Here’s a roundup of some of the top business headlines from across the state this week:
A panel of roving lawmakers and other state officials tasked with revamping some of Alabama’s alcohol laws met in Mobile Thursday. Brewers, farmers who make wine and those that want to take the opportunity to bend their ears.
The Alabama Alcohol and Beverage Study Commission is expected to visit Colorado and North Carolina later this year to learn about their alcohol laws once it swings through the state for meetings in Mobile, Hoover and Huntsville.
An act of the legislature created the body after several measures that would have allowed breweries to sell beer directly to a consumer to go. Beer makers in the state argue that the three-tier system, which provides individual licenses for brewers, distributors and retailers needs to broaden in order for their businesses to grow.
Off-premise sales is “our No. 1 goal,” said Brian Kane, owner of Fairhope Brewing Co., said to the commission. Tourists from out-of-state regularly expect to be able to come in taste beer and take some home, Kane said.
“It seems the logical place to look, go to the brewery itself,” Kane said, noting that several states already permit those kinds of sales.
“We’d like to have that person who comes in from Louisiana on their way to Gulf Shores come in and pick up a six-pack or a growler on the way pick up a six-pack or a growler from our place to go.”
Under current law breweries and brewpubs are limited to selling beer in their tap rooms or restaurants, often in small amounts.
The Alabama Brewers Guild released a report recently calling for the creation of a single craft brewer license. The advocacy organization’s proposal would allow brewery owners to sell beer directly to consumers in kegs and 32-ounce or 64-ounce jugs called growlers.
Dan Roberts, executive director of the Brewers Guild, said though it may be “more controversial,” they’re also asking breweries receive permission to self-distribute and for brewpubs to sell their beer to go with the single license. “We’re open to alternatives,” Roberts said.
Rebecca Maisel, a lawyer for Gulf Distributing Co. of Mobile, said in a prepared statement that a proposal from the beverage distribution industry is forthcoming after the commission finishes their research.
Maisel defended the current laws at the meeting, saying the “three-tier system — as it is now — is working” in the state.
“There are no barriers to entry to getting into a brewery and they already have the ability to have people come in and taste their beer in their taproom,” Maisel said. “So if someone wants to purchase their beer, they can go across to street where a distributor has brought it and they can buy it from that store.”
Winemakers and distillers also impressed upon the commission needs for their industries.
Cindy Monroe, a farmer in Chambers County, said she has “4 acres of grapes in the ground” with plans to more than double that by 2016 when she expects to open a winery. “But this industry today, the way the regulations are, they do not support Alabama farmers and Alabama growers,” Monroe said.
Monroe, 55, sought to made her point with “show and tell” presentation, a basket filled with cane syrup, grits and wine — all made from products grown on the farm she has with her husband.
Wineries are subject to regulations similar to the beer industry, she said they are limited to selling their product at the winery for visitors to drink and through a distributor. Under that practice, Monroe said it becomes more difficult for smaller establishments to gain a foothold in the industry.
“We can make all of those things and I can go into any store in this state and sell it,” Monroe said. “But if I make wine, you can’t do that. Think about it from that perspective.”
APM Terminals‘ secured Wednesday the first of three requested tax abatements for its planned second-phase, $47.5 million container terminal expansion on Choctaw Point.
The request, which came before the city of Mobile’s Industrial Development Board, represents the first local request approved invoking recently passed “Made in Alabama” jobs incentives legislation. The project, which will also expand the company’s container yard by 20 acres, represents a continued partnership between APM and the Alabama State Port Authority that has already seen the investment of nearly $50 million.
The legislation, known as the Alabama Reinvestment and Abatements Act, extends the maximum duration of allowable non-educational ad valorem tax abatements from the traditional 10-year cap to 20 years, but it also introduces additional red tape to gain approval.
The city of Mobile’s Industrial Development Board is authorized to approve requested municipal, county and state abatements through the initial 10-year period but can only grant approval for the city’s portion of the second 10-year period.
All told, the city of Mobile’s board approved unanimously total non-educational ad valorem abatements totaling about $2.2 million for the first year and nearly $7.9 million for the full 20-year abatement. APM Terminals must now seek separate abatement approval from both Mobile County and the state of Alabama for the additional 10-year period.
In recommending the project’s approval, Troy Wayman, the Mobile Area Chamber of Commerce’s vice president of economic development, told the board the project is expected to create 97 jobs with average annual salaries of $53,000, boosting both the city’s and the Port of Mobile’s “logistical advantage.”
“The importance of this expansion to our local economy is quite significant…Any infrastructure improvements we can foster for our port…represent significant benefit to us in economic development,” Wayman said.
Per the chamber’s benefit-cost analysis, the project is also expected to generate $11.2 million and $1.1 million for local and state education coffers respectively during the total abatements’ duration.
Specifically, the project consists of two parts:
- A capital investment of about $39.4 million – including an estimated $1.5 million in locally-sourced constriction labor and engineering services – to add two new ship-to-shore cranes capable of serving the largest modern container ships; and
- A capital investment of about $8.1 million to include a major rail Intermodal Container Transfer Facility as well as a distribution center closer to the port area.
“This will really put us more on a global stage as it relates to shipping because it ties in to the intermodal facility and allow us to meet the needs of existing industry as well as potential new industry,” Wayman said.
The project, slated for completion in the first quarter of 2016, is expected to create 24 jobs at startup, 59 by the end of the first year in operation and 97 by the end of year two.
