eorgia's water woes are either no big deal or a very big deal, depending on whom you ask. In the corporate real estate context, the difference really is location, location, location. Virtually every county in the Peach State is affected by the worst drought in recent memory, from the southern counties reporting below average rainfall to the northern counties, where terms like "exceptional" and "extreme" are used to describe the situation.
   So when Norcross, Ga.-based Site Selection editors started getting calls from business reporters around the country seeking input on the drought's impact on economic development, they knew they wouldn't write the first story on the topic, but they could certainly write an authoritative one. Their premise when research for this report got under way in early November was that long-term project location decisions don't change course when an ostensibly short-term factor comes into play. Why forego an ideal location in terms of labor supply, logistics and so forth because the area needs rain? More importantly, what exactly is going on?
   The drought, with which neighboring states Alabama, Tennessee and North Carolina are also grappling, is a classic case of perception versus reality. Media accounts would have us believe Atlanta's water supply will be depleted sometime around Groundhog Day, leaving a metro area of more than 4 million people high and dry. Or that the drought is crippling key industries throughout the region. (As of Nov. 16, the official water supply estimate with regard to Lake Lanier was 79 days.)
   So what is one to make of the Atlanta water-supply estimates?
   "Some of the estimates you have heard were accurate the day you heard them," said Linda MacGregor, chief of the Watershed Protection Branch of Georgia's Environmental Protection Division (EDP), at a Georgia Society of Association Executives luncheon panel Nov. 14th. "The water supply estimates change every day based on inflows, rain and other factors," she added. "It is not a linear situation, and it is more complicated than can be put in a headline or in a sound bite on the evening news."
   Input from economic developers around the state – those on the front lines of recruiting investment to their areas – provides important intelligence concerning what's really happening.    "The media has been a bit misleading in that most people perceive that Georgia is in a major drought," says Andy Riley, president of the Swainsboro/Emanuel County Joint Development Authorities. "It's north Georgia that is down 17 inches below normal rainfall. We in south Georgia are only down two inches, which is a very mild drought. That's a big difference." Besides which, he adds, "In Emanuel County, we are sitting on two major aquifers, unlike north Georgia."
   Central Georgia, too, is drought-stricken, but not to the same extent as the northern counties.
   "The main issue has been additional irrigation required by our agriculture sector, which affects their bottom line," says Josh Fenn, president, CEO and economic developer at the Eastman Dodge County Area Chamber of Commerce. "Our water supply is in good shape with the Floridian aquifer being our main source of water; the Ocmulgee River is a back-up source."
   Fenn, Riley and other Georgian economic developers are increasingly frustrated by the perception that just because the state's largest metro, Atlanta, is in a bind, the whole state is.
   "It is real simple," says Fenn. "The communities along the Floridian aquifer have supply to meet most needs for new industry, because the communities along with the agricultural users have managed their use of the water and have protected it. They know what a great asset it is for our area," he points out. "This situation is a problem for Metro Atlanta and the communities downstream along the Flint and Chattahoochee Rivers, who might or might not be getting their fair share of the water from upstream. Georgia is not just Metro Atlanta. Georgia's number one industry is still agriculture."
   Even economic developers in the northern part of the state are seeking some distance from Atlanta's issues, because many of them have water despite being in the "exceptional drought" zone.
   "The drought is serious, but our abundant water supply remains unaffected," says one such economic developer, who requested anonymity. "All our new prospects and the prospects with whom we're currently working are inquiring and are concerned."
   Which, in itself, is to be expected. But is the state making things worse by enacting regional or statewide measures, such as watering bans, that are meant for severely affected areas? "We must go through the process of educating site seekers that the statewide policies enacted in response to Atlanta and the Chattahoochee basin problems really aren't appropriate for our area," says the ED official. "Our water supply is in a different basin, and our water supply and withdrawal limits aren't affected.
   In late September, Georgia's EPD declared a level four drought response across the northern third of the state prohibiting most outdoor water use. Some commercial exemptions are in place.
   "The drought of 2007 has reached historic proportions, so it's critical that we take immediate steps to ensure that Georgians have a sufficient supply of drinking water," noted EPD Director Carol Couch when the restrictions were announced. "All of the counties included in the level four declaration are located in areas of either exceptional or extreme drought." Or are they?
   "Non-Georgians need to understand that the statewide watering ban and the state prohibition on new withdrawal permits does not mean that communities that do have water are in the same situation as Atlanta," says the northern Georgia ED official. "Atlanta has supply problems. We don't."    But others in the northern counties do.
