MBJ_Jun30_2017

INSIDE — Sanderson Farms sued over ads that allegedly mislead — Page 4 RETAIL

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June 30, 2017 • Vo. 39. No. 26 • 16 pages

CONSTRUCTION

Highland Village: more it changes, more it’s the same — Page 2

MBJ DOUBLE FOCUS

Big Cat is on the prowl

Real Estate {Section begins P8}

» Law offers housing help » Fewer homes for sale favor sellers

{The List P11} » Commercial Real Estate Firms

Construction {Section begins P12}

» Technology changing construction industry at a dizzying pace

» Caterpillar rental expansion into Columbus follows up an opening in Tupelo

Page 12

http://msbusiness.com/events/leadership-in-law/

2 Q Mississippi Business Journal Q June 30, 2017 SHOPPING/RETAIL

Highland Village: the more it changes, the more it’s the same

By JACK WEATHERLY jack.weatherly@msbusiness.com

Masa Liles, general manager of Highland Village, thinks of herself as a curator.

Selecting new pieces and keeping certain “old” pieces has been the signature approach since the shopping center was opened in 1972.

In an era when naysayers are predicting the demise of shopping aggregations, especially enclosed malls, Highland Village closes in on 50 years in business.

The center has its own pace, Liles said during an interview seated at a table in one of the comfy passageways that connect the shops and restaurants and give the Village a bit of old-world ambiance.

Hence, its logo of an old Lile carriage.

Here are the latest: » Aplos Restaurant, Greek “fast fine” cuisine with infusions of Lebanese and Italian influences Alex Eaton, owner and chef of the Manship Wood-Fired Kitchen on State Street, will open the restaurant soon. “The opportunity to be in an iconic retail venue like Highland Village and adjacent to its beautiful, spacious courtyard was just too good to pass up. Our covered patio will be the perfect setting for family dining,” Eaton said in a release. » Kendra Scott, “the hottest retailer on the planet,” according to Liles. The jewelry shop makes jewelry while you wait, or you

JACK WEATHERLY/MBJ

make your own or simply choose a Kendra Scott design. It will open in July. » Lily Rain, a young-woman’s boutique clothing store, the 19th in the chain, will open toward the end of August. » The Nail Lounge opened recently and offers wine and beer while you get your feet or fingers done.

Liles offered a few previews about what’s to happen in the near future:

Courtesy of Highland Village/MBJ

Chef Alex Eaton of Aplos Restaurant.

Kids Court in the courtyard.

» Bravo! Italian Restaurant and Bar will undergo a renovation in the fall. » The walls of the village will be graced with murals by Mississippi artists.

“By the end of next year, you won’t recognize” the place, she said.

In the retail business, the Village is engaged in what is called “place making,” Masa (pronounced MAY-sah) Liles said.

WS Development of Chestnut Hill,

Mass., is the shaper since it bought the center in 2012. Two years ago it gave the exterior a freshening by whitewashing the brick facade and creating the courtyard. It built the Whole Foods store in 2014.

Kendra Scott and Lily Rain will bring to six the number of first, and thus far only, stores in upscale chains in Mississippi.

“They see something here,” Liles said.

ENERGY

PSC TO MISSISSIPPI POWER: ENOUGH IS ENOUGH ON KEMPER

By JACK WEATHERLY jack.weatherly@msbusiness.com Years of construction delays and huge cost overruns at Mississippi Power Co.’s Kemper County clean-coal gasification plant have reached the breaking point, as far as state regulators are concerned.

The Mississippi Public Service Commission voted unanimously June 21 to issue an order on July 6 giving the utility 45 days to comply with the order that would allow only the use of natural gas to operate plant – and not add to ratepayers’ burden.

That would mean that the $7.5 billion facility that has been under construction for seven years would function as plant that would have cost a fraction of the plant designed to produce synthetic gas from lignite in a nearby deposit.

The plant, which originally projected to cost $2.9 billion, was approved based on the assumption that lignite-gasified power would be cheaper in the long run than natural gas. That has not proved to be true.

Tom Fanning, chief executive and chairman of parent Southern Co.,

referred last August to the plant as a “dual fuel” operation, though he was adamant that gasification would be the primary fuel. The process is designed to remove most of the carbon dioxide from the synthetic gas produced. And the C02 is to be used in removal of crude oil from the ground.

The project is more than three years behind schedule.

Mississippi Power serves about 187,000 customers in 23 counties.

“We are telling the parties to get a plan and get a settlement in 45 days that does not increase rates one penny,” PSC Chairman Brandon Presley said, according to The Wall Street Journal. Presley voted against the construction of the plant, which was approved 2-1. The two other current commissioners were not in office at the time.

Mississippi Power posted a statement on its website that says: “The Mississippi Public Service Commission today held a special meeting to discuss the Kemper County energy facility and Mississippi Power’s request to keep Kemper related customer rates stable. The PSC has kept the rates for Kemper in place.

“The Commission also established a process to address project costs and encouraged discussions among all parties to reach agreement.

“The PSC provided several guidelines to consider for the negotiations, including the possibility of the project only operating as a natural gas-fueled combined cycle plant. We expect the process for any negotiations and this new docket will be formally addressed as part of a proposed order the Commission will consider at their July 6 meeting. We look forward to reviewing the order.”

The Wall Street Journal reported June 21 that “if Mississippi Power cannot find a way to pass on some of the remaining costs, it will face a difficult financial situation.” The paper noted that Mississippi Power’s assets exceed its liabilities by $1.2 billion.

Moody’s Investors Service, a leading credit rating firm, downgraded $800 million of Mississippi Power Co.’s debt securities in March because of continuing problems with the coal-gasification plant. The downgrade means that future credit for the power company stands to be more expensive.

The plant isn’t finished, even though Mississippi Power announced in January that it produced electricity from syngas. Engineering challenges have led to the delays and cost overruns.

