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Timber business booming throughout northeast Florida

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LIVE OAK, Fla. — The towering grove of century-old longleaf pines surrounding Roger Ward’s family home is a rare site in this verdant swath of north-central Florida — most pines here are cut and processed for profit as soon as their 15-to-18-year growth cycle is complete.

The demand for timber worldwide is booming and this remote section of Florida, along with other timber-growing regions of the southeastern U.S., are benefiting. Dozens of lumber mills and pine straw, bark and wood pellet processing plants have sprung up in north Florida to take advantage of the unique soil composition, lengthy growing season and warm, moist climate in which pine trees thrive.

In a state where undeveloped real estate quickly gives way to neighborhoods, strip malls, hotels or amusement parks, this timber-rich part of Florida is unique.

Ward jokes that the acres of tall pines constituted his college fund and his parents’ 401k. The family’s fortunes have long been linked to the rise and fall of the timber market.

“This is certainly one of the better times around here for timber,” Ward said as he inspected a field of tree saplings on a recent afternoon.

Timber prices are rising as demand grows for timber used in building, paper products and biofuels worldwide. Prices for Florida saw pine peaked around 2005 — before the housing bust and the recession — at $40 a ton, according to Timber Mart-South, a Georgia-based nonprofit organization that tracks the timber industry. Prices fell to $21 a ton in 2011 but are now around $25 a ton and rising.

Thomas Mende, president of U.S. operations for the Austrian-based timber company Klausner, is another person banking on the southeast timber market. Mende’s company recently invested $130 million in a new Suwanee County, Florida, timber mill, which ships pine boards to Asia, South America, Europe and beyond.

On the main road outside the mill, a billboard encourages locals to apply for jobs. Klausner currently employs 300 people here and hopes to hire about 50 more.

“What you have here is an ideal location where the trees grow fast, there is political stability, excellent infrastructure and a solid workforce,” Mende said from his office, which overlooks acres of processed wood awaiting shipment.

In the American northwest and in Canada, some federal restrictions on foresting, longer growing cycles and problems with wood boring beetles have created supply issues and driven up costs, Mende and other experts said.

“Wood is being rediscovered as environmentally friendly,” Mende said.

He points to major building projects, including a 10-story wood building recently built in Australia and a taller wood building in Austria. The buildings use massive wood panels up to 64 feet long and 8 feet wide.

The building trend is one of many factors fueling a steady increase in price of pine, said Sara Baldwin of Timber Mart-South.

“Certainly with the opening of a brand new mill in the middle of that region, I would say Florida pine is experiencing a resurgence,” she said.

Nowadays Ward and his fellow Suwanee County farmers are turning to Brian Coble, the region’s longtime state forestry manager, for his expertise on nurturing tree saplings to maturity and making sure they make the best use of their land. On a recent morning, Cobble and Ward waded through acres of waist-high saplings, assessing their health.

The fresh smell of dog fennel sprouts, also known as wild chamomile, permeated the muggy mid-morning air as gnats and mosquitos buzzed over the young trees.

Ward and Coble used a tape measure to help count the 31 saplings within a 26.3 foot radius or a 20th of an acre. Coble inspected saplings that weren’t thriving to determine if they had bugs or were being smothered by the surrounding vegetation. He advised Ward to mow in some areas and use herbicide in others.

But as has often been the case in Florida, despite the growing demand for timber and rising prices, some in the area think the tree farms will eventually give way to development.

Timber expert Sara Baldwin said development, especially in Florida, frequently wins out over other land uses.

“Trees are not always the highest and best use of land and there are often economic pressures to develop,” she said.

But Mende, of the Klausner mill, says trees, at least in the short term, are the region’s future.

Ward agreed.

“It comes down to the math,” he said. “If trees are the best return on investment available for the land, people will plant trees.”


Gulfstream opens new paint shop

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Savannah-based Gulfstream Aerospace Corp. announced last week that it has opened a paint facility on its Savannah campus specifically for in-service aircraft.

The 88,000-square-foot, state-of-the-art building is expected to create 100 new jobs, approximately 80 of which have been filled. Paint technicians will bring in the facility’s first customer aircraft sometime this week.

“Demand for new Gulfstream aircraft is strong and so is the demand for enhancing aircraft already in service,” said Joe Rivera, vice president and general manager, Gulfstream Savannah Service Center.

“This new facility gives customers a dedicated space for our product support organization to tackle their paint requests — from full strip-and-paint jobs to custom livery and logo applications.”

The paint shop’s proximity to the Savannah Service Center makes it an ideal location for customers who need maintenance and/or refurbishment work to go along with painting an individual part, multiple parts or an entire aircraft, Rivera said.

“The end result will be reduced downtimes,” he said.

Of the new building’s nearly 90,000 square feet, hangar space takes up more than 72,000 square feet. The remaining square footage is dedicated to offices, back shops and storage areas.

The air-conditioned and heated hangar space is divided into a cross-draft bay for stripping, sanding and priming, and a down-draft bay for painting.

All Gulfstream aircraft models can be accommodated, Rivera said.

The new paint facility is equipped with environmental controls and the latest fire suppression systems.

Toyota to invest $50M in car-tech research at Stanford, MIT

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EAST PALO ALTO, Calif. — Toyota is investing $50 million with Stanford University and the Massachusetts Institute of Technology in hopes of gaining an edge in an accelerating race to phase out human drivers.

The financial commitment announced Friday by the Japanese automaker will be made over the next five years at joint research centers located in Silicon Valley and another technology hub in Cambridge, Massachusetts.

Toyota has hired robotics expert Gill Pratt to oversee research aimed at developing artificial intelligence and other innovations that will enable future car models to navigate the roads without people doing all the steering and stopping.

“We believe this research will transform the future of mobility, improving safety and reducing traffic congestion,” said Kiyotaka Ise, a Toyota executive who oversees the company’s research and development group.

Unlike some of its rivals in the technology and auto industries, Toyota believes the day when cars are able to drive entirely by themselves is unlikely to arrive within the next decade. The company instead is focusing its efforts on developing technology that can turn a car into the equivalent of an intelligent assistant that recognizes when it should take over the steering when a driver is distracted or automatically play a favorite song when it detects a driver is in a bad mood.

“What if cars could become our trusted partners?” mused Daniela Rus, an MIT professor who will lead the university’s research partnership with the automaker.

Major tech companies such as Google and Uber are competing against a range of automakers to make robot cars that will be better drivers than people and save lives by causing fewer accidents.

Google, which runs some of the world’s most popular online services, has been working on a fleet of self-driving cars for the past six years. Its goal is to have the cars capable of driving completely on their own by 2020. Ride-hailing pioneer Uber has teamed up with Carnegie Mellon University on a Pittsburgh research center in its quest to build driverless cars.

Toyota Motor Co. has been working on autonomous driving technology for about 20 years, but it was known as “advanced driving support” back in the 1990s, Ise said.

Pratt, a former program manager at the U.S. government’s Defense Advanced Research Projects Agency, or DARPA, suspects many people will still want to drive some of the time even when cars are fully equipped to handle the task. He hopes Toyota’s research will give the option of relying on computers to do the job when they are stuck in traffic or traveling down a boring stretch of highway. “Our focus today is more on the autonomy of people,” said Pratt, who will be based in Silicon Valley.

