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Economy

Expansion of the Port of Mobile gets the green light

Josh Moon

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Big ships are coming. 

On Tuesday, the Alabama State Port Authority announced that it has received federal authorization to deepen the Mobile Harbor, allowing for much larger vessels in the Port of Mobile. 

The project will deepen the bay and river channels to 50 feet and widening the bay channel by more than 100 feet for three nautical miles. The widening will allow for two-way vessel traffic. 

With the federal approval, the project will now enter the design phase, which will include preconstruction, engineering and design. Actual work to deepen and widen the channels will begin in 2020. 

That project will supplement two already-initiated improvement projects undertaken by the Port of Mobile over the last two years. Two separate $50 million projects expanded the terminal in the Port, meeting growth demands. 

“With the completion of Phase 3 expansion, the Port and its partner, APMTerminals, will have nearly $500 million in intermodal assets to serve our customers,” said James K. Lyons, director and CEO for the Port Authority. “As demand dictates, we’re positioned to respond quickly to further expansion.”

The phase 3 expansion includes lengthening of the dock area of the port to accommodate two post-panamax size vessels and bring throughput capacity to more than 650,000 TEUs. A “post-panamax” ship is one that exceeds the limits to travel through the Panama Canal. The Canal’s locks are only 110 feet wide, 1050 feet long and 41 feet deep. (A TEU is a 20-foot area of capacity on a cargo ship — an inexact measurement based on the size and shape of a standard, 20-foot shipping container.)

The expansion of the Port of Mobile is a project that has been in the works since 2014, as the Port’s business began to rapidly increase. Funds from Alabama’s newly-implemented gas tax increase will go to support $150 million in bonds that will be used to meet the federal cost-share expenses. 

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Even before the expansion, the Port and the shipping companies that utilize it employ more than 130,000 people and have a greater than $24 billion economic impact on the state, according to numbers provided by the Port Authority.

 

Josh Moon is an investigative reporter and featured columnist at the Alabama Political Reporter with years of political reporting experience in Alabama. You can email him at [email protected] or follow him on Twitter.

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Economy

Task force looks at reopening state economy

Brandon Moseley

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Lt. Gov. Will Ainsworth announced Thursday that the Alabama Small Business Commission Emergency Task Force has formed a subcommittee on reopening the state’s economy and plans to present a plan to Gov. Kay Ivey and State Health Officer Dr. Scott Harris by April 17.

“Reopening Alabama’s economy and getting businesses back to work will not be like flipping a light switch, but it will more likely be accomplished in stages once the COVID-19 pandemic begins to ease,” Ainsworth said. “The purpose of this subcommittee is to provide a roadmap to reopening the economy that balances the public’s health and safety with the need for small business owners and employees to resume operations.”

The subcommittee will consider issues like how to best ease restrictions on restaurant and store capacity guidelines and how to incorporate social distancing needs with increased commerce once officials decree that the worst of the COVID-19 threat has passed.

State Rep. Danny Garrett (R – Trussville) will serve as chairman of the subcommittee.

The other members of the subcommittee include: Senator Chris Elliott (R – Fairhope), Senator Garlan Gudger (R – Cullman), Representative Joe Lovvorn (R – Auburn), Rosemary Elebash – National Federation of Independent Business, Alabama State Chair, Mindy Hanan – Alabama Restaurant and Hospitality Association, Executive Director, Katie Britt – Business Council of Alabama, CEO, Rick Brown – Alabama Retail Association, President, Tony Cochran of CK Business Solutions in Albertville, and Stephen McNair of McNair Historic Preservation in Mobile.

The state remains under emergency shutdown orders from Alabama Kay Ivey (R) through April 30. All nonessential businesses have been ordered to close and Alabamians have been ordered to shelter in place.

On Thursday, Treasury Secretary Steve Mnuchin said that he believed that the economy can reopen in May.

A number of measures were taken at the national, state, and local levels to shut down the economy beginning in early March in order to stop the spread of the coronavirus strain, SARS-CoV-2, that causes COVID-19.

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In March there were estimates from public health officials that over a million Americans would die from COVID-19 without the forced economic shutdown. As Americans have widely adopted the social distancing recommendations of the CDC and the White House Coronavirus task force those estimates have come down to less than 60,000 deaths.

