackson suburbanite myself, I ask Speaker Gunn to see the wisdom of Mayor Cornett’s words and support Clinton, Jackson, and the entire Metropolitan area by allowing the house to vote on SB2763.

» 1LT Matthew D. Bolian, a Metro-Jackson native, was a Distinguished Honor Graduate at the United States Military Academy at West Point in 2011, and he served as a Rotary Ambassadorial Scholar and Phi Kappa Phi Fellow at the London School of Economics (LSE) in 2012, earning a MSc in Regional and Urban Planning.  He currently lives in Colorado Springs and plans to return to Jackson after serving his commitment to the Army. 

BARKSDALE/LAMPTON: Mississippi Works will attract jobs and strengthen our workforce

When Gov. Phil Bryant delivered his inaugural address, he pledged to work hard to build a Mississippi where every resident who wants a job can find a job. In order to attract new opportunities, Mississippi must position itself as a prime location for business and workforce development.  To generate solid policies to help our state grow, Gov. Bryant created Mississippi Works—a diverse group of business leaders focused on increasing economic opportunities in Mississippi and crafting a long-range strategy for strengthening the state’s business and workforce development efforts.

Energy and healthcare are two industries that are outlined as major growth sectors by Mississippi Works.

Energy and healthcare are two industries that are outlined as major growth sectors by Mississippi Works.

In collaboration with the governor, the members of the Mississippi Works executive committee have developed a policy agenda for the 2013 legislative session. We believe that these policies, if adopted by the Mississippi Legislature, will bring new jobs to Mississippians and will equip our state with a more skilled workforce.

Chief among our proposals is stabilizing Mississippi’s tax environment for small businesses. In his Executive Budget Recommendation, Gov. Bryant provided relief for small employers that are penalized by a state budget mechanism that requires them to pre-pay certain taxes. In 2007, the Legislature exempted many small businesses from this burdensome requirement but then suspended its own proposal. We urge lawmakers to finally enact the relief this year and provide Mississippi’s small employers with a more secure environment for growth and job creation.

We must also take action to develop industries that are positioned for growth. We believe that private sector health care development can be a major economic driver and know there is a strong correlation between physician recruitment and economic development. Unfortunately, Mississippi has some of the most burdensome physician licensing requirements in the country; revising requirements will encourage physicians to relocate in Mississippi without affecting the standard of practice.

Further, Mississippi should draw more physicians to its most medically underserved areas, and Mississippi Works proposes enhancing the state’s already successful rural physicians scholarship program. Providing an additional $5,000 per year to the current $30,000 per year scholarship program for doctors who commit to practice in rural areas and raising the scholarship recipient cap from 60 students to 65 students per year will create better health care access for Mississippians while boosting rural economies.

As Gov. Bryant has said, Mississippi must also focus on strategically developing its energy industry. Through our proposal for The Energy Sustainability and Development Act, the Mississippi Development Authority will work to promote Mississippi as a leader in energy development, job creation, and research. In addition, state agencies will be required to save tax payer dollars by adopting smarter energy management plans and sharing consumption data

Mississippi Works proposes harnessing energy-related opportunities by improving the Energy Infrastructure Revolving Loan Fund. Utilizing funds already authorized by the Legislature, this loan mechanism will aid local governments and utilities in constructing and upgrading energy infrastructure throughout the state, enhancing Mississippi’s ability to welcome new industry—even in very remote areas.

Mississippi should also continue to provide incentives to businesses when appropriate. By providing workable funding levels to proven programs managed by MDA, Mississippi will remain competitive with other states and can support expansion of existing businesses. Mississippi Works is also supportive of legislation that would require the State Bond Commission to approve any bonds that are considered state debt and listed in the Comprehensive Annual Financial Report. Such oversight would protect the interests of the taxpayers whose money finances those bonds and would provide additional safeguards for Mississippi’s financial stability.

Finally, we recommend further investment in Mississippi’s most important asset—its workforce. In Mississippi, certain businesses that create jobs are eligible for incentive tax credits, and Mississippi Works supports offering workforce training funding in lieu of the tax credit to businesses that want to further educate and develop Mississippi workers. We believe that this effort, combined with the comprehensive reforms to public education that Governor Bryant and others will push for this legislative session, will set a path for developing the type of top-notch workforce that companies need.

We are excited about what the future holds for Mississippi. By adopting sound policies to guide our growth, we can ensure prosperity now and for the generations to come.

Jim Barksdale is chairman of the board and president of Barksdale Management Corporation. 

Bill Lampton is president of Asphalt Groups of Ergon, Inc. 

Bill Yates to be honored at Innovators Hall of Fame Awards Gala Nov. 13; Fred Haise to headline Conference on Technology Innovation Nov. 14

The Mississippi Technology Alliance (MTA) will host the Mississippi Innovators Hall of Fame Awards Gala, Nov. 13. The 13th Annual Conference on Technology Innovation, hosted by MTA, will be held Nov. 14. Both events will be held at the Jackson Convention Complex.

The Mississippi Innovators Hall of Fame was established in 2008 as a tribute to the many innovative and creative entrepreneurs who call Mississippi home.

