Recipe for success is out there

Published 12:03 am Sunday, January 30, 2011

NATCHEZ — If Natchez is seeking a model of economic development success, Columbus and Lowndes County may hold at least a few ingredients worth “borrowing” — provided no one tries to steal the exact recipe.

Joe Max Higgins Jr., CEO of the Columbus-Lowndes County LINK said the community has had big success in the last few years.

Approximately $3.7 billion in investment, bringing more than 4,000 jobs is a track record anyone would be happy to emulate, but Higgins cautions others by telling a story of a neighborhood lady.

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Higgins said the woman used to come by he and his wife’s house, often bringing some homemade bread with her as a gift.

“Finally, one day my wife said, ‘I’ve just got to make your bread, can you give me the recipe?’” Higgins said. “She looked at her and said, ‘Honey, you can’t make my bread. Even if I give you the recipe, you can’t make it exactly like I make it.’”

“She was right,” he said. “And I tell people, you can’t duplicate exactly what we’ve done here or anywhere else. You’ve got it figure out what works for you.

“People talk all the time about Tupelo and how they’ve done things, and they’ve been successful, but the way they do it probably won’t work exactly like that anywhere else.”

Higgins does, however, suggest that nearly any community that works together and pushes itself can succeed.

Interestingly, Lowndes County and Adams County share some similarities in physical size of the county and other demographics. Lowndes’ population is approximately double that of Adams, though.

Higgins points to just how bad Columbus’ economic outlook was a few years ago as an example of how togetherness can come from the depths of despair.

“In the early days, Columbus was a loser, a major loser,” he said. “They hadn’t won (any economic projects),” Higgins said. “I was speaking before a group of people when I first came to town, and I said, ‘How many of you, if you were not upside down at the bank, would get the hell out of dodge?’”

He said at the conclusion of the meeting some business owners said he was correct — they would leave if they could afford to do so.

“We were so bad, so much of a loser, that they were willing to try anything,” he said.

One of the things Lowndes County leaders tried — and have become among the state leader in — is the use of a state incentive involving property taxes for sizable economic development projects.

Mississippi law allows a negotiated fee to be set and paid in lieu of traditional property tax. It’s only available on projects in excess of $100 million.

Local government can negotiate the fee and award it for up to 10 years, but the amount of the fee cannot be less than one third of the traditional property tax that would be due — including school district taxes.

The program is often referred to as “fee-in-lieu” or payment in lieu of tax.

Higgins said use of this has been one tool that Lowndes County has used to great success.

“We’re probably recognized as the state’s expert on fee in lieu,” he said.

Use of the fee in lieu incentive is not revolutionary, but Lowndes County took the payments it received and started using them to provide funding to help make the projects happen.

“We said, ‘What if we gave that break to the company and invested a portion of their funds to offset the project costs?’” Higgins said. “Let’s use this on something to help them.”

In addition, the funds have been used on infrastructure for the developments and land acquisition for future developments.

“With the overages on two fee in lieus, we were able to buy 2,500 acres of new land,” Higgins said. “All of the sudden, we said, ‘We’re on our way,’ and we’re playing with the house’s money.”

Higgins said, early on, getting local leaders and politicians to realize the need to not only work the fee in lieu arrangements, but also to reinvest the proceeds was difficult, particularly for the school district, which initially saw the plan as taking away potential tax money from the district.

“I had to ask them, ‘Would you rather have 33 percent of something or 77 percent of nothing,” he said.

Eventually local leaders start seeing the benefits, Higgins said.

“We said ‘Hey, this fee in lieu money is kind of nest egg money,” he said. “We could use this to either acquire a property or run a water or sewer line or something else. It’s just unrestricted cash that the county could spend however it wants to.

“If you have politicians who want to give everyone government cheese and pave all the streets with gold, it won’t work. You’ve got to have politicians who see that the money is seed money for further growth.”

That growth, Higgins said, is not seen in a pile of cash, but in jobs for the area and approximately 4,000 acres that either have been developed or are available to be developed.

Higgins said they make sure the fee money is treated like a tax so that if a company were to close, the fee could be placed on the tax rolls, putting the county ahead of other creditors.

“Fee in lieu is a good vehicle, if you do it right,” he said. “But if you’re going try to make our bread, make damn sure you follow our recipe.”