Under the Toyota partnership, the MIT research center will focus on inventing ways for cars to recognize their surroundings and make decisions that avert potential accidents. If the goals are realized, Toyota might be able to build a car “that is never responsible for a collision,” Rus said.

Besides working on recognition technology, the Stanford research center will try to create artificial intelligence programs that study human behavior to learn more about the decision making and reasoning that goes into driving so cars can quickly adjust to potentially dangerous situations. Stanford’s research will be led by Fei-Fei Li, director of the university’s artificial intelligence laboratory.

Not far away from Stanford, both General Motors Co. and Ford Motor Co. have established offices in Palo Alto, California, in their own quests to make smarter cars.

Meanwhile, just to the south, Google’s self-driving cars are regularly cruising the roads of the company’s hometown of Mountain View, California, during ongoing testing of the vehicles.

California law still requires humans to be in the self-driving cars to take control in dangerous situations or if something goes wrong. Most of the time, though, Google’s self-driving cars are being controlled by a computer. They logged a combined 147,000 miles in autonomous mode from June 3 through Aug. 31, according to Google. The self-driving cars were involved in four collisions that resulted in no major injuries. The robot cars were rear-ended by vehicles driven by people in those accidents.

Gas prices down three cents in metro Savannah

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Average retail gasoline prices in Savannah have fallen 3 cents a gallon in the past week to $2.22 a gallon on Monday, according to a daily survey of 262 gas outlets in Savannah.

The national average has fallen 6.1 cents a gallon in the last week to $2.39, according to gasoline price website GasBuddy.com.

Prices Monday in the Savannah area were $1.08.8 a gallon lower than the same day one year ago and are 20.6 cents a gallon lower than a month ago. The national average has decreased 20.2 cents a gallon during the last month and stands $1.03.7 a gallon lower than this day one year ago.

“Not only did Labor Day weekend see millions of Americans take to the road and spend far less than they did last year at the pump, but a growing number of them were able to fill up at under $2 a gallon for the summer’s last hurrah,” said Patrick DeHaan, GasBuddy senior petroleum analyst. “Better than one in ten stations in the country now offer gasoline prices at $1.99 a gallon or less, and gas prices in 48 of the nation’s 50 states fell in the run-up to the holiday itself, showing that holiday’s aren’t always a catalyst for price increases.

“The Midwest led the biggest decliners, again, and prices in some of these states now stand a staggering dollar per gallon lower than they were just last month after the BP refinery issue led to spikes, a stunning and quick reversal. As we begin to near the terminus for summer gasoline, I expect prices to continue moving lower, with our projections aiming at a sub-$2 a gallon average by Christmas — or perhaps even earlier.“

For a complete listing of current averages and other fuel price data, go to http://media.gasbuddy.com.

Geekend: Innovation is for everyone

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As I look forward to Geekend from Oct. 15-17, I am bubbling over with excitement to learn how corporate communications will shape up beyond email; what’s new in healthcare technology; how virtual reality will affect our future; and the roles gaming and mobile app development will play in social, political and economic realities.

Geekend, the innovation pilgrimage that is intentionally interdisciplinary, is attracting attendees from South Dakota and South Carolina, Estonia and Effingham, Seattle and St. Simons, Los Angeles and LaGrange.

Surely, when you see the amazing schedule of speakers, topics, events and socializing at www.geek-end.com, you will be excited, too.

Despite the awesome lineup of speakers and panelists and regardless of the fact that Geekend was launched here in Savannah in 2008, occasionally I have conversations with local doctors, lawyers, bankers or insurance agents who say something like “Geekend is for someone else, not me” — and I wonder how innovation is not for everyone?

Think how major innovations have affected economies and social change throughout the world. And you still think innovation is not for you? Just look at three examples of innovation — the printing press, cotton gin and bicycles

— and I’ll bet you have second thoughts about innovation’s relevance to you.

Then we’ll tackle social media just to be sure you are convinced.

Johannes Gutenberg invented the printing press in 1440. What would the world be like if only scholars and monks had the possibility of reading? Truly, I would miss the chance to connect with you through this column, and I suspect (wink) that wouldn’t be the world’s only difference. Would John Calvin and Martin Luther have led the Protestant Reformation without the ability to publish their books?

As southerners, we should talk about the cotton gin.

Whether you believe the cotton gin of the late 1700s was invented by Eli Whitney or Hodgen Holmes, or whether you believe its presence on southern plantations increased or decreased the demand for slaves, it is impossible to deny that the cotton gin was a huge innovation in textiles, perhaps laying the groundwork for the shirt you are wearing today.

Mentioning southerners, some innovations have had particular impact on the Savannah economy, specifically the shipping container and Charles Herty’s work in the manufacturing of pulp and paper products. Without these innovations, our local economy would be about half its current size.

One of my favorite innovations for social change is the 1890s American bicycle craze and how that event connected women across the country and eventually led to their right to vote. If women had not been interested in bicycle innovation, I wonder how much longer it might have been before they first entered a voting booth?

Social change ignited by innovation is present today and perhaps the most vivid example is the role Facebook played in the Egyptian Revolution in 2011.

In The New York Times, Jose Antonia Vargas describes Wael Ghonim’s book about the Egyptian uprising Spring Awakening: “It’s a book about social media for people who don’t think they care about social media.”

Similarly, Geekend is a conference about innovation, in part, for people who don’t think they care about innovation.

So, as I prepare my heart and mind to embrace new perspectives and glimpse into the world of 2026 through the Geekend lens, I worry about those doctors, lawyers, bankers and insurance agents I mentioned earlier. I wonder if the sign on their door says, “no readers, cotton wearers, women voters or users of foreign made products allowed.”

Bea Wray is the executive director of The Creative Coast, a not-for-profit organization that promotes the creative and entrepreneurial community within the region. Bea can be reached at 912-447-8457 or bea@thecreativecoast.org.

By Bea Wray

BREAKOUT

Geekend takes place in Savannah from Oct. 15-17. To register, go to www.geek-end.com.

Apple event to focus on new iPhones, Apple TV and Siri

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SAN FRANCISCO — Hey, Siri, what does Apple have in store for us this week?

Along with new iPhones, the iconic company is expected to show off a new Apple TV system and a bigger role in the home for Siri, its voice-activated digital assistant.

While the company has been coy, here’s what analysts and others expect at Apple’s event today in San Francisco:

New iPhones

Apple sold a record 183 million iPhones in the nine months since releasing the iPhone 6 and 6 Plus, which have bigger screens than earlier models. That has allowed the company to remain profitable, even as Samsung and other phone makers struggle.

Based on the iPhone’s usual two-year product cycle, industry experts expect this year’s models will be the same size with more subtle refinements, such as a faster processor, higher-resolution cameras and new exterior colors.

One likely addition is “Force Touch,” which uses screen sensors to discern between a light tap and extended finger pressure to trigger different functions.

