Alabama makes its case for Hyundai plant
Mobile Register
12/12/01
By DR. SEMOON CHANG
University of South Alabama

Fierce competition among southeastern American states to attract a $1 billion Hyundai Motor plant to make 100,000 to 300,000 cars has been reported almost on a daily basis in recent weeks.

The states pursuing the Hyundai plant include Georgia, Kentucky, Tennessee, Virginia, Ohio and Alabama. Southeastern American states have been especially active in attracting foreign direct investment through the provision of generous packages of incentives.

Recent attractions of foreign automobile assembly plants to these states include a BMW plant in South Carolina (1992), a Mercedes Benz M-class SUV plant in Alabama (1994), a Toyota pickup truck plant in Indiana (1995), a Honda plant in Alabama (2000), and a Nissan plant in Mississippi (2001).

Alabama is one of seven southeastern American states that comprise the Southeast U.S.-Korea Joint Economic Conference, which is sponsored in Korea by the Korea-U.S. Economic Council.

Reports in recent days indicate that Hyundai has selected Alabama as its site, although the news has been denied by Alabama officials as well as Hyundai officials who indicated that final decision would not be made until March 2002.

I have no way of knowing whether Alabama is Hyundai's first choice. Based on my research on site selection, it is not likely that Hyundai will reveal its decision to Alabama officials even if Alabama is Hyundai's first choice. This is because no deal is final until incentive packages are negotiated, accepted and signed by both sides. Hyundai is not likely to admit their selection of Alabama, even if it is true, until Hyundai officials are satisfied with Alabama's package of incentives.

Those who support the alleged selection of Alabama as well as those who have reservations about the selection of Alabama as Hyundai's choice as the place for its first U.S. plant may want to know more about Alabama from a Korean-American who made a career in Alabama working with state and local officials, including Gov. Siegelman, who was so happy to read his Korea Times article on Thanksgiving Day during his trip to Korea that he gave a copy of it to Hyundai officials.

Alabama today has little resemblance to the racist state portrayed during the 1960s when George Wallace was its governor. The Marshall Space Center in Huntsville, located in the northern end of the state, is an integral part of the U.S. space program's testing of its booster rockets, while the UAB Medical School in Birmingham is one of top ten medical research universities in the nation, receiving over $100 million NIH research funds each year.

The Port of Alabama, located in Mobile on the Gulf of Mexico waters, has undertaken a $300 million facility improvement with major focus being placed on increasing its container business. There is a regular shipping schedule from Mobile to Inchon. If Hyundai has any plans to invade the South and Central American markets in the future, it cannot find a better port location to start from than the Port of Alabama in Mobile.

This is because ships have to navigate about one hundred miles off a narrow fresh-water ship channel before they reach the Port of New Orleans, the nearest competitor to the Mobile port, from Gulf waters.

When Alabama offered a $253 million package to Mercedes Benz in 1994, many laughed. No one laughs any more. Mercedes started assembling its popular M-class SUVs at an annual rate of about 50,000. The number increased to 80,000 this year and is expected to surpass 100,000 vehicles in the near future.

Honda in Alabama began its production of its popular Odyssey minivan in November this year and plans to produce 120,000 vehicles each year.

One of the most important factors in selecting a vehicle assembly site is the existence of a parts suppliers network. There was virtually no supplier of parts in Alabama when Mercedes opened. This year, the Alabama Automotive Manufacturers Association was formed with 121 member firms.

There are several hundreds of Koreans and Korean-Americans in Huntsville, Birmingham, Montgomery and Mobile.

There are more than one thousand Koreans and Korean-Americans in the Dothan area south of Montgomery near a large military base. There are at least two Korean companies in Alabama that I know of, one in Huntsville and one in the Montgomery area. Also, there is one company in Mobile that is managed by a Korean president. There is also a seafood processing plant near Mobile that is owned and operated by the Unification Church.

How Korean employees will be treated in Alabama is not different from how Korean employees are treated in the rest of the United States. It all depends on how hard Korean employees try to adapt to the American way of life.

Recession? Been there, still doing that
Mobile businesses look for light at end of extra-long tunnel
Mobile Register
11/11/01
By ANGIE DROBNIC
Business Reporter

Mobile's economy has been in a slump for longer than a year, says local economist Semoon Chang, a professor at the University of South Alabama.

"Mobile's slowdown began in June last year," Chang said. "Our slowdown is really one-and-a-half years old."

Chang bases his opinion on months of declining sales tax collections, which strongly correlate to consumer spending. As well, a series of plant closures -- including International Paper, Sappi Fine Paper North America, Corus Mobile and Acordis Cellulosic Fibers -- have sucked jobs from the local economy over the past 18 months.

But Sept. 11 made things worse, both for the country and the Mobile area, he said.

"Now we have a full-blown recession because of Sept. 11, and the recession is spreading well beyond manufacturing," he said.

Sellers of consumer goods in Mobile agree that a local recession started last year.

John Moses, president of the car dealership Bay Chevrolet, said he also believes the local economy was experiencing a downturn for more than a year before Sept. 11, which sent business into further decline.

"The first roughly 20 days of September were just ghastly in terms of retail sales," he said.

But General Motors, the parent company of Chevrolet, quickly instituted zero percent financing at its dealerships, Moses said, which sent a wave of shoppers into the dealership.

"We're seeing that taper off a bit," Moses said. "I think we saw the first flush of people who realized what a good deal that was and took advantage of it."

Moses sees other ominous signs: The dealership's service department has not housed a vehicle overnight in the past 60 days because so few customers are having maintenance performed. Earlier this year, the department would house as many as 20 cars on any given evening.

And medium-duty trucks -- typically delivery trucks used by small businesses -- have hardly been selling long before the terrorist attacks, Moses said.

"We have seen that market just go away in the last year," he said.

For some businesses, however, economic upheaval can still bring good news.

MCSi-Spanish Fort, formerly C & G Video Systems, has seen demand surge for its video conference capabilities.

"After the Sept. 11 attacks, our video conferencing requests are up 50 percent," said Peter Comer, the district sales manager.

The company charges $200 an hour for video conferences, Comer said. The service is especially popular with attorneys who need to conduct depositions and corporate headquarters that want to offer training to far-flung subsidiaries, he said.

With companies cutting back on travel, many have turned to technology to help them get business done, Comer said.

As for what can juice Mobile's economy, no one seems to have an answer.

Chang hopes the massive downtown office tower to be built by Retirement Systems of Alabama next year will help the economy, but he doesn't see any type of business coming in to replace paper mills and other manufacturing jobs.

"We just lost a big chunk of the manufacturing base in Mobile. There's nothing really replacing that. We just lost," he said.

