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Building for the Future

by Fred D. Baldwin

Real estate agents like to say that the three keys to property value are "location, location, and location." By that standard, both Tishomingo County, Mississippi, and Muskingum County, Ohio, have a lot going for them. Both are located next to high-volume transportation arteries that provide low-cost access to major markets.

Tishomingo County sits at the junction of the Tennessee River and the Tennessee-Tombigbee (Tenn-Tom) Waterway, a shipping route that connects producers in the South and the Midwest with the deep-water port of Mobile, Alabama. Muskingum County boasts a major highway—Interstate 70—which connects it to markets throughout much of the nation.

But access to high-volume traffic arteries does not automatically create local jobs. An area's ability to develop a strong economy depends heavily on its own infrastructure. During the past decade, Muskingum and Tishomingo Counties, with help from the Appalachian Regional Commission (ARC) and other state and federal partners, have made substantial investments in infrastructure, primarily industrial parks. Those investments are paying off. Tishomingo County, despite some setbacks (for reasons outside of local control), is starting to diversify its industrial base. In Muskingum County, that process is far along, and the rewards are evident.

Tishomingo County: A Roller-Coaster Ride

In Tishomingo County, the course of economic progress has been anything but smooth. Over the past two decades, the county has attracted, and then lost, three large industrial operations.

"We've been on a roller-coaster ride," says Alvia Blakney, interim director of the Tishomingo County Economic Development Foundation. "But I think we're coming back. We've been trying to recruit and bring in smaller firms. We're diversifying. That's better than having all your eggs in one basket."

Dale Price, a member of the Tishomingo County Board of Supervisors, uses exactly the same metaphor: roller coaster. But he's also cautiously optimistic: "We've lost a lot of jobs," he says, "but we're a little ahead of where we were."

Among Tishomingo County's major assets are the Tenn-Tom and the Yellow Creek Port, near Iuka, the Tishomingo County seat. In 1999 the port handled 400,000 tons of freight, up from 150,000 tons in 1985, the year the Tenn-Tom opened. The port's facilities now include a dock, mooring cells, a railway connection, mobile cranes, warehouses, and storage for 14 barges.

Barges provide a highly cost-effective way of moving heavy loads like coal, lumber, and metals. The Tenn-Tom's carrying capacity has enabled Tishomingo County to create several promising heavy-industry sites. Ironically, the prospect of attracting really large operations to the county may have diverted energy from attracting smaller firms.

That story goes back to 1978, when the Tennessee Valley Authority (TVA) began construction of a nuclear power plant on the Yellow Creek site. Several buildings went up. But in 1982, TVA pulled the plug on its nuclear power program, stopping construction on the Yellow Creek plant when it was about 30 percent complete.

In 1988 NASA selected the same site for an advanced solid-rocket motor facility, for which Lockheed Martin was to be a prime contractor. But budget cuts in 1993 led NASA to cancel production on the rocket motor. NASA then announced it would use the site for rocket motor nozzle manufacturing and refurbishing, under contract with Thiokol Corporation (now Cordant Technologies). But additional cuts in defense budgets caused NASA and Thiokol to close down construction on that operation as well.

At the same time, Tishomingo County was experiencing other economic setbacks. The area's economy had long depended on agriculture and on textile operations of one kind or another. Starting around 1990 the textile operations began to move away, followed later by a shoe factory.

But even before the Thiokol plant closure, state and local officials had turned their attention toward diversifying the area's economy. In 1992 a cluster of federal, state, and local groups partnered to create an industrial park on a 900-acre tract of land along the Tenn-Tom near Burnsville, a few miles away from the port itself. Initially, the developers expected this site, the Northeast Mississippi Waterway Industrial Park, to accommodate spin-offs from activities at the NASA site.

ARC support for the project included grants for access roads to open up the interior of the park and for the installation of water lines, fire hydrants, and a water storage tank. About 200 acres of the tract have all the needed infrastructure in place for small industries and have attracted several small firms with a total employment of about 70 workers. The remaining 700 acres are accessible for rapid development.

The port itself has attracted other development. One example is Ferrous Metal Processing, a company that takes steel from mills in coils up to six feet wide and slits them into narrower widths for making products such as pipes, construction beams, and automobile parts. In November 1998, the company moved into a building immediately adjacent to the port. The firm now employs 25 people and expects to "at least double" that number within another year, according to Reed McGivney, the company's executive vice president.

"We elected to go into the area to take advantage of proximity to barge transportation," McGivney says. "It's been a great business arrangement for both parties. All of the infrastructure was there. We see our past and future in Iuka and northeast Mississippi as a key factor in our long-term growth."

