Flanked by business and legislative leaders, Gov. Nathan Deal announced that Site Selection magazine has named Georgia the #1 place to do business in the nation during a press conference at the Capitol Monday, November 4, 2013.
Photo: Kent D. Johnson, kdjohnson@ajc.com
Photo: Kent D. Johnson, kdjohnson@ajc.com

Deal boasts about Georgia’s business ranking while skeptics question it

Gov. Nathan Deal has put a niche magazine’s glowing endorsement of Georgia’s business environment at the center of his campaign for re-election, frustrating critics who say he’s using the accolade to mask the state’s pressing economic problems.

Site Selection Magazine’s embrace of Georgia as the nation’s No. 1 place to do business is a key part of Deal’s stump speech, an automatic applause line at GOP gatherings and bill-signing ceremonies. Even his TV ads invoke the governor’s vow to better Georgia’s business environment — and cite the endorsement as proof he fulfilled that promise.

The magazine’s stamp of approval came at an opportune time for the governor, who is bracing for a GOP primary and a potential November matchup against Democrat Jason Carter. But it’s come under criticism from skeptics who question whether rankings from a magazine that has long had a business relationship with the state are truly meaningful.

“I have no doubt that CEOs, boards of directors and entrepreneurs care far more about having a skilled workforce, efficient infrastructure and honest — and rational — government,” said state Rep. Scott Holcomb, an Atlanta Democrat who is often critical of Deal. “If we really want to stand out, we have to get these right.”

Deal said in an interview that he’s surprised by the criticism. In his mind, he said, the magazine’s ranking is a crucial marketing tool and not a political calculation.

“You would think they would want to be proud of that fact,” he said. “It’s really hard to understand how people could not think that’s a good thing.”

Movers and shakers

Site Selection was launched in 1954 by Mac Conway, a former Georgia state senator who was an ally of Jimmy Carter’s. With a circulation of less than 50,000, it is far from a household name. But the magazine said its focus on business climate and economic development means its small readership packs a big punch.

It claims as loyal readers corporate executives, site consultants and decision-makers from a majority of Fortune 1000 firms who pull the strings on billions of dollars in new developments and investments. And some states, eager to one-up each other to land the next big jobs deal, have eagerly used the magazine to market themselves.

Georgia’s Department of Economic Development has spent more than $60,000 in the past three years paying for subscriptions and marketing with the magazine. The Georgia Corporation for Economic Development, a nonprofit tied to the state, also gave a $74,000 grant to the Industrial Asset Management Council, which is linked to the magazine’s parent company.

Other local publications, including The Atlanta Journal-Constitution, also have marketing and financial relationships with the state. Records show the AJC has received more than $33,000 from state agencies since 2011.

Adam Bruns, the magazine’s editor, said the publication’s rankings have nothing to do with marketing relationships or advertising spending with the publication. He said the magazine used a formula that includes a survey of corporate consultants and economic metrics such as state tax burdens to put Georgia at the top.

“The findings in our rankings are based on evidence that companies are selecting locations for investment,” Bruns said.

On Tuesday, the governor’s office and economic development officials crowed about the latest Site Selection ranking, which named the state tops for competitiveness.

“With critical factors such as a qualified workforce, solid logistics infrastructure and connections in key international markets,” Economic Development Commissioner Chris Carr said, “it’s no surprise that Georgia outranks other states in this category and our state continues to be the best choice for industry-leading companies.”

The magazine based that ranking on the number of new and expanded facilities in the state, private investment, job creation and calculations of competitiveness based on its own and other organizations’ research.

Mileage over a magazine

Deal isn’t the only politician to try to gain traction from the rankings. Indiana Gov. Joe Kernan also highlighted Site Selection’s top ranking of his state during his bruising 2004 re-election run. At the time, the campaign of Republican Mitch Daniels, who eventually ousted Kernan, criticized the criteria the magazine used to select the state.

Georgia’s governor is getting mileage out of those rankings.

At political events and campaign rallies since the top ranking was released in November, he often invokes the ranking. Deal has even quipped that his audience is becoming fast familiar with the line. The ranking also has become standard in his introduction; a Cobb lawmaker mentioned it Tuesday at the groundbreaking ceremony for a new health center.

Deal’s supporters hope it tempers the negative national attention showered on the state in recent months, including the icy gridlock that embarrassed metro Atlanta in January and the sweeping gun rights expansion signed into law in April that attracted outrage in some corners of the country. Democrats see it as little more than a distraction.

“These stories hurt us far more than any benefits gained from the Site Selection ranking,” said Holcomb, the Atlanta lawmaker. “And these stories keep entrepreneurs from wanting to move here.”

For Deal, though, touting the ranking is an opportunity for him to cite an independent assessment to validate his economic approach. University of Georgia political scientist Charles Bullock also said it plays into the GOP wheelhouse by providing an upbeat message to the unemployed who may not be sold on Deal’s re-election bid.

Frank Woodruff of the National Alliance of Community Economic Development Associations said the rankings matter — to a point. A thriving economy also needs diverse housing options, a reliable health care network, smooth transportation systems and solid schools, he said. And those are all areas where Georgia has struggled.

Some analysts, though, warn politicians not to put too much stock into the rankings.

North Carolina, for example, was routinely at or near the top of the magazine’s list between 1997 and 2012. Yet during that time, the state posted mediocre growth in its gross domestic product and ranked 47th in the nation in per capita income growth, said Brent Lane, who directs the Carolina Center for Competitive Economies at the University of North Carolina.

Georgia, another perennial high-performer in the publication’s rankings, was 30th in GDP growth and 49th in per capita income growth during that same span, according to an analysis Lane conducted using data from the U.S. Bureau of Economic Analysis. And Georgia’s jobless rate was tied for 39th as of March, according to federal labor records.

Lane said toasting a magazine’s endorsement of Georgia’s economic climate is “like celebrating how the football team is doing while a university is going to hell.”

“Georgia has a growing economy,” he said, “but those benefits haven’t translated to its citizens.”

Bullock expects the message to be targeted by the Carter campaign, which declined to comment for this story, should Deal win his party’s nod in this month’s primary. The governor has a ready retort if that’s the case.

“I just can’t understand people who don’t want to have good public relations, good things to talk about in the state of Georgia,” the governor said.

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