Commissioned by the Alabama Department of Economic and Community Affairs March 2007 ...

228 Pages·2007·2.78 MB·English

ALABAMA DEPARTMENT OF
ECONOMIC AND COMMUNITY AFFAIRS

ECONOMIC DEVELOPMENT
ADMINISTRATION

Commissioned by the
Alabama Department of Economic and Community Affairs
March 2007
Center for Business and Economic Research, The University of Alabama
University Center for Economic Development, The University of Alabama
Economic and Community Development Institute, Auburn University
for the
Alabama Department of Economic and Community Affairs

March 2007

by

Center for Business and Economic Research, The University of Alabama
University Center for Economic Development, The University of Alabama
Economic and Community Development Institute, Auburn University

Samuel Addy Nisa Miranda Joe Sumners
Center for Business and University Center for Economic and Community
and Economic Research Economic Development Development Institute
The University of Alabama The University of Alabama Auburn University
Box 870221 Box 870138 3354 Haley Center
Tuscaloosa, Alabama 35487-0221 Tuscaloosa, Alabama 35487-0138 Auburn University, Alabama 36849
Phone: [phone] Phone: [phone] Phone:[phone]
Fax: [phone] Fax: [phone] Fax: [phone]
[email protected] [email protected] [email protected]
Contributors to the Report

Center for Business and University Center for Economic and Community
and Economic Research Economic Development Development Institute
Samuel Addy Nisa Miranda Mike Easterwood
Lottie Burleson Karla Jordan Joe Sumners
Kathy Banks Martha Whitson
Ahmad Ijaz
Sherry Lang
Carolyn Trent
Annette Watters

Other contributors in addition to those listed above are Ms. Maureen Neighbors of the Alabama
Department of Economic and Community Affairs and Ms. Vickie Locke, Project Director.

Acknowledgments

Completion of this project was due to the timely contributions of many people. We are very grateful
to the officers, staff, members, participants, and affiliates of the Alabama Association of Regional
Councils, Alabama Emergency Management Agency, Smart Coast, and Woods Research Inc. Many
thanks also to our colleagues and graduate research assistants at the Center for Business and
Economic Research, the University Center for Economic Development, and the Economic and
Community Development Institute for their help on different phases of this project. Last, but not
least, much gratitude is owed to the many Alabamians who are involved in planning, strategy,
marketing, hazard mitigation, emergency response, and related issues as well as economic
development in general, and whose efforts provide the critical material required in reports of this
kind.
Contents
Executive Summary i

Chapter 1. Existing Conditions Analysis 1

Chapter 2. Population Projections and Economic Forecasts 46

Chapter 3. Damage Assessments and Impacts 73

Chapter 4. Hurricane Katrina Strategic Plan for Economic Recovery 80

Chapter 5. Literature Review of Best Practices of Disaster Mitigation Strategies 93

Chapter 6. Capacity Development 100

Chapter 7. Recommendations 116

Appendix – Methodology 119

Appendix – CEDS Summary 125

Appendix – Economic Development Agencies 186

Appendix – Available Buildings and Sites 198
Executive Summary
This report, related to U.S. Department of Commerce Economic Development Administration
(EDA) project number 04-88-05668, is a strategy document that outlines the current situation,
projected resource and policy requirements, measurable goals and objectives, and recommendations
for full economic recovery and sustained progress for the 24 Alabama counties that experienced
damage from Hurricane Katrina. The counties are Baldwin, Bibb, Choctaw, Clarke, Colbert,
Cullman, Dallas, Greene, Hale, Jefferson, Lamar, Lauderdale, Madison, Marengo, Marion, Mobile,
Monroe, Perry, Pickens, Sumter, Tuscaloosa, Washington, Wilcox, and Winston. Also presented are
the economic and fiscal impacts of Hurricane Katrina damage on Alabama and the 24 counties.
Included with this hardcopy of the report is a compact disk (CD) that contains various referenced
material, the data and other files used for this report, and an electronic copy of the report itself.

Analysis of socioeconomic trends and dynamics for the counties using selected demographic and
economic indicators showed that four counties—Baldwin, Jefferson, Madison, and Tuscaloosa—
have outperformed the state as a whole. Three others—Cullman, Lauderdale, and Mobile—have
more or less kept pace with the state and the remaining 17 have underperformed. Variables
considered in the assessment include labor force, employment (persons employed), unemployment,
underemployment, population, housing units, per capita income, average wage per job, poverty,
educational attainment, real output, wage and salary employment (jobs), and business sales. Trends
in these variables were analyzed for the period from 1990 to 2004 or to 2005, depending on data
availability.

