Archive for October, 2011

Moran opposes all three ballot initiatives

October 24th, 2011 No comments

Ocean Springs mayor and Democratic candidate for state treasurer Connie Moran was the speaker at Monday’s Stennis Capitol Press Corps luncheon.

Moran’s presentation and the Q&A that followed was among the shortest I can remember at the monthly Stennis meetings, so let’s just hit some highlights.

Moran said she would vote no on all three of the ballot initiatives that will appear on next month’s ballot. She said Alabama’s putting together 30 parcels of land in two weeks for its Mercedez-Benz plant is proof that the ability to use eminent domain for private enterprise is the “number one tool” for landing mega projects. Mississippi was considered for the plant.

“Was that worth it? Absolutely,” Moran said of Alabama’s efforts, which included the use of eminent domain. “Would I want to use that to build a golf course? No. But for major investment, yes.”

Moran cited what she called the “unintended consequences” of the Personhood Initiative among her reasons for opposing it. She made it a point to say that she was pro-life, but supported the use of abortion in cases of rape and incest.

As for the Voter ID Initiative, Moran said she was worried it could potentially disenfranchise elderly voters, particularly those who no longer drive and have no need to keep a driver’s license.

Moran also opposes converting the PERS system into a 401 (k)-style format, an idea that has emerged after Gov. Haley Barbour appointed a commission to study the state’s retirement system. She added that the annual cost-of-living adjustment retirees get — commonly called “the 13th check” — should be held harmless in any sort of discussion of PERS reform.

Moran’s opponent, Republican Lynn Fitch, did not attend, citing a scheduling conflict.

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Hearing provides few insights over proposed rail abandonment

October 23rd, 2011 No comments

A joint hearing of the House and Senate Transportation committees last week provided a few answers from the company that has filed to abandon a stretch of railroad from Grenada to Canton.

But it did nothing to assuage some of the concern from officials of affected communities.

Grenada Railway filed in late September with the federal Surface Transportation Board a request to abandon the 80-mile line it purchased from CN in 2009. Since then, waves of protests have followed, led by the Mississippi Department of Transportation and local economic development offices. Their grievances have carried the same warning: Eliminating rail service will be detrimental both to current businesses and to future economic development prospects.

Grenada Railway said in its initial filing that the short line lost about $100,000 in 2010, and had lost almost that much in the first six months of this year.

“We’ve made our best faith effort to operate these businesses at a profit,” Scott Leavenway, an attorney who represents the company, said at last week’s hearing at the Capitol.

Leavenway said to turn an acceptable profit on the line, its traffic count needs to average 35 cars per mile per year. It hasn’t come close to that, averaging 3.5 cars per mile in 2010, and falling to about 2 cars per mile in the first six months of this year.

“And the prospects are worse for the rest of the year,” he said.

On top of that, two of the bridges on the line are in major disrepair and carry nearly a $1 million price tag to fix.

Things do look better on the northern end of the rail, which runs from Grenada to Southaven and is not slated for abandonment. Leavenway said traffic this year is up 22 percent from last year.

Keeping the northern portion from meeting the same fate has been the goal of folks like Larry Hart, the Water Valley Mayor.

Hart said in a letter to the STB in early October that the closure of the northern line would cut off his town from shipping to the south via rail. Rail freight would have to be shipped north to Memphis, and then south. He said at the hearing last week that three counties have hearings pending that would advance the process of forming a rail authority, which could theoretically purchase the line if Grenada Railway ever decided to abandon it. “We’re well down that road,” he said.

Steve Zea, president of the Kosciusko-Attala Development Corp. said in a STB filing that the line slated for abandonment connects to another short line rail that serves as the only rail service in Kosciusko.

“We currently have a major energy site that has several active prospects that would depend on this rail,” he wrote.

He wrote further the rail’s abandonment “would put this region of Mississippi at a huge disadvantage when competing for economic development projects and overall job creation.”

Pablo Diaz, of the Grenada County Economic Development District, said in his STB filing that nine companies currently use the rail, using nearly 4,000 cars per year. Those companies, he said, have pledged to add 2,000 more cars in the next three years. Some of those companies, he wrote, have been forced because of rate increases to use other rail routes for distribution, or have started shipping their products via truck.

These companies employ 1,895 people. If the rail were abandoned, at least 500 of those jobs would be lost.

One of the companies that uses the rail is Newly Weds Foods in Horn Lake. Plant manager James Rone told the STB in an October notice of opposition that his company is currently being charged rates that are three and four times higher than CN charged when it owned the track. The portion of rail he connects to isn’t slated for abandonment, but he’s worried that it eventually could be.