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4 Q Mississippi Business Journal Q June 30, 2017 AGRIBUSINESS

Sanderson Farms sued over ads that allegedly mislead

By JACK WEATHERLY jack.weatherly@msbusiness.com

Several consumer advocacy groups have sued Laurel-based Sanderson Farms Inc. for allegedly using antibiotics and other chemicals in its chicken that the producer advertises as “100% natural.”

The Organic Consumers Association, Friends of the Earth and the Center for Food Safety filed the complaint June 22 in the U.S. District Court for Northern California against Sanderson, the nation’s third-largest poultry producer.

Sanderson issued a statement on Friday that says that while it “generally does not comment on pending litigation . . . the allegations in this lawsuit bear upon food quality and safety. The company unequivocally states it does not administer the antibiotics, other chemicals and pesticides, or ‘other pharmaceuticals’ listed in the complaint to its flocks, with one exception. . . . Company veterinarians do, or rare occasions, prescribe penicillin to treat sick poultry flocks.

“In its 70-year history, Sanderson Farms has never been cited by the United States

Department of Agriculture or any other regulatory body for violation of any residue law, rule or regulation.”

Yet the lawsuit states that “when tested by governmental entities, Sanderson’s chicken have been found to contain residues of antibiotics important for human medicine, residues of veterinary antibiotics, and other pharmaceuticals, as well as residues of hormones, steroids, and pesticides. . . . [Sixty-nine] inspections [were made] in 2015 and 2016 at Sanderson facilities, and in 33% of those inspections Sanderson samples tested positive for such residues.”

Sanderson said in its statement that beyond the penicillin used for ailing flocks “most all of the other drugs and chemicals cited in the complaint are not approved for use in chickens, and some would be lethal to chickens.”

The complaint contends that Sanderson uses antibiotics “prophylactically.”

Sanderson’s marketing includes videos featuring two actors known as “Bob” and “Dale” wearing Sanderson ball caps and dressed like farm hands, extolling, as one video says, the company’s “honest chicken.”

From Sanderson Farm YouTube page

Sanderson Farms videos feature characters who extol the company’s ‘honest chicken.’

Despite the statement issued by Sanderson on Friday, Lampkin Butts, president and chief operating officer for the company, was quoted in an interview with The New York Times in August as defending the use of antibiotics, calling “its competitors’ efforts in the other direction a ‘marketing gimmick’ aimed at charging higher prices.”

The four other major producers use antibiotics in the raising of their poultry, though they are taking steps to reduce, if not eliminate, them, according to The Times. Critics of such use contend that it contributes to antibiotics resistance in humans.

See SANDERSON, Page 5

June 30, 2017

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Mississippi Business Journal

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SALES MOVES

What is the key that unlocks the sale?

I

s there a one word answer to making more sales happen? YES! Probing?

Listening?

Presenting?

Talking?

Assessing?

Pain?

Objections?

Closing?

Manipulating?

The key to selling is not probing, listening, presenting, talking, assessing, pain, objections, and especially not manipulating.

The key that unlocks sales is harmonizing.

But you’d never know that from most salespeople’s actions.

Selling is about understanding the other person and their needs. Their fears. Their desires. And their urgency to buy. Prospects and customers have different motives to buy, and it’s the salesperson’s job to uncover them – and harmonize with them.

RULE OF SALES: No two sales or sales presentations are alike.

They must be adapted to uncover the motives and objectives, understand the opportunities and barriers, meet the needs and desires, harmonize with the person and the personality, and satisfy or fit within the financial parameters of the buyer.

All my sales life I’ve been exposed to – “no, no,” frustrated by, “systems of selling.”

And all my sales life I’ve fought them as being hokey, outdated, bogus, non-realistic, manipulative processes that salespeople learn, but never really feel comfortable using.

Not that systems are “totally wrong” –

SANDERSON Continued from, Page 4

Butts said in the Times article that “there is not any credible science that leads us to believe we’re causing antibiotic resistance in humans.”

In one of the Sanderson advertising videos, seen on television and social media, “Bob” echoes Lampkin Butts by saying that competitors use the phrase ‘raised without antibiotics’ to get consumers to pay more money,” according to the suit.

The plaintiffs in the California case seek a jury trial, an accounting of profits from what they contend are misleading ads, an injunction to stop using the ads and an order to engage in a “corrective advertising campaign.”

more that they don’t always “fit” the situation. And that the salesperson focuses on the execution of the system to make the sale, rather than focusing on and harmonizing with the prospect to make the sale.

No one system will work all the time – BUT specific elements of any system may be applicable. I’m NOT saying don’t learn systems – all sales knowledge is valuable. I am saying be yourself in the sale, not the system.

RULE OF SALES: Prospects don’t always want to buy the way you have been taught to sell.

Here are some “more” clues: THE RULES OF “THE MORE THE MORE”: • The more you believe in your company, your product, and yourself, the more you will sell.

• The more value you provide to others, the more people will come to know, respect you, and buy from you.

• The more you follow up and follow through, the more sales you will make.

• The more you study sales, the more you will know how to react to any sales situation.

• The more you harmonize with the customers situation, and offer answers they can apply – answers they perceive as valuable, the MORE SALES you will make.

Keep this in mind at all times. You are a SALESperson, and the prospect or customer is expecting you to ask for the sale.

Don’t disappoint them. But don’t fail to win the sale by earning it.

As a sales master, your job is to take the characteristics and needs of the prospect and blend them with your skills and un-

Sanderson shares on the NasdaqGS stock market gained 72 cents on Friday to close at $123.93.

Sanderson is a defendant in two other federal court cases, neither of which the company has discussed publicly.

Former contract chicken growers filed suit Jan. 27 in the U.S. District Court for the Eastern District of Oklahoma against Sanderson and three other major processors, seeking damages for what they contend is price fixing that squeezed them out of their livelihood.

