By Christopher Butler

Will federal stimulus money jumpstart a struggling economy in northwest Tennessee?

U.S. Rep. John Tanner says it will.

Officials in Washington D.C. took out $1 trillion in debt last year as a way to stimulate the U.S. economy. The national economy continues to suffer from a recession that began in 2007.

But elected officials claim a small portion of the stimulus money will have an effect on Lake County, where the economy has languished for two decades.

On first impression, Lake County seems like an area where the economy ought to flourish.

The region is flush with cotton and soybean farms, yet it’s the nation’s 12^th poorest county. A sizable segment of the population has relied on welfare benefits for years. People who live in the region, however, have numerous resources to take advantage of if they wish to learn new job skills (one community college and many truck driving schools).

Lake County contains another huge advantage that begs many to wonder why new private industry failed to invest there years ago. One of its cities, Tiptonville, lies along the Mississippi River and offers prime real estate for any company that ships material by boat. The location is within one-day’s driving distance of most of the nation’s major markets. Additionally, if anyone were to build a port there, it would be in one of the few locations along the Mississippi River that is safe from flooding.

Even with the usual tax and cost of living incentives, county officials (and those in the surrounding counties) still cannot lure companies to create new industry. Officials say that businesses worth billions of dollars are interested in creating jobs in the area, but they balk at the lack of a port that would cost roughly $50 million to build.

Thus far, private, state and federal money has paid for the first phase of the proposed port, but about $15 million more is needed before the port becomes a reality. To make that happen, officials requested, and later received, $13 million in federal stimulus funds.

Regional leaders cite ConAgra as one company that has expressed strong interest in moving to the area – if a port is built. ConAgra officials, however, deny ever expressing interest in northwest Tennessee.

Additionally, one official intimately involved with the project said he and others could have used private money to finish the port – without relying on stimulus money.

AN ECONOMIC CATASTROPHE

Last week, Tanner, a Democrat representing Tennessee’s 8^th Congressional District, had what he said was great news for his constituents in Lake County.

The federal government – or, more precisely, $13 million in stimulus money –will pay to complete the Port of Cates Landing along the Mississippi River, 90 miles north of Memphis.

Once completed, the port will bring up to 2,300 jobs to the region, according to a press release distributed by Tanner’s office.

A request to ask Tanner or his media relations spokesman Randy Ford about the stimulus money was not granted  – Ford said he did not have time to talk to TCPR.

The region’s economy started to deteriorate about 15 to 20 years before the recession began. Lake County’s economy, as well as the economies of the surrounding counties, started to suffer greatly in the early 1990s. Most manufacturers left the area. County leaders said companies left because they found cheaper labor overseas, although they said that no exit surveys were conducted to determine the actual reasons.  The county’s unemployment rates soared. Lake County’s population numbers dripped downward as residents left for job opportunities elsewhere.

County officials tried to recruit new businesses to the area, but even the best of incentives did nothing to entice them. Those same incentives also failed to encourage existing businesses to stay, said Lake County Mayor Macie Roberson.

“We couldn’t do anything. Our taxes here are so low. On this side of the state, our taxes and utilities are lower than that of any other part of the state. There are only so many incentives you can give.”

Jimmy Williamson, chairman of the Northwest Tennessee Regional Port Authority in nearby Dyersburg, said regional officials even offered to help companies with tax abatements and financing of new facilities.

“We have done anything you can legally do in the state of Tennessee,” Williamson said.

“None of those efforts worked.”

According to a recent economic analysis of the region’s economy conducted by Middle Tennessee State University (MTSU), Lake County presently offers no manufacturing opportunities for its residents. The county’s largest employer is the Tennessee Department of Corrections.

The county had a 10.6 percent unemployment rate in 2006, even before the recession began.

The population of the seven county northwest Tennessee region, including Lake County, relies twice as much on federal assistance as the U.S. average. Overall, the region has lost 7,700 jobs since 1990, according to the analysis.

WHY THE PORT?

According to the MTSU analysis, officials in Lake, Dyer and Obion counties started planning for the port 20 years ago as a way to increase their employment rate. Representatives from those three counties incorporated the Northwest Tennessee Regional Port Authority in 2001 to operate the proposed port.

The proposed port offers tremendous advantages to any business that wishes to locate in northwest Tennessee.  The two most important advantages are (1) its one-day drive proximity to 76 percent of the nation’s major markets and (2) its elevation above the 100-year floodplain, which, combined with a deep harbor channel at Cate’s Landing (the deepest of any port between Baton Rouge and St. Louis), protects the area from flood and drought.

After the port opens, the MTSU analysis predicts area wages will increase and thousands of new jobs will be created.

Much of this, however, depends on businesses opening new facilities in the area. According to the grant application for the stimulus money, representatives from companies such as ConAgra, NucorSteel and unspecified others have specifically expressed strong interest in building facilities in northwest Tennessee that are worth more than $1.73 billion – if only the area had a port. Roberson and Williamson also cited the two companies as those that want to expand their businesses in northwest Tennessee.

Attempts to reach NucorSteel for comment were unsuccessful.

A spokesman from the Nebraska-based ConAgra, however, said he was not aware of any such interest on his company’s behalf.

“I spoke to our real estate folks, and they are not aware of any plans or interest with regard to building a facility in northwest Tennessee,” said Jeff Mochal, ConAgra’s director of Communications and External Relations.

“Building a new facility from scratch is a significant dollar commitment, though, and the person I spoke to internally would have knowledge of such an effort. He was not aware of anything.”

Two days later, Mochal responded again, and said the following:

“I have followed a few more paths internally but, unfortunately, I have come to the end of the road. The location and port mentioned (in northwest Tennessee) are not ringing a bell to anyone at ConAgra Foods. We are not currently looking at this location for any sort of expansion or building project.”

ALTERNATIVES TO STIMULUS MONEY?

Regional officials predicted they would somehow gather the federal, state or private funds necessary to fully construct the port, even if no stimulus funds were available.

Before the stimulus, Williamson said he planned to use U.S. Department of Agriculture loans to help pay for the port’s construction.

Kerry L. Brannon, chairman of the Port Marketing Committee, who is responsible for promoting the port from a public relations perspective, admitted that private money would have paid for the port –just in case the project failed to get any stimulus money.

“We had already made contact with different firms that were willing to bring in potential private financing. Their money could have helped us be a part of an investment package. We had contingency plans with local banks and also with some loans that could have been made through federal agencies,” Brannon said.

“Without stimulus money, it would have set us back six months to a year (on building the port).”

Brannon, after speaking with other regional officials, called TCPR one day later. Brannon expressed concerned that his initial remarks would cause the public to have a negative attitude about stimulus money paying for the port.

“Now that I’ve had some time to think about what I said, I wouldn’t say anything other than try to advance this project. The long side of the equation is that these communities have already overextended themselves a lot to get this project. We see it as a last-ditch effort to help our area, and it’s badly needed.”

Roberson, though, maintained that private investors, such as ConAgra, which was worth $1.5 billion last year, would have shied away.

“It would take a really big gambler, someone with deep pockets, to fund something like this.”

If investing in the Port of Cates Landing is indeed a gamble, then U.S. taxpayers are going to pay for $13 million of that risk with stimulus money that puts the nation deeper in dept.