Apple TV

Apple is expected to unveil a redesigned Apple TV set-top box with new capabilities for apps and games, plus recognition of Siri voice commands to search for shows and retrieve weather forecasts and sports scores. The current model is a few years old and does little beyond playing video and music.

Analysts say the new TV box is part of Apple’s broader strategy to carve out a bigger role in the home. It could also set the stage for Apple to later introduce a streaming video service aimed at competing with Netflix and other Internet entertainment services.

Smarter Siri

Even without an Apple TV, new iPhone software will make it easier to set up automated homes, including having lights turn on and window shades go up when you tell Siri on the phone, “Time to wake up.”

What else?

After major software updates over the past two years, the new software for iPhones and iPads is mostly about refinements, including a different font, a new way to scroll through photos and behind-the-scenes tweaks to improve battery life.

But there will be a few new features beyond a smarter Siri. For instance, major cities will get transit directions, addressing a major shortcoming with Apple Maps. Apple is also expected to unveil a larger iPad for business users, but probably not until at least October. Existing iPads can get the software update when it comes out for the iPhone.

Mac computers will get their own software update, but not until after the new iPhones are out.

Business in Savannah in brief

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New Lucky’s Market hosts open-house events

Lucky’s Market, which will open its first natural and organic grocery store in Georgia in October at 5501 Abercorn St., will employ approximately 150 people.

Lucky’s has full- and part-time positions available in all departments and is hosting open house events from 9 a.m. to 5 p.m. every Monday through Friday until the store opens.

The market will feature in-house cured and smoked bacon, a large selection of local produce, fresh seafood and a bakery as well as a selection of “never ever” meats that have never been treated with antibiotics or artificial growth hormones.

For more information about employment opportunities, go to www.luckysmarket.com/work-with-us/ or contact Walter Jimenez at walterj@luckysmarket.com or 720-378-9160.

New SCAD program upgrades architectural training

The Savannah College of Art and Design has announced changes in its architectural program that would allow students to become licensed architects after following a seven-year academic track.

The new academic track is expected to be launched in the fall of 2016, with the first students who enroll in the program expected to graduate in 2023 as licensed architects, according to a SCAD news release.

SCAD’s announcement said the new program is in response to a 2014-2015 proposal from the National Council of Architectural Registration Boards.

Christian Sottile, dean of SCAD’s School of Building Arts, said the program reflects the national council’s commitment “to evolving the profession into the 21st century.”

The program, which will involve students in professional internships during each summer quarter, has received the endorsement of local and regional components of the American Institute of Architects, including AIA Georgia and AIA Savannah, as well as the Georgia Board of Architects and Interior Designers.

Burger King has grand opening for DeRenne outlet

Savannah Restaurants Corp., the franchise holder for Burger King restaurants in the greater Savannah area, had a ribbon-cutting celebration Aug. 28 for its new restaurant at 14 W. Derenne Ave.

The new facility, which has Burger King’s first double drive-thru feature in Savannah, replaces the original restaurant that was built in 1973 on the same site.

A number of local businesses were used as contractors and vendors for the project, which began in June, including Kern Engineering, SignMart and Environmental Landscapes of Savannah.

The restaurant will employ about 50 people, and the interior décor is accented with photos of Hunter Army Airfield as a tribute to the base and to servicemen and women who frequent the restaurant.

China's shifting economy mints U.S. corporate winners, losers

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China is losing its appetite for dump trucks, iron ore and construction cranes. But the Chinese still want to travel and give their kids a better education.

Growth in the world’s second-largest economy is decelerating and rattling financial markets around the world. Behind that slowdown is an evolutionary shift in China’s economy— from a dependence on exports and investment in factories and housing — to a reliance on spending by its emerging middle class.

That transition, a gradual and perhaps painful one, will affect which U.S. companies stand to benefit and which will be squeezed as China’s growth slides from the double-digit annual rates of the mid-2000s to 7 percent, 6 percent, maybe even less.

The shift is likely to pinch American manufacturers that prospered during China’s investment boom — makers of heavy construction equipment and industrial machinery, for instance.

But the service sector — a broad category that includes things like restaurant meals, haircuts and hotel stays — remains “reasonably robust” and has been a dominant driver of China’s growth since the first half of 2012, said economist Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics.

“Yes, China is slowing,” said Jeremy Haft, an entrepreneur, consultant and author of the forthcoming book “Unmade in China: The Hidden Truth about China’s Economic Miracle.” ‘’But households have huge (savings). People need to keep eating, walking, powering their homes.”

Chinese consumers now have more discretionary income to spend on entertainment, education and travel after years of robust economic growth. That additional income has created a bright outlook for companies that serve them.

The Princeton Review, a Natick, Massachusetts, company that helps students prepare for standardized tests and college entrance exams, remains bullish on China. The company declines to provide specific sales numbers. But the number of Chinese students enrolling in U.S. colleges is growing by double digits every year.

“We do not see any slowdown in the future,” said Steven Chou, international vice president at Princeton Review.

Also doing well are American companies that make things in China and export them back to the United States, where economic growth is solid.

Haft, for example, runs a company that exports U.S. cattle hides to China. Business is booming, he says, because the Chinese turn the hides into wallets and ship them back to the United States, where the economy and consumer demand are comparatively healthy.

Recent trade numbers highlight the changes: U.S. merchandise exports to China rose just 0.2 percent in the second quarter to $30.5 billion from a year earlier. By contrast, services exports, which include tourism and banking, surged nearly 14 percent to $11.97 billion.

Boeing Co., the biggest provider of commercial jets in China, forecasts demand for 6,330 new jetliners in that country by 2034, with a value of $950 billion. Most of those new planes will handle passenger growth. Company executives said in a recent podcast that they’re seeing “tremendous” demand for international flights, and they also expect a surge in demand for cargo-carrying aircraft.

At General Motors, which sells more vehicles in China than any of its U.S.-based competitors, sales in July slipped 4 percent compared with a year ago. But the company’s first-half sales in China rose 4.4 percent to a record 1.7 million vehicles, and the carmaker still forecasts single-digit growth for the rest of the year.

So far, the shift is hurting companies that have benefited from China’s building boom. Construction equipment giant Caterpillar, for instance, said its Asia-Pacific region sales dropped 21 percent in the second quarter — a casualty of a slowing China.

China is facing a construction glut, which is leading to a deceleration in property investment that will likely bottom over the next few quarters, Lardy, the economist, said.

“Ninety percent of the population already has a house,” he said. “They’ve got a lot of very under-utilized real estate.”

Market-wide demand for medium- and heavy-duty trucks in China plunged 30 percent in the first half of the year. That’s not good for a company like diesel engine maker Cummins Inc., which draws between 10 percent and 15 percent of its revenue from China.

But the company’s results show that picking winners and losers of China’s shift isn’t as simple as identifying broad industries that are experiencing either growth or slowing demand. Cummins’ second-quarter sales in China advanced 6 percent to $916 million, thanks in part to a government push for tighter emissions standards. Those standards are fueling demand for new engines and parts that help older ones cut pollutants.