Mobile Area Chamber of Commerce President Win Hallett said Mobilians shouldn't be too pessimistic over industrial losses because other jobs are being created.

"At the point that the paper jobs were lost, we did have an increase of net jobs. They just weren't as high profile," Hallett said.

Most International Paper workers have found other jobs, according to Hallett's discussions with IP management, he said. Some IP workers are now employed at pipe-coating plant Bredero Price, for instance.

"It's easy to be pessimistic when there's a slowdown," Hallett said. "The good news is virtually every economist I've read said the economy will rebound next year. They see strength in the market and there will be a recovery."

Tax projections don't match up
County anticipates no increase in revenue from gross receipts tax,
while Mayor Dow is counting on economist's prediction of a small increase
Mobile Register
08/25/01
By STEVE MYERS
Staff Reporter

Though the city and county of Mobile get most of their tax money from the same pot, they don't agree on how large that pot will be in the next fiscal year.

The two governments depend on the gross receipts tax, a tax on businesses usually passed on to customers in the form of sales taxes.

The County Commission is setting its budget for the next fiscal year with the expectation that revenue will not go up, while Mayor Mike Dow has based his proposed budget on a 2 to 3 percent increase. The fiscal year starts Oct. 1.

Both the mayor and County Commission President Sam Jones said they are being conservative.

County and city tax collections fell this year, forcing both governments to revise their budgets. Roger Rendleman, county finance director, said he sees no evidence that the economy will improve soon.

"I would think we are heading toward the bottom," Rendleman said Thursday. "My question is, how long are we going to be on the bottom?"

Nationally, some have predicted the economy will pick up around the first of the year, Rendleman said. But he said he does not feel confident enough about that prediction to base his budget on that. He planned to set the county's general fund budget for the next fiscal year about 1.5 percent lower than this year's.

Earlier this year, the city's general fund was projected to be about $12 million below budget. Dow's general fund budget for the next fiscal year includes a 7.7 percent growth in gross receipts taxes within the city, compared to the original 2001 budget.

Much of that doesn't come from an increase in collections, said Robert "Bubba" Young, the city's budget director. It comes from putting all revenue from a new out-of-county tax into the general fund rather than splitting it between the general and capital funds. That 2 percent tax is levied on sales made from Mobile businesses to consumers living outside Mobile County.

But the rest of the increase is expected to come from a 2 to 3 percent growth in collections compared to this year, Young said. He reached that conclusion after talking with Semoon Chang, director of the University of South Alabama's Center for Business and Economic Research.

In the first three months of the next fiscal year, Chang said, revenue will be about what it was this year -- braced by extra spending from people's tax refunds. But starting in the second quarter, "I do expect revenue for the city and the county to increase 2 to 3 percent," he said.

Chang based that prediction on several upcoming construction projects that will inject money into the economy, through the cost of actually building and the spending of construction workers. Those include the Retirement Systems of Alabama skyscraper, which Chang said he expects to be under way around Jan. 1, and a $45 million expansion at the State Docks during the next year.

New school construction also could help the economy, Chang said. This summer, the school board approved a two-year, $101 million building plan.

Other factors that will help the economy include the Federal Reserve's continued reduction of interest rates and the depletion of most of industry's extra inventory, Chang said.

"You will begin seeing a very slow and gradual recovery of the national economy," he said, "and some meaningful recovery of the local economy, in the first quarter of next year.

Jones described Chang's predictions and the city's budget projections as optimistic.

"We have found in the county it is not a good practice to budget on optimism," Jones said. "We can't afford to over-budget at the county, especially with a $5 million contribution to the school system."

Bess Rich, District 6 councilwoman and a mayoral candidate, said she shared Jones' view. She said Dow has a history of over-budgeting and then cutting back when the money does not come through.

"If I was framing the budget," Rich said, "I would be looking at little to no growth, knowing what has happened to the treasury in the last couple of years."

Mobile will be going to the polls Tuesday to pick a mayor and six members of the City Council. Rich is running against Dow and political newcomer George Clarke.

Whatever happens, there should not be a significant difference in tax revenues between the city and the county, Chang said. The county may benefit from some retail activity shifting outside the city limits, but that will not create a large difference in collections between the governments, he said.

Dow partly blamed falling tax revenues this year on people shopping outside the city limits and in Baldwin County, where taxes are lower.

During an interview this week after unveiling his budget, Dow said he stood by his staff's projections. But he also said "sometimes Chang gets hopeful. ... He tries to make things happen in a positive way."

One reason the county is holding back next year, Dow said, could be that the county was caught more off guard last winter when revenues started falling. Jones disputed that.

Both governments announced that revenues were slowing around the same time. On Jan. 22, the County Commission cut its budget by $1 million, about six percent of the budget, and by $500,000 March 26.

On March 20, the City Council passed a revised budget with cuts of about 6 percent in the general and capital funds.

Candidates clash on sales tax issue
Mobile Register
08/24/01
By RHODA A. PICKETT
Staff Reporter

Mobile Mayor Mike Dow and challenger Councilwoman Bess Rich continued their verbal sparring match Thursday over reducing the city's sales tax percentage, with each labeling the other as fiscally irresponsible.

"I'm sure every mayor in America would love to cut taxes," Dow said in a prepared statement.  "I can no longer in good conscience stand idly by while Mrs. Rich continues to promise that she's going to cut Mobile's sales taxes.  At the same time she states that she's going to give the firemen, sanitation workers, policemen and other city employees raises.

"Mrs. Rich's promises are purely political and financially irresponsible," Dow's statement read.  She "owes it to the voters of Mobile to explain how she will be able to cut sales taxes, give raises to all city employees and still keep Mobile financially sound without putting other taxes, fees or charges on the people."

Rich countered that a tax reduction is the very thing needed to spur the city's economy.  Businesses won't stay where they can't make a profit, she said.

"I believe in all the years I've watched and what I've been asked to approve, he's not practiced fiscal restraint and proper money management," Rich said of Dow on Thursday.  "Businesses are not going to stay here if we don't help them compete on an equitable playing field.  This hinders the community's future."

Rich said that contrary to popular belief, she has not suggested reducing sales taxes all at once.

"It's got to be done gradually," she said.

Dow said Mobile receives 4 percent of the 9 percent sales tax that people pay within the city limits.  If the sales tax is reduced by 1 percent, then the city stands to lose around $27 million, using fiscal year 1999-2000 estimates, Dow said.

Rich has maintained that lowering the sales tax percentage could help slow the exodus of business from the city.  At the same time, that reduced rate would not result in enough growth to counteract the lost tax revenue, said Semoon Chang, professor of finance and economics at the University of South Alabama.

