Baldwin County officials are optimistic a $32 million investment it made in 2012 will still generate an economic benefit, despite the 3,000-acre South Alabama Mega Site remaining vacant more than three years after the purchase.
According to Treasurer Kimberly Creech, the Baldwin County Commission unanimously approved paying $25,976,500 to the Crosby Trust and $6,312,500 to Catawba Land Company LLC for the property in 2012. The county has since paid $8.5 million on the debt but still owes $23,775,798, which Creech said is divided into a $10,350,000 debt tied to the county’s 2014 General Obligation Warrant and a $13,425,798.99 debt remaining on the $15 million it borrowed from its own oil and gas trust fund.
The county makes annual payments of $392,790 for the General Obligation Warrant and starting in 2020 it will make annual payments of $762,790. It pays $1,297,508 per year to the oil and gas trust fund.
Despite the county’s efforts to attract manufacturers to the site, it has been unable to secure an anchor tenant. Baldwin County Economic Development Alliance President Lee Lawson said the site has been a finalist for a handful of major manufacturer relocations, but those projects ended up in areas near Huntsville, Alabama; Nashville, Tennessee; and North Carolina.
“To the outsiders, I get that it looks like it is sitting there dormant,” Lawson said. “But to insiders, we know it is a contender. We’ve been a finalist for several projects and in consideration for others.”
Alabama Secretary of State records indicate James H. Faulkner Jr., Donald P. Robinson, Jay B. Faulkner, Daniel G. Blackburn, H. Wade Faulkner and Paul M. Taupeka are members of Catawba Land Company LLC, which was formed in 2000 in Bay Minette with the purpose of purchasing, selling and managing real and personal property. Blackburn is a former attorney for the Baldwin County Commission.
The county purchased the bulk of the property from the Crosby Trust, which Lawson identified as a family-owned timber investment company. Principals of the company include Bettigray Crosby Hollingsworth, Lynn Crosby Clark, John D. Crosby III and James H. Crosby.
As far as the previous suitors, Lawson said marketing efforts coordinated by the Tennessee Valley Authority made other sites in the southeast more desirable.
“If you look at where a lot of large projects are announced, like in Huntsville or the Carolinas, most of the large projects have dropped in there,” he said. “The TVA identified these sites for them. The reason why the commissioners are not down in the dumps about it is because they know how close we’ve been.”
One highly publicized potential deal was a tentative 2011 agreement with Chinese company HK Motors, which promised to build ecologically friendly cars at the site. At the time, several local officials joined corporate leaders at an event organized by the BCEDA to unveil artist renderings of an impressive manufacturing facility. But according to reports, HK Motors eventually canceled plans for the site when it could not secure financing.
Commissioner Chris Elliott, who was appointed to office in 2014, recently downplayed that deal.
“I don’t think it ever got as far as was reported in the media at the time,” he said. “When the county vetted the interest, there wasn’t much there. We are much more thorough in our vetting now and we are working hard to find the right tenant.”
Lawson said there are approximately 2,300 developable acres on the site, excluding wetlands and a proposed spur to the existing CSX railway on its southern border.
Elliott said BP’s Deepwater Horizon oil spill revealed the county’s economy was heavily dependent on tourism and exposed its need to diversify with advanced manufacturing, defined as manufacturing that “entails a rapid transfer of science and technology into manufacturing products and processes.” Advanced manufacturing industries include, but are not limited to, aerospace, automobile manufacturing and high-tech products.
According to a report from the BCEDA, of the county’s 62,719-employee workforce, 11,319 are employed in the accommodation and food services industry. The service industry is the second-largest employer in the county behind retail, which employs 12,642 workers. The county’s largest industrial employers are Foley’s UTC Aerospace Systems with 820 employees and Bay Minette’s Standard Furniture, which employs 600 workers.
“Our top two employers are retail and food and accommodation, and rightfully so, because 5.7 million visit here each year,” Lawson said. “One thing we saw through the oil spill and various hurricanes is that the tourism industry is susceptible to outside forces. White-collar and advanced manufacturing is not. When the oil spill hit, every single manufacturing company kept going. We need to balance it out.”
North Baldwin Chamber of Commerce Executive Director Ashley Jones said the economy in Bay Minette is growing, but at a slow pace. She cited Quincy Compressor, an air compressor manufacturer that recently moved its base of operations from Illinois, bringing approximately 100 new jobs with it.
Another, Plasmine Technology, a chemical company that manufactures the adhesive agent on the back of labels, recently brought 10 jobs to the area. With a home base in Pensacola, Plasmine has manufacturing operations in Bay Minette and Portland, Maine.
“We are growing and some new businesses are moving in,” Jones said. “We have had a huge increase in requests for relocation packages because some industries have expanded their operations here.”
Jones said a handful of small businesses have opened in Bay Minette in the last few years, but suggested an advanced manufacturer at the mega site would make a big impact on one of the county’s slowest-growing economies.
“It would certainly increase our economic activity,” she said. “Having a large manufacturer out there would help the quality of life here, bringing high-paying jobs and economic stability.”
According to Elliott, what makes the mega site appealing is that it is already owned by the county and most of the necessary infrastructure is in place. The commissioner said it isn’t a matter of if an industry will move into the site, but when.
According to Southern Business and Development magazine, the South Alabama Mega Site is one of a small handful of “certified” mega sites on the Gulf Coast. In its online register of mega sites, the magazine lists the 1,323-acre Pryor/Interstate 65 site in Atmore and the 3,467-acre Tensaw Tract in Mobile as the only other South Alabama sites. Nearby mega sites in Florida are the 11,000-acre Shoal River Ranch site in Crestview near Eglin Air Force Base and the West Bay Sector site near Panama City.
Lawson said Baldwin’s site differs from the others because of its proximity to I-65 and the CSX railway, its 2011 CSX megasite certification from McCallum Sweeney Consulting and its Advantage Site certification from Economic Development Partnership Alabama. The site offers water and natural gas service from North Baldwin Utilities, electricity from Baldwin EMC and Alabama Power, and telecommunications service from AT&T.
While Elliott has heard a handful of complaints that the initial purchase was a waste of tax dollars, he said the county is making efforts to ensure it finds the right tenant for the site.
“Whether you agree with it or not, the investment has been made and in order to recoup the value of the investment, we have to make sure we get the right tenant,” Elliott said. “We have to look forward instead of back.”
County Commissioner Tucker Dorsey estimated that an automobile manufacturer at the site, employing 1,500 workers at an average annual salary of $50,000 to $60,000 per worker, would mean an additional $1.5 million in tax revenue to the county annually — an amount that would increase as more companies follow. The BCEDA and the County Commission would like to attract a large automobile or similar manufacturer to anchor a large portion of the space.
“That would pay for the mega site, and the gravy would be that businesses around the site would also be able to expand,” Dorsey said. “The auto company would need parts nearby, payroll services and other amenities that would come in and employ more people. It could be a potential $4.5 million windfall for the county.”