“The Innovator’s Hall of Fame Awards Gala is a unique and rewarding opportunity to recognize outstanding innovation companies for their success and to highlight Mississippi’s innovation economy,” said Tony Jeff, president and CEO of the Mississippi Technology Alliance.

This year, Bill Yates, president of The Yates Companies Inc., will receive the Legends Award, joining previous inductees Jim Barksdale, Dr. Robert C. Khayat and Ambassador John N. Palmer.

Inducted into the Innovators Hall of Fame as Excellence Award recipients are Frank Day (posthumously), founder of the Luckyday Foundation and former chairman of the board and CEO of Trustmark National Bank; Dr. John Hall, Arthur C. Guyton Professor and associate vice chancellor for research at the University of Mississippi Medical Center; Dr. Shelby Thames, Distinguished University Research Professor and former president of the University of Southern Mississippi; and The Taylor Group of Companies. Also recognized as some of Mississippi’s most impressive entrepreneurs, Innovator to Watch Awards will be presented to Hyperion Technology Group, Lazy Magnolia Brewing Company, PFG Precision Optics Inc. and PILEUM Corporation.

The following day, the Conference on Technology Innovation will celebrate 13 years as Mississippi’s premier innovation showcase. “Our 13th annual conference features a terrific line-up of speakers and valuable networking opportunities for entrepreneurs, investors, economic developers and business professionals from throughout Mississippi,” said Jeff.

The conference begins with a breakfast program featuring Jeff Good, Jackson restaurateur and principal with Dollars & Sense Creative Consulting, and will be followed by a variety of informative sessions and the luncheon featuring keynote speaker Fred Haise, former NASA astronaut and member of the famed Apollo 13 mission. The annual Company & Investor Spotlight event will follow the luncheon, showcasing the latest innovations from Mississippi entrepreneurs.

Tickets to the Innovators Hall of Fame Awards Gala are $100. Tickets to the Conference on Technology Innovation are $65. Visit www.mta.ms to view the complete agenda and to register online.

Wilkerson resigns as MDA tourism director, accepts same job for city of Ridgeland

The state’s tourism director informed the Mississippi Development Authority’s Interim Executive Director Jim Barksdale, tourism staff and industry partners on Wednesday that she is resigning her post to take a position with the Ridgeland Tourism Commission.

MDA Tourism Director Mary Beth Wilkerson is leaving her position effective June 15, 2012. Wilkerson, who has been with the state tourism office for 20 years and nine months, has served as MDA Tourism Director for two and a half years.

“The Tourism Division of MDA promotes Mississippi as a travel destination by highlighting the state’s culture, heritage, history, natural resources, outdoor and recreational opportunities,” said Barksdale. “Mississippi has had an experienced, dedicated and wonderful leader in Mary Beth Wilkerson. I know that she will continue to be an asset to developing our state tourism product.”

Barksdale comments on Christensen appointment

Upon announcing the appointment of Brent Christensen to the directorship of the Mississippi Development Authority, Gov. Phil Bryant recalled joking about the salary with current interim chief Jim Barksdale.

“I told (Barksdale) I would double what Leland Speed was making,” Bryant said. “Leland was making a dollar a year.”

The governor has an eye for the ironic.

Leland Speed took over as interim MDA chief after then director Gray Swoope was hired by a Florida economic development firm for more than twice his current salary.

Speed was replaced as interim by Barksdale after Bryant came into office.

Barksdale

Barksdale met with the media today to comment on the recruitment of Christensen including some of those salary negotiations.

“We worked hard on this,” Barksdale said. “The first job in January I was given was to recruit my replacement. It was my duty to get that done.”

Barksdale said he found many in the economic development community who favored Christensen.

“We realized the reason we lost our last very effective director- he was recruited away from us by a public-private partnership that was able to pay him more than twice what Mississippi was paying through our compensation program,” Barksdale said.

The former Netscape and FedEx executive said he pushed the new pay program through the state legislature because the MDA hiring process needed to be competitive.

“I come from the world of business and executives are recruited based on what it takes to pay the executive, what others are paying and what it costs to recruit and retain the talent you need,” Barksdale said.

“It’s got nothing to do with what you think the person should make but what the market says they should make. The reason the price of eggs are what they are is because that’s what eggs are worth in a free market. The price of people is the same way.”

Christensen’s compensation package includes:

  • The maximum amount of money that the state can pay for his salary is $183,000 a year, one-and-a-half times the governor’s salary.
  • A supplemental performance-based bonus of up to $47,000 based on how well Christensen meets Gov. Bryant’s economic development objectives.
  • A $15,000 relocation allowance is also included. Christensen currently lives in Gainesville, Fla.
  • A car is also provided, a historic provision for MDA directors that only Speed rejected.

“If we had not been able to do that then we wouldn’t have been able to pay (Christensen) more than what he was making in Florida,” Barksdale said.

“It was a necessity. Several other states do it this way. We do that within the state for several jobs. That’s how we pay our football coaches so much money in this state.”

Christensen will start his new job in early June.

Florida giveth just as Florida taketh away.