Mobile's 9 percent sales tax rate is one of the highest in the country, but even reducing by a fraction of a percentage point will hurt, Chang said.

"Lowering the sales tax is a good idea, but lowering it has to be accompanied with the lowering of some (tax) exemptions," Chang said "This is what I've been telling people for a long time."

Chang said Dow called him last week about reviewing the sales tax issue.  Dow offered to pay for the review from campaign funds, but they did not discuss price.

"I spent a couple of hours on it for free," Chang said Thursday.  "I would have done the same for any candidate.  If Mrs. Rich had called me, I would have done the same for her."

Rich said she has not asked Chang to perform such an analysis of the city's finances.

Economic Climate
Mobile Register
08/19/01
By ANGIE DROBNIC
Business Reporter

Like a sticky summer day when rain threatens but a downpour is averted, Mobile's economy during the first half of 2001 was sluggish but not stormy. And in some places, a few shafts of sunlight managed to peek between the clouds.

Data compiled by Semoon Chang, director of the University of South Alabama's Center for Business and Economic Research, show that local sales tax revenues -- an important indicator of consumer spending -- were down during the first six months of the year, but the declines did not grow progressively larger.

For instance, Mobile County sales tax revenues lagged last year's collections by about 3 percent. Declines during the first six months of the year were broken by a rise of 5.4 percent in February. In June, revenues dropped only slightly by about 1.8 percent.

Statewide, sales tax revenues appear to be stabilizing after consecutive drops during the first four months of the year. Collections for May rose 2.4 percent, and June lagged behind only 1 percent.

Sales tax revenues will continue to parallel last year's collections at a modestly lower level, said Chang, an economist noted for his tracking of Mobile business activity.

"I think sales tax revenues will move in step with last year's sales tax collection," Chang said. "I really don't think revenues will continue to fall."

Terri Gray, owner of the gift store The Ivy Cottage on Old Shell Road, agreed that the slowdown seemed to be cruising, if not to a halt, then at least to a plateau.

"April was definitely an off month, and it was a little scary, but May came back so strong," Gray said.

Gray scaled back earlier this year by closing a second location that sold furniture. She combined the furniture with the gift shop, which offers cards, luggage, bath and body wares, candles and linens.

"The first part of the year, there was a lot of gloom and doom," said Gray. "I really do feel we've weathered the worst of it."

City sales tax revenues dropped less than 1 percent, from $35 million collected during the first six months of 2000 to $34.8 million during the same period of 2001.

But those numbers could mask stronger hints of reduced consumer spending.

Last fall, the city began collecting a 2 percent tax on sales delivered outside the city limits. True consumer spending in 2001 may actually be lower than city sales taxes indicate, Chang said.

Tourism, an industry Chang tracks in detail, seemed to slump during the first six months of the year.

The total number of visitors to Mobile area exhibits dropped 5 percent, from 591,512 in the first six months of 2000 to 562,083 in 2001.

Those numbers include the gate counts of the Fort Conde Welcome Center, USS Alabama, Oakleigh Period House Museum, Mobile Greyhound Park, Bellingrath Gardens, Bragg-Mitchell Mansion, the Gulf Coast Exploreum Science Center, Fort Gaines, the Dauphin Island Fishing Pier and the Mobile Museum of Art.

Biloxi casinos, which experienced virtually unbridled growth in 2000, started to show a few small signs of weakness in 2001. Gaming revenues were down in February, March and June this year.

But gains from other months offset the down months, and the casinos still experienced 2 percent growth during the first half of the year.

Some Mobile attractions -- most notably the USS Alabama -- defied the overall downward trend and posted gains.

With the exception of April, the gate count for the World War II destroyer showed increases every month of 2001.

Bill Tunnell, executive director of USS Alabama Battleship Memorial Park, credited the attraction's growth to aggressive marketing.

The park is stocking state welcome centers and area brochure racks with 20-percent-off admission coupons. The park also spends $110,000 each year on billboards. A new campaign urges travelers to "Visit America's Battleship" or "Visit Your Battleship."

The USS Alabama has often done well when other Mobile attractions haven't, Tunnell said, because it has such high visibility along Interstate 10.

"We get about 50 percent of our business off the highway, people who didn't plan to stop here when they started their trip," he said.

Mobile County's hotels kept their rooms almost as full this year as last year.

But hotels in different parts of the city had very different fortunes: Hotels in west Mobile witnessed tidy gains, while downtown reservations plummeted.

"It's been a pretty dismal summer so far," said Charles Cuff, president of the Mobile Area Motel and Hotel Association.

Occupancy rates at downtown hotels had a terrible second quarter: Rates declined from 44 percent of rooms filled in 2000 to 39 percent of rooms filled in 2001.

"Things are getting tighter. We're seeing competition from all over. Baton Rouge just opened up a new center," Cuff said.

Business could get worse: Convention bookings have dropped a precipitous 66 percent during the first half of the year. Conventioneers booked almost 86,000 room nights during the first six months of 2000 compared with almost 29,000 in 2001.

"It's down for every city in America," said Brenda Scott, president of the Mobile Convention & Visitors Corp. "A lot of the corporate business has dried up, and associations are sticking to their geographical areas."

But Scott said that business has been flat, not down, for downtown hotels.

The hotels had a good first three months of the year -- 54 percent of rooms filled -- that brings the six-month average to 47 percent. That's only one point off the 48 percent that downtown hotels averaged during the first half of 2000, she said.

At the other end of the spectrum, hotels at Tillman's Corner and along Beltline Highway outdid the national average during some months, hitting highs in June of 73.9 percent and 77.6 percent, respectively.

The outlying areas offset downtown's slump to make occupancy rates for Mobile County hotels about the same as last year, at about 63 percent.

For employment, the number of people working in Mobile County dropped in May, compared with the same month a year ago. That's the first time county employment has dropped this year, Chang said.

But employment numbers tend to be lagging indicators, which means it takes a few months for economic conditions to affect hiring practices, he said.

In other words, employment numbers are performing as expected given the economic conditions a few months ago.

As for recovery, Chang said, the economic forecast nationwide has lots of positives: Inflation is low, energy prices are falling, interest rates are lower and recent tax refunds are starting to reach consumers. But Mobile needs its own rays of sunshine to heat up the local economy.

That could come from the Retirement Systems of Alabama, which plans to spend $147 million to build its downtown RSA Battle House Tower.

And the Alabama State Port Authority has embarked on a multi-year, $300 million building campaign that will include a new terminal for containerized cargo. The port is the 11th largest in the United States in terms of cargo volume, and is making an expansion to capture more containerized cargo.