China’s slowdown is expected to contribute to a year-over-year decline in the total revenue for roughly 60 chip companies in the current quarter ending in September, predicted B Riley analyst Craig Ellis. It would be the first quarterly drop in three years.

But these companies are also somewhat insulated because they supply Chinese factories run by contractors hired by Apple and other device makers. Those factory orders are more heavily influenced by consumer demand for finished smartphones, tablets and other products in the United States, Europe, Japan and other markets.

“No chip company is going to be completely immune” to China’s slowdown, Ellis said. “But it’s also important to distinguish where the hardware is being built and where it’s being consumed.”

Tech companies still see China as an important end market. Apple reported that more than a quarter of its revenue for the three-month period that ended in June came from selling products like the iPhone to consumers and businesses in China, Hong Kong and Taiwan.

Responding to investor worries about Apple’s reliance on the Chinese market, CEO Tim Cook declared late last month that the company’s business was still growing in China, where new iPhone activations had “actually accelerated over the past few weeks.”

In a conference call with analysts in late July, Cook called China a “fantastic geography.”

“Nothing that’s happened has changed our fundamental view that China will be Apple’s largest market at some point in the future,” he said.

China accounted for 46 percent of semiconductor maker Ceva Inc.’s revenue in the first half of this year, up from 40 percent in 2014. The company still views the country as a hotbed, particularly because the Chinese government is investing billions of dollars into building its own semiconductor industry.

Ceva licenses processors for communications, vision, audio and other uses to companies in China, providing them with technology they need to make chips for tablets, smartphones and other devices.

“I believe that the strategic merit behind China’s investment in its own semiconductor industry over the next 10 years will outweigh any potential slowdown that other areas of China’s economy are experiencing,” spokesman Richard Kingston said.

Roughly 60 percent of companies that belong to the American Chamber of Commerce in China reported increased revenue in China last year, down from 71 percent in 2013 and 2012. Fewer businesses reported higher profit margins last year. And 31 percent said they had no plans to increase investment in China this year, the most since the recession year 2009.

“Our companies have seen their top-line revenue growth slow along with” the Chinese economy, said John Frisbie, president of the U.S.-China Business Council. “It’s still pretty good. It’s outpacing other emerging markets ... Most companies feel like China will continue to grow.”

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Murphy reported from Indianapolis, Wiseman from Washington. AP Business Writers Michael Liedtke and Brandon Bailey in San Francisco, Tom Krisher in Detroit, Barbara Ortutay in New York and Joe McDonald in Beijing contributed to this report.

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This story has been corrected to say that Princeton Review is based in Natick, Massachusetts, not Washington D.C.


NLRB's joint employer decision impacts all employers

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There has been buzz for many months about the likely decision of the National Labor Relations Board (NLRB) to expand the definition of “joint employer” under our federal labor laws.

Just last week, the U.S. House of Representatives Subcommittee on Health, Employment, Labor and Pensions conducted a field hearing in Savannah titled “Redefining ‘Employer’ and the Impact on Georgia’s Workers and Small Business Owners.”

On the same day the hearing took place, the NLRB released its decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015), which effectively redefines who is an employer under the National Labor Relations Act (NLRA).

First, a little background: The NLRB enforces the NLRA, passed in 1935, which preserves the right of employees to join a union and collectively bargain regarding their wages, hours and other conditions of employment.

The NLRB has jurisdiction over most private employers throughout the United States. While unionization in this country is at an all-time low, the NLRB has steadily expanded its reach by overturning decades of its own legal precedents, including the confidentiality of witness statements, the scope of appropriate employee bargaining units and the timing and procedures for union elections.

The NLRB has pursued its agenda through the agency’s rule-making and through decisions in specific cases.

Two companies whose cases have been closely followed are Browning-Ferris Industries of California Inc. (BFI) and McDonald’s, USA, LLC. For both, the central question is whether the companies are joint employers of another entity’s workers.

In Browning-Ferris, the International Brotherhood of Teamsters (IBT) sought to represent employees of a subcontractor, Leadpoint Business Services, at one of BFI’s recycling facilities in California. Arguing that BFI was necessary for meaningful collective bargaining, the IBT contended that BFI was a joint employer with Leadpoint.

The board agreed. The NLRB overruled 30 years of precedent, finding its “joint-employment jurisprudence increasingly out of step with changing economic circumstances, particularly the recent dramatic growth in contingent employment relationships (temporary or contract workers).” Thus, the NLRB turned to common law principles to determine whether an employment relationship exists — in this case between the putative employer (BFI) and the employees of Leadpoint.

According to the board, analysis centers on who has the right to control the employees even if that right is not exercised.

Using this analysis, the NLRB found that BFI did have the requisite right to share control of the essential terms and conditions of employment for Leadpoint’s employees.

Some of the factors the board found that supported BFI’s status as a joint employer included:

• Leadpoint’s employees had to pass a drug screen, and BFI could request a written certification of the completion of the drug screen

• BFI retained the authority to reject or discontinue use of any Leadpoint employee for any or no reason

• Leadpoint was forbidden from paying its employees higher than BFI employees who performed similar tasks

• BFI determined the shifts that Leadpoint employees worked

• BFI had to sign off on the accuracy of the hours of service summary submitted by Leadpoint

• BFI dictated the number of Leadpoint employees to be assigned certain tasks and set productivity standards

• BFI trained and counseled Leadpoint employees on specific issues following customer complaints.

As BFI was a joint-employer with Leadpoint, the NLRB required BFI to bargain collectively with the IBT in the event the union won the election.

Multiple NLRB cases are pending that involve McDonald’s, USA, LLC’s relationship to employees of certain McDonald’s restaurant franchisees.

Most franchisors justifiably seek to protect the company brand and the quality of their products and services, regardless of whether they are selling french fries or hotel rooms. This business interest often leads franchisors to provide extensive training on operations and customer service to their franchisees, which are, by their nature, separate and distinct legal entities.

Did McDonald’s, USA, LLC reserve too much control over the independently operated restaurants’ employees? Although each case must be determined on its own facts and circumstances, the NLRB will no doubt use its newly minted standard from Browning-Ferris to make its rulings, which ultimately may have profound impact on the viability of the franchise as a business model, no matter the industry.

A party may appeal an NLRB decision to a federal appellate court, and there is already talk of legislation to combat what is perceived by many observers to be an activist board. For the moment, however, the NLRB’s new joint employer standard is alive and well and applies broadly to all businesses where subcontractors, staffing agencies, temporary workers and leased employees are used.

Sarah Lamar is a partner in employment law at HunterMaclean. She can be reached at 912-236-0261 or slamar@HunterMaclean.com

By Sarah Lamar

Luxury apartments coming to President Street

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Developers and city officials tossed shovelfuls of dirt into the air Wednesday as they broke ground on Savannah’s newest luxury apartment complex.

Nestled among century-old Live Oaks, the Mariner Grove apartment complex will be just off of East President Street on Wahlstrom Road.

The complex is expected to be completed by next fall.

“Our team considers Savannah to be one of the iconic cities of the South, and we’re thrilled to have a project like this here,” said Ian Smith, a principal of Mariner Group, which is developing the site along with Brand Properties. “When we first saw this site two years ago, we immediately recognized that it was a unique opportunity to develop a very special residential community.”