Sanderson and 14 other processors were sued along the same lines last fall in the U.S. District Court for the Northern District of Illinois.

Both cases are pending.

derstanding to determine the reasons the prospect is buying. His or her motive.

This will motivate and inspire the prospect to act. Note that the root word of motivate is motive.

Harmony is understanding, not manipulating. It’s sensing the tone of the situation, and comfort level of the prospect — And gives the prospect enough confidence to buy. Harmony converts salesperson selling to prospect buying.

Even though I don’t believe in or subscribe to a “system of selling,” I am still searching for “the best way” to make the sale. And what I have discovered along the way are elements, mostly personal (non-manipulative), that when mastered will create an atmosphere where people (your customers and prospects) will be compelled to buy.

Here are three of them in an acronym that ties the introduction to the point – AHA! The three elements to master are Attitude, Humor, and Action. These elements, when mastered, are the surest (and shortest) sales formula to long term success. And they have nothing to do with systems, manipulation, or sales pressure.

These words, elements, and characteristics create harmony.

Every salesperson I have ever come in contact with wants to build better customer relationships – and the best way to do that is never Gitomer manipulate them. Manipulation makes people defensive, reluctant, and distrustful.

Harmonize, baby.

Mastering these elements will make prospects attracted to you, like you, trust you, believe you, have confidence in you – and then – buy from you.

Editor’s note: Jeffrey Gitomer is on sabbatical. This column originally appeared in the August 26, 2016, Business Journal.

Jeffrey Gitomer is the author of 12 books. His real-world ideas and content also are available as online courses at gitomerlearningacademy.com. For information about training and seminars, visit gitomer. com or gitomercertifiedadvisors.com, or email Jeffrey at salesman@gitomer.com.

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• Environmental Site Assessments • Indoor Air Quality Investigations • Brownfield Assessments and Remediation • Asbestos and Lead-Based Paint • Mold and Biological Assessments • Property Condition Assessments • General Environmental Engineering Contact:

E. Corbin McGriff, Ph.D., P.E. Veteran Owned Small Business HAZCLEAN ENVIRONMENTAL CONSULTANTS, INC. JACKSON, MS & BIRMINGHAM, AL

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• email: info@hazclean.com www.hazclean.com

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MBJPERSPECTIVE June 30, 2017 • www.msbusiness.com • Page 6

OTHER VIEWS

#just sayin’ by FORD WILLIAMS

Partnership gives students opportunities

Website: www.msbusiness.com June 30, 2017 Volume 39, Number 26

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Entire contents copyrighted © 2017 by Journal Inc. All rights reserved.

» INSIDE MISSISSIPPI

Consensus perspective on Medicaid

I

t is the obvious which is so difficult to see most of the time,” wrote Isaac Asimov. “People say ‘It’s as plain as the nose on your face.’

But how much of the nose on your face can you see, unless someone holds a mirror up to you?”

A conservative Republican legislator, speaking about Medicaid cuts, shared this perspective with Mississippi Hospital Association members, “some don’t think government should be involved in health care at all.”

Prominent social conservatives like Gary Bauer also reflect this notion.

While “liberals have traditionally been seen as standing up for the weak and the vulnerable,” said Bauer, “conservatives can be just as empathetic. But they believe that, in most cases, it’s not government’s role to be the primary dispenser of empathy.”

Other conservative mirrors, however, reflect a different perspective. As C. S. Lewis wrote, “For what you see and hear depends a good deal on where you are standing: it also depends on what sort of person you are.”

Even Mississippi’s old 1890 Constitution reflects a role for government

Bill Crawford

in caring for the insane, indigent, and “those persons who, by reason of age, infirmity, or misfortune, may have claims upon the sympathy and aid of society.” (See Sections 86 and 262).

Sen. Roger Wicker appears to support an active role rather than no role.

Last week he told MSNBC that the Senate is working to give the 50 states greater say in how Medicaid works, “while also preserving the system that was meant to protect poor children and disabled people.”

Wicker’s perspective no doubt reflects that of most Mississippi conservatives. Turns out lots of them have elderly relatives in Medicaid funded long-term care facilities. This includes many not-so-poor conservatives who pragmatically move nursing home costs to Medicaid by transferring their elders’ assets to other family members.

“Our country is great because it is built on principles of self-reliance, opportunity, innovation, and compassion for others,” reflected Ronald Reagan.

It was Reagan who, in 1986, created one of the most intrusive roles of government in health care. He signed the See CRAWFORD, Page 7

new partnership is making high-level, college preparatory coursework available to Mississippi high school students.

Beginning in the upcoming school year, the Mississippi Public School Consortium for Educational Access is launching a pilot program that will teach Advanced Placement courses in select rural and low-income school districts that currently do not offer the courses.

In preparation, many students are participating in a two-week summer academy held at Mississippi State University to get them ready to take AP physics this fall.

When the students return to school in August, they will take an AP physics course taught by Meg Urry of Yale College, an internationally renowned astrophysicist and director of the Yale Center for Astronomy and Astrophysics.

The AP classes this school year will be taught in blended style, combining online and in-person instruction from teachers within the students’ schools and from Urry.

Thanks to private support — including a $200,000 grant from the Jack Kent Cooke Foundation — the consortium is able to provide the preparatory summer academy and the advanced courses to students free of charge.

The consortium also is working in partnership with the Global Teaching Project to take this year’s pilot program to scale and offer AP courses to more students.

Such courses introduce high school students to the rigors of college-level classwork and offer them an opportunity to earn college credits early. In doing so, they engage students, open pathways to more selective universities and even spark confidence in what they’re capable of achieving.

According to the College Board, about 85 percent of selective colleges report that a student’s AP experience favorably affects admissions decisions. Millions of students have been able to graduate from college more quickly and at lower costs because they earned college credits through high school AP courses.

