Mayor Dow: We Must Invest to Prosper

Mar 10th, 2005

Letter to the Editor:

Economic development, jobs and investment are the backbone of our city's competitiveness and the determinant of our ultimate financial success. Expanded and stronger city services, crime prevention and raises for city employees are a direct result of sustained economic development and jobs growth. That growth does not just happen.

We are in a global struggle that requires competitiveness and incentives to lure industry – most importantly, high-tech, higher-paying jobs. Our state government's financial condition cannot provide all of the economic-development incentives required to attract those global opportunities. A case in point is the City and County of Montgomery were required to put $38 million in cash incentives into Hyundai. That investment resulted in 5,000 direct jobs and dozens of automotive suppliers. In this day and age, there is no shortcut to this type of economic development and jobs-recruitment success.

The State of Alabama provided $100 million in cash incentives to jumpstart the modernization of our Docks facilities and the construction of a new, state-of-the-art container port. The Retirement Systems of Alabama has invested over $500 million in the Mobile area in golf courses; three four-star hotels; a modern, high-tech office tower; a state-of-the-art cruise port; upscale retirement communities and major industry investments such as IPSCO Steel and Degussa.

The feds have invested another several hundred million dollars in recent years with four new downtown office buildings, our new waterfront development and soon-to-be high speed ferry investments, our new Port of Alabama, USA's Cancer Research Center and other infrastructure. Our city and county have been blessed with the financial leverage and the resulting jobs growth of these substantial economic incentives and investments.

Several of the high-tech industry opportunities before us, however, will require city and county participation to secure. The University of South Alabama's Cancer Research Center offers 700 jobs, a $70-million payroll and technology spin-offs to their new high-tech Business Park. USA required local incentives.

Singapore Aerospace/MAE, which already employs 1,600 Mobililans in 10 aircraft hangars on Brookley Field, is proposing to build an airplane engine shop for an additional 600 jobs. They want to build a new A380 Airbus maintenance hangar for 300-500 new jobs. This strategic expansion is anticipated to create several other exciting aerospace partnerships with much more jobs potential.

Austal Shipyard is working hard to secure the Navy's Littoral combat ship project, bringing 300 General Dynamics engineers and project managers to our city. These new employees will be buying houses and expanding our tax base. Six hundred (600) additional local workers will be needed per each $200-million, high-tech combat ship that is built. In time, we believe that two ships will be constructed annually over a ten-year period.

Locally, our city and county, along with our state, will have to commit and participate in these three high-tech expansions in order for them to win their bids and for their targeted investments and jobs growth to occur. The state and county have already committed their share. The City of Mobile is currently moving to uphold its end of the bargain.

Recently, the city passed a two-cent hotel tax which, incidentally, will allow our visitors to finance the city's $6-million share of USA's Cancer Research Center. The county has already put in its $6 million of tobacco-tax monies; the state is contributing $12 million and a local philanthropist $12 million. The feds are contributing the last monies needed. This project is a go. These are modern, competitive, public/private partnerships. It is estimated that this project will have a multi-billion-dollar local economic impact and technology spin-off over the next decade.

Currently before the city council is a plan to pay as you go (not borrow) $3.5 million for the Austal ($2_ million) and Singapore ($1 million) request before the city for incentives. Again, the county, state and feds are funding their share. Mobile needs to be business-smart and proactive related to our partnership and our share. Modest city investments of this nature will leverage thousands of high-tech jobs for our citizens and a much higher city-revenue tax base than our incentive contributions. Again, look to Montgomery and the Hyundai Corporation as an example. The Hyundais and Singapore Aerospaces of this world do not just happen.

It is important that we all understand the significance of these important economic-development opportunities and what it takes to recruit them. Otherwise, our city would be unable to create high-tech jobs for our kids and unable to compete effectively on a global basis. We are all in agreement that our city is far better off today than we were yesterday. This progress is no accident. The City of Mobile is in the process of developing a new strategic plan to take us to a higher level. Let's unite behind this planning process, do the right things and get there quickly. We are in a fast-paced, complex competition.

Mayor Michael C. Dow
Jan 12, 2005 Letter to the Editor