The Real Deal

By Sharman Egan

Lagniappe columnist

In the last “Real Deal,” we looked at the most important events of 2006 in the Mobile Bay area, based on interviews with five area business leaders: Darrelyn Bender, president of the Eastern Shore Chamber of Commerce; David Clark, chairman of the Eastern Shore Chamber of Commerce and general manager of the Grand Hotel Marriott, Win Hallett, president of the Mobile Area Chamber of Commerce; Lee Metzger, president of the Mobile Bay Area Association of Realtors and director of real estate for Providence Hospital; and Claudene Nichols, president of the Baldwin County Association of Realtors and broker/co-owner of Prudential Nichols Real Estate.

Now that we’ve put 2006 to bed, what do these same leaders see on the horizon in 2007? Here’s my list based on their comments (in no particular order):

Continued economic development. These leaders believe prospects are excellent for even more success in the coming year. “We have over two dozen bona fide economic development projects we’re working on,” said Hallett of the Mobile Chamber.

Completion of three RSA projects: the RSA Tower, BattleHouse Hotel and Riverview Plaza. There’s a lot of excitement about these projects, which should be completed in the first half of the year. Business leaders expect them to provide more economic stimulation for the Mobile area, but the full impact isn’t clear yet. “I hope RSA and Dr. Bronner are successful in bringing in folks from outside the area,” said Metzger.

A decision on the EADS KC-30 project. Everyone is holding their breath on this one; a decision is expected next summer. “If EADS gets this contract, the impact will be enormous for our area,” says Metzger. “What Hyundai did for Montgomery, what Mercedes did for Tuscaloosa County – that’s the impact this could have on the Mobile area.”

Resolution on the $900-million in reserved GOZone money. Gov. Riley has frozen almost one billion dollars of GoZone funds for a super-secret project code-named Project Compass (but we all know it’s the ThyssenKrupp steel plant that may be built in the Mobile area). The governor is reserving those funds to use as economic incentives to win the deal for the state. If Alabama loses the deal, there will be a feeding frenzy to claim a share of those funds for other projects. Downtown property owners and the Downtown Mobile Alliance have applied for $40 million of the frozen GOZone funds.

Solution to the traffic problem on I-10 at the Mobile River. In 2006 diverse groups worked together successfully on challenging projects including Mobile County’s Highway 98 issue and the Eastern Shore’s Blueprint for Tomorrow plan. In 2007, we’re going to need all that cooperation and more to resolve the contentious issue of the proposed I-10 bridge.

Improved real estate market in Baldwin County. Nichols is looking for prices to come down so the market will pick up. “I’m feeling very positive about a stronger market in 2007. But prices have to come down to bring investors and other buyers back into the market.” says Nichols.”There’s too much inventory, particularly in the high 300’s to 500’s. We have priced ourselves out of the market.”

Alabama Motorsports Park. When I interviewed these leaders, the racetrack location had not yet been announced. “We’re a regional economy. The racetrack will be huge for Mobile County even if it ends up in Baldwin County,” Lee Metzger of the Mobile Area Association of Realtors said when I spoke to him. Now that the Prichard site has been selected, I think it’s safe to say the Eastern Shore leaders would agree on its impact – the racetrack will benefit Baldwin County significantly even though it will be in Mobile County.

What are the biggest challenges we will face in 2007?

Managing growth and developing the infrastructure needed to handle our growth. Clark is looking forward to taking action on the Eastern Shore’s Blueprint for Tomorrow plan developed in 2006. “It addresses six areas: economic development, transportation/infrastructure, environmental, education, governmental affairs and tourism,” said Clark. “In 2007, we will act on that plan.” Bender agrees. “We need to focus on infrastructure and managing growth so we can retain the quality of life we have all come to love,” she said. “The Blueprint for Tomorrow and the Baldwin County Commission’s new strategic plan are very important steps to address our growth issues.”

Stabilizing insurance rates. Both Nichols and Bender are concerned about insurance rates. “Insurance is a major issue for 2007. I hope the former mayor has success in putting together a pool,” Bender said, referring to Tim Russell’s proposed insurance cooperative. Russell resigned as mayor of Foley in November to serve on a planned coastal insurance agency that will deal with cities, businesses and condominium associations in South Alabama.

Workforce development. Hallett thinks this is the biggest single challenge we will face in the year ahead. “Unemployment in the area is at the lowest rate in a generation,” he said. “How are we going to man all these jobs? If we can’t answer this question, it could knock us out of the competition for new projects.”

Clearly, area business leaders are optimistic about 2007 and ready to take on the challenges ahead. “We are set up for success in the Mobile Bay area,” said Clark. Hallett agrees. “2007 will be a very interesting year,” he said.

Sharman Egan covers real estate and business for Lagniappe. E-mail her at sharman@sharmanegan.com.

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