Population projections and forecasts of real economic output and employment were made for the 24
counties in the study in five-year intervals through 2030. Economic forecasts were for industry
sectors using the one-digit SIC (Standard Industrial Classifications) codes. Real output (or real
economic output) for each county is defined as the total value of goods and services produced and is
similar to the concept of gross domestic product (GDP) for the nation. Output is presented in 1996
dollars in order to adjust for inflation or any price changes that can vary across geographical areas.
Baldwin County is expected to lead both population and economic growth over the 25-year
projection period from 2005 to 2030.

Six counties are projected to experience population growth of 20 percent or higher; Baldwin (65
percent), Bibb (39.8 percent), Cullman (32.6 percent), Madison (25 percent), Tuscaloosa (21.2
percent), and Hale (20.5 percent). Counties that will add the most new residents rounded to the
nearest 10 are Baldwin, 105,760; Madison, 74,680; Mobile, 47,330; Jefferson 42,450; and Tuscaloosa,
35,790. Only Greene County is expected to lose residents and 14 counties will have population
growth below 10 percent.

Real output and jobs will increase in all counties over the forecast period. Baldwin County’s real
output will be 122 percent higher in 2030 than in 2005, followed by Hale with 118 percent, Cullman
and Marion with 110 percent each, Jefferson with about 106 percent, and Tuscaloosa with 97
percent. Lamar County will have the lowest output growth with 30.1 percent. Employment in
terms of jobs located in each county will grow from 15 percent for Perry County to 96 percent for
Baldwin County. Rounding up the top job growth counties are Cullman (79 percent), Tuscaloosa
(78 percent), and Jefferson (70 percent).

Economic Recovery Strategy for AL Katrina Impacted Counties AU/UA i
The Hurricane Katrina damage assessments total of $139.7 million was less than 0.1 percent of the
$151.6 billion Alabama gross state product (GSP) in 2005. Debris clearance totaled $61.4 million, 44
percent of the total. Buildings and equipment damage was $30.7 million, followed by $26.8 million
for utilities and $5.8 million in road system damage. By county, Hurricane Katrina damage ranged
from $71,250 for Wilcox to $81.3 million for Mobile. About 86 percent of the damage assessed was
in Baldwin and Mobile counties; Baldwin’s was $38.3 million and the remaining 22 counties had total
damage of $20 million.

The distribution of damage varied by county; for example, damage to utility systems was more than
a third of the total for Baldwin County, but just about 3 percent for Mobile County. Anecdotal
evidence suggests that Mobile County may have built more hazard resistant utility systems in
response to past storms. This indicates that Baldwin and other counties in disaster prone areas
might consider similar approaches to minimize future damage. Restoration or replacement may not
be sufficient to mitigate future hazards—complete redesign and construction may be warranted.
Hazard resistant standards may be costly, but they minimize future damage and debris clearance
costs.

The statewide economic impacts of the damage assessments were 2,972 direct and indirect jobs
(0.144 percent of the state total in 2005), $94.5 million in earnings to Alabama households (0.135
percent of total state wage and salary income), and $305.6 million in output (0.202 percent of
Alabama GSP).* Accompanying these impacts were $5.4 million in lost state taxes—$3.8 million in
income and $1.6 million in sales tax receipts—and between $1.6 million and $2.2 million in lost local
sales taxes, which is most likely to be about $2.1 million. The total tax loss of about $7.4 million was
0.143 percent of statewide income and sales taxes in 2005. The economic and fiscal impacts are
therefore minor from a statewide perspective, but they are significant for Baldwin and Mobile
counties because they bore most of the damage. Dallas County suffered the least impacts and
Mobile County had the most.

It is important to note that damage impacts can be localized as indicated by reports of how
Hurricane Katrina extensively damaged Bayou La Batre in Mobile County. Serious local damage can
have far-reaching impacts beyond the economic and fiscal ones highlighted in the preceding
paragraph. For example, cultural and community assets such as institutions and relationships can be
destroyed. These represent soft and irreplaceable assets whose impacts are nonetheless real, though
extremely difficult to place monetary values on or quantify. The impacts presented are therefore not
comprehensive and are just the economic and fiscal impacts of identified damage.

A summary of economic development strategies for the 24 counties affected by Katrina is provided
in tabular format in the Appendix organized by region and with information presented by county or
city/township. Included is a listing of priority projects by category of development emphasis
(infrastructure, workforce development, economic development, etc) with accompanying funding
source, leadership responsibility, and project benchmark and timeframe. This format provides an
accessible reference guide to the detailed information found in the individual comprehensive
economic development strategy (CEDS) regional documents provided by the Alabama Association
of Regional Councils’ Planning Task Force and the 12 regions.

