Post by HardTimeTrucker on Nov 30, 2008 22:29:52 GMT -5
When the Downturn Sailed Into Savannah
Stephen Morton for The New York Times
www.nytimes.com/2008/11/30/business/economy/30econ.html?emc=eta1&pagewanted=all
A container ship passes through downtown Savannah, Ga. The nation’s economic downturn has begun chipping away at expansion and prosperity in this port city, dimming a 20-year boom.
By LOUIS UCHITELLE
Published: November 28, 2008
SAVANNAH, Ga.
Stephen Morton for The New York Times
A warehouse in the Northport Industrial Park in Pooler, Ga., outside Savannah. Developers put up warehouse and distribution centers on speculation.
Stephen Morton for The New York Times
Robert B. Briscoe, left, chief financial officer of Dozier Crane, and Dozier Cook, the company’s founder.
Stephen Morton for The New York Times
Doug J. Marchand, executive director of the Georgia Ports Authority, said activity at the port had “flattened” for the first time in his tenure
Stephen Morton for The New York Times
Elizabeth Patterson said business at her cigar and novelty store on Bull Street, in the middle of Savannah’s historic district, had slowed.
DOZIER COOK founded the construction crane company that bears his name here 35 years ago. He’s weathered economic scares over the years — the wrenching recessions of the mid-1970s and early ’80s come to mind — and he’s confident that the current downturn will be no worse. His words ring with optimism.
“We have people lined up to buy, and we are losing deals because we don’t have enough cranes to sell to them,” he says, adding that even if the market “gets bad here, we sell cranes in Russia, Dubai, you name it.”
But Robert B. Briscoe, the chief financial officer of Dozier Crane and Machinery Inc., quietly contradicts his boss.
“We are battening down the hatches and being cautious,” he says, ignoring his boss’s frown. “Before the credit crunch we were not as cautious as we are now. We want our bankers to know that. They would be spooked by anyone who showed too much optimism today.”
And so it goes, as a crisis born in the mortgage collapse and sent into overdrive by Wall Street’s financial disaster now spreads to the broader economy. In this port city, near the mouth of the Savannah River, the downturn is chipping away at expansion and prosperity, dimming a 20-year boom. The unemployment rate in Savannah has risen sharply, just as it has across the nation. And cutbacks in output in midsize cities like Savannah are contributing to an accelerating decline in the country’s gross domestic product.
“You are seeing a fairly widespread recession, with all major components of demand now in decline,” said Brian Sack, an economist in Washington for Macroeconomic Advisers L.L.C., a consulting and forecasting firm. It expects the gross domestic product to decline in the fourth quarter at an annual rate of 4 percent, down sharply from the contraction of 0.5 percent in the third quarter.
For his part, Mr. Cook, 62, remains an assertive, upbeat commander of a company that buys truck-mounted cranes new — at $450,000 or more a pop — and then rents or resells them. But four months ago, as economic shifts became more dramatic, he hired Mr. Briscoe, a 56-year-old former banker, to keep himself and his staff grounded in reality. In addition to a hiring freeze and other cost-cutting measures, Mr. Briscoe explained, the company has cut back sharply on the number of new cranes it will buy next year. It made that move largely at the direction of its bankers, who had grown leery of financing an expansion.
Even so, buoyancy still holds sway in Savannah. During the Civil War, the relentless Union general, William T. Sherman, spared Savannah in his devastating march to the sea. Residents here think that the financial whirlwind will also ultimately pass them by.
On Wall Street and in Washington, where the crisis is more palpable, comparisons with the Great Depression are frequent. In interviews here, however, that association was never made. Even those squeezed the most said they expect this recession to be no worse, or not much worse, than others since World War II — ending in six months, by Mr. Cook’s estimate; by late next year, according to others; or, by still others, 18 months at the longest.
“The belief in an early rebound is real,” said Michael Toma, an economist at Armstrong Atlantic State University here. “The history of our economy in Savannah has been slow, steady growth since 1990, and we are conditioned to believe this will resume.”
STATELY antebellum mansions and Victorian homes, many of them newly renovated, fan out from the river here, clustering near rectangular plazas originally laid out in 1734. Savannah is proud of that heritage, and locals are determined to try to ensure that any economic malaise be short-lived.
No one has a greater stake in keeping the recession mild than Doug J. Marchand, executive director of the Georgia Ports Authority, which operates the port here, a mile upriver from the Atlantic Ocean. It is now the fifth-largest port on the East Coast, as measured by cargo tons; most cargo is shipped in huge steel containers.
