Blogs

I want to thank Debbie for inviting me to blog on the area economy and share some good news to all the Wiregrasslive community. Debbie, Quilla, and crew do an amazing job in providing a format to engage and inform with this forum.  

The good news is that among the 309 urban areas that have participated in the first quarter 2009 ACCRA Cost of Living Index, the after-tax cost for a professional/managerial standard of living ranged from more than twice the national average in New York (Manhattan) NY to just over 14.9 percent below the national average in Dothan, Alabama. The ACCRA Cost of Living Index is published quarterly by C2ER - The Council for Community and Economic Research.

The ACCRA Cost of Living Index measures regional differences in the cost of consumer goods and services, excluding taxes and non-consumer expenditures, for professional and managerial households in the top income quintile. It is based on more than 90,000 prices covering almost 60 different items for which prices are collected quarterly by chambers of commerce, economic development organizations or university applied economic centers in each participating urban area. Small differences should not be interpreted as showing a measurable difference.

The composite index is based on six components - housing, utilities, grocery items, transportation, health care and miscellaneous goods and services.

The recent index places the Dothan area as the 8th lowest cost of living area in the country to live. This index is an invaluable tool that provides apples to apples information on cost of our community versus other metro areas in the United States. It is helpful for individuals relocating to our area for a variety of reasons tied to retirement or employment or those individuals seeking information on general health care costs, transportation, and miscellaneous services. Anybody that wants to compare our area with another can go to the Dothan Area Chamber of Commerce website at http://www.dothan.com/ and go under the Visiting and Living section and pull up the Cost of Living calculator to obtain your comparison of prices. We get numerous hits on this section of our website, so I know people are looking.

Economic and Community Update

While the global and national markets are a bit sluggish these days, there are some positive signs that our area is doing better than the U.S. as a whole. Right now, the Alabama unemployment rate is 9.8%, the U.S. rate is 9.4%, and our area is weighing in at 7.8% for Houston County and 8.1% for our Dothan Metro market.

A recent publication highlighted Alabama as one of seven states to be the first to emerge from the recession in first quarter of 2010. Economist Andrew Gledhill of Moody's believes our state will bounce back sooner because we did not suffer the drastic downturn in the housing market that struck so many other states. With the March 2009 release, the Dothan area suffered less in loss of industrial production and housing starts than other metro areas in Alabama.

I still believe there is a good lag with the stimulus funding that Congress passed earlier this year that will boost the economy significantly. With the large amount of funding that is to go in various programs and projects, it must be administered at the federal and state levels and mechanism is not in place to expedite this type of funding. I believe the impact will start showing up in the last quarter of 2009.

We are still working on some potential expansions and responding to inquiries on available buildings. In the month of May we handle 1,217 calls or inquires, 537 visitors, 61 relocation packets, and handled a number of small business planning, financing, or information related events. Our work continues on working to put the pieces together on the public-private toll road project from Montgomery to the Gulf Coast, working to strengthen our education efforts from P -20, and continuing our work to target business sectors that our area can attract. This past legislative session we did get the legislature to expand some statutory incentives to help us with financial servicing centers and data backup centers. I believe our area and state can attract some of these sectors now that we can compete with the other states due to the new incentives. In fact, I am following up with a gentleman from Wiregrasslive on one of the sectors right now. I love it when our citizens can call and provide input. A similar event took place a couple years ago when we brought in Southeastern Sheetmetal manufacturing plant.

On another front, the Cottonwood Corners and Brownfield Tax abatement is getting attention. For those interested,   in 2004 the Alabama Legislature passed the Brownfield Tax Abatement Act to help revitalize, reclaim, reuse, and redevelop properties which are complicated by the presence or potential presence of hazardous substance, pollutant, or contaminant. The act provides certain protections that indemnify the developer, require that site be enrolled in the Voluntary Clean-Up program, and offer the tax breaks to cover what may be additional cost incurred when the sites are constructed. This law also provides additional assurances that the lenders of these type projects like to see. Our area was the first area to use this incentive, while Birmingham is another community that has used the incentive. There has been a lot of interest in the summer of 2008 on this incentive from developers that called me on this, so I know more projects can use it in the future when economic and financial market conditions improve. The site where the Cottonwood Corners development is proposed is currently paying approximately $2,300 in ad valorem tax per year. When the site is developed and the $16M is invested to purchase site and construct these facilities, the ad valorem taxes generated will be approximately $105,787 without any tax abatement. With the tax abatement, the amount of ad valorem tax collected that will generate $41,674 per year. Over a 20 year period of time, the amount of ad valorem taxes paid with this development with the tax abatement will total $828,000.

This project is estimated to create 200 jobs with an annual payroll of $5.8M.  The sales tax abatement portion (one time) will amount to $206,000 on the construction material and machinery, but $225,500 will be paid in sales tax for the construction material and machinery that go into developing the facility that are not abatable.

Now, we could expand this incentive to all of the tenants that invest and occupy said facilities, but we do not recommend this and have not presented it to the City or County for their consideration. We have narrowed our focus to the property portion and the land owner for undertaking this project due to the protection and potential risk tied to the site. The County recently approved this incentive for the development and we are hopeful that the City of Dothan will at their Commission meeting on June 30^th.

Finally, we are finalizing the June 29^th event to be held at the Dothan Convention Center that will see the democratic candidates running for Governor of Alabama debate on the issues. Agriculture and Industries Commissioner Ron Sparks and Congressman Artur Davis will be in Dothan to kick off the campaign season and we have a number of questions to ask each candidate. Later in the year we will do the same event for the Republican candidates. As for the City races, there will be a mayoral debate to be held at Troy University Dothan on July 2^nd sponsored by the Dothan Eagle and WDFX, while WTVY News 4 and the Dothan Area Chamber of Commerce will conduct a forum on July 8^th with mayoral candidates.  Additionally, WWNT 1450 AM and the Dothan Area Chamber of Commerce will conduct one hour radio show on June 29^th at 8:06 a.m. with mayoral candidates, July 2^nd with District 3 candidates (same time), and we are still scheduling the other two commission races. Wow, I hope I can keep up with all this?

I also want to recommend a website that is all about good news. It is a partnership formed in the tri-states area to promote good news, check out www.goodintheneighborhood.com. 

Until next time, stay cool! It's hot!

 Matt Parker

President, Dothan Area Chamber of Commerce

 
102 Jamestown Blvd P.O. 638 Dothan, Alabama 36302
Ph: (334) 792-5138 or 1-800-221-1027 Fax: (334) 794-4796