But the RSA Tower probably won't begin construction until January, and the Port Authority's spending will gradually increase over the next six years.

That could push a robust recovery for Mobile into next year.

"We may not have any meaningful recovery until January," Chang said.

Rebate checks on the way
Mobile Register
07/25/01
By GEORGE TALBOT
Business Reporter

Spend or save - that's the $545 million question facing Alabama residents as the first wave of federal tax rebates land in mailboxes across the state this week.

The Internal Revenue Service estimates that more than 1.2 million checks of up to $300 per tax-payer and $600 per married couple will be mailed to Alabamians by the end of September.

Semoon Chang, director of the University of South Alabama's Center for Business and Economic Research expects that most people will spend about 75 percent into savings or use it to pay off bills.

Nationwide, the checks are expected to total $38 billion, which some say should be enough to provide at least a modest boost to the lagging economy, including Mobile's.

"The timing is perfect because of the economic slowdown we are experiencing," said Chang, an economist widely regarded for his tracking of Mobile business activity.  "It's going to help the national and local economies recover."

Area merchants are pushing their customers to take their Treasury checks and load up on merchandise.  Wal-Mart Stores Inc. and Home Depot Inc. are part of a growing list of companies scrambling to cash in on the rebates.

Wal-Mart and Sam's Club stores are offering to cash the rebate checks for free or convert them to the chains' shopping cards; Home Depot is waiving payments and interest for six months on purchases of more than $299.

But some large retailers - Sears, J.C. Penney, Target and K-Mart among them - said they don't plan on special marketing campaigns related to the rebates and don't expect a windfall of sales.

A recent analysis of the tax rebate plan by The Birmingham News found that about 677,400 Alabamians, or 33 percent of all Alabamian workers, won't qualify for the rebate at all because they don't earn enough to pay federal income taxes.

Another 287,000 workers will get only partial rebates, according to the analysis.

Alabama is seventh in the country in the percentage of residents who get partial or no rebates, according to the Citizens for Tax Justice, a nonprofit organization that favors lower tax burdens on the poor and lower-income earners.

(Register Reporter Scott Parrott contributed to this report.)

Tricentennial celebration should help tourism
Mobile Register
07/12/01
By GEORGE TALBOT
Business Reporter

Mobile's Tricentennial celebration should draw an extra 110,000 to 225,000 tourists to the city, generating anywhere from $100 million to $234 million for the economy, according to a report released Wednesday.

Semoon Chang, director of the Center for Business and Economic Research at the University of South Alabama, said the tourists will make direct expenditures of $60 million to $130 million at Tricentennial events.

"The Tricentennial celebration is going to generate a boom in the local tourism industry," Chang said.

Chang's projections are over and above what Mobile could expect from its tourist trade without any Tricentennial activities. Last year, about 1.2 million tourists visited area attractions including the Fort Conde, Mobile Greyhound Park, Bellingrath Gardens and the USS Alabama, among others.

About 1.2 million visitors attended Mobile area special events in 2000, Chang said.

The year-long celebration, scheduled to commence in January, will feature a variety of events -- from picnics and book signings to a re-enactment of the Battle of Mobile Bay -- culminating with the city's 300th birthday party during the first week in November.

Chang, widely regarded for his tracking of Mobile business activity, polled organizers of the various events at the request of Mobile Tricentennial Inc., a nonprofit group that is spearheading the celebration plans.

"Next year will be the best year for tourism in Mobile since 1992," he said.

The significance of 1992, Chang said, is that it was the year that casinos arrived along the Gulf Coast of Mississippi, drawing thousands of tourists away from Mobile.

"In 2002, we're going to beat them," he said.

The tourist boom, he said, should extend to the area's existing attractions and special events such as Mardi Gras and Bay Fest. Chang said that, based on attendance figures in 2000, the existing attractions should draw an additional 86,000 visitors from outside Mobile County over the course of the year, while existing special events, taken together, should expect an extra 93,000 visitors.

Tricentennial organizers said they hope to exceed Chang's projections. They can better their chances at doing so, they said, with an aggressive promotional campaign.

"We think these are wonderful figures," said Ann Bedsole, president of Mobile Tricentennial Inc. "And keep in mind that Dr. Chang is very, very conservative."

Bedsole said the celebration will do much more for the city than just providing a boost to its economy.

"We believe it will be a launching pad for the renaissance of Mobile," she said. "It will mark a return to the glory days when Mobile was the most important city on the coast."

Highlights of the Tricentennial include a five-day regatta of tall ships, expected to cost about $1.5 million and draw 50,000-100,000 visitors each day from July 3-7.

"Sail Mobile -- A Salute to the Sea," which will feature about 30 of the high-masted clipper ships, should be one of the celebration's most popular events, said Chang.

"That's the one that people are going to be willing to drive a long way to see," he said.

The $13,000 re-enactment of the Battle of Mobile Bay, scheduled for May 3-5, is expected to draw 8,000-12,000 visitors over the course of the event.

Unfortunately, said Bedsole, "we're still going to lose the battle again. But it should be a lot of fun."

Other highlights include a tour of historic Mobile homes, a cook-off featuring chefs from across the country and the city's 300th birthday party, scheduled for Nov. 1-3.

The three-day party is "very appropriate," Bedsole said.

"Anyone who survives this long needs to blow it out," she said.

The play's the thing
Mobile Register
07/11/01
By JOHN CAMERON
Assistant Managing Editor/Sports

A Saints official contends there is a lot of support for the state of Louisiana giving the NFL franchise $12.5 million to
keep it in New Orleans and that the team's threats of moving will soon be forgotten.

Mike Feder, director of regional sales and marketing for the Saints, said he has not encountered any opposition to
Louisiana's decision to help increase the Saints' operating income.

"The general public has really been positive about all of this and I think most people don't want to get involved with the
politics of all this and are just ready for some football," he said.

Louisiana Gov. Mike Foster announced Monday that the state money will keep the Saints in New Orleans.

The agreement also calls for the governor, in the next two weeks, to assemble a committee to study the possibility of
building a new stadium or completely re-engineering the Saints' current home, the Louisiana Superdome.

As the Saints were making the effort to get more money out of Louisiana and New Orleans, the state of Mississippi
and the Gulf Coast Gaming Association spent $90,000 on a study designed to attract the Saints to Mississippi.

Many NFL observers believe the Saints just used Mississippi in their efforts to get more help out of Louisiana
and that they had no intention of moving across the state line.

Whatever the intention, some observers see it as a public relations blunder but Feder, who spent 27 years in baseball
before joining the Saints in April, said it will be forgotten when football season arrives.

