Government: A blessing for the economy

Times like these (as in “so-so”) make me glad to live here. Although the recent economic downturn (no one is using the R-word yet) has business and industry in many parts of the nation pulling on the emergency brake, the Augusta-Aiken metro area has simply eased off on the gas pedal.

The local economy’s behavior is not all that different from that in previous national downturns. The topic came up during a conversation I had with an executive at a recent Leadership Augusta event. The lifelong area resident mentioned that during several national recessions in recent history, “Augusta chose not to participate.”

Had our conversation lasted longer than four minutes, we might have touched on “why”: government.

Yes, the very government we curse is also what smooths out the peaks and valleys of economic cycles. If the metro area were a table, three of the legs would be Fort Gordon, the Medical College of Georgia and Savannah River Site – all large, government-supported institutions.

The fourth leg is either the region’s diverse manufacturing base or its large concentration of health care centers. I’m not ready to say which one it is, but evidence clearly shows which of those two industries is growing and which is stagnant (hint: it’s the one where the federal government pays 45 percent of the bills).

Back to the other three table legs for a moment. Each is largely immune from business cycles:

- Fort Gordon: With 16,000 military personnel assigned to the post, 2,900 civilian employees and 2,700 contract workers, Fort Gordon is the region’s largest employer.
The post focuses on high-tech communications training and development, something the military will need more of.

As a bonus, the fort’s military intelligence components have allowed it to attract the National Security Agency’s communications center, a half-billion- dollar project that will employ 4,000 people by 2012. With national security never going out of style, Fort Gordon will be even better positioned whenever the next round of base closings takes place.

- MCG: There are two industries where costs never go down: health care and higher education. Fortunately for Augusta, it has an institution that combines the two.

Sure, there is a lot of apprehension about expanding MCG in Athens, but the state medical school’s core will always remain in Augusta, where more than 5,100 faculty and staff members and residents are on the payroll. That doesn’t include the 3,200 people who work at MCG Health Inc., the company that operates its hospitals and clinics.

- SRS: It doesn’t employ nearly as many people as it did during the height of the Cold War, but the 310-square-mile installation still employs more than 10,000 (well- paid) people.*

The $3 billion mixed-oxide fuel facility, which will turn weapons-grade plutonium into fuel for nuclear power plants, will extend the life of the installation and create about 800 full-time jobs when construction is completed in 2014.

Is there a downside to having stable, recession-insulated employers? You bet – slower economic growth. The NSA center and MOX facility notwithstanding, government isn’t exactly a growth industry.

What the executive at the Leadership Augusta event didn’t mention (and I don’t hold it against him, considering it was only a four-minute conversation) is that the Augusta metro area also chooses “not to participate” in national economic booms.

Consider this: When the U.S. economy was enjoying its fastest-ever peacetime expansion during the 1990s, the Augusta area was in a recession caused by post-Cold War layoffs at SRS.

The same thing would likely be happening now had Fort Gordon ended up on the chopping block during the latest round of base closings in 2005.

That being said, there are a lot of communities out there that would love to have just one of our table legs. We should be thankful for having all three.

MEET THE NEW BOSSES: With billions of government dollars in the SRS trough, heads are spinning throughout town because people no longer know whose butt they need to kiss.

That’s because SRS’ owner, the Department of Energy, recently upheld its decision to award the management and operating contract to Fluor Corp.-led Savannah River Nuclear Solutions LLC. The installation’s previous operator, Washington Savannah River Co., has ruled the roost (under various incarnations) since taking it over from DuPont in 1989.

Community officials, business leaders and liaisons are no doubt in a tizzy.
About 100 top managers at the site will be replaced by the new regime, which consists of Fluor, Northrop Grumman, Honeywell and Lockheed Martin.

A 90-day transition period began this month. A name you’ll hear more of is Chuck Munns, a retired naval officer, who has been named head honcho.

BRINGING IT BACK: Every day without the TEE Center is a day the city misses out on a convention or trade show. One of those is the LandWarNet Conference, the military trade show that replaced the Fort Gordon Signal Symposium in 2005.

The sponsors of the event already have indicated they would like the show moved from Fort Lauderdale, Fla.,** to Augusta.

Local tourism officials no doubt will be heavily courting organizers after the TEE Center is built.

The cancellation of the Signal Symposium put an end to 3,000 military officials and private-sector contractors coming to Augusta. In 2005, those visitors pumped an estimated $3.6 million into the local economy.

Augusta will have a chance to bring them all back after it TEEs off. So let’s get moving, already.

WHAT’S GOING ON IN FRONT OF THE BOBBY JONES HOME DEPOT? Rooms to Go’s new store. It’s old news (chronicle.augusta.com/stories/081107/bus_139260.shtml) but I thought I’d mention it because people tend to forget these things.

WHERE’S COSTCO GOING? Dunno.

The suburban Seattle-based warehouse chain is said to be very interested in building near Augusta Mall, specifically on property occupied by Bobby Jones Ford. The Lawrence family, the dealership’s owner, has been approached several times by company representatives but – as of this writing – has not entered into a contract to sell their 22-acre tract.

In December The Augusta Chronicle reported that the developers of the Village at Riverwatch, which we all recently learned will be the home of Bass Pro Shops, was listing Costco in its marketing materials as an anchor tenant. It turns out that was news to Costco, too.

The company had only been in discussions with the developers and had no formal contract to locate there. The marketing materials were abruptly changed after Costco officials blew a gasket.

Of course, just because Dallas developer MGHerring Group jumped the gun doesn’t mean Costco won’t end up locating there. For all I know (which isn’t much) the Village at Riverwatch could be the brand-spanking-new location of Bobby Jones Ford.

WHAT’S THE FASTEST LAND ANIMAL? The cheetah.

THE BILL IS IN: Last week, Georgia Power announced it received no outside bids to build two new reactors at the Alvin W. Vogtle Electric Generating Plant. That means it will move forward with its self-build proposal now under review by an independent evaluator hired by the state Public Service Commission.

What’s the price tag looking like? Georgia Power said its 45.7 percent share of the project – which includes financing costs and inflation – will likely be $6.4 billion. That means the final tab will be well over $12 billion.

The final cost to you, ratepayer, has yet to be determined, but Georgia Power estimates its typical customer, using 1,000 kilowatt-hours a month, would see a base rate increase of about $12 per month in 2018, when both units are fully operational.

* I earn almost as much as their janitors.

** A city that hasn’t had a military base since 1842.