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Expert: Market Newton as manufacturing hub

COVINGTON -- Newton's strong manufacturing base can be capitalized on with the right marketing, but there are still lots of obstacles standing in the way of economic growth, according to a report presented to local officials by economic analysts Wednesday afternoon.

The presentation was based on a study commissioned and jointly funded by the city of Covington, Newton County, the Industrial Development Authority and the Chamber of Commerce Board of Directors to determine the county's assets and shortcomings as they might be viewed by industries and businesses on the hunt for a new location. The results were presented to leaders on the political, business and academic fronts at Triple Horse Productions.

"Reality is our friend and hope is not a strategy," said Chamber President Hunter Hall. "We've got to deal with the good, the bad and everything in between and this study is going to help us do that."

Jay Garner, president and founder of Garner Economics, an Atlanta firm that helps communities with economic development strategies and assists the corporate sector in identifying where to locate, expand, consolidate and close facilities, said the study compares Newton to the state and nation, as well as two communities -- Hall County and Greenville County, S.C. Hall was chosen by the Chamber because Newton often competes with that community for projects, and Greenville was identified as an example of a community to aspire to be like. A 22-member panel of officials, business leaders and members of academia participated in focus groups to assist with the study.

All told, out of 75 criteria, Newton had 19 assets that should be marketed to attract business and 17 challenges that could deter companies from locating here. The remaining factors were deemed neutral, not a plus or minus. The challenge over the next few years is to turn those neutrals into assets and the challenges into neutrals, Garner said.

One positive is Newton's proximity to I-20 and Hartsfield-Jackson Atlanta International Airport, as well as the local airport, said Garner. The county has significant water capacity that is important to some industries such as food processors. But available industrial land is overpriced, with an acre at Stanton Springs, the four-county mixed-use development that has yet to acquire a tenant, going for $50,000. Local government should be prepared to subsidize that cost through incentives or some other means if officials expect to attract industry there, he said.

Focus group participants indicated it can be challenging to work with the city and county on building permits, and Garner recommended local governments undertake a more comprehensive survey to find out what other issues they might have. He also recommended the city and county have an ombudsman to talk with industries about concerns, noting that the Chamber has no authority to address local government policy issues.

There's also a lack of shopping, cultural activities and first class hotels, although the beautiful downtown district is a plus, Garner said. Tom Tveidt, research economist with Garner Economics, said the crime rate is lower than the comparison communities, and that's a plus.

Educational attainment for the population over age 25 is a challenge, however, as the majority have only attained a high school diploma and companies want a workforce with bachelor's and speciality degrees. SAT scores are poor. But the new College and Career Academy is an asset that should be promoted as preparing students to enter the workforce, the analysts said.

Statistics on employment also aren't great, with 78 percent of the county's workforce commuting to jobs outside Newton. The average wage is $37,577, lower than the state average of $40,628 and the national average of $43,961. Companies look at that number as an indicator of quality of workforce, Tveidt said. Per capita income has decreased by 13 percent during the last 10 years. Government transfers such as Medicaid, Medicare and Social Security have increased.

"There's not a lot of upsides to those programs. The message here is you want to get more people on payrolls," he said.

The local unemployment rate is 12.7 percent, higher than the national and state rates, but the county did gain 225 jobs in August.

Most jobs lost during the last few years have been in construction, likely due to the decline in the housing market, Tveidt said.

Optimal industrial targets are food processors; specialty creative and business services, such as video and movie production, computer systems design or engineering services; advanced materials and process manufacturing such as plastics, pharmaceutical preparation and surgical and medical instruments; and distribution and logistics operations, such as refrigeration warehousing, freight and trucking transportation.

Garner had several recommendations to improve the county's chances at winning industrial prospects. The Chamber's economic development budget should be increased from the current $218,000 to at least $500,000 to be competitive, he said.

A public/private effort should be undertaken to raise money for economic development purposes, Garner said. He also recommended the county create a project opportunity fund to use as a "deal closer" on certain projects. The fund could be established through various fees or a local 1 percent sales tax, which could generate $9.9 million per year, Garner said.

Other recommendations include branding Newton as a manufacturing base and a community "good at making things," he said, offering free wireless service downtown, passing liquor by the drink sales outside Covington and Porterdale, offering more living options downtown and starting a small business incubator to support small businesses.

Asked about how to attract more retail options, Garner said it all comes down to population density and buying income.

"Any of those sophisticated retailers have already looked at you. If they're not here now, there's a reason for them not being here," Garner said.