“My plant has 300 employees and we are in fierce competition from other plants in neighboring states –which have a competitive advantage by having viable rail service,” he wrote.

Leavenway insisted at last week’s hearing that only the southern end of the line is financially weak enough to meet the company’s standards for abandonment. He said that the company had been close a few times to reaching a deal for state assistance via the Mississippi Railroad Improvement Fund, but that had never materialized. The fund currently has $5 million worth of bonds that are not yet issued, said Mississippi Development Authority chief financial officer Kathy Ghelston.

“And we’ve had about $19 million worth of requests,” she said. The MDA will most likely wait until MDOT completes a rail study before deciding how to spend the money, she said, adding that a one-to-one match from whatever rail company receives the funds is the only way it can work.

Grenada, Ghelston said at the hearing, is currently marketing one of the last megasites in the state under the promise that it will have rail access.

Leavenway said Grenada Railway would be willing to construct a lift station, which allows for cargo to be loaded and unloaded from trains to trucks, at Grenada as part of its plans to abandon the Grenada to Canton line.

“This is anything but a staged abandonment,” he said of fears that the northern line would eventually be targeted. “We’d be much smarter to abandon the whole thing at once.”

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Hearing this week on proposed railroad abandonment

October 16th, 2011 No comments

Attorney General Jim Hood has joined the chorus of people asking the federal Surface Transportation Board to hold a public hearing on Grenada Railway’s plans to abandon  a stretch of rail from Grenada to Canton.

Hood asked the STB that the hearing be held in Grenada so stakeholders on the line could air their grievances.

Hood’s plea to the STB followed one by the Mississippi Department of Transportation.

Mike Tagert, whose northern district includes a significant portion of the targeted line, said abandonment could have an adverse effect on that area’s ability to attract new economic development.

“We’ll no longer have rail service in the area,” he told the Mississippi Business Journal in an interview last week. “And there are companies that already use the rail. It’ll have an immediate impact on them.”

Rep. Warner McBride, D-Courtland, chairman of the Transportation Committee, has set a hearing – not one sanctioned by the STB — at the Capitol for Tuesday. “I hope to let the general public know what’s going on,” McBride said. “We also want to let the Surface Transportation Board that we as a Legislature do not support the abandonment of this line.”

The request by Hood and MDOT has a tough road ahead of it, said Walter Brown, a Natchez attorney MDOT retained to represent the state.

The type of abandonment Grenada Railway seeks is what’s known as an “exemption abandonment,” meaning the company is asking the STB to fast-track the process, hearing it without rounds of hearings but with briefs.

“There are two ways to do it – the regular abandonment, where you have hearings with cross examination and all that, and an exemption abandonment, where the (the STB) makes a decision based on filings,” Brown said. An exemption abandonment means a fast-tracked, non-controversial process, which is not appropriate in this case. We’ll ask for the STB not to consider this as an exemption or an expedited track, but to consider the full application. Most abandonments are done on an exemption basis, so we know we have an uphill fight on that issue. Very rarely is an oral hearing granted in an exemption abandonment.”

Brown said Mississippi Department of Transportation has a filing due Oct. 27 that will seek a regular abandonment process.

If the STB chooses to allow Grenada Railway to proceed under exemption abandonment rules, there are options for the state, Brown said. For example, the STB could impose conditions for environmental reasons, or reasons meant to protect properties along the line that are on the National Register of Historic Places.

“But the most important thing right now is to try to persuade the STB to consider this a regular abandonment,” Brown said.

The timeline of an exemption abandonment is squarely on the side of Grenada Railway. By eliminating hearings, the railway can officially abandon the line 110 days after their original filing stating their intention to do so. In this case, that’s Jan. 6. A regular abandonment would slow down that process considerably.

Mississippi Central Railroad Co., an Illinois-based company that own a few lines in Northeast Mississippi, has filed with the STB a notice that it intends to file an offer of financial assistance. An OFA is an information-gathering technique one railroad uses to glean financial information about another that is considering abandonment. The possibility exists that Mississippi Central could purchase Grenada Railway and operate it as a short line railroad, Brown said.

In filings, Grenada Railway said the line handled 289 carloads of inbound and outbound freight in 2010. In the first six months of 2011, it handled 92 carloads. The operating loss for 2010 was $101,000; for the first six months of 2011, it was $94,674.

Grenada Railway bought the line from Canadian National in 2009.

Yet another option would be for the affected counties to form a railroad authority, similar to what three counties in Southwest Mississippi did earlier this year in response to their fears of Grenada Railway’s parent company abandoning a track from Brookhaven to Natchez and selling it for scrap.