It’s not your father’s apartment complex, Smith said of the $41 million project that boasts a modern and sleek design.

Choate Construction Co. is overseeing construction of the 16-acre site, which will feature 320 units within three three-story multi-family residential buildings. The grounds will include numerous courtyards, meeting space and a dog park.

“Choate is extremely excited to be a part of the team assembled for the Mariner Grove project in Savannah,” said Ben Bunyard, division manager for Choate.

Layouts will include studios and one and two-bedroom apartments and initial rents are expected to range from $1,000 to $1,600.

“We really believe it will set the gold standard for apartment living in Savannah,” Smith said.

Developer eyes Johnny Harris land

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Owners of longtime Savannah restaurant Johnny Harris have entered into an agreement with a regional developer to explore opportunities for development on the property surrounding the restaurant at 1651 East Victory Dr., according to a press release.

The area just east of the restaurant has undergone extensive development in the past couple of years with the opening of Whole Foods, PetSmart and a number of other smaller chain stores.

“It is still very early in the process,” said Norman Heidt, president of Johnny Harris Restaurant, in the release. “We are continuing to operate business as usual, with great employees serving our customers and the community.”

The land in consideration includes areas behind the restaurant, along Wicklow Avenue, several lots along Dixie Avenue and stable properties behind the restaurant. The land was surveyed over the summer but is still owned by Johnny Harris Restaurant, Heidt said. The name of the developer was not released, and Heidt could not be reached for additional comment.

The signed agreement provides the developer the right to study comprehensive land use for all of the property and ultimately purchase it. The agreement period will last into the third quarter of 2016 when the developer will solicit an unspecified number of retailers for the location.

Once the agreement period ends the restaurant could continue on its current site without any changes, rebuild or relocate to a new location.

“What is important for everyone to remember at this early stage is that this is an agreement to explore possibilities for this property. This agreement with the regional developer gives them the right to purchase our property and Johnny Harris Restaurant is not responsible for the selection of retail brands that will come to this property as that is the developer’s role,” Heidt said.

It probably will be sometime next year before there is anything definitive regarding the surrounding property, he said, and until then it’s business as usual for the restaurant.

Johnny Harris Restaurant originally opened in 1924 on the corner of Bee Road and Victory Drive as a barbecue shack with a sawdust floor but as business quickly grew Harris and business partner, Red Donaldson saw the need for a bigger location. In September of 1936 the doors at the present location opened.

After Harris’ death in 1942 and Donaldson’s in 1969 the restaurant has been passed down to Donaldson’s children and grandchildren, who operate the restaurant.

The restaurant celebrated its 90th anniversary in 2014 with the release of a 208-page cookbook.

Cultural arts center gains design approval

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The city’s proposed cultural arts center moved another step closer to reality on Wednesday, gaining unanimous design approval from the Savannah Historic District Board of Review.

The project gained height and mass approval from the board in July, but board members — who voiced concerns about the reduced height of the structure and the loss of a tower element at the Montgomery Street entrance — said the building needed a more “iconic” look.

“A tremendous amount of effort has gone into this, and we’re fairly confident that we’re presenting to you a design that is excellent and worthy of this location in this place in time in the city of Savannah,” said architect Patrick Shay.

The latest plans show added height to the curved facade along Oglethrope Avenue and added

height to the parapets along Montgomery and Turner Streets.

The landscape plans show that the outline of the Wetter House, which stood on the northwest corner of what is now Olgethrope Avenue and Martin Luther King Jr. Boulevard, from about the mid 19th century to 1950 will be outlined and the foundation — if it’s still there — will be exposed and a grassy courtyard will surround the area providing a park-like area.

“Everything about the design you’re seeing today has been very carefully studied and very carefully calculated to help anybody that comes to this place or drives by it to understand that it is a monumental scale building in every way,” Shay said.

Board member Robin Williams raised concern over a support beam that runs between the curved walls on the Montgomery Street entrance, noting that the beam looked like a prop and suggested that it be curved to mirror the curvature entrance wall, which Shay said was physically possible but not what they wanted to do.

“It also provides lateral support for the walls when they become free standing and disengaged. They’re like sails. They need to be braced,” Shay said of the beam.

Daniel Carey, president and CEO of the Historic Savannah Foundation, spoke in opposition to the design plans, suggesting another archeological dig take place on the area where the Wetter House stood.

He also expressed concern over materials used on the curving facades.

“We had concerns of the smaller brick material supporting the seemingly larger, heavier material and we thought that order was wrong...,” Carey said of the walls.

Responding to Carey’s concerns, Shay said numerous other buildings in the city have smaller brick supporting larger materials and the brick along the bottom also serves as a way to keep the wall clean.

And according to Shay, pending sewage line construction will serve as a window to any archeological significance surrounding the Wetter House foundation.

“This is an evolutionary process... Probably the worst thing that could happen to us right now would be to pause... What we have presented is what we would like to have approved today,” Shay said.

“The idea of stucco above a more rustic brick base is absolutely compatible with many, many buildings within the National Landmark Historic District.”

The board, however, deemed that as a condition of its approval any area where smaller brick meets stucco, such as in the curving facade walls, must be restudied along with the canopy support beam.

The board also required that some sort of architectural relief be added along the Martin Luther King, Jr. Boulevard wall until proposed fig ivy begins to grow.

Business in Savannah in brief

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Job fair, aid for homeless veterans offered

The 12th annual Veterans Stand Down for Homelessness Resource and Job Fair will be 8 a.m. to 2 p.m. Sept. 15-16 at the Savannah Civic Center.

Participants will be offered a hot meal, haircuts, showers and opportunities for a variety of health screenings.

Representatives from more than 40 social service agencies will provide information and outreach on a variety of services including housing options, job resources, resume writing tips, substance abuse treatment, income tax assistance and accesses to Social Security and Veterans Administration services.

The Stand Down is intended to serve homeless veterans but is open to all individuals and families affected by homelessness. There is no cost.

The job fair will be 9 a.m. to 1 p.m. Wednesday, Sept. 16, at the Savannah Civic Center. If you know of a local business interested in hiring have them reach out to Michael Whitfield of Goodwill of the Coastal Empire at 912-354-6611.

For more information, go to http://nchv.org/index.php/service/service/stand_down/.

AT&T donates $10,000 to Bethesda Academy

Bethesda Academy, a school for boys in grades 6-12, has received a $10,000 donation from AT&T to support its academic programs and activities.

Gary Sanchez, AT&T’s regional director of external affairs, presented the check to Bethesda president David Tribble and board of governors chairman John Helmken in honor of Lee Hughes, former Bethesda board member and AT&T government representative, at a special check presentation on the Bethesda campus Sept. 3.

“We’re delighted to continue our ongoing support of Bethesda Academy,” Sanchez said. “This school is changing lives and making a positive impact in our community.”

Tribble said school officials appreciate AT&T’s donation.

University of Georgia MBA program rises in rankings

ATHENS — Forbes magazine HAS released its biannual MBA program ranking, once again recognizing the University of Georgia Terry College of Business among the nation’s best business schools.