"When we got the land," says Eugene Bishop, executive director of the Yellow Creek State Inland Port Authority, "we started to develop it. Economic developers say, "Raw land is great, but you've got to have the infrastructure in place—roads, water and sewer, and possibly a building.' "

Investments in infrastructure are also beginning to pay off on the land that was, in succession, a TVA-NASA-Thiokol site. Now called the Tri-State Commerce Park, it was transferred by federal authorities in 1996 to the state of Mississippi. Again, a number of local, state, and federal partners, including ARC, have helped make the site suitable for many different kinds of development. ARC's grants primarily went toward improvements to access roads.

The Tri-State Commerce Park is home to a diverse group of small manufacturing operations, including a division of Alliant Techsystems, which makes rocket parts and employs about 200 workers. A number of smaller firms have a total employment of about 85 workers.

In the near future, local development officials say, some of the undeveloped land in the Northeast Mississippi Waterway Industrial Park will be excavated for a barge notch, which will be to the Tenn-Tom Waterway what access roads and loading docks are to a highway. In addition, Blakney says, the last sections of U.S. 72, a four-lane highway that connects Chattanooga and Memphis and runs through Tishomingo County, have recently been completed.

"I think the future looks good for a number of reasons," Blakney says. "We have the capacity to accommodate any and all industry—heavy industry that requires large acreage and smaller tracts that have access to road, water, and rail. And we have good infrastructure. We're getting a lot of inquiries. It's kind of becoming a hot spot again."

Muskingum County: Choosing to Compete

Once infrastructure projects have led to development, their benefits seem so evident that it's easy to forget that the decision to dig and pave vacant land can be controversial. Installing water and sewer lines creates temporary inconveniences. Improving roads changes traffic patterns and affects property values. And by definition, building on speculation involves real risk. For everyone who says, "Build it and they will come," there's someone else who asks, fairly enough, "But what if they don't?"

"Basically, at one point in the past," says Larry Merry, executive director of the Zanesville–Muskingum County Port Authority, "the attitude of many people here was, "Last one out, turn off the lights.' We'd been natural-resource driven. We'd lost thousands of jobs. We had a Rust Belt mentality."

Fortunately, Merry goes on to say, some Muskingum County leaders had already realized that the area had a choice between remaining tied to industries with declining employment and competing in a different kind of economy. They chose to compete.

Construction began on the area's first multi-tenant industrial park, NorthPointe, in 1987, on a 390-acre tract. The park's current tenants include the Kellogg Company, Anchor Glass Container, Federal Express, the Corbett/Mock Cabinet Company, and Ohio Textile Service.

"A couple of people stuck their necks out," says Gene L. MacDonald, who was then president of the Ohio Mid-Eastern Governments Association, a local development district. Recalling how some early decisions were made, he pays tribute to a gas supplier "who went out of the way to get a gas pipeline to a site."

ARC helped with infrastructure grants for NorthPointe and, later, for the 250-acre Airport Distribution Park. (Among Muskingum County's transportation assets is a class-1 regional airport with two runways that can handle both corporate jets and freight aircraft.) The airport park tenants include a diverse mix of firms with headquarters around the world: Atico-Internormen-Filter, Carlisle Home Products USA, the Ritchey Produce Company, National PharmPak Services, Plaskolite, and Han-Yei (a Japanese-owned company). It will soon be home to a Korean drinking-straw manufacturer.

In addition to attracting companies from faraway places, the airport park enabled one local entrepreneur to stay close to home. In 1980, after 20 years in the steel industry, Lee Biles, with his wife, Vicci, founded the company 5 B's, Inc., which adds embroidery and other enhancements to textile products. The firm soon threatened to outgrow its space. Biles, who became the airport park's second tenant, says he would have been forced to move away if it hadn't opened. His company has had its ups and downs, but currently employs about 380 people.

"The county commission and port authority had the foresight and readiness to fight off all the objectors," Biles says. "I really have to compliment them for their aggressiveness."

Incidentally, although countless 18-wheelers pull up to loading docks in the port authority's industrial parks, ships and barges do not. The "port" label comes from the Ohio legislature's 1987 decision to use port authorities as a model for economic development entities that combine governmental authority with the flexibility of a private organization.

Today, the port authority, again assisted by ARC, is in the process of developing EastPointe, a 1,200-acre tract acquired in 1998. "This is all possible," MacDonald says, "because 20 years ago people made the decision that we'd invest in infrastructure. It takes that long, especially in the hills of Appalachia. The new infrastructure will be the linkages to the Internet, but you'll still need the water and sewer and electricity."

Merry sums up like this: "The seed money from ARC is growing a tremendous crop of jobs."

Ohio Governor Bob Taft sees the Muskingum County experience as a model. "Local leaders in Muskingum County recognized the importance of access roads, water and sewer lines, and industrial parks well over a decade ago," he says. "Today, its citizens are realizing the benefits of that foresight. Already, Appalachia is home to successful manufacturing and distribution companies. Infrastructure investment will help other companies take advantage of the quality workforce in Appalachia."

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