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A Georgia City Takes a Chance on Success

by Fred D. Baldwin

Lined up along the factory floor like dozens of super-disciplined spiders, the big machines extrude strand after strand of shimmering, hair-fine fiber. The stuff comes out looking much like cotton candy, and you find it hard to remember that it's made from what would otherwise be trash.

It's part of a success story in Chattooga County, Georgia, where the energy created by a local government in partnership with an imaginative entrepreneur has created nearly 400 new jobs. That it's also helping to protect the environment is a fine bonus.

"It's sort of mind-boggling to see the progress," says Sewell Cash, mayor of the city of Summerville (the Chattooga County seat) and one of the public officials who took the lead in providing help to a homegrown firm, a carpet manufacturer called Image Industries. "This thing wasn't popular with everyone. We had money in the till, but we were going to spend ourselves broke."

Mayor Cash is talking about a decision of the Summerville City Council to use all of its capital reserves—$1,080,000, accumulated and hoarded over decades—to buy a 150-acre industrial park, build a building on speculation, and then lease that building and part of the acreage to Image Industries. That kind of public partnership with private business ventures was new to the area, and it didn't help that Image Industries was itself a relatively new firm committed to technological innovation.

Image recycles polyethylene terephthalate (PET) containers—primarily two-liter soft-drink bottles—into usable plastic. Bales of the brightly colored bottles are broken open and shredded into shimmering plastic confetti. The confetti is melted down, pelletized, and extruded into polyester fibers, which are then incorporated into high-quality carpets that offer excellent wear and superior resistance to stains.

None of this was on the minds of Summerville city officials in 1985. Mayor Cash and a new City Council were concerned that it had been exactly 30 years since any significant new industry had located in Chattooga County. The textile industry on which the area's economy is largely based was suffering from foreign competition, and unemployment was an alarmingly high 14 percent. Long term, the area was projected to lose population.

The Council began to invest in improvements to the municipal infrastructure, especially water plant facilities and natural gas delivery lines. (Natural gas in Summerville is a municipal utility.) They also felt that an industrial park was needed to attract industry. When a suitable location came on the market, the mayor recalls, "They backed their ears and said, 'Let's buy it!' "

In addition to buying the land, the city erected a 40,000-square-foot building although no tenant was anywhere in sight. The building was to stay vacant for nearly three years.

In time they found their entrepreneur—Kelly Hudson, co-founder of Image Industries. Hudson and a partner, Larry Miller, had started the firm as a home-basement enterprise in 1976. The firm had grown rapidly, specializing in carpets made from polyester fibers, then a niche market. By the late 1980s, facing severe competition from larger, better-established companies, Hudson decided to build a new plant equipped to process recyclable plastics.

Significant Savings

"Recycled material was so much cheaper," explains Hudson (who is no longer president of Image). "At the time we first started we could save 20 cents a pound on 50 million pounds. So it was worth 10 million bucks to us. Big, big number. We decided at that point that we might as well go ahead and bet the farm."

The next decision was where to locate a new plant, and about that time Hudson was contacted by Mayor Cash.

"Some of the folks came down," Hudson recalls. "They said, 'We want you to build here. "We want to create jobs here.' I grew up in Summerville. My parents and kinfolks live in Summerville. We knew them, and we knew the type of community Summerville was. And they'd spent some money and stuck their necks out. We just couldn't turn it down. Image has been glad ever since. The work force has been wonderful. It just turned out to be a good situation for both parties."

Mayor Cash recalls his own nervousness, however:

"He said, 'What can you do for us?' At the time it was embarrassing. We couldn't do anything for him."

The problem was that the industrial park lacked sufficient water for the extensive washing and fire-protection needs of a large recycling operation, and the city had already spent its cash reserves. However, with the assistance of the Coosa Valley Regional Development Center, located in nearby Rome (Floyd County), the city secured an ARC grant for $150,000. Matched with almost $380,000 of state and local funds, the grant made it possible to upgrade the site to Image's specifications.

The public investment has paid off handsomely. In addition to Image Industries, the Summerville Industrial Park has two other substantial tenants: Century Glove, Inc., which manufactures cotton work gloves and employs about 100 people, and Signature Interior Woodwork Corporation, which builds custom wood cabinetry and employs some 40 people.

As for Image itself, its Summerville operation opened with about 30 employees working in the city-built, 40,000-square-foot facility. By 1994 its expansion plans warranted a second ARC grant to the city in the amount of $50,500. Today approximately 380 people work in two buildings occupying more than 360,000 square feet. Many of the jobs, particularly in the fiber-spinning side of the operation, are high paying.

Overall, unemployment in the Chattooga County area is an amazingly low 3.8 percent. Much of the good news is, of course, due to a generally strong national and regional economy, but some of it also results directly from Image-related spin-offs. For example, Bob Evans, owner of a small welding business, says that his shop gets about 75 percent of its work from Image Industries. Not only has he added three full-time and two part-time workers to his payroll, but he's also invested in new equipment and upgraded his entire staff's skills.

"We've added metal shears, rollers, and benders just for them," he says. "We've done work for them that we didn't know we were capable of doing."

Investment and Growth

Image pays the city of Summerville almost $50,000 annually in property taxes and over $57,000 per month for gas, water, and sewer services. The company is not only in the process of paying off its original mortgage to the city; it has also bought adjacent land for expansion and is exercising an option to buy over eight acres from the city. Moreover, it continues plans for growth. In June its directors announced a merger with the Maxim Group, Inc., a carpet retailer operating 775 stores, for an exchange of stock valued at over $90 million.

This spring Image Industries received a 1996 Georgia Economic Development Association Governor's Award to Existing Industries. The nomination by the Chattooga County Chamber of Commerce noted not only the company's economic contributions but also the positive social impact of its business decisions. Although almost any growing business would have been welcome in Chattooga County, it's a special source of satisfaction all around that the Image Industries operations are built around recycled materials.

"It takes about ten two-liter bottles to make a pound of polyester fiber," Hudson says. "This year Image will keep the equivalent of a billion two-liter bottles from going to the landfill. Any time that you can gain an economic advantage and at the same time improve the environment, it's a win-win situation."

In the light of all this success, it's important to remember that the end of the story couldn't have been foreseen at its start.

"Image's decision to go into recycled plastics made the original decision more difficult for the city," Jim Parker, Chattooga County commissioner, reminds his interviewer. "They [the mayor and council members] were not only helping to finance a private industry, but an unproven industry. But because of the kind of demanding work involved, many of our college kids now can have good jobs to come back to."

Sue Spivey, president of the Chattooga County Chamber of Commerce, agrees. She mentions having heard Jesse White, ARC's federal co-chairman, talk about the special virtues of "homegrown" industries—a long-term commitment to a community, incentives for talented young people to remain in an area, and, above all, models of how willingness to take prudent, well-planned risks can yield big rewards.

"He challenged people to create 'an entrepreneurial environment,' " Spivey says. "That's exactly what the city and Image have done. At the time they were extreme risk takers, and they were criticized for it. But they created an entrepreneurial environment. And now we're getting local people moving back here to work, and we're upgrading their skills."

Fred D. Baldwin is a freelance writer based in Carlisle, Pennsylvania