The biggest problem with that, Brown said, is that Grenada Railway said in its initial filing that it would take no less than $21 million for the track and related materials in a scrap sale.

“That is a lot of money, and therein lies the problem,” Brown said.

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Noone’s loss is a big one

October 14th, 2011 No comments

Jackson’s business community woke up to jarring news Friday morning.

Craig Noone, the chef and owner of Parlor Market on Capitol Street, was killed in a car accident around 1 a.m. Friday at the intersection of Capitol and West streets.

Although I never spoke to Noone for any type of story, I had been in his restaurant plenty of times, and had enjoyed all of them. You could tell he took a lot of pride in his place. He’s my favorite kind of person to write about — a small business owner who assumes all of the risk to build something he believes in. Starting up Parlor Market required no special legislative session, no government handout, and it didn’t touch off a round of press releases from politicians literally racing each other to take credit for having made it happen.

The only thing Noone asked of taxpayers was for them to eat at his restaurant. Plenty of folks took him up on it. That should continue.

Jackson’s WAPT has the details here.

And here is a story the MBJ‘s Laura Smith did shortly after Parlor Market opened a littler over a year ago:

From the owner to the hostess stand and from the floors to the bar, nearly everything in Parlor Market tells a story.

Owner Craig Noone got his start at the Palace Casino Resort on the coast after graduating from the Texas Culinary Academy. He then moved to Italy where he obtained his master’s from the Italian Culinary Institute.

Before opening Parlor Market, Noone worked with renowned chefs John Besh of Restaurant August in New Orleans and Stephan Pyles and his eponymous restaurant in Dallas.

Noone had wanted to open a restaurant since he was a child because his parents didn’t cook all that much.

“All I ever wanted to do was open a restaurant,” he said. “I just thought I’d be a restaurateur and go to culinary school to learn more about food. While I was there I decided I would be a chef.”

After a decade working in restaurants, Noone heard about the redevelopment of downtown Jackson with the reopening of the King Edward Hotel.

“I didn’t know if I was ready, but I knew it was the right time,” he said. “I knew if downtown did come back, and I didn’t come immediately, I might not be able to get a place, and I wanted to help out with the renaissance downtown.”

And he has.

Parlor Market opened in September 2010 drawing on the building’s former life as inspiration for nearly everything inside.  It’s named Parlor Market because that was the name of a grocery store in the building during the 1920s that sold local produce and smoked meats. Today, the restaurant smokes some of its own meats. The banquettes are leather to pay homage to the days when the building housed Continental Leather. Cypress beams in the ceiling are a tribute to the lumber company housed there, and the raw oyster bar pays its respects to Al’s Half Shell, also once housed there. The hostess stand, bar and tables are made from wood taken from an 1858 plantation home in south Louisiana, and the floors are from a 1910 Louisiana home.

The menu centers on seasonal Southern cuisine with favorites being pork belly and wild game like antelope, elk, wild boar and duck. Restaurant employees from Texas, Georgia and Florida bring their heritage to each dish.

“I like to saw we have the oldest and newest tables in Jackson,” Noone said. “We worked really hard – not only on the food, but on the restaurant itself. We wanted the restaurant to tell a story because everybody in the south is definitely a storyteller.”

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Eastover development’s impact depends on popularity, accessibility

October 9th, 2011 No comments

One of the many enduring lessons from The Great Recession is that home values are more vulnerable to a plunge than they were thought to be.

Two of Jackson’s more affluent neighborhoods — Eastover and Fondren — are a testament to that.

Two Realtors who do business in each told the Mississippi Business Journal that a new mixed-use development whose first phase could open in fall 2013 could theoretically help property values get back to where they were before the real estate meltdown.

Jackson-based developer Ted Duckworth has spent nearly five years working on the District at Eastover, a $110-million, 400,000-square-foot lifestyle center with retail, residential and office space. Duckworth is under contract with the state to purchase the 20 acres on the site of the Old Blind School, which abuts Eastover and sits across Interstate 55 from Fondren. The site is a 10-minute drive from downtown Jackson.

“If you look at the history of (Atlanta’s) Buckhead, East Memphis and places like that, everybody wants the convenience of the city,” said Denise Furr, a Realtor with Donald Cooper Realty in Jackson. “But when you start (taking away) special amenities then the whole idea of suburbia looks wonderful. But when you pull it all back in, it’s where a lot of people want to be. It makes life simpler. It makes it more convenient.”

Furr estimated the Eastover development could bump home values up between 10 percent and 15 percent.