University of South Alabama economics professor Semoon Chang said he didn't think it was right for governments to
subsidize professional sports teams.

"I don't think governments should do things like that but the fact is they do," he said.

Chang, who has done economic impact studies for sports teams and events in Mobile, said he is confident that the
franchise provides enormous economic benefits for New Orleans but taxpayer subsidies for sports teams have
become a real problem nationwide.

"Likely, the only remedy will be to pass a law and ban government subsidies for sports teams," Chang said.

He said that cities and their governments are now competing for sports franchises to the point that they have
to give incredible incentives and even subsidies.

Chang pointed out that the real problem stemmed from the salaries that the millionaire players are being paid.

"Actually, it is worse in baseball and basketball than football and these costs are being passed down to
ticket-buyers and now to governments or taxpayers," he said. "The salaries that the athletes are making are driving
all this need for more money."

Chang said one thing about the Saints' demands that he could not understand was the need for a new stadium. "I
was quite surprised to read that the Superdome was not good enough," he said.

He pointed out that the NFL was still putting Super Bowls in the Superdome.

The Saints will have to wait until early 2003 to learn if the state is willing to build a new $450 million stadium, which
is what they are seeking.

'We've had a bad time'...but area's economic numbers holding steady
Mobile Register
06/17/01
By ANGIE DROBNIC
Business Reporter

The Mobile economy may be struggling, but it isn't succumbing to a full-blown recession, according to the most recent monthly  statistics on the Mobile area economy.

"We've had a bad time since June 2000, there's no question about that," said Semoon Chang, an economics professor who directs the University of South Alabama's Center for Business & Economic Research.  "But once we start seeing a turnaround, it will come quickly."

For the first four months of the year, tax collections, tourist counts and job numbers seem to be staying about even with last year, and in some cases have increased, if only slightly.

That's good news, especially since the first quarter of last year was fairly robust.  Economists define recession as two consecutive quarters of negative growth.  Staying even means Mobile is not falling into recession, said Chang, who compiles the numbers on a monthly basis.

Sales tax collections:  flat

Sales tax collections, which reflect how much consumers spend, held almost steady in the city and county during the first four months of 2001 compared with the same period the year before, Chang said.

In the city of Mobile, collections dropped by less than 1 percent to $23.7 million, down from $23.8 million.  In Mobile County, collections dropped to about $14.7 million, down 2.7 percent from $15.2 million during the first four months of 2000.

The state suffered a little more than the Mobile area in its tax collections.  Statewide sales tax collections for the period fell by about 3.5 percent, to $494.9 million, compared with the previous year's $513.1 million.

But the state collected more use taxes and income taxes, so total state tax collections for the four months essentially were flat, with $2.08 billion collected this year compared with $2.09 billion collected last year.

Chang's analysis:   Mobile's economy is doing a little better than the overall state economy.  He said that trend should continue because the state's persistently poor rural areas traditionally drag down the state's overall economic growth.

Employment:  flat

Despite several layoff announcements this year, the number of people employed in Mobile County stayed about the same, increasing less than 1 percent.

An average of 192,430 people were employed in the county during the first four months of the year, compared with 191,868 people last year.

The employment number has remained about even because of more service jobs.  But those jobs don't pay as well as the ones lost at Mobile paper mills such as International Paper Co. and Kimberly-Clark Corp., Chang said.

Tourism :  mixed

Mobile's tourism industry had a mixed performance, according to the gate counts at 10 area attractions during the first four months of the year.

Some locations drew greater attendance than the previous year.  The Fort Conde Welcome Center, the Gulf Coast Exploreum Science Center and the Dauphin Island Fishing Pier all saw gains of about 5 percent in 2001 compared with 2000. The USS Alabama's visitor count was up 10 percent, and the Bragg-Mitchell Mansion was up 20 percent.

But gate counts dropped at the Oakleigh Museum House, the Mobile Greyhound Park and the Mobile Museum of Art, which is in temporary quarters whiles its new home is being built.

Overall, visitors to tourist attractions declined 3.3 percent during January through April, compared with the same period last year.  Visitors numbered 370,327 in 2001 compared with 383,060 in 2000.

Housing:  down 10 percent

Among the worst drops tracked by the Center for Business & Economic Research was in Mobile County's housing market.  The number of homes sold through Multiple Listing Service, which includes most residential sales, dropped by 10 percent, to 1,319 homes sold from January to April, compared with 1,455 homes sold during the same four months last year.

That drop isn't so startling, however, when you consider that the number of homes sold through the service has almost doubled since 1990, Chang said.  Falling interest rates, which make it easier for borrowers to get credit, will help those numbers, he said.

Chang's outlook:  optimistic

There's other economic good news on the horizon as well:  Chang predicts the economy will pick up by the end of this year or in the first quarter of 2002.

Taxpayers should receive refunds later this year from the federal government, and now is not the time to save that wind-fall, he said.

"People should spend it to stimulate the economy," he said.

In Mobile, Retirement Systems of Alabama has said it will spend $147 million to build its RSA Battle House Tower.  The Alabama State Port Authority has embarked on a multi-year, $300 million building campaign that will include a new terminal for containerized cargo.

Both of those projects should provide a significant boost to the Mobile area economy, Chang said, sending it ahead of the state as a whole.

"We'll probably lead the state in recovery," he said.

Mobile's Tricentennial, a year-long celebration of Mobile's 300th anniversary as a city, should bring in extra tourist dollars in 2002, Chang said.

"There's a good chance we'll see a better economy and lots of tourism next year," he said.

Economic benefit at least $255 million
Mobile Register
06/06/01
By ANGIE DROBNIC
Business Reporter

The $147 million office tower and hotel planned for downtown Mobile will pump at least $255 million into the economy during its construction and untold benefits long afterward, said economist Semoon Chang of the University of South Alabama.

"It's a really big project that will be good for the local economy," said Chang, the director of USA's Center for Business and Economic Research who tracks business indicators for Mobile County.

Retirement Systems of Alabama announced last week it intends to build a $100 million office tower, renovate the historic Battle House hotel for about $32 million, and have the city of Mobile spend $15 million on a new parking garage.

Using models developed by the U.S. Department of Commerce's Bureau of Economic Analysis, Chang estimated construction related to the tower and hotel will create a $255 million overall economic benefit. The impact on Mobile will depend on how much is spent with city contractors, he said.

The construction will affect 2,950 workers by creating new jobs or giving existing jobs more work, Chang said. The project will produce $70.5 million in additional wages for new and existing workers.

The models can't predict exactly how many of those jobs will be newly created, but they account for a variety of effects such as new construction jobs and how workers will spend their money for transportation, on health care and at restaurants, among other things.