The Terry College MBA program ranks 19th among public institutions (No. 36 overall) in the 2015 Forbes rankings, up from 24th among public schools (49th overall) in 2013.

The Forbes rankings are based on the return on investment over five years by graduates of the class of 2010.

Forbes compared the 2010 graduates’ reported earnings during their first five years after graduating to their “opportunity cost” (defined as two years of foregone wages, plus the cost of tuition and fees).

The full list of ranked schools is available at www.forbes.com/bschools.

Uh oh! New Panama Canal lock leaking

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From cost overruns to labor issues, the construction consortium working on the Panama Canal Expansion project has had its share of hiccups. Now United Groups for the Canal is back in hot water after photos began showing up on social media a few weeks back depicting some pretty serious leaks at the head of one of the new locks.

That prompted the Panama Canal Authority to issue a warning that it would not accept the current work until all flaws are addressed and fixed to the authority’s satisfaction.

The leaks began springing as workers were doing a test fill in one of the new lockheads on the Pacific shore side of the canal. Members of the consortium are reportedly working on a strategy to repair the cracks and seal the leaks.

But Panama Canal administrator JorgeLuis Quijano told HispanTV that not just any repair will do.

“We won’t accept low-quality repairs. This is a new lockhead, and we expect it to work properly,” he said. “We aim for a lifespan of 100 years.”

The canal authority also issued a statement noting that the consortium is the sole responsible party for the expansion works, and the authority won’t accept anything short of perfection.

“Our technicians are closely monitoring (the situation) so that every detail complies with the quality standards.”

Imports starting to climb

Import cargo volume at the nation’s major retail container ports —including Savannah — is expected to increase 1.2 percent this month over the same time last year as retailers head toward the holiday season, according to the monthly Global Port Tracker report released Wednesday by the National Retail Federation and Hackett Associates.

“After supply chain worries earlier this year, inventories are plentiful this fall,” NRF spokesman Jonathan Gold said. “Shoppers should have no worries about finding what they’re looking for as they begin their holiday shopping.”

Ports covered by Global Port Tracker handled 1.62 million TEUs in July, the latest month for which numbers are available. That was up 2.9 percent from June and 8.1 percent from July 2014. One TEU is one 20-foot-long cargo container or its equivalent.

Numbers were estimated to be up for August through November, with August and November year-over-year containers up the most, at 5.5 percent and 7.9 percent respectively.

If those numbers hold true, that would mean a total of 18.2 million 20-foot containers moved in 2015, up more than 5 percent over 2014.

While December’s numbers are expected to be down slightly, the forecast for January calls for 1.44 million TEUs, up a whopping 17 percent over last year, when labor and management on the West Coast had yet to agree on a contract.

The Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the East Coast and Houston on the Gulf Coast.

The report is free to NRF retail members, and subscription information is available at www.nrf.com/PortTracker. Subscription information for non-members can be found at www.globalporttracker.com.

That time of the year again

The 2015 State of the Port address, hosted by the Georgia Ports Authority and the local Propeller Club, is set for Sept. 24 at the trade center on Hutchinson Island.

Always a sellout, the event will feature GPA executive director Curtis Foltz, who will offer a look at the fiscal year ending in June, as well as upcoming developments at the port.

As Fiscal 2015 was a banner year for the fourth-largest port in the country, expect the news to be good, with up-to-date status reports on the harbor deepening and accompanying landside projects.

The annual event begins at 10:30 a.m. with a coffee bar and networking reception. The luncheon and address begins at 11:45..

Tickets are $50 in advance, or $55 (if available) at the door. To register, contact Patricia Richardson at the Georgia Ports Authority, 912-964-3996 or prichardson@gaports.com

Senior business reporter Mary Carr Mayle covers the ports for the Savannah Morning News and savannahnow. She can be reached at 912-652-0324 or at mary.mayle@savannahnow.com.

Following are the ships expected to call on Georgia Ports Authority’s Garden City and Ocean terminals this week. Schedules are supplied by GCT and are subject to change.

TERMINAL VESSEL ETA

GCT ZIM ALABAMA Today

GCT MAERSK WEYMOUTH Today

GCT MAERSK WINNIPEG Today

GCT SEALAND NEW YORK Today

GCT MSC BEIJING Today

OT GRANDE SIERRA LEONE Today

GCT CMA CGM L’ETOILE Saturday

GCT TOMMI RITSCHER Saturday

GCT MUKADDES KALKAVAN Saturday

GCT YORKTOWN EXPRESS Saturday

GCT MSC FLAMINIA Saturday

GCT EVER DEVOTE Saturday

GCT KOBE EXPRESS Saturday

GCT DEIRA Sunday

GCT AXEL MAERSK Sunday

GCT NYK ARCADIA Sunday

GCT EVER LEGEND Sunday

GCT ZIM COLOMBO Sunday

GCT MSC MARIANNA Monday

GCT OOCL SOUTHAMPTON Monday

GCT MSC ANNICK Monday

GCT MAERSK KARLSKRONA Monday

GCT HYUNDAI GLORY Monday

GCT CMA CGM PARSIFAL Monday

OT BAHRI HOFUF Monday

GCT ALLISE P Tuesday

GCT BEAR HUNTER Tuesday

GCT JONATHAN SWIFT Tuesday

GCT XIN CHONG QING Tuesday

GCT YM UPSURGENCE Tuesday

GCT HANJIN HAIPHONG Tuesday

GCT HH NIKOL C Tuesday

GCT MARTHA SCHULTE Wednesday

GCT MOL EXCELLENCE Wednesday

GCT AL SAFAT Wednesday

GCT ARIAN Wednesday

GCT MSC INGRID Thursday

GCT CMA CGM AUCKLAND Thursday

GCT E.R. DALLAS Thursday

GCT MOL MANEUVER Thursday

GCT ZIM SAN FRANCISCO Thursday

GCT MSC SILVANA Thursday

GCT AMELIA Thursday

Airport gets $3.7 million grant

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The Savannah Airport Commission, in a specially called meeting Friday, voted to accept an Airport Improvement Program grant offer from the Federal Aviation Administration for $3.76 million.

A few hours later, the Savannah City Council put its stamp of approval on the award. The called meetings were necessary to accommodate a time frame to accept the grant.

The grant, designed to be used for airport development projects, will help pay for lighting replacement on Taxiway C, the relocation of an airport maintenance road, runway safety area improvements and road relocation at Runway 28, and improvements to Runway 1, Perimeter Road and gates.

As a small primary hub, the Savannah/Hilton Head International Airport must contribute from 5 percent to 10 percent of the cost for the projects.

“We are very pleased to receive this grant, which allows us to move forward on four capital projects at the airport,” said Greg Kelly, airport executive director. “The funds for these grants are derived from the ‘ticket tax’ applied to an airfare, so those who use the airport are the ones who ultimately fund many large airport projects.

“Unfortunately, Congress has yet to arrive at new legislation to allow for a renewed multiyear FAA program,” Kelly said. “It is essential to all airports in the U.S. that this get done. We are working hard with our trade groups and lobbyists in D.C. to push new legislation through.”

