Top business stories for 2012: Callaway land deal, Hostess plant shutdown

tadams@ledger-enquirer.comDecember 25, 2012 

To say it has been a busy 2012 in the Columbus business world would be a serious understatement.

The story lines run the gamut:

• A beautiful garden resort on the brink of bankruptcy.

• The manufacturer of Twinkies shutting down nationwide and on Victory Drive.

• A historic local bank finally pulling itself together financially.

• And the community anxiously awaiting more budget cuts at a prestigious local Army installation.

But those are only a few of the many interesting and sometimes dramatic developments on the business front. Here we break down the Top 10 of the year, which followed a vote and discussion by the staff of the Ledger-Enquirer.

1. Callaway Gardens sells prime acreage to pay down debt

Averting the financial disaster — and possible bankruptcy it faced earlier in the year — Callaway Gardens over the summer completed the $4.63 million sale of 2,560 acres of prime Harris County land to an Atlanta real-estate broker who plans to use the forested acreage for hunting with his sons.

That land deal was preceded by another with Lands’ South Ventures LLC , which paid $8 million for 4,500 acres and its timber value. The acreage includes the site of The Steeplechase at Callaway Gardens, an annual fall fundraiser for the area’s arts community. Lands’ South is headed by Joe Rogers Jr., chairman and CEO of Norcross, Ga.-based Waffle House.

The deals wrapped up Callaway Gardens’ strategy of selling off large chunks of its land to pay down a debt load that had grown to $44.5 million in March 2011 before a restructuring of the resort’s employee base and overall debt.

2. Hostess closes Dolly Madison plant in Columbus, 426 lose jobs

The Dolly Madison plant in Columbus, caught in a national struggle between Hostess Brands’ corporate executives and striking union workers, closed suddenly in mid-November, costing 426 local workers their jobs. The Victory Drive plant — which opened in 1971 — was among the 33 snack-food factories and 565 distribution centers nationwide that bankrupt Hostess began liquidating.

“I just hope I can find me another job,” said one 30-year employee, who was visibly upset but declined to give her name. “I’ve worked there too long for them to take everything like that.”

Irving, Texas-based Hostess Brands had been demanding that its workforce of 18,500 take an 8 percent pay cut, with pension plans also being eliminated. The Columbus factory’s products included the pop-culture phenomenon, Twinkies, and the popular Zingers.

3. Synovus makes profit, signals TARP repayment coming

Nearly four years after receiving $968 million from the federal Troubled Asset Relief Program, Synovus Financial Corp. in October laid out its best estimate to date for when it will be paid back. Kessel Stelling, the Columbus-based regional bank’s chairman and chief executive officer, said the company’s financial models indicate that could come sometime between next spring and fall.

The CEO’s projection came after the company reported a profit of $16 million in the third quarter of this year, it’s fourth straight profitable quarter. Synovus, the parent company of Columbus Bank and Trust, owes the most of any remaining financial institution under TARP.

4. Big plans proposed for downtown Columbus, riverfront

This fall, Uptown Columbus and an urban design firm released an ambitious master plan for the redevelopment of the city’s downtown waterfront district. The plan includes the possibility of closing Bay Avenue — which runs along the riverfront from 10th to 12th streets — and creating an elaborate riverside park along the lines of Atlanta’s Centennial Park. It also would restore two-way traffic to 11th and 12th streets to make them more pedestrian-friendly, while also increasing Columbus State University’s presence by possibly moving its nursing program downtown. That plan comes with the 2.5-mile whitewater course on the Chattahoochee River continuing to take shape following the destruction of old dams early in the year. Crews have been tearing away rock and creating areas of roiling rapids on the stretch of river downtown to accommodate rafters and kayakers. The course is scheduled to be finished next year, with hopes of it becoming a major recreational and economic draw for the city.

5. Columbus braces for more cuts at Fort Benning

In January, U.S. Defense Secretary Leon Panetta laid out plans to cut the active Army ranks by 80,000 soldiers amid a post-war restructuring. The local community since then has been waiting anxiously to see if additional cuts might take place in the next federal budget. Potential targets at Fort Benning include the loss of the 3rd Heavy Brigade Combat Team and its roughly 3,900 troops. The post already identified nearly 250 civilian jobs for elimination this year. And the training load at the installation was cut sharply this year. There will be $500 billion in automatic federal defense budget cuts in January if President Barack Obama and Congress can’t work out a compromise before then. “I do worry about the bursting of the federal spending bubble and how much that’s going to affect defense spending,” University of Georgia economist Jeff Humphreys said during an economic forecast luncheon in early December. Fewer soldiers, civilian employees and defense contractors at Fort Benning translate into fewer dollars to go around in the Columbus-area housing, hotel, retail and service sectors.