The long-term impact of the building at the corner of Water and St. Francis streets could be even greater, but that is much more difficult to quantify and depends on how many new businesses locate in Mobile because of the project, Chang said.

For instance, Celia Wallace, who is selling the long-vacant Battle House Hotel building to RSA for $2.5 million, said at a news conference Friday that a technology company from the Carolinas already has contacted her about the possibility of moving operations into the new tower.

RSA will also market the city of Mobile to prospective tenants from around the country, Chang said.

"That's where the real beauty of the project is. It will bring a lot of tenants from outside Mobile," Chang said.

RSA controls about $26 billion in assets for the benefit of retired state employees. It has real estate holdings throughout the state, including office towers in Montgomery, the Grand Hotel in Point Clear, and the Robert Trent Jones Golf Trail.

It advertises these projects through newspapers owned by Community Newspaper Holdings Inc. and television stations owned by Raycom Media. RSA has heavily financed the expansions of the two companies.

"By having the RSA tower, Dr. Bronner will have a vested interest in seeing it filled," Chang said. "So he'll want to see Mobile succeed, and he'll promote it for his own interests."

Once construction is complete, 300 to 500 service jobs will be created at the tower and the 240- to 250-room hotel, including support workers such as clerks, housekeepers, maintenance workers and restaurant workers.

Construction of what will be named the RSA Battle House Tower is expected to start this summer and last about two years.

The City Council on Tuesday approved an agreement with RSA, but the agreement includes no stipulation about how much construction money must be spent in Mobile.

Steve Walker, the city's director of historic downtown redevelopment, said he is confident that David Bronner, RSA's chief executive officer, will use Mobile area contractors as much as possible.

"Dr. Bronner is mindful of using the resources available to him in the region in which he's working. He's a good steward," Walker said.

Chang said he believes about one-third of the economic benefits generated by the new building will go to companies outside Mobile.

Barbara Estes, president of the Mid-Gulf Chapter of the Associated Builders and Contractors, said her members had hoped the city of Mobile would require RSA to spend a certain percentage of construction money with Mobile area contractors.

"It's a big project, but we do have local contractors who are able to handle that scale," Estes said.

Nevertheless, Estes said Mobile area contractors still are thrilled with the project, which will add 600,000 square feet of office space to the city.

"I had a contractor in my office this morning who said it was the biggest coup Mobile's pulled off in the last decade," she said.

Editorials: Skyscraper, hotel project can ease economic woos
Mobile Register
06/03/01

David Bronner's offer to build a new downtown office tower and renovate the Battle House Hotel should have city officials dancing a jig.

It's a deal that's too good to pass up - even with the economy in a slump. In fact, it could go far toward pulling Mobile out of the economic doldrums that have dogged the city since last December, when International Paper Co. announced the closing of its Mobile paper mill, throwing nearly 900 employees out of work.

Dr. Semoon Chang, a University of South Alabama economist, says the proposed office/hotel complex would have a "major impact" on Mobile's economy.

Mr. Bronner proposes to invest $100 million of Retirement Systems of Alabama funds to build a 35-story, 600,000-square-foot office building in downtown Mobile, and another $32 million to renovate the historically important Battle House Hotel. The once-luxury hotel, built in 1909, has sat vacant since 1974.

The construction work alone would create about 2,000 jobs, and the resulting office/hotel complex can lure major firms that want first-class office space in the city. Furthermore, the new hotel would position Mobile to attract bigger conventions.

RSA plans skyscraper downtown
Economist says skyscraper/hotel project could create 2,000 jobs
Mobile Register
06/01/01
by Kathy Jumper

David Bronner plans to invest $132 million in downtown Mobile by building the city's tallest office tower - 35 stories - and renovating the historic Battle House Hotel, according to city and project officials.

Here's how the project would work:

An estimated 2,000 jobs, full- and part-time, would be created during construction of the hotel and the office tower, said Semoon Chang, an economist at the University of South Alabama, who has done an economic impact study on the project for the city.

"This is a huge project," Chang said. "It will bring new businesses into Mobile who have been wanting some good office space. And once we have the hotel, the MCVC (Mobile Convention & Visitors Corp.) will go after larger, upscale conventions. That will also have a major impact on the city. And we will have permanent employment at the hotel."

We Have to Raise More Money For Schools
Mobile Register
04/12/01
By Angie Drobnic

Residents of west Mobile and north Prichard could bear the brunt of a tax proposal to increase school funding, University of South Alabama economist Semoon Chang said Wednesday.

Speaking to a Mobile United committee meeting, Chang said residents on the cities edges could wind up paying higher property taxes, higher gasoline taxes and higher sales taxes charged in unincorporated areas if the multi-pronged tax referendum passes May 15.

"We've probably lost some votes just by the way it's set up," said Chang, director of USA's Center for Business and Economic Research.

Chang said he supports a tax increase because Mobile County's local tax contribution is among the lowest in the state.

"We have to raise more money for schools," he said.

The May 15 ballot measure separates voters into those who live in Mobile and Prichard and those who live in the rest of Mobile County.

Voters must first answer a yes-or-no question on whether taxes for schools should be raised at all.

Mobile and Prichard voters then will choose one of two options: a 12-mill increase in property taxes; or a 4-mill increase in property taxes combined with a half-cent sales tax increase.

Chang said that most observers predict that if a tax increase is passed, county voters will avoid the highest property tax proposal by opting for the property/sales tax combination.

If that holds true, residents in west Mobile and in north Prichard could feel the increase more because they would be more likely to shop in unincorporated areas where sales taxes could go up a half-percent.

In west Mobile, people tend to shop along Schillinger Road, while north Prichard residents go to Saraland or Chickasaw.  Those people are unlikely to support the new tax measure, Chang said.

The sales tax rate on Schillinger Road, which is within Mobile's police jurisdiction, is 7 percent.  Chickasaw's sales-tax rate is 9 percent and Saraland's is 8 percent.

The rate is 9 percent in Mobile and 10 percent in Prichard.

The effects of different types of tax increases could have other unintended consequences as well, Chang said.

Property taxes already are higher in the cities than in the county.  The disparity could grow even wider if county voters adopt the lowest possible property tax increase, and that could lead to to more development outside the city limits, Chang said.

"The greater the difference in property taxes between the city and the county, the greater the housing migration to the county," he said.  "It has been happening in the past.  This will speed it up."

A mill is $1 for each $1000 of assessed property value.  Residential property is assessed at 10 percent of market value.  Someone with a $100,000 home would pay $120 more in property taxes under a 12-mill increase and $80 more under an 8-mill increase.