But the tonnage in those containers, rising at an annual rate of 10 percent or more annually through most of the last 20 years, has lately “flattened,” as Mr. Marchand put it, to almost no rise at all — the first time that has happened in his 13 years as port director.
That unanticipated slowdown caught Savannah off guard. The city has four million square feet of newly built, never-occupied warehouse space, intended primarily as temporary quarters for the growing flow of imports. Big as hangars, these buildings sit shuttered and alone in industrial parks sprouting weeds.
Mr. Marchand helped ignite the building boom. In a 2004 “call to action,” a speech that business and government officials still cite here, he declared that Savannah needed to make room for a vast new crop of warehouses to accommodate the cargo surge.
Savannah had benefited in recent years, he noted, as cargo shippers shifted delivery routes away from California and to the East Coast, in order to escape possible strikes near Los Angeles and to avoid cross-country rail delays. Huge retailers like Wal-Mart, Home Depot, Lowe’s, Pier 1, Ikea and Target already had warehouse and distribution centers here. Mr. Marchand said Savannah needed even more.
Developers, caught up in the euphoria of the real estate bubble, responded quickly to Mr. Marchand’s invitation, buying and clearing land for new industrial parks and putting up giant warehouse and distribution centers on speculation. They were counting on companies to quickly occupy the completed buildings. That happened initially, but now demand has petered out.
Mr. Marchand, saying the setback is temporary, has nevertheless frozen hiring at the port. He is going ahead, however, with an expansion of its facilities. In an interview, he ticked off the multimillion-dollar projects under way: four new ship-to-shore cranes have been ordered, along with a dozen smaller ones; rail facilities along the docks are being upgraded; and work is progressing on a system for moving trucks through the port more quickly.
“I don’t know how long this downturn will last, but I don’t think it will be a protracted period of time,” Mr. Marchand said. “So I think it makes sense to get ourselves ready for more strong growth once this recession ends.”
WHILE Mr. Marchand and many others await an upturn, Savannah’s economy deteriorates. The unemployment rate in the three-county metropolitan area has jumped to 5.7 percent from 3.9 percent a year earlier. Analysts attribute the jump to hiring freezes and a lot of little job cuts.
With home sales down 24 percent, the local Coldwell Banker has watched its army of real estate brokers, the largest in the city, dwindle to 180 from 240 last year. “They just went into other businesses or stopped working altogether,” said Connie F. Ray, chief executive of the Coldwell operation here, adding that through last year brokers had been averaging $40,000 to $50,000 annually in commissions.
Manufacturers still have a big presence here, employing 15 percent of greater Savannah’s 171,000 workers, but factory employment is shrinking. Georgia-Pacific, for example, which makes paper towels, napkins and toilet paper at a mill here, no longer hires dozens of contract workers. They had been used as a flexible work force, a supplement to the 1,200 regular employees, to step up production during demand surges, now nonexistent.
“It is prudent not to bet on demand at this time,” said Russ McCollister, a Georgia-Pacific vice president. He notes that as output has tapered off, some machines have been taken out of production, and workers are no longer assigned, or brought in, to maintain them. “We invest in maintenance for those machines that are running,” he said. “It is little choices like that that get us through these times.”
THE much smaller Chatham Steel Corporation, which buys steel in bulk directly from mills and cuts it into beams, pipes and plates for customers, has gone through a similar weakening in demand since late summer. It has also reduced its staff since last year, to 140 from 146.
Even so, Chatham’s president, Bert M. Tenenbaum, is upbeat. His immigrant grandfather founded the company, which is now a division of Reliance Steel and Aluminum.
Mr. Tenenbaum was a big supplier of steel for shopping-center construction, and with that business drying up, he talks of a coming boom in oil and gas pipelines, refinery upgrades, hospital construction and, if the government comes through with significant infrastructure spending, school and wastewater plant construction.
“We think the economy will come back sooner rather than later,” he says.
He has cut back on inventory, meanwhile, reducing his purchases from steel mills. Like so many others, he shaves costs in little ways, putting speed governors, for example, on his trucks so they can’t go over 68 miles per hour.
“That has translated into a 5 percent saving in fuel, which is huge for us,” he says.
And so it goes across the Savannah economy: falling retail sales, fewer hotel bookings, a canceled convention, layoffs at Memorial Hospital, an announcement late this month that Great Dane Trailers, a major manufacturer, would soon close its factory here, and weakened tourism in a city that over the last 15 years has built an industry out of visits to its historic downtown.