The fear of opening the economy up too soon is that it will unleash the virus as everyone returns to work, restaurants, sporting events, and shopping. The fear of waiting too long to open the economy is that businesses are currently burning up their emergency funds and lines of credit with little or no revenue coming in. The fear is that the longer we wait the fewer the businesses that will survive likely sparking a long protracted recession that will deeply impact Alabama families.

The 22-member Small Business Commission is statutorily tasked with formulating “policies encouraging innovation of small businesses in the state” and advising the Department of Commerce in promoting small businesses within Alabama. The state legislature placed the Alabama Small Business Commission under the authority of the Lieutenant Governor’s Office in 2018.

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Economy

AG: Local governments may not assist businesses negatively impacted by shutdown

Brandon Moseley

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Alabama Attorney General Steve Marshall wrote in an opinion Tuesday that county and city governments can not provide public funds to private businesses that were impacted by the forced economic shutdown to fight the coronavirus.

“During the COVID-19 pandemic, this Office has received numerous inquiries from counties and municipalities regarding whether a program could be developed using Amendment 772 (Section 94.01 of the Alabama Constitution) as a vehicle for giving economic development grants and loans to small businesses,” Marshall wrote. “While the desire to keep these businesses afloat during the crisis is understandable, unless the grants and loans contemplated under these proposed programs serve a public purpose rather than merely confer a private benefit, they violate section 94 of the Alabama Constitution.”

“Section 94 prohibits the Legislature from “authoriz[ing] any county, city, town, or other subdivision of this state to lend its credit, or to grant public money or thing of value in aid of, or to any individual, association, or corporation whatsoever, or to become a stockholder in any corporation, association, orcompany, by issuing bonds or otherwise (emphasis added).” ALA. CONST. art.

“The Alabama Supreme Court, howeve r, held in Slawson v. Alabama Forestry Commission, 631 So.2d 953, 956 (Ala. 1994) that Section 94, as amended, is not violated when the funds of a subject governmental entity are appropriated for a “public purpose.” Whether the funds are appropriated for a public purpose depends on if they bring about a “direct public benefit of a reasonably general character . . . to a significant part of the public ” rather than merely a “remote and theoretical benefit. ”

Amendment 772 is widely cited by proponents of such a grant or bridge loan program as providing a constitutional basis for the program.

Marshall explained, “The Legislature passed Amendment 772 as a codification of Slawson insofar as economic and industrial development is concerned. Amendment 772 specifically gives a county or municipality authority “to lend its credit to or grant public funds and things of value in aid of or to any individual, firm, corporation, or other business entity, public or private, for the purpose of promoting the economic and industrial development of the county or the municipality. ”

There are two requirements under Amendment 772, the county or municipality must comply with: “(1) The action proposed to be taken by the county or municipality is approved at a public meeting of the governing body of the county or municipality, as the case may be, by a resolution containing a determination by the governing body that the expenditure of public funds for the purpose specified will serve a valid and sufficient public purpose, notwithstanding any incidental bene fit accruing to any private entity or entities and (2) At least seven days prior to the public meeting, a notice is published in the newspaper having the largest circulation in the county or municipality, as the case may be, describing in reasonable detail the action proposed to be taken, a description of the public benefits sought to be achieved by the action, and identifying each individual, firm, corporation, or other business entity to whom or for whose benefit the county or the municipality proposes to lend its credit or grant public funds or thing of value.”

“Although Amendment 772 gives counties and municipalities flexibility to grant or loan funds to private entities without violating section 94, the definition of “economic and industrial development” for purposes of Amendment 772 must be read in light of Slawson’s requirement that the benefit conferred be a “direct public benefit of a reasonably general character . . . to a significant part of the public,.” Marshall wrote. “Whether the expenditure is made for a public purpose is a factual question to be determined by the local governmental body making the expenditure by looking to the statutes setting forth that body’s authority. Opinion to Honorable Robert S. Presto, Escambia County Attorney, dated August 24, 1995.”

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“Grants, loans, interest payments, and other similar awards to a private business for the sole reason of keeping that business operating would not meet the Slawson test,” Marshall stated. “Whereas such payments would bestow a significant private benefit, any benefit to the public -at-large would be remote and indirect. The governing body of the county or municipality must be able to articulate a rationale for the expenditure which benefits the public-at large in a more direct manner and is supported by the governing body’s statutory authority. Furthermore, using entities such as the Chamber of Commerce or private banks as “pass-throughs” to facilitate the expenditures does not change this analysis so long as ultimately public money is being lent or granted in aid of a private entity and no public benefit is served.”