Yet, access to AP courses is limited for many Mississippi students. The state is filled with small, rural districts, and many of those entities do not have the manpower to offer such specialized courses. School funding cuts increase those pressures.

That is what makes this innovative partnership so valuable. It offers students a profound opportunity not readily available to them.

As Cooke Foundation Executive Director Harold O. Levy said in a press release, “Talented students, regardless of their geographic location and family income, need to be supported so they can reach their fullest potential.”

Doing so can set these students on a new educational and career trajectory. The result can have a tremendous impact on our state and its local communities.

— Northeast Mississippi Daily Journal

PERSPECTIVE » RICKY NOBILE

June 30, 2017 I Mississippi Business Journal

CRAWFORD

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7

Continued from Page 6

Emergency Medical Treatment and Active Labor Act (EMTALA) that requires all hospitals that accept Medicare and Medicaid payments to provide people emergency room care “regardless of ability to pay.”

Missing in action are social conservatives willing to undo the government’s intrusive EMTALA dictates, despite the abusive and costly use of emergency rooms by patients with no emergency medical conditions.

Also missing in action are conservatives willing to have government pay for the free care EMTALA requires hospitals to provide, which puts many Mississippi hospitals in financial jeopardy.

This was particularly evident last week when Gov. Phil Bryant’s Division of Medicaid ignored Mississippi hospitals’ proposal to provide managed care for Medicaid recipients, a proposal designed to keep money in Mississippi to help offset losses from uncompensated care. Instead, millions in fees for Mississippi Medicaid managed care will continue to flow to out-of-state vendors.

While most may join with Reagan and Wicker in seeing an active role for government in health care, our state and nation are far from a consensus perspective, especially regarding Medicaid.

Bill Crawford (crawfolk@gmail.com) is a syndicated columnist from Meridian.

»UNDER THE CAPITOL DOME

Unclear path for revamp in student aid

A

s tuition grows more expensive at Mississippi's universities and community colleges, more students are seeking aid to help them pay. But the state's financial aid programs have problems of their own. And while aid might be revamped, competing interests might preserve the status quo.

Mississippi has three major undergraduate grant programs: the Mississippi Resident Tuition Assistance Grant (MTAG), the Eminent Scholars Grant, and the Higher Education Legislative Plan for Needy Students (HELP). The three traditionally have had different goals. With low test scores and high school grade requirements, MTAG is available to many students, but excludes those poor enough to qualify for federal Pell Grants, meaning mostly middle-class and above students qualify for $500 in each of their first two years and $1,000 in each of their last two years.

The Eminent Scholars Grant, by contrast, has high qualifications — an ACT score of 29 or above and a high school grade point average of 3.5 or higher to get $2,500 a year.

Those best-qualified students generally come from more affluent families Most generous is the HELP program, which pays full tuition and fees for students whose families earn less than $39,500 a year, if the student earned a 20 or higher on the ACT and GPA of 2.5 or more. The Legislature made it easier to qualify for HELP, and it surged from the smallest of the three grant programs to the largest. In the budget year starting July 1, the state projects it will spend more than $18 million on 3,280 students. By comparison, $12.4 million will go to 23,500 MTAG recipients and $5.8 million will go to 2,700 eminent scholars. The Education Commission of the States, in a May 2017 analysis , found that growth in HELP meant Mississippi's spending on need-based grants rose 221 percent from 2011 to 2015, the third-highest percentage growth among states in that time.

That expansion in HELP, combined with state budget cuts, is pressuring Mississippi's financial aid program. Projecting a $9 million shortfall, lawmakers decided to end students' ability to combine or '"stack" the grants , affecting 3,400 students. Lawmakers also directed officials to check student grades every semester, which means a projected 430 students will lose grants. Those two changes are projected to save $3.6 million. But lawmakers also cut $5.3 million from a series of smaller programs that repay loans for students who go into teaching or health care by barring new awards from any of those programs.

The Education Commission of the States, in a 2016 report on Mississippi's situation , suggests that the state should put more of its effort into making sure students from families earning less than $50,000 a year go to college to increase skill levels across the state. It suggests the eminent scholars and MTAG programs may not be reaching their goal of keeping high-achieving students in the state.

The report also questions whether the loan repayment programs are the best use of the state's money. It suggests streamlining those programs and evaluating whether desired outcomes are met.

Finally, the commission suggests a later application deadline for HELP and allowing part-time students to get grants,

instead of just full-time students. Both those suggestions would increase costs.

But those proposals would be hard to Jeff Amy implement. Cutting eminent scholars grants might not cause any overall savings, because individual universities could use their own money to compete for high-achieving students. Cutting MTAG could be unpopular among legislators. And increas-

Cutting eminent scholars grants might not cause any overall savings, because individual universities could use their own money to compete for high-achieving students. Cutting MTAG could be unpopular among legislators. And increasing access would only increase the financial pressure on the system. ing access would only increase the financial pressure on the system.

Members of the state financial aid board could debate all those options in coming months. But without more money, the choices will be hard.

Jeff Amy has covered politics and government for The Associated Press in Mississippi since 2011. Follow him at: http://twitter.com/jeffamy . Read his work at https://www.apnews.com/search/Jeff_Amy .

June 30, 2017 • MISSISSIPPI BUSINESS JOURNAL • www.msbusiness.com

AN MBJ FOCUS: REAL ESTATE

ALEX JACKS / Special to the MBJ

Law offers housing help » Mississippi Realtors invest in First-Time Homebuyers Savings Account program

By ALEX JACKS mbj@msbusiness.com

F

or the first-time homebuyer, the real estate market can be a bit overwhelming. There are numerous financial considerations new buyers must contemplate, which in the past have prevented many from buying a first

home.

