Wednesday, July 29, 2009

Survey Says EDOs Feeling the Effect of Recession Too

A recent survey by Place Marketing Group asked how economic development organizations (EDOs) were faring in the economic downturn.

The survey found that the economy has constrained economic development activity. 47% reported fewer prospects in the first half of 2009, 94% saw their funding decline or stay the same and 78% decreased or kept their marketing activity at the same levels.

Since most EDOs depend on the health of other organizations (businesses and governments) for their own financial well-being, it's no surprise that budgets would be under pressure in a recession. And when budgets are declining or stagnant, it's often the marketing resources that are first to hit the chopping block.

While some EDOs see little choice but to slash marketing spending, it is a step that risks a loss of future growth opportunities. Experts agree that those who maintain spending often emerge the strongest when things pick up. Cuts in marketing will show the most and help the least.

Not all marketers are cutting back however. 15% of survey respondents are increasing their marketing activity. Some tactics being used include a stronger focus on existing businesses; taking advantage of advertising bargains and lower cost marketing tools and using the time to tune up website and data sources.

By continuing your marketing effort during a downturn, you maintain awareness of your community's locational strengths and position it to capitalize on opportunities that will be waiting as we exit the recession.

Chamber unveils business recruiting strategy

By Dan Chapman
The Atlanta Journal-Constitution
7:36 a.m. Friday, July 17, 2009

Bruised by the recession and concerned about low per capita income growth, the Metro Atlanta Chamber on Thursday unveiled its business and job recruitment strategy for the next decade.

Not surprisingly, the chamber expects to play off the strengths — the region’s enviable air, rail and interstate network, low cost of living, a renowned medical community — that built Atlanta into an economic juggernaut.

But its New Economy Task Force, chaired by Southern Co. CEO David Ratcliffe, recommends spending time and money on four key sectors — logistics, high tech, bioscience and business services — to find job-growth gems that will afford Atlanta a prosperous 21st century.

“In this economy, everybody needs to reassess whether or not we’re focused on the right things,” Ratcliffe said. “Everybody’s gazing into that crystal ball and wondering what will make us stronger in the future.”

The challenges are immense. Metro Atlanta no longer competes against just Charlotte, Nashville or Dallas for business. A global, wired economy makes competitors of San Diego, Toronto and Seoul, South Korea. And chambers elsewhere, including Houston’s, also are updating their post-recession recruitment strategies.

Atlanta faces an array of challenges — a paucity of recruitment dollars and venture capital, bad traffic, less-than-stellar schools and water woes.

Most critically, though, the post-recession economy promises to be a very different, less lucrative hunting ground.

“There will be winners and there will be losers coming out of this economic crisis,” said Sam Williams, the chamber president. “We want to make sure metro Atlanta will be a winner. If we play it smart, we can make some big gains once the storm clears.”

By most measures Atlanta’s economic development the past 10 years is enviable. The chamber takes credit for businesses investing $2.4 billion and adding 37,291 jobs in the 28 county metro area.

Yet Atlanta trailed the nation’s 25 largest metropolitan areas in per capita income growth between 1998 and 2007, according to consulting firm Bain & Co., which conducted the New Economy study. “We have not created enough new jobs, and the jobs we’ve created are fairly low-paid,” said Alan Colberg of Bain’s Atlanta office, who directed the pro bono report. “You can see some of the impact right now: Atlanta is more severely affected by the economic downturn than the average U.S. city.”

Before, the chamber took the any-company-is-worthy approach to recruitment. It won’t turn its back on prospective recruits now. But it will focus on logistics, high tech, bioscience and business services niches.

Warehouses are out; recruitment of logistical engineering firms is in. Digitized medical data and wireless telephony companies get high priority. Vaccine and prosthetics makers will be targeted, as will the wide array of engineering, architectural, graphic design and marketing firms.

And, mindful that existing companies generate three-fourths of jobs, the chamber vows to boost hometown businesses in hopes of creating the next Home Depot or Internet Security Systems.

Business leaders said in interviews this week that they need help to remain competitive. Bain consultants tallied $89 million in economic development grants, loans and specialty funds budgeted by Georgia last year. Florida set aside $388 million.

