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The Great Recession: A look at local economic sectors

POSTED: December 15, 2012 11:59 p.m.

Agriculture
Hall County’s biggest agriculture industry, poultry, has endured some tough times, especially in 2008 when the economic downturn began to hit and this past year, as a Midwestern drought drove up the price of corn.

“We’re hopeful 2013 and beyond will be better,” said Mike Giles, executive director of the Gainesville-based Georgia Poultry Association. “We don’t anticipate the price of corn to come down dramatically until we get a better feel for the new crop.

“Hopefully, the price of chicken will improve, so that we’ll have better times ahead.”

Hall did get an economic boost when the state decided to build the new $11 million Georgia Poultry Laboratory Network headquarters in the future Gateway Industrial Centre off Ga. 365 in North Hall.

The new building replaces a 50-year-old structure near downtown Oakwood.

Otherwise, costs of fertilizer, seed and other farming needs have gone up, “making it a little tougher to keep the profit margin where it needs to be,” said Michael Wheeler, Hall County extension coordinator.

“Commodity prices are strong, so if you’re a row cropper and you’re into corn and soybean, things have looked OK,” he said.

Also, the recession has spurred more home gardening, which has turned into a small business for some growers. A farmers market that has taken place the past couple of years at the Spout Springs Library in South Hall draws huge crowds.

“That’s spurred a subindustry of agriculture,” Wheeler said.

Banking and finance
As the economy began to crumble, Congress passed a $700 billion bailout signed into law by President George W. Bush.

The bill, which also included help for homeowners facing foreclosure, was met with huge public protest and became the butt of many jokes (as in, “Why can’t I get a bailout?”).

Some banks also found themselves in financial trouble, such as Wachovia, which eventually sold out to Wells Fargo.

But they have stayed busy during the recession and its aftermath, as property owners fell into foreclosure in record numbers. That trend appears to be reversing, said Frank Norton Jr., a Gainesville real estate executive who tracks housing and construction trends.

“The 132 advertised in (The Times on Nov. 29) is the lowest number ... that has been posted for foreclosure in Hall County since December 2008, when there was 95,” he said. “I can’t tell if that’s a one-month aberration ... or if it’s a trend line. (Foreclosures) have been trending down and are about 20 percent less than last year.”

Smaller banks “have squeezed out a lot of productivity by doing more with less and that’s just now getting to the bigger banks in the U.S.,” said Tim Evans, vice president of economic development for the Greater Hall Chamber of Commerce.

“I think you’re going to see a lot of the bigger banks doing what the smaller banks have already done in shedding layers of management and processing. Here in Gainesville, we had a lot of regional banking and processing, and some of that probably won’t come back.

“Some of that banking is being done a different way. Just like insurance, which required a lot of claims processing personnel. It doesn’t happen that way much anymore.”

Health care
Even as the recession was hitting the hardest, the Northeast Georgia Health System quickened its growth pace.

Northeast Georgia Medical Center opened its $180 million North Tower on its Gainesville campus, a new wing featuring 96 surgical beds, 32 intensive care unit beds, a waiting room for the Ronnie Green Heart Center and 23 operating rooms and post-anesthesia care units.

The wing also features a 738-space parking deck off Downey Boulevard.

The health system now is planning for the 100-bed Northeast Georgia Medical Center Braselton off Ga. 347/Friendship Road an Ga. 211/Old Winder Highway in South Hall. Grading has started on the project, with an official “blessing of the grounds” taking place in a ceremony at the site Dec. 9.

The hospital is scheduled to open in April 2015.

Otherwise, the recession has taken a toll on the health system.

“We’ve seen a change in our payer mix, as our percentage of commercial insurance has declined and the percentages of Medicaid and (uninsured patients) have increased,” Health System CEO Carol Burrell said.

“More people are uninsured due to unemployment, because their business no longer offers insurance to its employees or because the cost of that insurance has gone up, so they can no longer afford it.

“In addition, many patients are choosing high-deductible health plans, because the monthly premiums typically are lower, but then have trouble paying the high deductible if they need to access hospital care.”

Hospitality and tourism
Hall County borders one of Georgia’s biggest tourism spots, Lake Lanier, which has been a boon in tough economic times.

Even in 2009, the tail end of a severe two-year drought, the North Georgia reservoir drew nearly 7 million visitors, the population of many U.S. states.

The drought and the Great Recession, which began at the same time (the drought lasted longer), served as a double whammy for many businesses on the lake, especially marinas.

Otherwise, the lake and local destinations — including the North Georgia mountains — have served as a cheaper vacation destination for Atlanta travelers, said Stacey Dickson, Lake Lanier Convention & Visitors Bureau president.

“They took a lot of small, weekend trips,” she said. “As a result, spending from tourists has been up.”

The average daily room rate dropped, with consumers “wanting a very high-quality lodging experience, but wanting to pay that discount, online bargain price for it,” Dickson said.

Oakwood, the South Hall hub for hotels, has gone through some transition in the hospitality industry, with a couple of hotels closing and a rebranding and opening of others.

For example, Best Western Plus has taken over the former Country Inn & Suites.

That kind of activity is common throughout the industry, Dickson said.

“It’s happening all over the place — the changing of ownership, the changing of brands,” she said. “We’re more concerned about hotels that get shuttered and don’t get reopened or open (but not under) a franchise brand.”

Manufacturing
Many areas of the country have seen jobless rates hit the roof because of dependence on a shallow manufacturing base.