In an effort to encourage Mississippians to take the plunge, Gov. Phil Bryant signed the First-time Homebuyer Savings Accounts, a new tax-advantaged savings program, earlier this year.

“First-time Homebuyer Savings Accounts are a great opportunity to put more of our citizens on

the path to homeownership, while also creating economic growth,” Bryant said in a written statement.

“We want shipbuilders in Pascagoula, Nissan workers in Canton, FedEx employees in Southaven, and all of our hard-working Mississippians to live the American Griffith dream. I can’t think of any better place for that to become a reality than in the Magnolia state. With these First-time Homebuyer Savings Accounts, the American dream is within reach for more Mississippians.”

Different versions of the bill were introduced in the Legislature throughout the last two years, Mississippi Realtors President David Griffith said.

“We researched how this bill would not only help first-time homebuyers but how it would help Mississippi as well,” Griffith said. “We made some revisions and worked with state leadership to bring the final bill to the table. This year, state leadership crafted a bill that passed with nearly

unanimous support in both houses.”

The program allows individual Mississippians who have never owned or purchased a home to deduct up to $2,500 from their state adjusted gross income annually by establishing a designated First-time Homebuyer Savings Account. Couples are able to deduct up to $5,000.

There is no cap on how long or how much money an individual or couple can save. Interest earned on the deposits also grows free from state income tax.

Mississippians can begin taking the deductions in the 2018 tax year.

“The homebuyer savings account program will help more Mississippians invest in themselves, their communities and our state,” Griffith said.

“It provides a new option to homeownership for many in our state to purchase their first home.”

Mississippi Realtors are working hard to raise public awareness about the program, Griffith said.

See SAVINGS, Page 10

Real Estate

June 30, 2017

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Fewer homes for sale favor sellers

By BECKY GILLETTE mbj@msbusiness.com

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ationwide, existing home sales dropped 2.3 percent in April, according to the National Association of Realtors (NAR). That was pegged to lower availability rather than lack of demand. NAR said the total number of homes for sale has dropped 9 percent in the past year.

“Nationally, low inventory is a hot topic,” said David M. Griffith, 2017 president, Mississippi Realtors, a broker and appraiser with Griffith Real Estate Inc. in Cleveland. “As inventory declines, buyers compete for the few units available, which drives up prices. Since [fewer] homes are listed for sale, [fewer] homes are selling, and they are selling at a higher price. As NAR Chief Economist Lawrence Yun said, ‘Sellers are in the driver’s seat this spring as the intense competition for the few homes for sale is forcing many buyers to be aggressive in their offers’.”

While the South sometimes lags behind other areas of the country in economic indicators, it was the only region in the country to see an uptick in pending home sales in March, Griffith said.

“In Mississippi, our markets seem to be doing well,” he said. “I travel around the state meeting with local Realtors boards, I hear how much activity their markets are seeing.

On the Gulf Coast, for Coker instance, there were 2,057 home sales through May 2017. There 1,778 during the same time frame in 2016.

Through May 2017, there were 3,529 new home listings, up about 500 from with 3,025 through May 2016. In the Jackson area, new listings are up 1.3 percent with 3,881 year-to-day. Closed sales are up 4.9 percent with 2,359 year-to-date. The median sales price is up 3.3 percent at $170,000.”

In some areas across the state, including his area, Cleveland, there are buyers, but more inventory is needed.

“One possible reason for this is the need of new construction in these areas,” Griffith said. “Another is the uncertainty factor about what’s happening nationally.

Potential sellers are staying in their current homes rather than selling them and moving up to a bigger or more expensive home.”

Based on information provided by Realtor.com, prices are rising in many areas.

Home Builders Association of Mississippi Executive Vice President/ Executive Officer ShanJoachim non Coker said while nationwide sales of new homes were lower in April after three consecutive monthly increases, the April reading was closely inline with 2016.

“However, in the Southern region, sales of new homes over the first four months of the year have been a bit more choppy, fluctuating between 331,000 and 347,000, with the April 2017 reading for the South region being 4.1 percent higher than its April 2016 number,” Coker said. “That being said, home sales are, to some extent, conditional on the number of homes available for sale, and the inventory of new homes remains below the six-month level, suggesting low inventory. The challenges faced by home builders are probably contributing to the low inventory and dampening the performance of new home sales.”

Nationwide, labor costs and availability,

lot costs and availability, and inspection fees are key challenges faced by the industry. Coker said recent policy affecting building materials prices, as well the slowdown in growth of acquisition, development and construction debt financing, are also keeping expectations for growth lower by holding back housing starts.

Coker said Mississippi is moving closer to the 2000-2003 average annual number of housing starts. At the low of the recession era, home starts in Mississippi were 49 percent of normal.

Cynthia S. Joachim, broker associate, Caldwell Banker Alphonso Realty, Inc., Gulfport, said both in Mississippi and nationwide, real estate markets are continuing to rebound.

“The coastal market has seen dramatic increases in home sales in the past two years and what is interesting is it is working in both ends of the market, housing under $100,000 and new construction, custom-built houses and housing in the seven figure sales prices,” Joachim said.

“The coastal counties have sold more homes under $100,000 in the past 18 months than in the first three years of

See SALES, Page 10

Real Estate

10 Q Mississippi Business Journal Q June 30, 2017

SAVINGS Continued from Page 8

In order to do that, the organization recently launched FirstHomeMS.org, a website where potential first-time homebuyers can go to learn more about the program, he said.

“Stakeholders from Mississippi Homebuilders Association, loan officers and representatives from several banks and credit unions joined about 100 Realtors for the website launch press conference earlier this month,” Griffith said. “The event was held during our semi-annual meetings, and our members left with information to take home to their local communities.”

Following the program website announcement, Griffith said the response from Mississippi Realtors’ financial partners at banks and credit unions has been overwhelmingly positive.

