Monday, January 28, 2008

01/19 - Despite national fears, local outlook OK

Date: January 19, 2008
Section(s): Local News
The Brunswick News

A Brunswick economist expects plans to invest millions of dollars in new hotels and facilities on Jekyll Island to be a major economic bright spot for Brunswick and the Golden Isles.

Don Mathews, economics professor at Coastal Georgia Community College, says the Isles will not escape all the shuddering going around the nation, thought it may fare better than other regions of the state and nation.

Part of his reason for optimism is the proposed revitalization of Jekyll Island, where Gov. Sonny Perdue is proposing spending $25 million in the state budget year that begins July 1 and a north Georgia developer hopes to begin work on a $452 million project next January.

"With the Jekyll Island redevelopment project exceeding a half of a billion dollars, the Golden Isles tourism and hospitality industries are positioned to be in good shape for years to come," said Mathews.

Mathews made his predictions Friday at the annual Economic Outlook luncheon sponsored by the Terry School of Business of the University of Georgia. It was held at the Jekyll Island Convention Center, which would be razed under the redevelopment plan proposed by Linger Longer Communities of Greensboro, Ga.

"We don't know what exactly is happening, but it's going to be big," Mathews said, referring to the debate over plans for new hotels, shopping district, condominiums and convention center at the state park.

Linger Longer Communities project manager Jim Langford has said that construction, set to begin in 2009, will create up to 500 jobs. Once the project is complete, another 500 hospitality jobs would be created.

Linger Longer is Jekyll Island Authority's private partner in the redevelopment.

Mathews advised the tourism industry to prepare for growth but, at the same time, to be ready to act defensively in 2008. The year could bring both opportunities and pitfalls.

Right now, the Golden Isles' sparkling economic jewels are tourism and the port, he said.

Port tonnage continues to climb. More cars, machinery and agriculture products are crossing the docks at the port - a trend that is expected to continue.

A 19 percent increase in tourism in the Golden Isles in 2007 is another trend that is expected to continue, he said.

"Tourism has been up all over the Golden Isles, particularly on St. Simons Island," Mathews said.

Not all industries have reported a banner year, though. Mathews said a weak retail market was surprising even to him. He said he expected a better showing with the addition of the Glynn Isles Market, at Golden Isles Parkway and Altama Ave., which includes popular national chain stores such as Lowes, Target and Pets Smart.

"With all of the new shopping areas added and the tourism boom, I was surprised that it didn't spill over into retail trade," he said. "But other factors play into retail, like the housing slump."

Residential construction is an industry that has seen better days. It's a nationwide trend that has hit almost every corner of the country, including the Golden Isles, he said.

Mathews doesn't see it improving any time soon.

"I believe it's going to get worse before it gets better," Mathews said. "We are not immune to state and national housing trends. It has been fairly severe."

If there is a bright spot, it's that the slump in new housing permits was not half as intense in Brunswick and the Golden Isles as it was in much of the rest of the state. There was a 20 percent drop in Glynn County permits compared to a 40 percent drop for the state last year.

Overall, Mathews told luncheon attendees he was cautiously optimistic about the local outlook.

Although regional economies have a high potential for growth this year, a great deal depends on the state's economic health, which could be in jeopardy, state economists said.

Georgia is at a 45 percent risk of falling into a recession, said Robert Sumichrast, dean of the Terry College of Business.

"The three recession triggers are housing, energy and drought," Sumichrast said. "Any one of these factors could tip that balance."

Nationally, economists are struggling to predict whether the economy is merely slowing or is headed to recession.

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