Projects eligible for AIP money include improvements related to enhancing airport safety, capacity, security and environmental concerns.


Business in Savannah in brief

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Kroger to have interviews for veterans, families

Kroger’s Atlanta Division will have open interviews Tuesday for all veterans and their family members to fill an estimated 1,500 positions.

Veterans and their family members need to fill out on application online at jobs.kroger.com by Sunday and then return to a store between 10 a.m. and 1 p.m. Tuesday with no appointment necessary.

Kroger also is part of the “100,000 Jobs Mission,” a coalition of more than 130 companies with the goal of hiring more than 100,000 transitioning service members and military veterans by 2020.

“Our hiring fair will help get our veterans back into the workforce,” said spokesman Glynn Jenkins.

The online application requests an email address, employment history and education information. It takes about 30 minutes to complete.

Kroger is asking applicants to input the hashtag #HonoringOurHeroes in the “Search by keyword” field at the top of jobs.kroger.com.

Greenbriar Children’s Center announces $5,000 gift

Greenbriar Children’s Center Inc. — a nonprofit organization that provides residential services for abused, neglected, runaway and homeless youth and young adults, early childhood education and care and family counseling services — has announced a $5,000 gift from Kinder Morgan Inc.

“The services Greenbriar provides are critical and help lead to the healthy development of children and the strengthening of families.” said Allen Fore, vice president of public affairs for Kinder Morgan.

The gift will go toward the purchase of a new 12-passenger van to transport the center’s children.

Regional Chamber announces military family of quarter

BEAUFORT, S.C. — The Beaufort Regional Chamber of Commerce’s Military Affairs Committee has recognized HM2 Joseph Shields, who’s stationed at Marine Corps Air Station Beaufort, and his family as the Military Family of the Quarter.

This recognition seeks to honor families who go above and beyond to serve our country and our community.

Shields is the leading petty officer, deputy family readiness officer for Combat Logistics Company 23 at Marine Corps Air Station Beaufort. His wife, Chelsea, serves as the vice president for the PTO at Elliot Elementary School. They have two children, Caliegh and Lucas.

Business after hours scheduled in Richmond Hills

The Richmond Hill-Bryan County Chamber of Commerce will have its next Business After Hours from 5:30-7 p.m. Thursday at AmerisBank, 10425 Ford Ave.

Chamber members and guests are invited for an evening of networking, live music, food and beverages.

For more information, go to www.RHBCchamber.org or contact the Chamber at 912-756-3444 or info@rhbcchamber.org.

Georgia cracking down on illegal 'runners'

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Earlier this year, Glynn County police arrested two private investigators for illegally soliciting business for a law firm by serving as “runners” or “steerers.”

Georgia law prohibits people or companies from acting as intermediaries for any attorney or health-care provider who receives a financial benefit from the referral. In violation of state law, these runners contact individuals and families after catastrophic incidents to solicit a client at the direction or request of, or in cooperation with, an attorney or a law firm.

In June 2014, Glynn County police initiated a probe of two private investigators associated with the Guardian Investigations Co. of Jesup. The two individuals were eventually arrested based on their actions after a vehicular crash on June 25, 2014, in Long County.

On the day after the accident, two private investigators solicited an individual who was involved in the crash at a residence in Glynn County.

Georgia law OCGA 33-24-53, which defines and creates specific penalties for the illegal practice known as “running,” went into effect July 1, 2014. The law is designed to protect the public from schemes involving payments to non-lawyers to solicit business for a law firm or health-care provider for financial gain.

Tougher penalties were also put in place for all parties associating with runner schemes. The penalties defined by the Georgia law apply all participants in the criminal activity, from attorneys to runners.

The first offense, a misdemeanor conviction, has a penalty of at least 30 days in jail and up to $1,000 in fines. Subsequent offenses, considered felony convictions, can impose a sentence of up to 10 years in jail and up to a $100,000 fine per violation.

The use of runners or steerers by a lawyer who pays non-lawyers to bring clients is unethical and criminal in most states. In 2011, the Georgia Supreme Court disbarred two attorneys who admitted to several charges made by the state bar and accepted the recommendation of the Review Panel of the Georgia Bar.

The Georgia bar recommended that the two law partners be disbarred for violating three separate standards governing attorney conduct, sending a strong message to lawyers across the state that participating in running schemes will not be tolerated. Violation of any one of the Georgia bar standards can serve as grounds for disbarment.

Runners and steerers muddy the legal process, interfering with the privileged attorney-client relationship.

If you or a member of your family has been injured and may be entitled to compensation, be sure to work with an experienced attorney who can help fight for your rights and secure potential compensation for your damages. Avoid contact with illegal runners, who may be more interested in seeking a referral fee than securing justice for you and your loved ones.

Stephen G. Lowry is a partner with the law firm of Harris Penn Lowry LLP. His practice includes wrongful death and personal injury claims. He can be reached at steve@hpllegal.com or 912-651-9967.

By Stephen Lowry

'Taste of Pooler' draws crowd to Mighty 8th

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‘Taste’ draws community
crowd at Mighty Eighth

A mix of restaurants showcased their most tantalizing dishes and hundreds of participants enjoyed the kickoff to Pooler’s third annual Patriot Weekend on Thursday night at the Taste of Pooler event at the National Museum of the Mighty Eighth Air Force.

Mayor Mike Lamb said the weekend commemorates victims of the Sept. 11, 2001, terrorist attacks, raises funds for veterans and brings together the Pooler community. “It’s about Pooler Pride, too,” Lamb said. “We’re about family, pride and honor. I was born in Savannah, I married a Pooler girl, and this is my 12th year being mayor. Our goal is to make this a better city.”

John Fender, one of the organizers of the event, said a Taste of Pooler and Patriot Weekend help build the community and honor those who died in the attacks in New York City and Washington, D.C.

“Pooler is growing so fast, and we need to find a sense of community,” Fender said. “All of these towns, like Beaufort and Savannah, have their festivals. This is ours. And it’s all in the name of our military, police officers and firefighters.”

Participants enjoyed small plates from local restaurants around the city such as Indian restaurant Naan Appetit, and Caribbean spot Sweet Spice, both local favorites.

“We opened a restaurant in Pooler in May. I had no choice. Business is moving to Pooler,” said Donovan Smith, owner of Sweet Spice.

Buffalo Wild Wings and Chicken Salad Chick are also new in town.

“These are major for us,” said Pooler Realtor Trish Cook.

Patriot Weekend also hosted the Guns and Hoses Golf Tournament to honor police and firefighters. The tournament took place Friday morning at Crosswinds Golf Course.

Patriot Weekend culminates today with The Festival in the Park at the Pooler Park off Rogers Street. The gates open at 4 p.m., and there will be free amusement rides, a concert featuring Pooler artist Jared Wade and fireworks.

Proceeds from the Patriot Weekend will be donated to Honor Flight Savannah. The mission of the Honor Flight is to fly veterans to Washington, D.C., so they can visit memorials dedicated to honor sacrifices in wars.