“We’ve lost that (during the recession),” she said. “Between the (District) and hopefully the growth of the economy, we should get that back. Something like that is going to do huge things for this area, and not just this area. It could span farther than that. We have a lot of (older homes) in Jackson. People are doing a lot of renovating and adding-on, and there’s some new construction. When you have a new complex like that, I think it could do for our area what Renaissance has done for Ridgeland.

“It depends on what tenants (Duckworth) gets. I really think he’s looking for niche retail shops, like the specialty grocery store.”

Duckworth told the MBJ in September that his retail targets will be a mix of locally owned shops and niche national chains that are not already in the Metro Jackson market.

The popularity of those retail tenants could be the difference between the development having a significant impact on area home values, or having a nominal one, said Realtor Traci Maloney.

“If it’s done right, I think it can have a positive effect,” said Maloney, who owns Traci Maloney Real Estate. “What I would compare it to is the Highland Park area in Dallas, where it blends into the neighborhood instead of sticking out. Hopefully we won’t have any 10-story buildings. If it’s done appropriately, it could enhance property values and enhance the area overall.”

Maloney said it’s more likely the most immediate effect the District will have on the area has nothing to do with a home’s selling price: time on the market. Instead of a home occupying the market for six months, it could potentially sell within 30 to 60 days.

“It could make somebody want to choose that location instead of another,” she said. “A house could sell quicker because of that. Over time, you could see an increase in value. Initially, though, it will be more of a desirability thing.”

Furr and Maloney both said the District being accessible by bike trail and/or walking path would be huge selling points. Duckworth said that is part of the plan for the development, though not immediately.

Furr said she had already mentioned the development to clients looking to buy in the area, but had not used it as one of her primary selling points, and wouldn’t until closer to construction time on the first phase. Maloney said she would most likely wait until work started on it, or at least got closer than it is now to starting, before bringing it up at all.

“It’s so new and doesn’t seem real concrete yet,” Maloney said. “When you start to see ground breaking, that’s when I would use it as a tool to promote the area. You don’t want to promise something that ultimately won’t be there.”

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Hood: Investigation gives reason to believe Brandon Rep. McGee violated ethics laws

October 6th, 2011 No comments

Mississippi Ethics Commission executive director Tom Hood just confirmed to Magnolia Marketplace that an investigation by that agency has turned up evidence that Rep. Kevin McGee, R-Brandon, violated the rules governing lawmakers having a financial interest in state vendors.

Hood said a hearing on the matter that was scheduled for Friday morning had been continued.

Hood said the Ethics Commission received an anonymous tip a few months ago that McGee’s financial interest in Pearl-based Service Printers Inc. violated the aforementioned rules about lawmakers being involved in entities that did business with state agencies. On the Service Printers website, McGee is listed as the company’s president.

After the investigation turned up probable cause to support charging McGee with a violation, Hood said, the Commission filed a formal complaint, which would have been aired Friday had the hearing been continued. What will most likely happen is that one of McGee’s attorneys will appear before the Commission during its regularly scheduled meeting to make a settlement offer, a few of which have already been rejected, Hood said.

Rep. Jeff Smith, R-Columbus, and Rep. Mark Baker, R-Brandon, are representing McGee. Baker wouldn’t say much when I reached him on his cell phone. McGee, who is unopposed in his re-election bid, did not immediately return a message left on his cell phone. Smith’s cell phone rang unanswered.

I’ll update this throughout the day.

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Hood, Simpson duck major policy issues at Stennis luncheon

October 3rd, 2011 1 comment

Current attorney general Jim Hood and his Republican opponent Steve Simpson both support the personhood amendment.

Things are pretty murky after that.

The two candidates’ feelings about the three initiatives with which they will share a ballot next month were what I really wanted to learn during their appearance at Monday’s monthly meeting of the Stennis Capitol Press Corps.

The legal challenge to the Affordable Care Act and the hiring of outside counsel for state-backed litigation have been the main themes of the campaign — at least Simpson’s — so far. I’ve heard enough about both.

For Simpson, the stickiest ballot initiative is the one that seeks to bar the use of eminent domain for private enterprise. For Hood, it’s the one that would require photo identification at the polls.

After being asked for their stance on each, I still don’t know what it is. Bobby Harrison of the Northeast Mississippi Daily Journal tried first. He asked Simpson how he felt about all three initiatives. Simpson was great guns for voter ID and personhood. But what he said about the eminent domain measure is, well, baffling.

“I don’t know how I feel about that,” Simpson told the 100 or so people gathered at the University Club in Jackson. “There are strong advocates for and against it.”  Later, I asked Simpson if he considered job-creation a public use. “I consider it a public opportunity,” he said. So I asked him how he planned to vote on the issue. “I haven’t changed my mind from two minutes ago. I just don’t know,” he said.