* The Regional Input-Output software, RIMS II, developed by the U.S. Department of Commerce’s Bureau of
Economic Analysis, is used to estimate the impacts.
ii AU/UA Economic Recovery Strategy for AL Katrina Impacted Counties
By current employment statistics, manufacturing is the dominant economic sector for 12 of the 24
Katrina counties. Nine counties are non-specialized (or mixed) economies and three are services-
dominant economies. By number of establishments, retail trade businesses dominate in 19 of the 24
Katrina counties and the services sector leads in five. Employment projections by the Alabama
Department of Industrial Relations indicate that services will be the major job provider for
workforce investment areas that the 24 counties belong to. The economic forecasts made for the
counties point to manufacturing being the most important job-providing sector in Choctaw, Clarke,
Lamar, Marengo, Marion, Monroe, Washington, Wilcox, and Winston counties. Services will drive
job growth for Cullman, Dallas, Greene, Hale, Jefferson, Madison, Mobile, Perry, Pickens, Sumter
and Tuscaloosa. Trade will lead job growth in Baldwin, Colbert and Lauderdale counties. Bibb
County job growth will be focused on government sector job growth.

Broad and county-specific economic development goals and activities are presented. In addition,
information on currently available buildings and commercial/industrial sites for the 24 Katrina
affected counties is provided in the Appendix. Physical address is provided, to facilitate GPS and
latitude/longitude location identification, as well as size of building/site and proximity to 4-lane
highway(s) and/or interstate. This information is available on websites maintained by the Alabama
Power Company and the Economic Development Partnership of Alabama.

For long range planning, the Alabama Department of Economic and Community Affairs (ADECA)
contracted with Smart Coast to review coastal damage assessments, review coastal Hazard Mitigation
Plans, prioritize coastal re-development projects, identify local, regional, and state agencies required
to implement strategies, and assemble a long range planning team. Smart Coast utilized a public
information campaign to build community awareness and involvement in the planning process.
Detailed information can be found at the Smart Coast website:
http://www.smartcoast.org/index.htm.

ADECA also contracted with Woods Research, Incorporated (WRI), to provide a comprehensive
housing needs analysis for Baldwin and Mobile counties. WRI gathered data to determine the post
Katrina housing needs of all income groups, especially lower income groups. Special efforts were
made to determine the post Katrina housing needs of homeless individuals and families for both
emergency shelter and transitional housing. In addition, WRI undertook an assessment of efforts
being made to: (1) prevent low-income families with children from becoming homeless, (2) help
homeless persons and families transition to permanent housing, and (3) address priority housing and
special supportive needs of persons who are not homeless (such as elderly, frail elderly, persons with
disabilities, persons with alcohol or other drug addiction, persons with HIV/AIDS) and their
families, and public housing residents. WRI also reviewed residential building codes regarding storm
proof and mold resistant housing as well as data and research available on the trends in relocation to
and from storm-impacted areas. The full report is archived on the CD accompanying this report.

A literature search was utilized to collect information on best practices for developing appropriate
and effective hazard mitigation, response, and recovery plans. Search parameters focused on
policies and strategies that encourage the development of disaster resistant communities, and
support capacity development to sustain business continuity and economic sustainability. The
review indicates that many states and regions provide good examples of approaches, governance and
planning structures, and operational strategies for mitigation, response, and recovery. The states of
California, Florida, and North Carolina and the two regions of Charleston County, South Carolina,
and Houston/Galveston, Texas demonstrated innovative and effective ideas and purposeful
Economic Recovery Strategy for AL Katrina Impacted Counties AU/UA iii
implementation of mitigation systems that responds to change and encourages sustainable growth.
They clearly emphasized the need for the authority of the Governor’s office to facilitate inter-agency
collaboration and for all entities involved in the delivery of service to utilize technology to support
communication and information transfer. Planning takes place at the local, regional and state levels,
requiring priority attention be given to the integration of these plans with other planning efforts.

The major economic development organizations for each of the 24 Katrina-impacted counties were
analyzed to determine the capacities of the organization and to identify needed training or technical
assistance each organization might need to perform at a more effective level. The analysis was
conducted by telephone interviews with organizational administrators and statewide organization
association staff members. Based on the findings of the capacity development survey, the rank-
ordered needs for each organization type are summarized below:

Regional Planning and Development Commissions:
1. Alabama-specific economic development issues (how to address or respond to Alabama-specific
or region-specific economic development issues).
2. Training in economic development finance.
3. Assistance in how to better assist rural and small towns in economic development approaches and
strategies.
4. Understanding the basics of economic development and the economic development process.