Savannah tourism numbers continue upward

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If you’ve felt as if you’ve been braking for more bachelorette parties in crosswalks and spending more time stuck in traffic behind trolleys full of tourists while driving downtown this year — well, you’re right.

Savannah’s overall hotel occupancy rate has grown almost 5 percent compared to this time last year, and while occupancy rates within the historic district experienced a slight dip from 79.6 percent in June to 79.1 percent in July, those two months were still the best summer months on record.

“Last year was the best year ever, and now we’re pacing ahead of that...,” said Joe Marinelli, president of Visit Savannah. “When I started here 8.5 years ago, the general comment was ‘nothing happens here in the summer time — you can shoot a cannon through here. It’s just too hot,’ but now most of the hotels and tour companies will tell you that June and July have become two of our busiest months of the year.”

Hotel/motel tax for the city, county and Tybee Island from January through July has increased almost 13 percent to more than $14 million over the same period last year. The average daily room rate for Savannah grew by almost $9, from $102.33 to $110.46. The historic district experienced a bit more of an increase from $158.93 to $172.71.

There had been concern about the new $5 nightly hotel/motel tax that took effect July 1, but Marinelli said there hasn’t been much negative feedback.

“There has been very little effect. I think some of the smaller hotels out on the interstate are more directly affected by it because their price point is a little bit lower...” he said. “But in the Historic District, for the person that’s paying $269 and now they’re paying $274, you don’t feel it quite as much, so we’ve been very fortunate so far.”

Construction and openings of new boutique-style hotels in the Historic District also continue to be a draw for visitors, particularly millennials, international travelers and those who don’t mind dropping a bit more cash while vacationing.

“They’re the rage right now,” he said of boutique hotels, which are smaller and tend to have a more modern, sleek decor or reflect the city’s heritage and surroundings.

On average, international travelers make up about 10 percent of Savannah’s visitors and come mostly from Canada, the United Kingdom and Germany, Marinelli said, but the market is continuing to grow.

“We’re seeing impressive growing numbers from Australia, Brazil and China,” he said, adding that the presence of Savannah College of Art and Design along with the Georgia Ports Authority helps bring those travelers to the city.

Throngs of new restaurants, retail shops and airlines have also kept visitors flocking to the Hostess City along with festivals and conventions, such as the Savannah Music Festival, which brought more than 13,000 visitors and almost 8,300 hotel rooms in March. The Georgia Municipal Association conference in June had 2,000 attendees.

“Those are the types of things that make great cities great. When you think about traveling to New York, Chicago or San Francisco, great hotels, great restaurants, great shopping and then the unique experiences like food trucks are what make great cities great,” he said.

“I think it’s great for our visitors when they come, but it’s also great for you and I. We live here and have more options than ever before.”

Marinelli said there are no signs that Savannah is slowing. His team is expecting a busy fall season with the upcoming November Rock ’n

’ Roll Marathon pacing 20 percent ahead of last year, combined with the Savannah Food and Wine Festival and upcoming conventions.

“Last year’s marathon was the second largest, and they’re pacing well ahead for this year... So we’re really expecting a strong second half of the year, and we’re hoping that carries over into next year,” he said.

OCCUPANCY RATES BY THE NUMBERS

2014 2015 percent change

Savannah 71.8 percent 75.1 percent 4.6 percent

Midtown 71 percent 75.4 percent 6.2 percent

Airport 73.1 percent 77.4 percent 5.8 percent

Historic district 79.6 percent 79.1 percent -0.7 percent

I-95 60.6 percent 66.5 percent 9.8 percent

Area economy just keeps growing

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The Savannah metro economy continued to grow at a healthy pace through the first half of 2015, bolstered by strong port numbers and gains in almost every other sector, according to the latest edition of the Coastal Empire Economic Monitor, released Friday by Armstrong State University’s Center for Regional Analysis.

Second-quarter gains were supported by strong numbers at the ports, in retail sales and airport activity, with favorable trends continuing in the housing and labor markets, said Armstrong economist Michael Toma.

The monitor’s coincident index, which measures the current economic heartbeat of the region, grew 1.4 percent in the second quarter, a healthy trend Toma expects to continue through the rest of the year, moderating slightly near year’s end.

“The lead economic horse this quarter was port activity, accounting for nearly 30 percent of the index lift, with retail sales and airport activity chipping in significantly as well,” he said.

The only negative he saw was a dip in consumer confidence throughout the South Atlantic states.

“And that already seems to be coming back up,” he said.

Building permits for single-family homes are up roughly 40 percent from this time last year after rocketing forward in early 2015 and stabilizing in the second quarter. Additionally, the average value for a single-family home rebounded strongly from a first quarter drop, rising 23 percent from $178,000 to $219,400.

The monitor, which looks at data and identifies trends affecting the tri-county economy of Chatham, Bryan and Effingham, tracks key growth areas for the immediate past quarter — the coincident index — as well as forecasting economic activity for the coming two or three quarters in its leading index.

In Friday’s report, the leading economic index increased slightly less than 1 percent, reflecting a slowing growth pace.

“The moderation in the forecasting index is a good thing,” Toma said. “It represents a more sustainable pace. Even though forecast gains are the smallest they’ve been in two years, they still reflect a healthy pace of expected future growth.”

The labor market is back to where it was in terms of its overall health in the mid-2000s, he said.

“I used to say the labor market was healing, but we’re beyond that now,” he said.

Overall, Toma said, the area economy is where it needs to be.

“Basically, we’re good,” he said. “I think we’re set up for growth through the next three quarters — growth that is at a healthy and sustainable pace.”

Additional highlights from the latest Economic Monitor include:

• Seasonally adjusted employment in the three-county metro area boomed, having added 3,100 jobs during the last year and 1,200 jobs in the second quarter alone, bringing the total to 169,800 positions. These are largely the businesses that respond to the demand for business-related services from other employers.

• Other service sectors were largely even during the quarter, except for employment in the leisure and hospitality sector. Tourism shed approximately 800 jobs, though this may be a retrenchment of sorts, given tourism’s hiring binge of 450 new jobs per quarter for the previous two years.

• Container handling at Georgia Ports hit an all-time high of nearly 340,000 units in May, growing 4.2 percent during the quarter and up 23 percent when compared to last year’s data. This supported 400 new jobs, totaling a 3.8 percent increase, in the transportation sector over the last year.

• In the labor market, seasonally-adjusted initial claims for unemployment insurance fell 4.7 percent to 732 from 768 claims per month. The number of new claims was 16 percent below previous year data. With falling unemployment insurance claims and steady job growth, the unemployment rate averaged a seasonally adjusted 5.8 percent, falling from 6.1 percent in the previous quarter and standing 1.2 percentage points below last year’s rate.

ABOUT THE CRA

Armstrong’s Center for Regional Analysis, housed in the university’s economics department, meets the applied research needs of Savannah’s business and community organizations. Areas of concentrated research include regional economic forecasting, economic impact analysis, economic development and business expansion, tourism development, survey-based research and specialty reports on topics of state, regional and local interest.

The center’s quarterly Coastal Empire Economic Monitor is available free by email. To subscribe, email CRA@armstrong.edu.

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