“Conclusion While the Office sympathizes with the desire of municipalities to assist small business during the COVID-19 crisis, the current dire circumstances do not provide for a workaround to the requirements of Section 94 of the Alabama Constitution,” Marshall concluded. “As previous Attorney General’s Opinions have found, unless the grants and loans contemplated under these proposed assistance programs serve a public purpose rather than merely confer a private benefit, they violate section 94 of the Alabama Constitution.”

The Attorney General’s opinion effectively bars efforts by city councils and county commissions to help businesses in their towns with grants or bridge loans in order to make it through the forced economic shutdown to stop the spread of the coronavirus.

There is some federal assistance available through the CARES Act and Senate Majority Leader Mitch McConnell (R-Kentucky) has proposed a $250 billion package to provide assistance businesses; but that bill has encountered resistance from Senate Democrats.

Nationally recognized financial consultant Dave Ramsey and other persons in the financial consulting field have long recommended that businesses, and even families should maintain an emergency fund equal to three to six months of expenses. Unfortunately, many business (including very profitable ones) failed to follow that advice and were overleveraged with insufficient cash reserves when they were unexpectedly forced to close by county health officers and orders from Alabama Governor Kay Ivey (R).

The forced economic shutdown to fight the spread of the coronavirus began to be implemented in early March and will not be lifted before April 30. On Thursday, Treasury Secretary Steve Mnuchin expressed optimism that the economy will be able to reopen at some point in May. All Alabama citizens remain under a shelter in place order thru April 30.

Globally 1,491,829 persons have been confirmed as having COVID-19 and 87,458 have died. In this country 468,566 Americans have contracted COVID-19 and 16,691 have died. Alabama has had 2,838 confirmed cases of COVID-19. 78 Alabamians have died and 339 are hospitalized with COVID-19.

To read Marshall’s opinion, click here.

EDITORIAL NOTE – Yesterday morning the Alabama Political Reporter published an article based on a legal opinion we were forwarded that we wrongly believed was written by Steve Marshall. That story was immediately retracted when the AG’s office reached out to us. We deeply regret the error, and we apologize for any confusion that our error may have caused.

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Economy

Business Council of Alabama Small Business Exchange on APT tonight

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The Business Council of Alabama (BCA) will present the Small Business Exchange on Alabama Public Television (APT) tonight, Thursday, April 9. This event is designed to help small businesses applying for federal stimulus funding under the new CARES Act.

In partnership with APT, BCA will bring together experts in business, banking, accounting, and law to answer phone calls from Alabama business owners and employers as they grapple with the impact of the coronavirus on the state’s economy. New federal loans are now available for small businesses, but funding is limited in some cases and quick action is required.

The Small Business Exchange program airs tonight on APT from 7-8 p.m. BCA experts will be available to answer questions from 7 p.m. – 10 p.m. tonight. In addition, experts will be available for consultation from 9.a.m. to noon tomorrow, Friday, April 10.


To ask a question or consult with our BCA experts during these times, the phone number is 1-833-BCA4BIZ (1-833-222-4249).

 

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Economy

Manufacture Alabama launches “Ask the Experts” webinar

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Ask the Experts: Employment Law Questions Related to the COVID-19 Pandemic is a new webinar being offered by Manufacture Alabama.

As the COVID-19 pandemic continues to develop, disrupting the lives of everyone around our state, country, and the globe, employers are left with many questions and Manufacture Alabama wants to answer them.

Manufacture Alabama is the only trade association in the state dedicated exclusively to the competitive, legislative, regulatory, and operational interests and needs of manufacturers and their partner industries and businesses.

Manufacture Alabama has enlisted some of the top labor and employment attorneys in Alabama to bring you the first installment of a web series, ‘Ask the Experts.’ In the first installment, their experts will be answering your questions about implementing the new CARES Act Leave guidelines, and best practices for what to do if you have an employee test positive for COVID-19.

The attorneys will also be covering questions whether they are questions related to OSHA standards, the Families First Coronavirus Response Act or the impact of the CARES Act, or anything else labor or employment-related.

Manufacture Alabama also wants to hear stories of the changes manufacturers have experienced in the workplace as a result of the pandemic, and how businesses have changed day to day operations.

Send your questions and responses regarding these topics to [email protected] and stay tuned.

The webinar will be published Tuesday, April 14.

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