But a diverse manufacturing presence has helped Hall County weather the recession.

“We’ve got some automotive (companies) that took a lot of hits in the first couple years, but in the last three years, they have more than rebounded,” said Tim Evans, vice president of economic development for the Greater Hall Chamber of Commerce.

“In some cases, they have more than doubled their employment.”

Food-processing companies “have been stable” throughout the downturn. One big company that opened in Hall was King’s Hawaiian, a California-based bakery that drew a huge crowd, including Gov. Nathan Deal, when it cut the ribbon to its 120,000-square-foot plant in Oakwood.

King’s Hawaiian will serve as the company’s East Coast distribution facility.

ZF Wind Power also opened with much fanfare when it started operations at its $98 million plant in September 2011. The plant, which makes gearboxes for wind turbines, president of the company at 1925 New Harvest Drive, off Calvary Church Road.

However, an expiring production tax credit for the wind power industry had a “chilling” effect on orders, said Elizabeth Umberson, who is now ZF’s head of materials management for North America.

The tax credit could be decided as part of other tax credits and breaks that are set to end Dec. 31, the “fiscal cliff.”

“Having that very diverse base of employers is just as important as having a diversified 401(k),” Evans said.

Government and education
Government has been particularly hard hit in the recession, as property tax revenues have been rocked by the drop in property values.

In addition to dropping revenues, officials have had to factor into budgets rising costs, such as health insurance premiums for their employees.

Furloughs have been commonplace on the public payroll. Employees ranging from teachers to sheriff’s deputies have been forced to take unpaid leave.

Hall County government battled an $11.5 million budget deficit in 2011 and ended up cutting park and library services. It also reduced funding for the Gainesville-Hall County Community Service Center, which operates the Senior Life Center, Hall Area Transit, Meals on Wheels and other services.

Also tightening up finances where it could, the Hall County Board of Education took the unusual move of closing a school, Jones Elementary, in the historic Chicopee Village, at the end of the 2009-10 school year.

Oakwood and Flowery Branch, although much smaller governments, have been able to keep up services without making deep cuts. But neither have they made great strides.

“We have no projects other than just a couple of police cars to purchase and doing our paving program,”

Oakwood City Manager Stan Brown said when the City Council approved its 2013 budget in November.

“Basically, we’re just continuing services.”

Conditions are improving in some ways.

Hall County spokeswoman Katie Crumley said the county’s fund balance at the end fiscal 2011-12 was $14.9 million, an increase from $9.3 million at the end of fiscal 2010-11. The county is now in fiscal 2013, which began July 1.

Real estate and construction
Hall County wasn’t spared from the housing collapse that plagued the nation during the Great Recession.

Unfinished subdivisions, often called “PVC jungles” because of pipes sticking out of the ground at home sites, sprang up. Several homes of a large development may have sold before the developer bolted, leaving the new residents to contend with unbuilt amenities and fields of weeds.

The Mundy Mill community off Mundy Mill Road and Cresswind at Lake Lanier off Browns Bridge Road are a couple of prime examples where the recession hit hard.

As a result of the slowdown, many construction jobs were lost.

Evans said things could have been worse in Hall. “We didn’t see as much of the bubble up and we didn’t see as much of the bubble burst,” he said.

In the past couple of years, residential development and sales have crept back up — but not nearly at the same pace as in pre-recession days.

Developers are returning to the market, but building a handful of homes at a time.

“One thing about our developer and our builders is they’re very strong financially, and we’re not operating on any borrowed money,” said John Schwartz, sales manager for Main & Main Realty, which markets the 604-acre Mundy Mill.

Sterling on the Lake in Flowery Branch also is moving along with new construction, although it has changed its master plan. The developer, Newland Communities, moved to reduce the homes’ minimum size from 1,400-1,500 square feet to 1,300 square feet and allow for single-story homes, drawing protests from some residents.

Patrick Clark, Newland vice president and general manager, told the Flowery Branch City Council at the time that Newland didn’t “want to lose the buyers right now that we’re seeing ... in good numbers that are asking for a single-story home in (a $150,000 to $180,000) price range.”

Retail
Stagnant in the early recession days, retail growth has boomed recently, particularly in Gainesville.

A $20 million-plus renovation of aging Lakeshore Mall off Pearl Nix Parkway by the owner, Garrison Investment Group, is planned.

Dick’s Sporting Goods has signed on as a new anchor tenant and plans call for the demolition and reconstruction of the J.C. Penney store.

Construction also has started on the New Holland Market shopping center off Limestone and Jesse Jewell parkways.

Plans include 400,000 square feet of commercial space, 200,000 square feet of nearby office space and about 300 multifamily residential units. A Kroger grocery store will anchor the 68-acre development.

Restaurant growth has taken place in the past year or so on Dawsonville Highway near Beechwood Boulevard and a rezoning has taken place to open up parcels for future retail use, as well.

After Stonebridge Village opened in 2008 in Flowery Branch, large-scale retail growth has floundered somewhat in South Hall.

Walmart Supercenter opened in Oakwood, along with a now-bustling strip shopping center off Mundy Mill Road. Sam’s Club relocated from a store on Frontage Road.

Just this week, Oakwood City Council approved the rezoning a 20.6-acre commercial site between Interstate 985 and Atlanta Highway near Exit 17 from planned commercial development to commercial at a meeting Monday evening.

Milton Martin Toyota is planning to move there from Browns Bridge Road in Gainesville.


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