Chambers of Commerce:
1. Basics of community infrastructure (water, sewer, electricity, etc.): general understanding of how
community infrastructure works.
2. Understanding of the basics of the economic development process: business and industrial
recruiting, chamber roles in the development process, etc.
3. Working with existing businesses and industries.
4. Alabama-specific economic development issues (how to address and respond to Alabama-specific
economic development issues).

Economic Development Alliances, Foundations, Authorities, Offices, Agencies, and Boards:
1. Training in economic development finance.
2. Understanding the basics of the economic development process.
3. Alabama-specific economic development issues (how to address and respond to Alabama-specific
economic development issues).
4. Assistance in how to better assist rural and small town economic development approaches and
strategies.

Recommendations to improve and enhance Alabama’s capabilities of mitigating hazards include:
• Build local capacity through leadership development, strategic planning, and training
• Improve communication on hazard mitigation at all levels
• Build disaster resistant infrastructure
• Improve local resistance to natural disasters
• Improve information on existing conditions and future development needs
• Improve economic response and recovery from natural disasters and economic downturns
• Promote more efficient use of available existing buildings, sites, facilities, and infrastructure.

iv AU/UA Economic Recovery Strategy for AL Katrina Impacted Counties
Chapter 1. Existing Conditions Analysis
This section examines selected demographic and economic indicators for each of the 24 Alabama
counties that had damage from Hurricane Katrina. The analysis assesses socioeconomic trends and
dynamics for each county. Variables considered in this section include labor force, employment
(persons employed), unemployment, underemployment, population, housing units, per capita
income, average wage per job, poverty, educational attainment, real output, wage and salary (or
payroll) employment, and business sales. Trends in some of these variables are analyzed for the
period from 1990 to 2004 or to 2005, depending on data availability. Real output (or real economic
output) is defined as the total value of goods and services produced in a region—similar to the
concept of gross domestic product (GDP) for the nation—and are presented in 1996 dollars in
order to adjust for inflation or any price changes that can vary across geographical areas.

Baldwin County

Table 1-1 shows selected economic and demographic variables for Baldwin County. Baldwin
County was the second fastest growing county in Alabama between 1990 and 2000, adding 42,135
residents for an increase of 42.9 percent. The county’s resident population gain of 15.8 percent
from 2000 to 2005 far exceeds the 2.5 percent for the state. Population of the coastal cities of Gulf
Shores and Orange Beach surged by almost 3,500 during this time, while Daphne, Fairhope, Foley,
and Robertsdale all saw strong gains. Baldwin County’s labor force grew more rapidly than its
population during the decade of the 1990s, rising 51.6 percent. However, the recession of 2001
caused civilian labor force and number of employed county residents to decline in 2001 and 2002.
Overall, the labor force and employment each grew by 9.4 percent from 2000 to 2005, with
employment rising by 6,400. The county’s unemployment rate has consistently been below the
Alabama rate; unemployment of 3.3 percent in 2005 compared to 4.0 percent statewide. About
2,530 unemployed and 17,700 underemployed workers who would consider moving to a better job
if one became available constitute an available labor pool of around 20,230 residents to supply new
and expanding businesses in Baldwin County.

Baldwin County had a 2005 population of 162,586 living in 66,976 households. Occupied housing
units rose by 11,640 (21.0 percent) between 2000 and 2005, much faster than the 15.8 percent
population growth during the same period. The 22,924 vacant housing units in 2005 was 25.5
percent of the total housing stock; this unusually large share results from the county’s role as a
vacation destination, with seasonal rental property and second homes that are not always occupied.
The Census Bureau’s special Katrina tabulation of Baldwin County’s household population as of
January 1, 2006 found that it had increased by about 220 since July 1, 2005 despite the hurricane.