Birmingham Business Journal: Alabama jobless rate holds at 6.1 percent in June
Alabama’s unemployment rate remained at 6.1 percent in June, the same rate from May.
June’s rate halted a two-month trend of increased unemployment since a 5.7 percent rate in March.
Alabama still lags behind the national rate, which stood at 5.3 percent for June. The state’s rate is lower than the 6.8 percent it posted in June 2014.
Total employment in the state slipped by 1,900, but 2,300 new jobs were added in the construction industry and 1,600 new workers were added in the leisure and hospitality sector to help offset losses in transportation, mining and education.
Metro Birmingham added 600 jobs in June, but its jobless rate rose to 5.9 percent from 5.5. percent in May.
Jefferson County reported a 6.2 percent unemployment rate, up from 5.8 percent in May. Shelby County’s rate was 4.6 percent, up from 5 percent in May.
Birmingham Business Journal: Alabama ranked among most expensive states for energy costs
Alabama’s energy costs are some of the highest in the country when compared to other states.
WalletHub.com ranked the state as the 11th most expensive state for energy prices, with Alabama consumers paying some of the highest rates in the U.S.
Alabama is one of the leading states for electricity output – generating more in April 2015 than Mississippi and Kentucky combined, as we previously reported.
Alabama ranked 49th overall for monthly electricity cost, with customers paying an average of $160 per month.
Walter Energy Inc. on Wednesday filed Chapter 11 bankruptcy, and now will be faced with a series of deadlines as the Hoover-based met coal producer begins the reorganization process.
The company is pursuing a restructuring plan that would allow senior lenders to convert debt into equity, but the bankruptcy process could also result in the sale of the company if certain conditions and deadlines aren’t met.
Here’s a look at some of the key deadlines for Walter’s restructuring plan:
1. By Aug. 12, Walter must make an initial proposal to the United Mine Workers of America and to United Steel Workers that must be acceptable to its majority holders of its debt.
UMWA – the country’s most prominent mining labor union with 30,000 members – said in statement on Wednesday that it’s important for retirees to know that their pensions are not affected by the bankruptcy filing itself, and their health care benefits will remain intact while reorganization process plays out.
2. While pursuing the restructuring plan, the company must also simultaneously market the company for sale. It has to start that process by Aug. 19.
3. By Oct. 28, a disclosure statement providing information about Walter’s restructuring plan must be approved by the U.S. Bankruptcy Court.
4. By Dec. 9, Walter must also achieve necessary cost savings that are acceptable to the company and the majority holders. It can accomplish that savings through negotiations with the unions or by rejecting collective bargaining agreements and terminating or modifying the retiree benefits.
Other cost-saving measures could lead to layoffs, idling plants, hourly and salary pay cuts and pension cuts.
Walter previously said as many as 370 Alabama workers could be laid off on or by July 15 – which was also a deadline for the company to file a motion seeking the appointment of a retiree committee.
5. The finalized bankruptcy reorganization plan must be confirmed by the court by January 13, 2016.
If the company fails to meet those deadlines, court filings show Walter must abandon the restructuring plan and solely pursue a sale of the company.
The last several months and years have seen thousands of manufacturing and tech jobs move to Alabama from other states, and Business Council of Alabama President and CEO William J. Canary says he knows why: Alabama’s status as a right-to-work state.
The right to join or not join a union and be free of coercive attempts to force unionization is often cited as a hallmark of Alabama’s attraction to every segment of our economy especially manufacturers and suppliers.
“Over the last two decades, many businesses that were located in heavily unionized states have moved their operations to Alabama, choosing to locate their facilities in the right-to-work Alabama due to the ability to compete in the global marketplace,” Canary said.
Alabama’s right-to-work status played a major role in the decisions of such companies as Airbus and Austal USA to manufacture in the Yellowhammer State, and auto workers make more here than in any other state.
Canary underscored the fact that heavy unionization does not attract new manufacturers, expand existing business, or lead to prosperity. “The BCA strongly supports Alabama’s right-to-work status for its benefits to economic growth, industrial recruitment, and job creation,” he added.
Laws prohibiting forced unionization in order to get a job are on the books of 25 states. In Alabama, right-to-work has been the law since 1953. Seeing the dramatic shift, three northern states have enacted right-to-work statutes in the last three years alone.
Canary said the law, and now the secret ballot reaffirmation secured in the Alabama Constitution in 2013, inspires confidence that Alabama will remain a business-friendly state.
“A union presence in Alabama would only serve to stifle job creation and economic opportunity,” Canary said. “I continue to believe that free enterprise can best meet the needs of its employees by maintaining an open and direct relationship with them, without the interference of a third party.”
South Carolina, a state that has many manufacturing similarities to Alabama, is led by Governor Nikki Haley—a steadfast supporter of the right-to-work. The Palmetto State is home to many manufacturers which reportedly made decisions to locate there due to the low level of unionization and the state’s right-to-work laws.
In January, Haley said that South Carolina has an international reputation for not wanting heavy union involvement, “because we don’t need unions.” She said right-to-work strengthens the direct relationship that employers have with their employees without interference of an intermediate party.
Costs are also higher in union operations due to transactional costs having to do with collective bargaining and other union activities.
Canary said the BCA pledges in its annual State Legislative Agendas to protect Alabama’s right-to-work status in order to keep the state competitive, “ours is a committed campaign.”
“Existing industries looking to expand and companies looking to locate here must be confident that Alabama will remain a business-friendly state,” Canary said in a recent interview. “I continue to believe that free enterprise can best meet the needs of its employees by maintaining an open and direct relationship with them.”