BY NANCY cotten HIRST

Contributing Editor, Delta Business Journal

In 1992, with the huge NASA solid rocket fuel plant looking at a location near Corinth, Mississippi, the legislature passed a bill giving the Mississippi Department of Economic and Community Development (MDECD) a new tool for helping to attract large projects like this.

Known as the Major Impact Authority, this tool allowed the state to issue general obligation bonds to finance certain needs of either the community or the business prospect to smooth the location efforts. This authority could only be triggered if a new project were going to have a really major impact in the community and if the initial capital investment were to be $300 million or above.

Most Mississippians remember that even though NASA eventually lost its funding for the rocket fuel plant, that a project that large would have overwhelmed the entire infrastructure of Alcorn and Tishamingo Counties. The Major Impact Authority helped the counties (in conjunction with many other funding sources) to instigate improvements in everything from health care and school systems to roads and water/sewer projects.

While loss of the plant was a huge blow to the area, the resulting improvements have helped not only the quality of life in Northeast Mississippi, but the ability of economic developers to bring in other projects which could eventually more than compensate for the loss of the plant.

The Major Impact Authority was also used when military bases in the state were threatened with closure, allowing Meridian, Biloxi and Gulfport to retain these vital entities and the jobs they generate. It should be said that the Authority itself cannot achieve these results, but in combination with other programs and individual community efforts, it can be the key to a successful effort.

Jimmy Heidel, Executive Director of MDECD, would like to see changes in the way the Major Impact Authority can be utilized and has legislation pending to this effect for the 1999 legislative session. As it is currently structured, developers with projects large enough to qualify can offer such assistance as a possibility. They cannot, however, guarantee the assistance without legislative approval of each bond issuance and the amount involved.

For a large percentage of prospective businesses, this time lapse is not a problem, since many projects can take many months, or even years, to develop, allowing plenty of time for legislative action. However, there is always the exception that proves the rule. According to Heidel, and to Jay Moon, an international developer who works closely with the Authority, more new projects are on a Òfast trackÓ time line than in the past.

If a huge project wants assurance of the availability of the Impact Authority aid, and the Legislature is not sitting, it is now possible to lose a project to another state because the business cannot wait six months for a decision. This happened with the Boeing plant that was looking at Mississippi and wound up in North Alabama. Alabama was able to guarantee the help on an immediate basis.

In order to prevent this type of loss in the future, Heidel is proposing a change in the legislation that would allow for $80 million in bonding authority for qualifying projects that could be approved on a fast-track basis by the Governor, Lieutenant Governor, and the Speaker of the House. If all three voted on approval, then the project could move forward without waiting for the Legislature to sit.

Neither Heidel nor Moon expect that this specialized legislation would be utilized very often, nor would the $80 million be used for one project. They outline, however, a hypothetical situation wherein two or three big projects, each needing, for instance, $20 million in infrastructure support, were being courted by various communities in the state. If each of the prospects is on fast-track, Mississippi could lose them all. If the bonding authority were not enough to cover the needs of all three, then someone would have to make a decision as to which community would not get funding.

In other words, Heidel would like to have the tools at hand to help land each and every one of these businesses. And according to Moon, this scenario isnÕt just a pipe dream. Speaking of projects that could trigger the Major Impact Authority, Moon says, ÒLately, weÕve been seeing at least one a year. Right now there are three. Projects are getting bigger and weÕre seeing a lot of them.Ó

Moon explains that every $300 million project is not a candidate for the Authority; that some are capital intensive and wouldnÕt create the number of jobs that would constitute a major impact. Others, he explains, may not create a large number of jobs, but the jobs would be high-paying, skills-creating positions that would trigger the Authority.

Theres no set number of jobs and no set amount that we can offer in bonding authority, he explains. What were looking for is the best possible impact for the state. We run a benefit-cost analysis internally for each project. Obviously, the larger the positive impact, the more weÕre prepared to offer in infrastructure or community assistance.

There is a current prospect that would qualify, which is looking at the Delta, but it doesnÕt seem to be on a fast-track time line, which, under current legislation is good. But for the future, this legislative change appears to be something Mississippi needs. The three top elected officials who would have voting power certainly have their fingers on the pulse of the Legislature, and being political people, they wouldnt vote through a project that the Legislature wouldnÕt like. The proposal seems to have the best of expediency for economic development and safeguards on expenditures to pass muster on all fronts.

Moon wants it made clear that these incentives are available to existing businesses who wish to expand in the state as well as new-location prospects. They would have to qualify in respect to capital investment and positive impact, but, as Moon says, First of all, we want to take care of the people who brought us to the dance. DBJ

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