Also, sales-tax compliance could go down as well because the taxation system has become so complex, Chang said.

"Complicated forms and ordinances tend to lead to greater non-compliance in sales taxation," he said.

Mobile's Economic Slump Deepens
Mobile Register
04/05/01
Angie Drobnic

With this week's news that Mobile soon will lose hundreds more manufacturing jobs, one question immediately comes to mind: Who's next?

"I just don't know where it's going to end," said Semoon Chang, director of the University of South Alabama's Center for Business and Economic Research.

Kimberly-Clark's downsizing of its Mobile mill and the closure of rayon maker Acordis Cellulosic Fibers Inc. probably will suck between $60 million and $80 million out of the area's economy, Chang said.

Between the two announcements, the area will lose 439 jobs by June.

Chang, an economist widely regarded for his tracking of Mobile business activities, said the layoffs announced this week diminish any hope for a fast recovery from last year's loss of International Paper Co.'s Mobile mill and other cutbacks.

"The economic slump in Mobile will last that much longer," he said, adding that more layoffs may be on the way.

The mill operated by Sappi Fine Paper North America in Mobile, by the company's own admission, could be the top candidate for any further cutbacks.

Sappi's 500-worker mill gets energy from Mobile Energy Services Co, the same power supplier that Kimberly-Clark blamed for high energy costs and, as a result, its newest cutbacks.

Sappi and Kimberly-Clark are trying to get Mobile Energy Services, which has declared Chapter 11 bankruptcy, to cut its prices for electricity and steam.

Economist: School cuts will be felt throughout Mobile
Mobile Register
02/15/01
By JEB SCHRENK
and BRENDAN KIRBY
Staff Reporters

The nearly $29 million in cutbacks the Mobile school board approved for this fiscal year could have a short-term impact of as much as $60 million on the local economy, said Semoon Chang, director of the Center for Business & Economic Research at the University of South Alabama.

Moreover, Chang said, the cuts will have a significant impact on 299 non-instructional employees - almost half of whom are custodians and all of which are probationary employees - who are proposed to be laid off.

"The impact on the individuals will be very harsh," said Chang, the Mobile area's leading economic analyst. "They are at the level of income where they don't have much savings at all. ... They live paycheck to paycheck."

Cutting out salaries of the 299 people would save $1.85 million at the end of the fiscal year, according to numbers released by the school board.

School board members approved the cutbacks to fill a hole left by a $15 million reduction in state allocations this year and to prepare a financial cushion for the next. The cuts come at a time when school system officials say they are already behind by about $4 million for the fiscal year.

Community leaders said the reductions hit hard, and some urged action in order to stop what they called bleeding.

"It's like losing a small industry," said Mobile Councilman Reggie Copeland of the employee reductions. "I'm sorry to hear this. This is devastating to the community, but the community needs to wake up" and offer assistance.

Mobile County Commission President Sam Jones used the occasion to urge the passing of a commission-endorsed 12-mill property tax increase. The tax hike must make its way through the Legislature, and voters would also need to approve it.

Three other property tax referendums since 1988 have been voted down, and some have urged that a 1-cent sales tax increase is the way to go.

"It appears to be very drastic, and it will have an adverse effect," Jones said of the cuts. "We have another opportunity to prevent this from happening."

The three-member County Commission sent a letter Wednesday to the school board offering assistance "in establishing a plan" to address needs for this fiscal year, which ends Sept. 30.

"The Mobile County Commission wholeheartedly supports public education and is willing to assist in bridging any needed gap until a permanent and stable solution is found," the letter states.

Jones said the county is reviewing the school system's budget to determine essential needs. He said one way would be through a loan or multiple loans, but he said it is too early to say what will happen.

State schools Superintendent Ed Richardson has encouraged many of the state's school systems, including Mobile's, to take out loans to help deal with reductions in education funding.

Baldwin County public schools spokesman Randy Davis let out an audible gasp when told of the cuts announced Wednesday in Mobile County. Davis said such cuts could have a major ripple effect upon schools in Baldwin.

For one, the elimination of sports programs in Mobile would force Baldwin schools to scramble to schedule new opponents.

Though the Mobile County school board has not officially voted yet to eliminate funding for coaches' supplements and band directors' supplements for 2001-2002, all five board members have said they will vote in favor of the cuts. Wednesday's move cuts only the first $110,000 that would be paid out of the current fiscal year budget to cover the September 2001 coaching expenses.

Davis said between 40 percent and 50 percent of the opponents on Baldwin's football schedules last year - excluding Gulf Shores High School - were from Mobile County. He estimated that other Baldwin sports teams played similar percentages of Mobile schools.

Davis said Baldwin schools probably would look to private schools, which also would need to schedule more games if they lost Mobile opponents. In addition, he said, schools would explore having more games with schools in Florida and Mississippi.

Davis, who used to work for Mobile County schools, said the last time the schools faced double-digit cuts in funding, in the early 1990s, enrollment in Mobile dropped, while it surged in Baldwin. He said he would expect a similar trend this year.

This time, however, Baldwin schools will have fewer options to absorb the newcomers. The state's efforts to reduce the number of temporary classroom trailers makes it much more difficult to manage sudden growth, he said.

And Baldwin already is growing rapidly, Davis said. He noted that the school system this year enrolled 431 more students than administrators had forecast.

"It's definitely going to have an impact," he said. "I get a significant number of calls each week with questions about schools ... from Mobilians."

Davis said principals likely will be more aggressive in enforcing rules prohibiting out-of-county children from attending Baldwin schools.

Economic stall started in summer
Mobile and the nation see varying causes -- and effects -- of downturn
Mobile Register
02/04/01
By ANGIE DROBNIC
Business Reporter

The Mobile economy slammed on the brakes last summer, right about the time the national economic engine started to idle, according to data collected by University of South Alabama economist Semoon Chang.

For the first time in at least a decade, city sales tax revenues -- which reflect how much people spend on taxable goods - declined, mostly due to the year's second-half slowdown.

"It has never happened this way in 20 years, an actual decrease over a six-month period," said Chang, who heads the university's Center for Business and Economic Research.

For the year, city tax revenues dropped to $67.4 million, down from $67.8 million in 1999.  Most of the decline came from July to December, when revenues dropped 3 percent to $32.3 million, down from $33.3 million in the second half of 1999.

The national economy stalled during the second half of the year as well, according to data from the U.S. Department of Commerce.  The gross domestic product grew 5 percent during the year, but growth during the third and fourth quarters declined to 2.2 percent and 1.4 percent, respectively.

The causes for Mobile's slowdown are varied.