The tourists are still coming. With gasoline prices falling, they’ve been driving here in growing numbers from Southeastern states, according to the Savannah Area Convention and Visitors Bureau.
But tourists are no longer big spenders. Elizabeth Patterson said business at her cigar and novelty store on Bull Street, in the middle of the historic district, has slowed. She said her competitors had seen a slowdown as well.
Her top seller once was a $4.75 Nicaraguan cigar, the Savannah Bulldog (also the name of her store). Cigars are still 50 percent of her revenue, which she says was $400,000 in 2007. But revenue is down 30 percent so far this year, mainly because tourists are buying cheaper cigars. They’re also purchasing fewer of her other big seller: novelty chess sets, at $35 and up, with pieces modeled on Walt Disney characters.
“They come in and ask, ‘What kind of cheap cigar do you have,’ ” she says. “Or they say, ‘Just looking.’ There is a total softening of our sales.”
Not surprisingly, the city government’s tax revenues have fallen, particularly since August, because of slowdowns from sales and lodging taxes. With home prices and construction down, property tax revenue is no longer rising at its old, brisk pace, and state aid has been trimmed.
Stuck with a shortfall, the city government has postponed until May a scheduled 2 percent pay increase for its more than 15,000 employees, including police officers and firefighters. It has also delayed for a year a host of capital projects, from building a new firehouse to rehabilitating storm sewers.
“We’ll still fill potholes,” says Christopher Morrill, the assistant city manager, “but we won’t repave any streets.”
From his perch as chief executive of Savannah Bancorp, John C. Helmken II, a 45-year-old native of this city, contributes to the slowdown, although reluctantly. Most of his clients are small businesses, and they are hesitant to expand.
Mr. Helmken, like other bankers here, encourages that hesitation. He defines the bank’s lending practices as “defensive.” Consumer lending is moribund, and with foreclosures having increased, home buying is, in effect, discouraged. “We still have programs where the purchaser can get by with as little as 5 percent down,” he says, “but it is usually 10 to 15 percent and borrowers must verify they have adequate incomes.”
In any event, mortgages are only 6 percent of the bank’s current loan portfolio of $850 million. The bulk of its lending is to small companies, but in the current downturn, the bank is focusing on professionals like lawyers with established practices and steady incomes who are opening or expanding an office.
“Dentists fall right into this preferred group,” Mr. Helmken says. “It was always a large part of our client base and now we are pushing it more.”
Dozier Crane is a longtime Savannah Bancorp client, with a line of credit exceeding $8 million. Mr. Helmken describes it as a healthy company. But when Dozier said it would draw down its entire credit line to buy more cranes, Mr. Helmken balked. There were discussions, particularly with Mr. Briscoe, the Dozier C.F.O. In the end, Dozier borrowed less than it originally intended and bought fewer cranes — which in turn reduced production at the American manufacturers of the cranes, which in turn bought less from their suppliers, and so on up the line, effectively weakening the broader economy.
“He said and we said, this is the right thing to do, given what is going on in the world,” Mr. Helmken said. “We asked the questions and he confirmed that Dozier would take a more cautious step.”
THERE are still islands of strength in Savannah’s economy. Gulfstream, which has its headquarters here, along with its research facilities and a big factory, is expanding and adding workers.
It came into the financial crisis with a backlog of more than 500 orders for its luxury jet aircraft, a majority from wealthy individuals and companies located overseas. Even without another order — and Gulfstream says orders are lagging — the backlog is enough to keep production going for about three years.
The Savannah College of Art and Design, with 8,000 students scattered in classrooms across the city, is also going strong. Five hotels and office buildings, started before the crisis, are still under construction. Fort Stewart, the huge Army base outside the city, is expanding, adding 3,800 soldiers to the 19,000 already stationed there, many of them living with their families on Savannah’s south side.
Mr. Helmken says he sees evidence of their contributions to Savannah’s economy, or at least evidence of the south side’s contribution.
“When I go by a Red Lobster inn on the south side on a Friday night,” he says, “there are people lined up waiting to be seated.”
But American cities depend heavily on corporate investment for expansion and new jobs, and that is dwindling here as capital spending grows more slowly everywhere. The Savannah Economic Development Authority, having signed up $360 million in new investment last year, has commitments this year for only $33 million.
“There aren’t that many deals in the country anymore,” says Lynn Pitts, the development authority’s senior vice president. “Everyone has pulled in their horns big time.”
