Economic Development Tax helps county to compete

Since its inception in 2003, the Mississippi County Economic Development sales tax has collected approximately $24 million and been a part of creating or retaining around 2,000 jobs within the county, according to numbers provided by the office of Economic Developer Clif Chitwood and the board of the Great River Economic Development Foundation. An additional 1,000 jobs have been created or retained by companies who did not receive money from the tax fund, but who would not have hired or retained their employees without it being in place.

The foundation, which employs Chitwood and his Project Coordinator Tamika Jenkins, is contracted to the county, which is its sole means of financial support.

Of that $24 million, approximately $18.7 million has been committed to companies in economic development contracts, most of which has already been paid out and $3.9 million of which is still being held for ongoing projects.

"Right now," said Chitwood, "we are one of a very few communities in Arkansas who are as committed to economic development as we are, and we have been able to win a project (a new company or a company expansion) every year since the tax was voted in, because we have incentives to offer that other places do not."

According to Chitwood, there are 22,000 economic development agencies similar to Mississippi County's in the nation. In an average business year, around 2,000 site decisions are made by large industries, and half of them will automatically go to large cities, in which around 2,000 of the agencies are located.

"That means that every year, you have 20,000 smaller agencies like ours fighting over 1,000 projects," he said, "which makes the fact that we've had one every year that much more positive."

It is for this reason, apparently, that the county's quorum court continues to approve the taxpayer dollars spent to employ Chitwood and Jenkins, which was $166,885.67 for the year 2011, as of Nov. 30.

The wooing of large corporations is not a cheap affair, and the Great River Foundation's financials show a line item expenditure of between $20,000 and $100,000 in tax dollars each year for recruiting and marketing. This, according to Chitwood, allows him to make an average of six trips per year, a portion of them overseas, to meet with industry consultants who have the potential to recommend Mississippi County as a location to their industrial clients.

"We can spend a lot of money," he said, "buying meals, buying drinks, paying for booths at expos, traveling to meetings, and that is what you are expected to do -- all just so one of these guys, when they're hired by some multinational corporation, might say 'hey, what about Arkansas?' We chase after 'whales' or large corporations, about ten percent of the time, but the rest of the time we are still traveling within the country going after smaller companies who could locate here."

Another expenditure funded by the sales tax has been that of providing large amounts of detailed information that companies look for by paying for professional studies.

"Tamika and I," said Chitwood, "are probably the only ones that know what the water pressure is south of Osceola, and what the soil quality is in Armorel. All of these things, from information about the ancestry of the area's population, to seismic possibilities and the water table, all have to be provided in order for an industry to even look at us."

Commissioning such studies in order to have that information on hand has cost the county's taxpayers approximately $525,000 in committed funds to companies who do professional research. Having this information on hand, said Chitwood, means that many companies who would not wait for such information to be gathered by him will enter into talks with the county.

An example of this process is Project Compass, which occurred several years ago and was the center of the county's negotiation with large international corporation ThyssenKrupp. The company was considering Mississippi County for a new site in 2007, and the county made it to the top three locations being considered.

"They were the company that would have changed the course of this county forever," said Chitwood, "we spent a lot of money courting them, but it would have completely altered the course of our local economy if we would have been chosen."

Nearly $50,000 was spent to develop a website containing professional video and photography of the area, complete with all the information gathered in professional studies on everything from the local workforce to the possibility of seismic activity. In the end, the company went to Mobile, Ala., but Chitwood says that the website, www.greatriversupersite.com, is still his main resource when attempting to recruit another business on the same scale as ThyssenKrupp.

An example of the process as a success is the recent contract with Beckmann Volmer, which was, in Chitwood's words, a direct result of multiple trips to Germany and Atlanta, meeting with consultants and company representatives.

Chitwood's perspective on the county's prospects is a realistic one.

"We are not a community like Fayetteville, which has businesses lining up to locate there, and we are not like Mountain Home or any of these smaller communities who grow due to tourism and/or people retiring there. Mississippi County is either going to emerge as an industrial powerhouse, or we will dwindle down to being a typical delta area, and that's what we don't want to happen," he said.

He says that the county's main competitors in wooing new industry to Northeast Arkansas are Jonesboro and West Memphis.

"If West Memphis passed a tax similar to ours, and if they had the negotiating power that we do, they would be a real threat," he said, "but currently they aren't. We compete very hard with North Mississippi, because they have different legal restrictions than we do and they have a lot of money. Incentives have become important. Ten years ago, a company looked at that sort of thing last, but now if they aren't on the table, they won't even talk to you most of the time."

The incentives come in the form of a financial commitment which helps with the company's relocation or building process -- sometimes an agreement to pay rent on a building for several years, sometimes to pay for preparation of a building site, and sometimes to pay for worker training.

Companies will then enter into a contract with the county, agreeing to accept said financial assistance in exchange for providing a certain number of jobs within a specified amount of time. The companies are then given an average of five years to prove that they have fulfilled their end of the deal. According to this timeline, Chitwood said that this year the state economic development agency and the county's -- both of which often provide incentives in a partnership -- will be looking for proof of contract completion with companies who signed on in 2006.

Some companies, like Aviation Repair Technologies, are monitored more closely than others, based on the amount of money committed to them. ART is monitored by project length from the county, and on a monthly basis by the state. They are currently at 220 employees, which is not quite up to the 300 jobs which they promised, but Chitwood said that they still have time to get there before the evaluation period is over, and their business is one of many which depend almost solely on fluctuations in the global economy.

Not all attempts at bringing in new industry are successful, and it costs the taxpayers money even to make those attempts, but having a corporation know what the possibilities are within the county and that it is a good site for industry is enough, according to Chitwood.

"I consider an attempt successful," he said, "if I get to work a project, make a presentation to a company and tell them about our county. If I can get them to come here for a visit, that's even better. And of course the ultimate success is like our most recent one with Beckmann Volmer, when they agree to locate here and employ people in the county."

sharris@blythevillecourier.com