International Paper closed its Mobile mill, taking 790 jobs out of the economy.  The city's tourism industry saw one of its worst years in a decade, losing travelers and their money to Biloxi's casinos.  And retailers reported that shoppers seem more cautious and are spending less.

Nevertheless, Chang said, a few big projects in 2001 could give the Mobile economy the gas it needs to get moving again.

Loss of jobs hurts retail

Though IP's closing was announced in December, the effects started back in early summer, when the company probably started to reign in spending, Chang said.

The company paid its employees about $37 million a year, and its non-wage spending reached about $39 million annually.  Those dollars would circulate through the economy as employees spent money and local suppliers gained business from IP, creating a multiplier effect.

"It's worse than many of us think it is, because it's not like $74 million out of Mobile County -- it's like taking out $140 million," Chang said.

Some retailers said consumer confidence is flagging.

MMI Music, a store on University Boulevard, saw a big decrease in spending during the middle of the year, said President John Matherne.

"People as a rule bought lower-ticket items," he said.  "I think you saw a lot of consumer care last year in what they were purchasing."

Some of his customers mentioned the falling stock market as reasons they wouldn't buy a more expensive guitar or set of drums, Matherne said.

He declined to give specific revenue numbers, but said a robust Christmas allowed MMI to end the year up 9 percent -- still less than what he had hoped.

"I feel fortunate we had a good year. Most music dealers in the Southeast experienced a very soft year," Matherne said.

While the city saw declining revenue, Mobile County's sales taxes remained flat, up only slightly to $43.91 million in 2000 from $43.87 million in 1999, Chang said.

County employment fell about 2 percent, to 193,498 jobs in 2000 from 197,483 jobs in 1999, a loss of about 4,000 jobs.

Tourism industry

The overall decline in the economy was just one more obstacle faced by the area's tourism and travel industry in 2000.

Fewer and fewer visitors are coming to the Fort Conde visitors center:  About 56,000 showed up this year, compared with a  1992 high of 95,894.

Bellingrath Gardens saw its fourth year of declining attendance, after reaching a decade high of 217,596 visitors in 1996.  In 2000, visitors numbered 167,473.

The Mobile Greyhound Park appears to have suffered the steepest decline.  Starting at 648,031 visitors in 1990, the park's attendance figures have dropped every year, to a low of 244,559 in 2000 -- a loss of more than 60 percent.

The primary cause for the overall drop in visitors?  Tourism officials blame the Mississippi Gulf Coast's glittering casinos, which have lured entertainment-seekers away from Mobile since they opened in 1992.

"They've been building steadily.  They're up to 17,000 rooms," Brenda Scott, president and CEO of the Mobile Convention and Visitors Corp., said of hotel rooms.  "But we're working very hard to promote the city.  You can't give up, you have to keep competing."

The MCVC has hired Donny Crain, formerly of the Heart of Arkansas Travel Association, as its new tourism director.  Crain will start work at the end of February, replacing Terri Gresham, who left the position in September.

Crain will focus on regional opportunities to bring tourists to Mobile.

Scott said she has transferred more of the MCVC's attention toward hooking short-term meetings, that is, groups that schedule conventions a year to 18 months in advance.

Attendance at Mobile conventions has dropped steadily since 1997, from 111,880 to 83,340, a fall-off of 25 percent.

Scott blamed the drop on a proliferation of convention centers, with more being built and opened nationwide.  More places are chasing roughly the same number of conventions, she said.

Hotels suffering

The slowdown in the overall economy and Biloxi's dominance in the tourism industry have thrown a one-two punch to area hotels.

Revenues from lodging taxes, an indicator of the number of rooms rented, have declined for the past two years after hitting a high of $2.27 million in 1998.  Taxes on 1999 revenues dropped to $2.09 million; 2000 revenues dropped again to $2.07 million.

Another blow has come from increased building in Gulf Shores, said Charles Cuff, president of the Mobile Area Hotel and Motel Association and the general manager of The Lafayette Plaza in downtown Mobile.

As Biloxi to the west grabs charter tours away from Mobile, Destin to the east seems to be snatching convention business, Cuff said.

"We don't get the overflow from Gulf Shores like we used to.  We're kind of between a rock and two hard places," he said.

Adding insult to injury is the fact that a lot of those conventions are gatherings of Alabama's own government and business groups, Cuff said.

"Over 33 percent of state associations went out of state, and about 75 percent of those went to Destin," Cuff said.

His group is working with state tourism officials to urge Alabama groups to hold their conventions in their home state.

For the future, Cuff said he is most worried about the condition of public schools, which he believes is closely tied to job growth and the overall economy.

"It's hard to attract a company that's used to a good education system to town when we're having our problems with funding," he said.

A vigorous business climate means corporate travel, a mainstay of the hotel industry, he said.

"The hotel industry is the first affected in an economic downturn because the first things companies cut is their corporate travel," Cuff said.

The Mobile Regional Airport has been one travel-related business to buck the trend of declining numbers.

Mobile Regional Airport finished the year with a 10 percent increase in ridership over 1999, thanks largely to lower fares that spurred summer travel.

Last year, 790,379 travelers passed through the airport, compared with 712,654 in 1999.

The airport saw fare prices drop after a new carrier, United Express, started service to Chicago and Washington, D.C., in October 1999.  That forced other airlines to become more sensitive to price, said Anderson Screws, a spokeswoman for Mobile Airport Authority.

The 10 percent increase marked a nice recovery for the airport from 1999, when ridership dropped about 15 percent after the discount airline AirTran left mobile in June 1998.

Chances for recovery

Mobile's economy could come around this year, economist Chang said, if a few big projects get off the ground.

First, spending on the Alabama State Docks could give Mobile a jump-start later this year.

Voters passed a constitutional amendment called Amendment One that authorizes the state to issue up to $350 million in new bonds, to be paid off by diverting future offshore natural gas and oil royalties.

Docks officials have said they intend to use their portion, about $100 million, to build a $300 million container port with adjacent warehouses and distribution centers just south of downtown.  The rest of the project money would come from federal and private sources, officials said.

Another of the city's long-held dreams -- attracting cruise ships to dock downtown -- would give hotels a lift, Chang said.

MCVC head Brenda Scott and city staff had hoped to attract a cruise line by the end of 2000; Scott said she still believes the city will soon attract a vessel.

Finally, construction of a 35-story downtown office tower by David Bronner, head of the Retirement Systems of Alabama, could juice the local economy if the City Council approves a deal.

City staff has said Mayor Mike Dow will bring a partnership plan to the Mobile City Council as soon as details are finalized in a couple of weeks.

"If all three of those projects happen," Chang said, "we'll have a strong recovery, beginning in the second half of this year."