VOL. 6 | NO. 29 | Saturday, July 13, 2013
By Bill Dries
Unless you see the signs, it is hard to tell when you have crossed the Tennessee-Mississippi state line where Fayette County, Tenn., meets Marshall County, Miss., not too far from the southern city limits of Collierville.
On the Mississippi side, immediately past the signs marking the transition to a new state, is the turn onto Cayce Road, where the boundary vanishes beneath kudzu and two lanes of asphalt.
Truck traffic off U.S. 72 is heavy and gets heavier as the road gets wider.
There is still ample evidence of the farming life and rural communities that have long rendered state and county boundaries a formality.
There are some older homes on large lots that turn from yard to farm fields. A country church and an RV park are part of the scenery.
But that is changing rapidly as Marshall County at its northern border is booming with manufacturing and distribution development.
Roxul, a Danish company that makes stone or rock wool insulation, began construction in May on the $150 million project on 110 acres in the Chickasaw Trail Industrial Park.
Nash Nunnery of the Mississippi Development Authority describes Roxul as an “anchor” of the development.
“It brings a lot to the table as far as the idea of bringing large-type projects to that area of the state,” he said. “DeSoto County is the fastest growing county in our state now and Marshall County is part of that growth as well.”
The plant is Roxul’s bid for the U.S. market. And it has some well-established neighbors in the 3,600-acre industrial park.
The 2-year-old Exel distribution center is 750,000 square feet with company executives reportedly beginning to plan for an expansion. ASICS America Corp. has a 500,000-square-foot distribution center there too.
Other tenants include Soule Furniture Refinishing, Eurowerks, Don Willis Construction and Office Warehouse Properties LLC.
RBR Enterprises makes the Vector 300 tractor and applicator in the park. Southeast Ag Equipment Inc. and Mid-South Ag Equipment Inc. are Vector 300 dealers who sell the tractors as well as distribute parts for them.
The park is North Mississippi’s most ambitious and well-planned effort for a business identity and appeal beyond not being Memphis. Its impact means jobs and growth for related or supplying businesses on both sides of the state line.
“It’s sort of hard to tell where the state line is,” Fayette County Mayor Rhea “Skip” Taylor said of economic development efforts in the border area. “So, they go back and forth almost at will.
“That whole region down there is basically piggy-backing on everybody else, bringing the jobs down there. There’s going to be a number of Fayette County folks down there applying for jobs, hopefully getting quite a few of them.”
The “piggy-backing” description isn’t a put-down of the Marshall County manufacturing boom.
“It is really a great advantage to be so close to Memphis, which is a major hub for business,” Nunnery said. “FedEx is there and these larger companies, distribution companies, larger plants and industrial sites find the proximity to Memphis very beneficial. … It’s a great concentric area.”
Roxul president Trent Oglivie, who was part of the company’s site selection team that began looking at locations in the summer of 2011, said the decision to go to Marshall County was about proximity to Memphis.
“We are closer to greater Memphis,” he said. “The employment and universities and just the economic size of greater Memphis was an attraction. Alabama fought really hard for it. It really didn’t come down to a bigger incentive for one state or the other.”
For some time, DeSoto County distribution centers and warehouses have been visible from the loading docks of Memphis warehouses.
And for just as long, if not longer, the land on the Marshall County side of the state line has been zoned and waiting for industrial development.
“It’s not an overnight success. This park has been in existence 15-plus years,” said Bill Mobley of the Marshall County Industrial Development Authority. “It’s just grown and getting the infrastructure there was an important piece of the puzzle.”
The industrial park is even more of an achievement given the smaller population and tax base in Marshall County for such an undertaking. Marshall County has a population of 35,919 with a labor force of 15,917, according to the 2010 U.S. Census.
That means it doesn’t have the tax base to undertake large, all-at-one-time infrastructure improvements that are necessary before site selection consultants will even consider recommending an area.
The 3,600 acres in the industrial park remain privately owned among a group of six to 10 landowners. They sign covenants enforced by the Marshall County Industrial Development Authority governing what the land can be used for and those conditions transfer to new owners should the current owners sell the land. The authority has options on approximately 1,000 more acres.
The covenant leans toward businesses in telecommunications, aviation, “and of course the thing that I think has made DeSoto County big – warehouse distribution,” said Mobley.
The Tennessee Valley Authority helped with access to power. Roxul will put in a new $3 million substation as part of its presence in the park. The Marshall County Water Association is a privately held utility that meets other infrastructure needs. And the city of Byhalia, whose city limits are a good 10-12 miles from the industrial park, extended gas lines to the park.
The landowners also joined together to form Marshall County Utility Services, a publicly and privately funded sewer company providing wastewater treatment for the park and surrounding area.
The landowners in the park hired CB Richard Ellis Memphis to market the industrial park and also market the park individually using the covenants to keep the multiple efforts on a common course.
“It’s not unusual, but it hasn’t been done that much in our area,” Mobley said. “We’re a rural area and in the past we’ve needed to be able to get that private partnership in there with it in order to be able to do it.”
Marshall County leaders also lent their voice to the location of the Norfolk Southern Corp. intermodal yard just north of the state line in Rossville. The key landowner in the Norfolk Southern project, William Adair, is also a substantial landowner south of the state line and in the industrial park itself.
The Chickasaw Trail Industrial Park is part of the Gateway Global Logistics Center on both sides of the state line that Adair and Joel Porter have partnered on with Panattoni Development Co.
An access road out of the Norfolk Southern facility goes south and soon crosses the state line.
“The only ingress-egress for truck traffic and car traffic is from the Mississippi side through our industrial park,” Mobley said.
Economic development and political leaders on both sides of the state line emphasize that the impact of what is happening in Marshall County at the state line includes jobs for Memphians and relies on the intermodal facilities in Rossville, the BNSF intermodal yard on Lamar Avenue and proximity to Memphis International Airport.
But there remains an element of competition at the government level because where a business locates involves whose taxes that business and its employees pay.
The Mississippi employees pay a Mississippi state income tax regardless of which side of the state line they live on. And tenants in the industrial park do not pay what is the highest property tax rate in the state of Tennessee – the combined Memphis and Shelby County property tax rates.
“There hasn’t been a new industrial building built in Memphis (speculatively) since 2008,” Memphis City Council member Kemp Conrad said last month on the WKNO-TV program “Behind The Headlines.” He was talking in general, and not specifically about the Chickasaw Trail Industrial Park.
“All an industrial building is – it’s an envelope to house capital and jobs. They are building them as fast as they can in North Mississippi,” Conrad continued. “They won’t build them here … because the (property) tax rate is so high, they simply can’t do it here.”
“For years we heard in Tennessee that we don’t need an income tax because it will hurt business,” added Memphis City Council member Jim Strickland, who like Conrad opposes a state income tax. “Mississippi actually uses their income tax to recruit businesses. They turned it around and said if you bring your business to Mississippi we will take all the income tax that your employees pay and give you some kind of kickback.”
Tennessee economic development leaders acknowledge that Mississippi’s state income tax is also a factor in the competition, although they hasten to add that they don’t believe Tennessee should go as far as implementing its own state income tax.
“I would never promote that as a policy for the state of Tennessee,” state economic development commissioner Bill Hagerty told The Memphis News editorial board in February. “While it may be advantageous in a particular recruiting scenario to tax the workers and then pay it back to the employer, it’s not good for the citizens. That’s not our objective, to mask incentives and do stuff like that. We have no interest in pursuing that as a tool, although we have been on the receiving end of that.”