Stephen Morton for The New York Times
www.nytimes.com/2008/11/30/business/economy/30econ.html?emc=eta1&pagewanted=all
A container ship passes through downtown Savannah, Ga. The nation’s economic downturn has begun chipping away at expansion and prosperity in this port city, dimming a 20-year boom.
By LOUIS UCHITELLE
Published: November 28, 2008
SAVANNAH, Ga.
Stephen Morton for The New York Times
A warehouse in the Northport Industrial Park in Pooler, Ga., outside Savannah. Developers put up warehouse and distribution centers on speculation.
Stephen Morton for The New York Times
Robert B. Briscoe, left, chief financial officer of Dozier Crane, and Dozier Cook, the company’s founder.
Stephen Morton for The New York Times
Doug J. Marchand, executive director of the Georgia Ports Authority, said activity at the port had “flattened” for the first time in his tenure
Stephen Morton for The New York Times
Elizabeth Patterson said business at her cigar and novelty store on Bull Street, in the middle of Savannah’s historic district, had slowed.
DOZIER COOK founded the construction crane company that bears his name here 35 years ago. He’s weathered economic scares over the years — the wrenching recessions of the mid-1970s and early ’80s come to mind — and he’s confident that the current downturn will be no worse. His words ring with optimism.
“We have people lined up to buy, and we are losing deals because we don’t have enough cranes to sell to them,” he says, adding that even if the market “gets bad here, we sell cranes in Russia, Dubai, you name it.”
But Robert B. Briscoe, the chief financial officer of Dozier Crane and Machinery Inc., quietly contradicts his boss.
“We are battening down the hatches and being cautious,” he says, ignoring his boss’s frown. “Before the credit crunch we were not as cautious as we are now. We want our bankers to know that. They would be spooked by anyone who showed too much optimism today.”
And so it goes, as a crisis born in the mortgage collapse and sent into overdrive by Wall Street’s financial disaster now spreads to the broader economy. In this port city, near the mouth of the Savannah River, the downturn is chipping away at expansion and prosperity, dimming a 20-year boom. The unemployment rate in Savannah has risen sharply, just as it has across the nation. And cutbacks in output in midsize cities like Savannah are contributing to an accelerating decline in the country’s gross domestic product.
“You are seeing a fairly widespread recession, with all major components of demand now in decline,” said Brian Sack, an economist in Washington for Macroeconomic Advisers L.L.C., a consulting and forecasting firm. It expects the gross domestic product to decline in the fourth quarter at an annual rate of 4 percent, down sharply from the contraction of 0.5 percent in the third quarter.
For his part, Mr. Cook, 62, remains an assertive, upbeat commander of a company that buys truck-mounted cranes new — at $450,000 or more a pop — and then rents or resells them. But four months ago, as economic shifts became more dramatic, he hired Mr. Briscoe, a 56-year-old former banker, to keep himself and his staff grounded in reality. In addition to a hiring freeze and other cost-cutting measures, Mr. Briscoe explained, the company has cut back sharply on the number of new cranes it will buy next year. It made that move largely at the direction of its bankers, who had grown leery of financing an expansion.
Even so, buoyancy still holds sway in Savannah. During the Civil War, the relentless Union general, William T. Sherman, spared Savannah in his devastating march to the sea. Residents here think that the financial whirlwind will also ultimately pass them by.
On Wall Street and in Washington, where the crisis is more palpable, comparisons with the Great Depression are frequent. In interviews here, however, that association was never made. Even those squeezed the most said they expect this recession to be no worse, or not much worse, than others since World War II — ending in six months, by Mr. Cook’s estimate; by late next year, according to others; or, by still others, 18 months at the longest.
“The belief in an early rebound is real,” said Michael Toma, an economist at Armstrong Atlantic State University here. “The history of our economy in Savannah has been slow, steady growth since 1990, and we are conditioned to believe this will resume.”
STATELY antebellum mansions and Victorian homes, many of them newly renovated, fan out from the river here, clustering near rectangular plazas originally laid out in 1734. Savannah is proud of that heritage, and locals are determined to try to ensure that any economic malaise be short-lived.
No one has a greater stake in keeping the recession mild than Doug J. Marchand, executive director of the Georgia Ports Authority, which operates the port here, a mile upriver from the Atlantic Ocean. It is now the fifth-largest port on the East Coast, as measured by cargo tons; most cargo is shipped in huge steel containers.