6. Mercer School of Medicine comes to Columbus

Early in the year, a notable announcement was made. After 18 months of discussion, Mercer University School of Medicine decided to put a satellite campus in Columbus, partnering with The Medical Center and St. Francis Hospital on a two-year doctor training program. “It is vital to the long-term success of our community that we bring those physicians here to practice and replace those physicians that we have that are retiring, and to meet the needs of the aging baby boomer population in our community,” said St. Francis President and Chief Executive Officer Robert Granger. Georgia ranks 37th in the United States in terms of physicians per capita. A quarter of doctors in the state are 55 or older. At the same time, the number of Georgians over age 65 is expected to double over the next two decades. Mercer’s School of Medicine, which was founded in 1982 in Macon, Ga., trains only Georgia residents.

7. Kia engine creates jobs; $1.6 billion investment to come

Can the Kia story get any better? Economic development officials and area residents — specifically those residing in once-downtrodden West Point, Ga. — might be pinching themselves after another banner year for the South Korean automaker. Early in 2012, a milestone was reached with the company assembling its 500,000th vehicle since opening the mammoth auto plant in late 2009. Area auto suppliers continued to add workers or locate in the Chattahoochee Valley. That included AFS America, which set up shop in Columbus to make floor mats and cargo trays, creating 65 jobs. If that weren’t enough, Kia Autosport opened its brand new $7.5 million dealership near Columbus Park Crossing in the fall to help feed local demand for the brand’s vehicles. Then, a few weeks ago, the company said it plans to invest $1.6 billion in its West Point plant over the next decade — proof enough that Kia is here to stay.

8. 149-year-old Harvey Lumber Co. files for bankruptcy protection

In early December, W.T. Harvey Lumber Company, a Columbus company founded during the Civil War nearly 150 years ago, filed for Chapter 11 bankruptcy protection, having never recovered from the 2008 housing market collapse. The company’s president said the decision to file for bankruptcy protection was difficult, but necessary because of the housing market meltdown four years ago that left many of its customers on the ropes financially. A flurry of competitors entering the market in recent years also contributed to the bankruptcy. A major construction materials business in the area for decades, some may best remember Harvey Lumber from a former advertising campaign featuring a smiling cartoon character called “Little Harvey” exclaiming: “Buy where the builders buy!”

9. Aflac gets a grip on investment losses, profits continue

With the global economy remaining sluggish at best, Columbus-based Aflac opened an investment office in New York City and hired a former Goldman Sachs executive to handle the firm’s $93 billion portfolio. The company continued to put Greece, Spain and other European investment potholes behind it, while also keeping the cash flow, profits and dividends rolling in. An interesting moment for investors came when Aflac Chairman and Chief Executive Officer Dan Amos pointed out at the supplemental health and life insurer’s annual meeting that the duck, indeed, does lay golden eggs. Said Amos: Anyone who bought 1,000 shares upon the company’s founding in 1955 would have paid $11,000. After factoring in 28 stock splits and reinvesting the dividends into the firm, that initial purchase would have multiplied to just under 1.9 million shares and a dividend payout of $1.2 million this year alone. A tidy return.

10. TSYS rolling again, regains Bank of America contract

It was just before Christmas 2005 that credit-card processor TSYS found out that longtime client Bank of America was snatching away its consumer credit-card portfolio valued at roughly $140 million per year. That was before the Great Recession. But in mid-2012, TSYS said it has brought Bank of America back into the fold with a contract to process cards in the United States for at least six years. It did not lay out financial terms, but getting the bank back was a major event that not only brings TSYS revenue, but takes that business out of the hands of competitors. The card conversion to the TSYS system should be finished by summer 2014. “We have approximately 100 million accounts in the conversion pipeline, which we expect to be converted by the end of 2014,” TSYS Chairman and Chief Executive Officer Phil Tomlinson said during one quarterly earnings period. But that was only one of the big developments in the technology world of TSYS. It bought a mobile-payment company called ProPay, opened another financial services support center in the United Kingdom, purchased a controlling interest in restaurant and retail processing firm Central Payment Co., and signed several clients, including BancorpSouth and Pivotal Payments. What’s more, TSYS management has not been shy about saying it has the cash flow and financial reserves to make more strategic acquisitions and other moves in the coming months.

Ledger-Enquirer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service