From the announcement of a couple of eye-popping, job-generating economic development projects early in the year to a mad rush of big corporate acquisitions right before the holidays, 2012 was a year of significant business news events in Atlanta and Georgia.
Here is a glance at some of the noteworthy stories.
Big Development Wins
Change may be coming in how Georgia leaders expect to grow business in the coming years. A state that has built its base of jobs and headquarters in part on companies lured from other states seems to be focusing more on organic expansion.
There’s no way to ignore the spoils that came in 2012 from bringing operations of big companies South, however. Think: Caterpillar, Baxter International and General Motors
CAT came first. In February the Illinois manufacturer confirmed it would build a $200 million heavy equipment plant and distribution center near Athens that would eventually employ 1,400. What’s more, CAT figured its suppliers would in time relocate 2,800 more jobs down South, many to Georgia. Ultimately, the facility will mean nearly 5,000 total jobs, economists said.
Baxter, an Illinois maker of vaccines and medical devices, said in April it would build a manufacturing plant in Stanton Springs, about an hour east of Atlanta where 1,500 employees could end up working when the $1 billion facility becomes fully operational in 2018.
Finally, The Atlanta Journal-Constitution reported General Motors has picked a former UPS facility in Roswell for a technology development center that could bring more than 1,000 new jobs to the region.
T-SPLOST Thumping
Voters in July rejected a transportation sales tax proposal called T-SPLOST designed to alleviate traffic woes that have vexed business people worried about the impact on future development.
The 10-year, 1-percent sales tax would have funded various improvements, and business leaders supported the idea. About $6 billion in revenue would have paid for 157 projects in the 10-county metro area, with additional funding for smaller local projects. The business community warned that without the improvements it would be hard to attract employers to the region in the future.
One site selection consultant termed transportation Atlanta’s “Achilles heel,” and business leaders initially put a positive spin on the ballot box thumping. But a Metro Atlanta Chamber strategy unveiled last month emphasized internal growth, an indication, perhaps, that the area’s ongoing transportation issues won’t be any help in attracting jobs from outside the state.
New Digs for Falcons
“Oh, give me a dome, a retractable dome where the Falcons and their opponents can play …”
It had to be music to the ears of Falcons owner Arthur Blank when the Georgia World Congress Center Authority began to sing from the same page this month to the tune of a $1 billion (give or take) play palace. A deal was roughed out under which the club would pay the bulk of the construction costs and keep most of the revenue from the new stadium, while the public would pick up a third of the building cost, funding it through an extension of the bed tax. Details have to be cobbled together that would allow state legislators to make it happen.
Opponents said Blank and his team didn’t need financial assistance, and that the Georgia Dome (which would be leveled) is hardly an antique at 20 years old. Too, there was concern that the economic development potential was overrated, and that the spinoff business from a new stadium wouldn’t be much more than that of the old one.
Security Breaches
In a world where people eagerly share intimate details of their lives with strangers as well as friends through social media, it sometimes seems as though all information is public.
Still, some things are still considered private. Like personal health care and credit card information. But security breaches at some Atlanta companies this year showed just how vulnerable we really are.
In April, Emory Healthcare admitted it had lost the personal and health information of 315,000 patients. Information included Social Security numbers, patient names, diagnoses and medical procedures provided. Emory said it lost computer discs with the data and had no idea how it happened, who took it, where it might have gone, or what harm might be done with the information.
Also this year, Sandy Springs debit and credit card payment processor Global Payments had a major security breach, and hackers accessed personal information of 28,000 Georgians in a computer breach at Nationwide Mutual Insurance.
Elephant in the (Waiting) Room
The federal health care law was a significant issue in 2012 for almost every business.
For insurance companies, hospitals, doctors and anyone in the health care industry, the November election confirmed that the law is not going away and prompted preparations to move into high gear. Many in health care are still waiting on the federal government to produce all the detailed rules and regulations that will tell them exactly how the law will work.
With most of the law’s major provisions set to take effect in 2014, insurance companies worked furiously to prepare the products that will be offered under the law. Meanwhile, doctors and hospitals tried to come up with plans for compliance especially after Georgia announced that it would not expand its Medicaid program, as the law envisioned.
This month, Piedmont and WellStar, two of Atlanta’s largest hospital systems, said they are forming an insurance company — a bold move in a rapidly changing health care marketplace.
Economy: Not there yet
Georgia dug itself a deep hole during the downturn, bigger than most other states and the nation as a whole. No surprise, the recovery hasn’t been swift or smooth. That was evident in 2012.
But the future is looking better, economists concur, and things improved some this year. That was visible in the latest state job numbers. Georgia’s unemployment rate fell to 8.5 percent in November from 8.7 percent in October to reach the lowest level in nearly four years. In November 2011 the unemployment rate was 9.5 percent.
Last month, UGA forecasters projected the state would do better than its peers starting in 2013, saying that the air finally has been let out of the real estate bubble. The expectation: Look for the growth rate in Georgia to outpace the U.S. average, with lower unemployment, more job growth and a mild improvement in home values.
New Nukes
The first new from scratch nuclear power reactors in the U.S. in 30 years, being built at Georgia Power’s Plant Vogtle near Augusta, proceeded in 2012, but the watershed development was not without its challenges. Regulatory issues, commercial disputes and heightened scrutiny slowed the $14 billion project.
The two reactors were scheduled to start operating in 2016 and 2017, respectively, but now are at least seven months behind schedule, according to one assessment.
The latest concern came when a consultant, in assessing the anticipated economic benefits of the project, disputed Georgia Power’s $5 billion figure. Instead, the benefit will amount to $3.5 billion over 60 years. The longer it takes to build the reactors, the more financing and capital costs customers have to pay, diminishing long term economic gains, the consultant’s report said.
Hartsfield takes off
A key economic asset for metro Atlanta got two boosts this year. The $1.4 billion, 1.2 million-square-foot international terminal at Hartsfield-Jackson International Airport got off the ground, with passengers checking in for international flights in the spacious new departures hall and others arriving at the facility from foreign countries.
Along with adding the 12-gate Concourse F, the international terminal eliminated the need for Atlanta-bound international passengers to recheck their bags after going through Customs before going back through the airport and leaving from the main terminal. Those passengers now can claim their bags once and exit directly through the international terminal.
In another big airport happening, Southwest Airlines started daily service between Atlanta and Baltimore/Washington, Chicago Midway, Denver, Houston Hobby and Austin.
End of the Year Deals
Big things came late in the year for three local companies.
Atlanta’s IntercontinentalExchange said it was buying the venerable New York Stock Exchange for $8.2 billion and running the business out of Atlanta as well as New York. The 12-year-old electronic trading exchange operator known as ICE said it made the deal with an eye to growing the business.
ARRIS Group, a Suwanee-area media technology company, said it was buying the home business of Google’s Motorola Mobility subsidiary for $2.35 billion in cash and stock. Google would get a 16 percent stake in ARRIS, which has about 450 employees in metro Atlanta, a number that could grow.
Calhoun-based Mohawk Industries acquired Italian tile maker Marazzi Group for $1.5 billion, making it the leader in ceramic tile manufacturing.
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