But the tonnage in those containers, rising at an annual rate of 10 percent or more annually through most of the last 20 years, has lately “flattened,” as Mr. Marchand put it, to almost no rise at all — the first time that has happened in his 13 years as port director.
That unanticipated slowdown caught Savannah off guard. The city has four million square feet of newly built, never-occupied warehouse space, intended primarily as temporary quarters for the growing flow of imports. Big as hangars, these buildings sit shuttered and alone in industrial parks sprouting weeds.
Mr. Marchand helped ignite the building boom. In a 2004 “call to action,” a speech that business and government officials still cite here, he declared that Savannah needed to make room for a vast new crop of warehouses to accommodate the cargo surge.
Savannah had benefited in recent years, he noted, as cargo shippers shifted delivery routes away from California and to the East Coast, in order to escape possible strikes near Los Angeles and to avoid cross-country rail delays. Huge retailers like Wal-Mart, Home Depot, Lowe’s, Pier 1, Ikea and Target already had warehouse and distribution centers here. Mr. Marchand said Savannah needed even more.
Developers, caught up in the euphoria of the real estate bubble, responded quickly to Mr. Marchand’s invitation, buying and clearing land for new industrial parks and putting up giant warehouse and distribution centers on speculation. They were counting on companies to quickly occupy the completed buildings. That happened initially, but now demand has petered out.
Mr. Marchand, saying the setback is temporary, has nevertheless frozen hiring at the port. He is going ahead, however, with an expansion of its facilities. In an interview, he ticked off the multimillion-dollar projects under way: four new ship-to-shore cranes have been ordered, along with a dozen smaller ones; rail facilities along the docks are being upgraded; and work is progressing on a system for moving trucks through the port more quickly.
“I don’t know how long this downturn will last, but I don’t think it will be a protracted period of time,” Mr. Marchand said. “So I think it makes sense to get ourselves ready for more strong growth once this recession ends.”
WHILE Mr. Marchand and many others await an upturn, Savannah’s economy deteriorates. The unemployment rate in the three-county metropolitan area has jumped to 5.7 percent from 3.9 percent a year earlier. Analysts attribute the jump to hiring freezes and a lot of little job cuts.
With home sales down 24 percent, the local Coldwell Banker has watched its army of real estate brokers, the largest in the city, dwindle to 180 from 240 last year. “They just went into other businesses or stopped working altogether,” said Connie F. Ray, chief executive of the Coldwell operation here, adding that through last year brokers had been averaging $40,000 to $50,000 annually in commissions.
Manufacturers still have a big presence here, employing 15 percent of greater Savannah’s 171,000 workers, but factory employment is shrinking. Georgia-Pacific, for example, which makes paper towels, napkins and toilet paper at a mill here, no longer hires dozens of contract workers. They had been used as a flexible work force, a supplement to the 1,200 regular employees, to step up production during demand surges, now nonexistent.
“It is prudent not to bet on demand at this time,” said Russ McCollister, a Georgia-Pacific vice president. He notes that as output has tapered off, some machines have been taken out of production, and workers are no longer assigned, or brought in, to maintain them. “We invest in maintenance for those machines that are running,” he said. “It is little choices like that that get us through these times.”
THE much smaller Chatham Steel Corporation, which buys steel in bulk directly from mills and cuts it into beams, pipes and plates for customers, has gone through a similar weakening in demand since late summer. It has also reduced its staff since last year, to 140 from 146.
Even so, Chatham’s president, Bert M. Tenenbaum, is upbeat. His immigrant grandfather founded the company, which is now a division of Reliance Steel and Aluminum.
Mr. Tenenbaum was a big supplier of steel for shopping-center construction, and with that business drying up, he talks of a coming boom in oil and gas pipelines, refinery upgrades, hospital construction and, if the government comes through with significant infrastructure spending, school and wastewater plant construction.
“We think the economy will come back sooner rather than later,” he says.
He has cut back on inventory, meanwhile, reducing his purchases from steel mills. Like so many others, he shaves costs in little ways, putting speed governors, for example, on his trucks so they can’t go over 68 miles per hour.
“That has translated into a 5 percent saving in fuel, which is huge for us,” he says.
And so it goes across the Savannah economy: falling retail sales, fewer hotel bookings, a canceled convention, layoffs at Memorial Hospital, an announcement late this month that Great Dane Trailers, a major manufacturer, would soon close its factory here, and weakened tourism in a city that over the last 15 years has built an industry out of visits to its historic downtown.