Georgia also lags behind competitors in private venture capital for start-up businesses. Between 2006 and 2008, according to PricewaterhouseCoopers, Georgia raised $148 million in biotech venture capital. North Carolina raised $564 million.

The chamber plans to seek more recruitment dollars, tax incentives and venture capital opportunities from the state Legislature.

The General Assembly has, for two years running, refused to give the metro region the chance to tax itself to begin solving traffic woes.

“Everybody’s got issues, anywhere you go in the country,” said Bill Linginfelter, a Regions Bank executive and task force co-chairman. “What we hear from prospects over and over again is, ‘Show us you’re dealing with that.’ ”

Atlanta’s business community rolls out economic development plans every two or three years with mixed results. Yamacraw Design Center. Georgia Cancer Coalition. Innovation Crescent. New Century Priorities. What’s different about this plan?

“We don’t need growth for the sake of growth,” said the chamber’s Williams. “What we need are quality jobs. And the business community has long had a record of looking over the horizon and fixing problems. We’ve constantly got to reinvent ourselves.”

EDAWN: Business relocations down but inquiries up for fiscal year


The recession crimped business relocations and expansions across Reno-Tahoe in the past year but new-company inquiries rose 15 percent, the Economic Development Authority of Western Nevada said today.

The Reno-based agency and its partners assisted 17 companies in moving in or expanding existing operations in the 12-month period ending June 30. That’s down 40 percent from the prior fiscal year.

The 11 new companies and six expansion projects represent nearly $112 million in economic impact to the region.

While those numbers are down from previous years, EDAWN said its fiscal 2009 efforts created 743 new jobs, a 13 percent increase from a year earlier.

The agency pegged that in part to the addition of a call center at AT&T Nevada and a new customer service center opened by The Hartford Financial Services Group, accounting for a combined 450 new hires.

“There’s no doubt the economic downturn has taken a toll on our local businesses and workforce with unemployment at an all-time high,” said Chuck Alvey, president/CEO of EDAWN. But with the surge in inquiries from prospective businesses, he said, officials are hopeful for a turnaround ahead.

“We see that as a positive sign that the economy is trying to rebound, and when it does, these companies will be looking to pull the trigger and make the move. And we want Reno-Tahoe to be top-of-mind when they do,” Alvey said.

The EDAWN report said 13 percent of the inquiries are from California, 5 percent from the Midwest, 4 percent from the Northeast, 4 percent international and the rest from Nevada and undisclosed regions.

Tina Iftiger, business development director, said EDAWN is preparing a marketing campaign aimed at California companies in clean energy technology and related technology and manufacturing.

She said California’s ongoing financial woes are the key motivator for companies considering leaving.

“They’ve told us they’ve had enough of the chaos and escalating cost of doing business and are looking to improve their bottom line,” she said.

EDC charts new course for marketing Rowan

By Mark Wineka

Rowan County's economic development efforts have a new logo — a tagline, if you will.


Robert Van Geons, executive director of the Salisbury-Rowan Economic Development Commission, explained Wednesday that "Rowan" is inclusive, recognizing that the EDC serves all of the county and its municipalities.

Meanwhile, "Works" is an action-oriented, positive word, he said, and it leverages all of the good marketing the Rowan Jobs Initiative already has done with its "Available for Work" campaign.

"I don't think we're going to lose anyone with this message," Van Geons said. "... It's all about the total package, it really is."

Rowan County Commissioner Raymond Coltrain said he liked the all-county, team approach conveyed by RowanWorks.

Actually the logo unveiled to the EDC board Wednesday incorporates other important words or phrases:

- Economic development — "It's what we do," Van Geons said.
- Salisbury, NC — reflective of the county's largest city and county seat and "where to find us on a map," Van Geons said.
- For your business — a phrase that compliments "Available for Work."

Van Geons says the new logo represents an end to "disconnected identities" that maybe confused site selection consultants, companies, real estate brokers and citizens trying to find economic development information for the county.

RJI, which has been a focused, five-year marketing effort for the county, turned over its Web site and all the marketing images for the EDC's use.