“Since it is a brand new program and the tax advantages don’t begin until 2018, we don’t have any data for the early participation rates by consumers,” he said. “Mississippi Realtors will work with our financial partners and the Mississippi Department of Revenue over the coming years to track consumer participation. (Despite the unknown data), the financial institutions are excited to create new deposit programs which will generate revenue, fund loans and establish relationships that could grow into mortgages.”

According to research commissioned by Mississippi Realtors, the program will enable nearly 7,600 new firsttime buyers to enter the market over five years. In addition to neighborhood stability, new homeowners spend about $1,800 more in their communities annually than renters. And, as more buyers enter the market, about 379 new homes will be built to keep up with demand, the research by Lisa Sturtevant and Urban Analytics revealed.

“As Realtors, we know that saving for a down payment is often one of the largest hurdle for would-be homebuyers,” Griffith said.

Mississippi was the fourth state to enact a First-time Homebuyer Savings Account program, after Montana, Colorado and Virginia, Griffith said.

“There is a national appetite to increase homeownership,” he said. “Since Gov. Bryant signed the law, Iowa and Minnesota have signed similar legislation. Currently, there are 11 other states looking at the program. Mississippi is leading the way.”

First-time Homebuyer Savings Accounts can be created at any financial institution licensed to do business in Mississippi. Individual account holders are responsible for maintaining the funds in a separate account and reporting to the Department of Revenue.

The deposits can be used for a down payment and closing costs on a purchase of single-family home in Mississippi. Unqualified withdrawal and use of the funds is penalized 10 percent and taxed as gross income.

The goal of the Mississippi Realtors is to make the savings program a household name in Mississippi, Griffith said. FirstHomeMS.org provides a venue to connect consumers with financial institutions, property professionals and resources to help them on the path to homeownership.

“Our state leadership has given us a great opportunity.

As Realtors, we have to champion the program in our communities. We have to engage our financial partners, homebuilders, media allies and other stakeholders,” Griffith said. “We’re all in this together. Together we can lead the state toward economic growth. And it all starts with homeownership.”

LOCAL ADVANTAGE.

SALES

Continued from Page 9

the housing slump. Our worry about that now is that we are seeing future homeowners buying to occupy a home now having to compete with investors and second home buyers. The investors can usually pay cash and that puts a home buyer in a difficult, as well as a different, position.”

Joachim said builders are trying to meet demand for new housing in their price points and there is little inventory in upper end homes.

“Seven figure house sales no longer surprise the real estate market,” she said. “Certainly we know that after the housing slump, it’s hard to fall off the floor. So, the only place to go is up, and up it has gone.”

Mississippi does not have the economic drivers that the other “sand” states enjoy, including Florida, Alabama, Georgia, Texas and California. Joachim said many of the markets in these states are either out of inventory or in multiple-offer scenarios which drive the prices higher.

“What drives real estate growth is jobs,” she said. “If we can keep jobs and development coming, we should be able to sustain our housing markets.”

One area of the market that is still troublesome is undeveloped land and lot sales. Joachim said there are thousands of lots and land parcels for sale, many of them still on the market from Katrina. But she said more of these have been selling lately, including some on the market 10 to 12 years.

“All of this good cheer does not alter the fact that real estate is still a tough business,” Joachim said. “It’s harder to keep people in deals, financing is not easy and the Coastal counties are not without challenges. Insurance, building codes and FEMA are hurdles to overcome, but the mayors are upbeat in their interviews and reporting.”

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Real Estate

June 30, 2017

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June 30, 2017 • MISSISSIPPI BUSINESS JOURNAL • www.msbusiness.com

AN MBJ FOCUS: CONSTRUCTION

Courtesy of Thompson Machinery

Cat Rental Store manager Scott Adair brings more than 30 years of rental experience and customer service to the Tupelo and Columbus area.

Big Cat is on the prowl » Caterpillar rental expansion into Columbus follows up an opening in Tupelo

By NASH NUNNERY mbj@msbusiness.com

L

evi Johnson has found nirvana.

A small-scale general contractor in rural Lowndes County, Johnson used to turn down more jobs than he could count simply because he lacked the right equipment in his tiny workshop.

No more.

Last month’s grand opening of The Cat Rental Store at Thompson Machinery in Columbus has

instantly transformed the 47-year old Johnson’s business fortunes. From building fences to constructing small barns to digging electrical trenches, Johnson rarely turns down a project now.

“The ability to rent a fork lift, dozer or even a light tower, has made a big difference in the type of jobs I can bid on,” he said. “Renting equipment makes a whole lot more sense because we don’t have to tie-up a lot of money on things we might not use but once or twice a year.”

Based in Tennessee, Thompson Machinery is the exclusive Caterpillar dealer for north Mississippi, and middle and west Tennessee. The company offers a complete line of Caterpillar equipment, as well as agricultural equipment. Through its Cat Rental Store operations, Thompson also offers allied equipment brands such as Genie, JLG and Sullair.

Company spokesman Mike Rattan said that

opening a Cat Rental Store location in Columbus made good business sense. Market trends continue to shift toward renting equipment as opposed to purchasing.

“The (Golden Triangle) region has been part of our sales territory for years,” he said. “The opportunity was there. Rental is a growing revenue channel, and the people in the area said we were missing the boat.”

The new Columbus store comes on the heels of Thompson’s recent expansion of its Tupelo rental operation. Located near the Golden Triangle airport, the store offers delivery to anywhere in Mississippi, or customers are welcome to pick it up.

Available for rent by the day, week or month, Cat Rental Store customers also have a rent-toSee CATERPILLAR, Page 14

Construction

June 30, 2017

Q

Mississippi Business Journal

Q

13

‘List goes on and on and on’ » Technology changing construction industry at a dizzying pace

Bob Wilson, executive director, Associated General Contractors of Mississippi

By BECKY GILLETTE mbj@msbusiness.com

T

“The cabs in cranes are like in an airplane cockpit. It is hard to find someone with the technology background to operate a crane today.”

echnology innovations such as drones, driverless vehicles and 3D printers are radically changing how buildings are constructed these days, and will do so even more in the future. That is both good and bad, depending on your perspective.