Per capita income grew faster in Baldwin County than across the state between 1990 and 2000, but
gains slowed to just 8.2 percent from 2000 to 2004—half the statewide increase of 16.5 percent.
Still, per capita income of $28,269 in 2004 amounted to 102 percent of the Alabama average and
ranked ninth among the state’s 67 counties. Average wages rose by 23.5 percent between 2000 and
2005, faster than the statewide increase of 19.4 percent. Annual wage growth accelerated to 4.8
percent in 2004 and 5.9 percent in 2005. The 2000 Census found 10.1 percent of Baldwin County
residents living in poverty, well below the Alabama rate of 16.1 percent. The share of individuals in
poverty stood at 10.0 percent in 2004. Educational attainment improved substantially in Baldwin

Economic Recovery Strategy for AL Katrina Impacted Counties AU/UA 1
Table 1-1. Baldwin County existing conditions review
1990 2000 2001 2002 2003 2004 2005
Civilian labor force 46,360 70,300 69,850 69,577 72,681 74,912 76,943
Change 23,940 -450 -273 3,104 2,231 2,031
Percent change 51.6 -0.6 -0.4 4.5 3.1 2.7
Employment 43,910 68,009 67,118 66,460 69,479 71,564 74,410
Change 24,099 -891 -658 3,019 2,085 2,846
Percent change 54.9 -1.3 -1.0 4.5 3.0 4.0
Unemployment 2,450 2,291 2,732 3,117 3,202 3,348 2,533
Unemployment rate 5.3% 3.3% 3.9% 4.5% 4.4% 4.5% 3.3%
Underemployment 11,105 17,696
Underemployment Rate (%) 14.7 23.5
Population 98,280 140,415 144,902 148,022 151,568 156,688 162,586
Change 42,135 4,487 3,120 3,546 5,120 5,898
Percent change 42.9 3.2 2.2 2.4 3.4 3.8
White 123,316 127,375 130,225 133,727 138,278 143,680
Black 14,522 14,945 15,208 15,438 15,766 16,139
Total Housing Units 50,933 74,285 77,687 79,669 81,694 85,380 89,900
Occupied 37,044 55,336 57,877 59,353 60,862 63,608 66,976
Change 18,292 2,541 1,476 1,509 2,746 3,368
Percent change 49.4 4.6 2.6 2.5 4.5 5.3
Vacant 13,889 18,949 19,810 20,316 20,832 21,772 22,924
Per capita income ($) 15,656 26,119 26,468 26,920 27,142 28,269
Change 10,463 349 452 222 1,127
Percent change 66.8 1.3 1.7 0.8 4.2
Average wage per job ($) 14,934 22,473 23,278 24,225 24,994 26,195 27,752
Change 7,539 805 947 769 1,201 1,557
Percent change 50.5 3.6 4.1 3.2 4.8 5.9
Individuals in Poverty (%) 14.3 10.1 11.1 10.7 10.1 10.0
Educational Attainment (percent of population 25 years and over)
High school or more 73.2 82.0
Bachelor's or more 16.8 23.1
Real Output ($, Millions 1996)
Total 743 1,574 1,625 1,692 1,743 1,824 1,897
Manufacturing 145 191 188 188 189 197 204
Mining 3 9 10 8 8 8 7
Construction 41 163 169 177 181 190 200
Trade 146 326 340 353 365 384 401
Services 169 393 414 433 446 463 478
FIRE 41 128 129 133 138 147 153
TCPU 40 72 73 73 74 78 81
Government 151 271 282 305 318 331 343
AFFF 8 21 22 22 25 28 30
Wage & salary employment (jobs)
Total 39,147 69,042 71,423 73,718 75,507 78,100 80,570
Manufacturing 5,587 6,158 6,007 6,012 6,034 6,232 6,399
Mining 148 197 241 208 206 205 189
Construction 2,195 5,983 6,072 6,303 6,413 6,671 6,978
Trade 9,297 18,430 19,522 20,026 20,549 21,300 22,004
Services 10,385 18,705 19,602 20,297 20,807 21,429 21,997
FIRE 2,891 6,774 7,124 7,460 7,786 8,142 8,505
TCPU 1,556 2,450 2,416 2,435 2,454 2,559 2,649
Government 6,228 9,025 9,117 9,655 9,928 10,221 10,504
AFFF 860 1,320 1,321 1,321 1,329 1,339 1,343
Total Business Sales ($ Millions) 5,642
Note: Acronyms are for Finance, Insurance, and Real Estate (FIRE); Transportation, Communications, and Public Utilities (TCPU);
and Agricultural, Forestry, Fisheries, and Farming Services (AFFF). Data not available due to suppression are indicated by n.a.
Source: Alabama Department of Industrial Relations; Global Insight; Dun & Bradstreet; U.S. Bureau of Economic Analysis; U.S.
Bureau of Labor Statistics; U.S. Census Bureau; and Center for Business and Economic Research, The University of Alabama.
2 AU/UA Economic Recovery Strategy for AL Katrina Impacted Counties