"They recognized the need to pull everything together," Van Geons said.

Van Geons said it will allow the EDC to leverage the investment in marketing and research already done by RJI and plow new ground for the future.

The EDC and Rowan Jobs Initiative decided there should be one Web site for economic development information in Rowan County and that will be

It essentially sends you to the Salisbury-Rowan Economic Development Commission, which is where the Rowan Jobs Initiative Web site directed visitors anyway.

A new sign at the county-owned Summit Corporate Center "is the only thing out there" which now incorporates the new RowanWorks logo, Van Geons said.

The new industrial park sign details the sites, what's available, what's developed and vital statistics on the various parcels. More here.

Leaders call for updated economic development incentives

Harris News Service

TOPEKA -- Economic development leaders asked lawmakers Monday to upgrade the state's financial incentives for attracting business to Kansas, despite a recent report questioning their effectiveness.

Economic officials from across the state told a legislative panel that better programs are needed for the state to remain competitive with other states.

"We need a better set of modern incentives if we're going to win," said Dave Kerr, president of the Hutchinson/Reno County Chamber of Commerce.

The comments to the Legislature's Joint Committee on Economic Development come several months after a report raised concerns about whether such efforts actually work.

A legislative audit updated in August found it difficult to tell whether the $1.3 billion in taxpayer funds spent from 2003 to 2007 on economic development actually had helped the state economy.

But Lavern Squier, senior vice president at the Overland Park Chamber of Commerce, said officials on the ground know how important such incentives are to wooing businesses.

"The numbers are not the entire picture," Squier said.

The Legislature Division of Post Audit's staff found other factors appear to be more important than economic development spending in producing job growth.

However, Kerr said financial incentives often can become the tipping point for companies that have narrowed its choices to communities with relatively equal profiles.

He also said while many of the state's existing incentives were once creative and good, they've become out-of-date. Many other states now are offering better packages.

The state's focus on reducing income taxes isn't effective for bringing in some multi-state business, Kerr said, because they lack significant tax liability in Kansas. Plus, even those who can use the aid might dislike the burdensome record-keeping requirements, he said.

What companies do want are cash or "near cash" incentives, which help them offset the costs of starting up business in a state, Kerr said.

He also suggested state officials need to set aside money for "closing the deal" with companies. The closest thing the state has to such a fund is only budgeted to have $1.3 million, Kerr said, enough to do maybe only one good project.

Eric Depperschmidt, president of the Finney County Economic Development Corp., said it also was important for the state Department of Commerce to have the flexibility to help communities offer aid for businesses, even when lawmakers weren't in session to write up special packages.

"We don't only have prospects coming in during a five-month period from January until May," Depperschmidt said.

Mike Michaelis, executive director of the Ellis County Coalition for Economic Development, said updating the state's incentives also might make it easier to measure their success.

But lawmakers on the panel said the state's dire budget picture -- a $1 billion deficit during two years -- would make it virtually impossible to put additional state dollars into incentives during the next legislative session, which begins in January.

Sen. Karin Brownlee, R-Olathe, said funding for new initiatives likely would have to come at the expense of existing programs.

"I just don't know where we're going to get the money to make changes," said Brownlee, the joint committee's chairwoman.

Monday, July 20, 2009

Answering the call for jobs

by Duncan Adams | | 981-3324

Y'all come.

Southern twang works just fine -- unless the accent is heavier than a pickup load of grits and the caller ends up longing to speak to a customer service agent in Bangladesh.

Many callers find a drawl charming, said Robert O'Leary, site director for the StarTek call center in Lynchburg.

Western and Southside Virginia host clusters of call centers that collectively employ thousands of people -- offering decent to high hourly wages with benefits. And even in the midst of the recession, many, if not most, are hiring workers to take customers' catalog orders and calls on service, billing and technical problems, to collect debts or to sell services.

What gives?

It's not just about accents.

Numerous forces influence the placement of call centers and their tendency toward prodigious hiring. The industry employs an estimated 7.5 million people nationwide, is infamous for stressful working conditions and consistently notches high rates of employee turnover.

Call center expert Bruce Belfiore said companies use sophisticated site selection models.