While technology is making construction safer and, in some cases, better, it is also eliminating jobs.

Associated General Contractors of Mississippi Executive Director Bob Wilson said innovations in construction technology are exploding right now. A drone research building in Dubai is being built entirely by 3D printers in Singapore. 3D printers are also being used to lay brick.

“With a 3D printer, you can build a wall in about a third of the time, and it is more accurate than one built by the best brick mason,” Wilson said. “The thing that is so incredible to me is how fast construction technology is evolving. There are certain things you just assume will happen because of technology improvements, like medical advancements. But the construction business is something that most people think of as a manual labor type thing.

They don’t realize how much technology can affect that industry.”

Wilson said everyone in the industry has figured out just how important new technology is to construction, and changes are happening at a rapid pace. Part of it is driven by work-force issues because many

construction companies can’t find enough qualified workers. Another big element is the potential to reduce costs and improve safety.

The general public might not understand how well trained some construction workers need to be.

“The cabs in cranes are like in an airplane cockpit,” Wilson said. “It is hard to find someone with the technology background to operate a crane today.

Drones are also having a big impact, as are driverless vehicles.

“The list goes on and on and on.”

Wilson said part of President Trump’s proposed infrastructure program is developing apprenticeships so workers can be trained for the high-tech jobs that

are replacing many of the manual labor jobs.

“It sounds like you will be able to get tax credits if you bring people in to be apprentices since we can’t seem to find people with that technology background to operate all this equipment,” Wilson said.

Drones have made it easier and safety to inspect buildings. It used to be an inspector would go out and walk a construction site to make a report on progress. Now a drone can do the job much more cheaply and safely.

“With a drone to check the whole construction site, you can drill down to see if there are issues or how the job is going,” Wilson said. “You can deliver supplies to the job. You used to have an inspector hanging off the side of a building to do the inspection. You don’t have to do that anymore. You can use a drone to check from an office on the construction site. It eliminates a lot of safety issues.”

Drones are now also being used to help build big tunnels. With the use of trans-

See TECHNOLOGY, Page 14

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CATERPILLAR Continued from Page 12

own option to build equity, if ownership is desired.

“Not all equipment needs warrant machine ownership,” said Thompson area sales manager Tom Simmonds. “Changing project demands and the cost of servicing equipment can make renting a great option.”

Over the last several years, the company has invested $13 million in Mississippi for facility upgrades, including new locations in Tupelo and Boyle.

Further expansion is expected, said Rattan.

“Right now, we’re looking to expand

Construction

the Greenwood facility and maybe open a store in Oxford,” he said. “Our plan is to be part of all infrastructure growth throughout the state of Mississippi.”

The company’s top rental item in Mississippi? Fork lifts.

“I would venture to say that most job sites need fork lifts, and they would definitely be classified as our top rental,” Rattan said. “But we also offer everything from two-inch pumps to scissor lifts and of course a full-line of Cat dozers. The Cat Rental Stores are a one-stop shop for customers looking to get the job done.

“We’re really excited to be in Columbus, Tupelo and Boyle to serve our customers in north Mississippi.”

Courtesy of Thompson Machinery

Recent expansion of the rental operations at Thompson Machinery includes a wide range of products from Cat, as well as JLG, Sullair, Multiquip and Skyjack.

TECHNOLOGY Continued from Page 13

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mitters along the route, the drones can safely inspect work being done that might be hazardous.

“It is always a big issue with tunnels or sewers with walls to continually check for leaks or cracks to make sure that construction is going the way it is supported to be going,” Wilson said. “You can use a drone to make sure the integrity of the walls can be maintained. When you have the human factor in there, the safety issues are pretty strong. It is safer for the workers we do have, and insurance rates go down. Those advantages are just becoming more and more apparent.”

Another advance is using high-powered cameras in historic buildings to look behind the walls to locate sewers, electrical lines and other cabling.

“You don’t have to drill exploratory holes if you have to renew cabling,” Wilson said. “It almost gives you a blueprint of that buildings. You also now have virtual reality with headsets. You can put the plans in the computer, walk through a building under construction, and overlay plans for the building with your goggles.

You can see if a door is in the wrong place or if there are other problems.”

The price of virtual reality equipment is continuing to drop, just like drones can now be purchased for a couple hundred dollars that have a lot of capability.

Another innovation he saw recently at a national convention was using computer games in safety training. For example, a game might be used to teach people the importance of how to check the safety of a harness when hanging to put up drywall or do other tasks.

“You have to continually check the harness string,” Wilson said. “You are playing a game like you are a construction worker. If you don’t do things right, it shows you falling. You have to go back and start checking everything and make sure to do things right. If you are able to complete the job, you go to a higher level.

This is going strong, and they are coming out with a Hispanic version, as well.”

June 30, 2017

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THE SPIN CYCLE

and reduced confidence in Snap’s ability to monetize via advertising.

White House communications team affects PR profession perception

M

embers of the White House communications team are traditionally the most prominent public relations professionals in the world. As the most visible figures in American and global media, they are a key voice for advancing presidential policies and priorities that affect not only Americans, but also citizens around the world.

Under the current administration, they are also affecting something else – their own profession.

A survey of public relations professionals conducted by the USC Center for Public Relations at the Annenberg School for Communication and Journalism found that 73.2 percent of respondents across the political spectrum believe the current White House communications team is affecting the public perception of the PR industry.

Of the 900 survey respondents, 55.3 percent identified themselves as liberal, 29.6 percent identified themselves as moderate and 15.1 percent identified themselves as conservative. When asked if the current White House communications team is affecting the image of the PR profession, 77.4 percent of liberals agreed, along with 77.2 percent of moderates and 53.9 percent of conservatives.

