Costs and resource scarcity are the biggest concerns in economic development right now, Golden Triangle Development LINK CEO Joe Max Higgins told the Starkville Rotary Club during a Monday appearance.
Higgins’ economic development career spans over three decades, about half of which has been spent in the Golden Triangle. He has been with the LINK since 2003. His efforts have led to the creation of over 15,000 jobs and over $7 billion in industrial investment.
While a prospective industry used to look at water and sewer availability or transportation, now it’s all about costs, and especially taxes, he said.
“The most important issue for most companies is cost,” he said. “Transportation costs, water and sewer cost, electricity cost, taxes. You know what we do now we didn’t do 35 years ago? We look at a company and what they make and run 30-year tax projections for companies for what they can expect to pay for the next 30 years. It’s not a lot of cigars and whiskey.”
Material costs are costing the area deals, he said.
“We have lost four or five projects due to material costs,” he said. “We had a $100 million project that is largely steel and concrete. They thought it would cost $95 million (for construction), and costs were actually north of $200 million. Part of that is adding capacity, but most of it was materials.”
Companies think that if they come to Mississippi, they are going to get low-wage workers, but that’s not the case in the Golden Triangle, he said.
“For manufacturing, it’s about $19 an hour,” he said. “That’s an average. We lose projects a lot of times because they look at the average wages and that’s more than they want to pay.”
The LINK is turning away projects now due to the amount of resources needed not giving enough of a return, he said.
“When we are recruiting we have to be conscious of some things,” he said. “This week we told a project, ‘no,’ that was cryptocurrency. What does cryptocurrency use a tremendous amount of? Power. Quite frankly, do you want to squander it on a business that will employ very few people and pay very little taxes and use up resources that the next guy can’t use?”
Other projects were declined because of water use, he said.
“Out there at the (Golden Triangle Regional) airport, the aquifer has the ability to pump about 25 million gallons a day without degradation of the aquifer,” Higgins said. “You pump it out, it recharges. We had some companies looking that were going to use 9 million and 12 million gallons of water a day. You can’t do that. It uses a precious resource.”
The types of deals the LINK is currently looking at are “all over the board,” he said.
“We’ve got one company that makes mini nuclear power plants, little package plants,” he said. “I know y’all don’t want no uranium in Starkville, Mississippi. They ain’t going to have no uranium in Starkville. It’s almost a glorified testing facility. They build and test them for functionality and pressure and that sort of thing.”
There have also been many companies associated with battery production, he said.
“We’re seeing a bunch of battery producers and producers of battery components,” he said. “I know of at least three solar projects that are looking in Oktibbeha County. They’re big, lots of acres. In the Golden Triangle we’ve already announced 550 megawatts of solar plants. That’s the size of a small nuclear power plant. I have a reason to believe in the next three to six months we’ll go to 750 and even beyond.”
Companies are using more and more green power, he said.
“Starkville Electric will take 30 megawatts from one of these facilities because companies want that,” he said. “More and more companies want this. We’ve got data centers looking in each of the three counties, and they all want green power.”
The LINK is making sure that the land the solar plants are taking up is not something that could be better used for another project, he said.
“Nobody cares if somebody goes out to Cedarbluff and builds a solar farm,” he said. “But when they start coming up to the edge of town, you’ve really got to think about it.”
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