   "The drought in northwest Georgia is at a crisis level, and without augmented water we may be facing severe water usage restrictions," says George Woodward, president and CEO of the Dalton-Whitfield Chamber of Commerce in the northwest corner of the state. Dalton is home to a carpet-manufacturing cluster. "Our industry has already cut back [water usage] 20 percent plus," he notes. "It is unfortunate, given the circumstances, that the carpet industry is in a mild recession due to the housing situation nationally. We have about 50 days water supply [as of early November] if no rain comes our way over that time period.
   "Water supply and the ability to augment current sources of water is something we need to develop a dialogue about between jurisdictions," adds Woodward. "Instead of just statewide water plans, we need regional water planning and drought contingencies."
   Elbert County, in northeast Georgia, is another baby-and-the-bath water case, as it were, inasmuch as it is subject to the state's level four restrictions, but water is abundant.
   "In spite of Atlanta's problems with water, Elbert County does not have a problem with water supply," says Anna Grant Jones, economic developer at the Development Authority of Elbert County, Elberton and Bowman. "We are permitted to draw 7.5 million gallons per day from Lake Richard B. Russell, and at peak only 2.3 million is drawn. Plus, Lake Russell never drops more than five feet, even during the current situation. While most of us suffer from a lack of rain," she adds, "most counties apart from metro Atlanta have plenty of water. I hope site selectors and industry will look outside of Atlanta for locating industry. The rural areas have capacity, land, better prices – and water."    But not every corporate investment belongs in rural areas. Atlanta clearly is the engine that drives Georgia's non-agricultural economy, and many businesses need to tap that energy.
   "I've talked to a number of people both at the [Metro Atlanta] Chamber [of Commerce] and with developers around town, and we see continued strong activity," says John Somerhalder, III, president and CEO of AGL Resources and vice chair of the Chamber's environmental policy committee. "The Chamber here and the business community in Atlanta have been very proactive on a number of issues, including the water issue. A lot of work has been done to prepare for a state water plan, and we're getting to that from a legislative perspective early next year."
   The consensus among city and business leaders, says Somerhalder, is that the lack of rain in 2007 is responsible for the drought, which in turn is a catalyst for moving area water planning to the next step. Part of the next step will likely involve managing the state's reservoirs differently in the future.
   Lt. Governor Casey Cagle and House Speaker Glenn Richardson (R.-Paulding County) plan to introduce the Reservoir Development and Drought Relief Act when the next legislative session gets under way in January. The bill will focus on improving water storage measures, including providing funding to communities that can enlarge existing reservoirs. Also, it will streamline the steps associated with building new reservoirs.
   "We need to be forward thinking in the event our state experiences another drought at some point in the future," says Lt. Governor Cagle. "We definitely have more than enough average rainfall to meet our needs, but we currently do not capture enough of that rainfall. On average," he explains, "our state receives 50 inches of rain, which if captured, would give us up to15 trillion gallons of water. For all of our state's water needs, we only require 1.7 trillion gallons. As we have seen, water management is a very important economic issue in our state, and I intend for it to be a top priority of mine this session."
   "Clearly in a drought period, there will be stress on the system," says Somerhalder. "But in my view, between the work Gov. Perdue is doing and what the Army Corps of Engineers looks to do with the reservoirs, and the fact that businesses are being proactive in looking for ways to conserve – all of that gives me a lot of confidence that we're doing the right things, and we will avoid this problem in the future. It's a catalyst to make sure we do the right things."
   That process is well under way, adds Katie Kirkpatrick, the Chamber's vice president, environmental affairs. "The outcome of the Clean Water initiative in 2000 was the formation of the Metropolitan North Georgia Water Planning District, covering 16 counties, which came into being in 2003," she explains. "[District officials] have undergone rigorous planning for 25 or 30 years out, looking at population and economic growth forecasts, and figuring out how to manage water resources and meet the needs of that growth 25 and 30 years out. It is an iterative process," says Kirkpatrick. "It's updated every five years, so the district is embarking on its first five-year update. Forecasts will be revised, they'll see what measures have worked and look at what they will do in the next five-year cycle to support that 25- and 30-year long-term planning outlook."
   Significant resources have been devoted to the district's planning – about $8 million to $10 million spent primarily by local jurisdictions to get their plans in place, Kirkpatrick estimates. "We can only be proactive and look to the future," she adds. "The best way to plan is to look at those metrics that we know – estimated population growth and economic growth that is projected to come to our region. By identifying that, we can plan appropriately. I really do believe that we have the opportunity now, not only in our region but in the state, to plan so we can continue to be successful in our state."
   Adds Josh Fenn of the Eastman Dodge County Area Chamber of Commerce: "The drought areas will recover because they will learn to better manage their water and build additional reservoirs from this situation. Georgia has survived many things through its 231 years. It will survive and thrive from this as well."