When asked about various aspects of the perceived performance of the overall White House communications team: » 83.7 percent agree they “constantly change their views/statements” » 80.2 percent agree they “distort the truth” » 63.5 percent agree they “purposefully lie” » 36.3 percent agree they “do their best despite the circumstances” » 32.0 percent agree they “work hard to explain the administration’s policies” » 15.7 percent agree they “are treated unfairly by the media” » 13.3 percent agree they “are strategic in their approach” » 11.6 percent agree they “act like PR professionals.”

A majority of PR practitioners believe that Counselor Kellyanne Conway, Press Secretary Sean Spicer and Deputy Press Secretary Sarah Huckabee Sanders have made a negative impact on the perception of their profession. Ninety percent of respondents believe that Conway’s impact has been negative, with 78 percent describing her effect as “very” negative. Ninety percent also state that Spicer has a negative impact, with 59.4 percent describing it as “very” negative. Huckabee Sanders’ effect was described as negative by 56.5 percent.

Many former White House spokespeople have gone on to secure high-profile

positions in the public relations industry after their stints in politics – despite the challenges of being closely associated with the policies and practices of a particular president. While 36 percent of PR professionals agree that current White House communications team members do “their best under difficult circumstances,” the majority indicated they would not hire the current press secretary or deputy press secretary in a PR-related job, if they were in a position to do so.

Recruiting professional replacements to fill spots on the White House communications team would also prove challenging.

If asked by the current president, the overwhelming majority of PR practitioners said they would not accept jobs in the White House. Only 6 percent would accept the job of press secretary or deputy press secretary. Only 7 percent would accept the job of director of social media. Of the conservatives polled, 75 percent said they would not accept an invitation to become press secretary.

Brands millennials think will do best for the world Many companies say they want to do more for the world beyond making money — including work on systemic social, environmental, and economic problems.

The World Value Index, a report from brand consultancy Enso, reveals that companies millennials believe are actually making an impact.

Enso asked 3,000 consumers about the top 150 brands in the US, including Google, Girl Scouts, and the World Wildlife Fund. A portion of these participants was millennials (which Enso defines as those between 18 and 35 years old).

On a scale of 1 to 100, they rated the companies based on the following questions: “How aware are you of the brand’s purpose or mission beyond making money?” “Is the brand’s purpose or mission something that you would openly support and care about?” “And does the brand’s purpose or mission motivate you to buy products or services from them?”

Enso conducted its surveys in February 2017, which means that Uber’s high ranking could have changed since then, considering the company’s recent scandals.

9.

Fitbit 8, Uber 7.

Starbucks 6.

Twitter 5.

Etsy 4.

Always 3.

Kickstarter 2.

Snap 1.

Spotify.

Todd Smith

Time Warner to spend $100M on Snapchat shows, ads Time Warner and Snap Inc. have announced a new deal that will bring increased ad spending and the development of new made-for-Snapchat shows. People familiar with the deal tell TechCrunch that it is valued at about $100 million spent over the next two years.

The newly created shows will span a variety of genres, including scripted drama, daily news shows, documentaries and comedy. The shows will be similar to those already released by other networks on Snapchat, and run 3-5 minutes in a vertical format. Right now there is about one new show airing per day – this deal will push that to about three news shows per day, varying between the different genres outlined above.

Snap will take 50 percent of the ad revenue generated by these shows and the content partners will keep the other half, according to the WSJ. While these new shows will definitely tempt users to spend more time watching content in the Snapchat app, they likely won’t create the buzz that the social network needs to convince users that Snapchat is the best place to watch new content.

Instead the company should focus on obtaining a giant blockbuster – in the style of Game of Thrones or House of Cards – that will generate the water cooler buzz that is needed to turn Snapchat into a place where users turn to for real entertainment.

On the advertising side, Time Warner will commit to investing in ads from Time Warner properties like HBO, Turner and Warner Bros. on Snapchat – a big vote of confidence for the young social media company.

This deal comes at the perfect time for Snap, as Wall Street has been punishing the company’s stock price after bad earnings

Grocery Mic | Amazon’s purchase of Whole Foods a game changer Amazon’s purchase of Whole Foods for nearly $14 billion is perhaps the biggest retail news in a century, and the e-commerce giant – long the dominating online force – has now invaded the brick-and-mortar marketplace, forever changing the dynamic of the industry, and signaling to retailers and consumers alike that it will play in the neighborhood as well as the cyberhood.

The move instantly makes it a major player in the U.S. grocery industry that leaves a lot for shoppers, retailers and other companies involved in the industry to chew on.

The online seller is bringing its firepower to a grocery industry plagued by razor-thin profit margins. The move could slice into profits for food manufacturers, other supermarket chains such as the nation’s largest by market share, Kroger, and behemoths like Walmart, which is currently the biggest seller of groceries in the U.S. with more than one-quarter of the market, according to Euromonitor.

It also potentially creates a challenge for companies that deliver groceries such as Fresh Direct and Peapod, and ready-tocook ingredients and recipes to customers’ doors, like Blue Apron and Sun Basket.

For years, Amazon has burst into new areas of business introducing the ease and efficiency of shopping online by bringing books, electronics, clothes, household items and some food items, often at low prices, to shoppers’ front doors. The value, convenience and ability to easily comparison shop online hastened the demise of both smaller shops and many big household names. Remember book superstore Borders? Electronics chain Circuit City?

Todd Smith is president and chief communications officer of Deane, Smith & Partners, a full-service branding, PR, marketing and advertising firm with offices in Jackson. The firm — based in Nashville, Tenn.

— is also affiliated with Mad Genius. Contact him at todd@deanesmithpartners.com, and follow him @ spinsurgeon.

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