The tourists are still coming. With gasoline prices falling, they’ve been driving here in growing numbers from Southeastern states, according to the Savannah Area Convention and Visitors Bureau.
But tourists are no longer big spenders. Elizabeth Patterson said business at her cigar and novelty store on Bull Street, in the middle of the historic district, has slowed. She said her competitors had seen a slowdown as well.
Her top seller once was a $4.75 Nicaraguan cigar, the Savannah Bulldog (also the name of her store). Cigars are still 50 percent of her revenue, which she says was $400,000 in 2007. But revenue is down 30 percent so far this year, mainly because tourists are buying cheaper cigars. They’re also purchasing fewer of her other big seller: novelty chess sets, at $35 and up, with pieces modeled on Walt Disney characters.
“They come in and ask, ‘What kind of cheap cigar do you have,’ ” she says. “Or they say, ‘Just looking.’ There is a total softening of our sales.”
Not surprisingly, the city government’s tax revenues have fallen, particularly since August, because of slowdowns from sales and lodging taxes. With home prices and construction down, property tax revenue is no longer rising at its old, brisk pace, and state aid has been trimmed.
Stuck with a shortfall, the city government has postponed until May a scheduled 2 percent pay increase for its more than 15,000 employees, including police officers and firefighters. It has also delayed for a year a host of capital projects, from building a new firehouse to rehabilitating storm sewers.
“We’ll still fill potholes,” says Christopher Morrill, the assistant city manager, “but we won’t repave any streets.”
From his perch as chief executive of Savannah Bancorp, John C. Helmken II, a 45-year-old native of this city, contributes to the slowdown, although reluctantly. Most of his clients are small businesses, and they are hesitant to expand.
Mr. Helmken, like other bankers here, encourages that hesitation. He defines the bank’s lending practices as “defensive.” Consumer lending is moribund, and with foreclosures having increased, home buying is, in effect, discouraged. “We still have programs where the purchaser can get by with as little as 5 percent down,” he says, “but it is usually 10 to 15 percent and borrowers must verify they have adequate incomes.”
In any event, mortgages are only 6 percent of the bank’s current loan portfolio of $850 million. The bulk of its lending is to small companies, but in the current downturn, the bank is focusing on professionals like lawyers with established practices and steady incomes who are opening or expanding an office.
“Dentists fall right into this preferred group,” Mr. Helmken says. “It was always a large part of our client base and now we are pushing it more.”
Dozier Crane is a longtime Savannah Bancorp client, with a line of credit exceeding $8 million. Mr. Helmken describes it as a healthy company. But when Dozier said it would draw down its entire credit line to buy more cranes, Mr. Helmken balked. There were discussions, particularly with Mr. Briscoe, the Dozier C.F.O. In the end, Dozier borrowed less than it originally intended and bought fewer cranes — which in turn reduced production at the American manufacturers of the cranes, which in turn bought less from their suppliers, and so on up the line, effectively weakening the broader economy.
“He said and we said, this is the right thing to do, given what is going on in the world,” Mr. Helmken said. “We asked the questions and he confirmed that Dozier would take a more cautious step.”
THERE are still islands of strength in Savannah’s economy. Gulfstream, which has its headquarters here, along with its research facilities and a big factory, is expanding and adding workers.
It came into the financial crisis with a backlog of more than 500 orders for its luxury jet aircraft, a majority from wealthy individuals and companies located overseas. Even without another order — and Gulfstream says orders are lagging — the backlog is enough to keep production going for about three years.
The Savannah College of Art and Design, with 8,000 students scattered in classrooms across the city, is also going strong. Five hotels and office buildings, started before the crisis, are still under construction. Fort Stewart, the huge Army base outside the city, is expanding, adding 3,800 soldiers to the 19,000 already stationed there, many of them living with their families on Savannah’s south side.
Mr. Helmken says he sees evidence of their contributions to Savannah’s economy, or at least evidence of the south side’s contribution.
“When I go by a Red Lobster inn on the south side on a Friday night,” he says, “there are people lined up waiting to be seated.”
But American cities depend heavily on corporate investment for expansion and new jobs, and that is dwindling here as capital spending grows more slowly everywhere. The Savannah Economic Development Authority, having signed up $360 million in new investment last year, has commitments this year for only $33 million.
“There aren’t that many deals in the country anymore,” says Lynn Pitts, the development authority’s senior vice president. “Everyone has pulled in their horns big time.”