After he noted supported for the eminent domain measure, Hood was equally evasive when it came to voter ID. He said if the initiatives passed — and they surely will — that he would defend them against any legal challenge should he be re-elected. Asked which way he would vote on the voter ID measure, Hood exercised his constitutional right not to reveal it. “I”m going to take that with me to the voting booth,” he said.

It’s hard to recall another instance of political hopefuls, at least those I’ve covered, flatly refusing to say which side of an issue they’re on. I know for sure I’ve never heard a candidate at any level say “I don’t know” in reponse to a policy question, nor have I heard one decline to reveal how he will vote on a policy issue.

It’s embarassing, weak and ridiculous.

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Kewanee still available should Hyundai want it?

October 2nd, 2011 No comments

If Mississippi is to attract another automaker, it will have to assemble a new megasite.

Mississippi Development Authority interim executive director Leland Speed said in a commercial real estate roundtable Sept. 21 that the state currently does not have a megasite assembled that would meet the size and infrastructure requirements of an automotive manufacturer.

Speed’s assertion came in response to a question about the possibility South Korean automaker Hyundai was looking at Mississippi as a possible destination for a facility to produce its best-selling Sonata sedan.

Hyundai builds the Sonata in Montgomery, Ala., and industry speculation for the past several months has been that the facility cannot meet the sales demand for the car.

Speed himself let slip in an interview earlier in September with a Jackson television station that the state had been in contact Hyundai about the company locating here.

He has declined to address it further. Speed said Sept. 21 that at least three automakers are “rumored” to be exploring Mississippi.

“I can’t comment,” he said when asked if Mississippi had been in contact with any of them.

The East Mississippi Business Development Corp. advertises on its website the Kewanee megasite as being available, with utilities like water and sewer and broadband already installed.

EMBDC executive director Wade Jones said his organization is still marketing Kewanee to original equipment manufacturers (OEMs). The site, Jones said, meets the size and infrastructure requirements for an automotive manufacturer or a facility that could build engines or transmissions for an automaker. Jones said the two Class I railroads that service the site and the adjoining interstate highway system make the site ideal for either of those. He said the EMBDC has spent $450,000 on engineering the site, to provide utilities and site work to ensure it’s not susceptible to flooding.

Kia, another Korean automaker, eyeballed Kewanee in 2005, and according to Speed, had decided to locate on the site, but the plant eventually went to Montgomery. The company backed out after it determined the labor force in Meridian and the surrounding area was insufficient, Speed said. Specifically, Speed said automotive companies prefer their workforce account for less than 1 percent of the area’s “labor shed.”

“This is so they can be sure of workforce quality. The week of Katrina they showed and we met with them in Montgomery,” he said. “(Kia told us) we need  to move farther west. So we moved twice, once on east side of Forest and one on west side of Forest. We didn’t own that land. We assumed we’d be able to assemble it by paying insane prices and, if need be, use eminent domain. They finally wanted it moved to Pelahatchie. We just couldn’t let them get that close (to Nissan). We were working Toyota at the same time. We figured we weren’t going to get but one or the other. So we went with Toyota. It worked out.”

Jones said two recent studies the EMBDC commissioned show more than 29,000 people who are either currently unemployed or under-employed are available within a 65-mile radius of Kewanee. That combined with the four community colleges in the area, he said, should put to rest any workforce concerns a prospect would have.

“We know we can supply the workforce,” Jones said.

Hyundai senior management told the automotive blog Auto Pacific last summer that it would consider building another U.S. facility when Hyundai and Kia sold more than 900,000 units per year in the U.S.

In 2010, the companies combined to sell just shy of 847,500 units stateside. The Montgomery facility, according to the company, has the ability to produce 400,000 units annually, and is at capacity. Hyundai is already importing its midsize Elantra from Korea to meet its demand, and Kia has added a third shift at its West Point, Ga., facility, which makes crossover sport utility vehicles for Kia and Hyundai.

Auto Pacific hypothesized that since Hyundai and its subsidiary Kia already had plants in Alabama and Georgia, it had likely reached the limit of public assistance in each of those states, which could bolster Mississippi’s case.

What could possibly work against Mississippi are the two automakers – Nissan and Toyota – that already call the state home.

Generally, Speed said, automakers prefer not to be within 90 miles of one another. In the case of Nissan and the Kia facility the state missed out on, both companies had reservations about Kia’s wage scale, which was $10 less per hour than Nissan’s.

“What you’re doing is just begging for a union to come into that site,” Speed said. “That’s a formula for trouble.”

What also puts Mississippi at a disadvantage, Speed said, is the state’s inability to quickly assemble a megasite should the need to do so arise.