"If you have sort of a semiurban or semirural area with fairly high unemployment, an available work force, two-year colleges and fairly low labor costs, you are ripe for call centers," said Belfiore, chief executive officer of BenchmarkPortal, a consulting firm for the industry.

Today, insiders refer to call centers as "contact centers," a phrase that incorporates e-mail inquiries and live Internet chats. Employees are called "agents."

Broadly defined as information technology jobs, call center employment, if nothing else, helps move the region's economy away from traditional manufacturing industries in decline.

Low labor costs

Liz Povar is director of business development for the Virginia Economic Development Partnership in Richmond. The partnership reaches out to companies searching for sites for new call centers. VEDP frequently touts Western and Southside Virginia as "valid and viable" places to do business, Povar said.

She said companies value rural and semirural areas for several reasons: the likelihood of a steady, stable work force and less turnover, comparatively lower wage and real estate costs and the potential to hire members of an employee's extended family. Povar said the ongoing deployment of broadband infrastructure in rural Virginia has helped attract the industry.

O'Leary said state and local incentives also encouraged StarTek to choose Lynchburg.

Once one contact center lands in a community, others tend to follow. More here.

Trash talk won’t win Boeing battle

Trash talk doesn’t win games. It can feel good, rally the fans and rattle a rookie opponent. But it doesn’t put points on the board.

Last week Boeing announced that it had agreed to purchase a South Carolina plant with capacity to spare. Although Boeing officials maintain that no decision has been made regarding the second production line for the troubled 787, the announcement spurred speculation. And, it got our governor talking a little trash about folks down South.

“You can go to South Carolina and pay peanuts and you can get that in return,” said Gov. Chris Gregoire. “That’s not what Boeing’s about. Boeing’s about quality.”

If Washington is going to retain good jobs, we cannot underestimate the competition. Home team cheerleading aside, the governor’s comments could backfire by feeding outdated stereotypes and reinforcing the Northwest’s too often deserved reputation for smug complacency, potentially undermining her efforts to make the state more competitive.

South Carolina is no rookie competitor and, far from Dogpatch, Charleston recently appeared on National Geographic magazine’s list of the 50 best places to live, along with several Washington cities.

In 2008, the Charleston metro area ranked 10th on the Milken Institute’s list of best cities for job creation, behind Olympia and Tacoma, but ahead of Seattle. Inc. magazine calls it one of the best cities for doing business.

All this comes from last December’s Charleston profile in The Economist, which also highlighted the region’s high concentration of industrial engineers and rapidly growing information technology sector. In addition to BMW’s only North American assembly plant, the state’s industrial base includes Michelin, Fujifilm, 3M, ArborGen, Eastman Chemical and other internationally recognized employers.

They’re not paying peanuts. They are getting quality. With the recession pushing South Carolina’s unemployment rate over 12 percent, the state welcomes new investment. One of the few firms capable of generating its own gravitational pull, Boeing would quickly anchor a constellation of related business activity. More here.

Saturday, July 18, 2009

Optimism Abounds on a New Economic Development Strategy

Published: July 17, 2009

ATLANTA — When the construction cranes have halted, business has slipped into a coma and growth has slowed to the speed of Interstate 75 at rush hour, what is a Chamber of Commerce to do?

In Atlanta, the answer is tinged with optimism: develop a strategy for the end of the recession.

For the Metro Atlanta Chamber of Commerce, the region’s future lies not so much in broad buzzword sectors like bioscience or technology, but in bite-size niches within those categories.

Atlanta could become a center for pet pharmacology, digitized medical records and video games — or so says a study released Friday for the chamber’s New Economy Task Force.

“There is no such thing as a technology industry,” said Alan Colberg, a managing director at Bain & Company consultants and the author of the study. “You have to say, ‘We’re going to build wireless telecom.’ Successful cities have gone to a focused area. The industries are more fragmented than they’ve ever been.”

Such a plan, of course, is predicated on the notion that the recession will end. But it also involves the somewhat instructive effort of trying to predict what the economy will look like in recovery, and how cities will compete more for less growth.

“It’s going to be this move from bad economy to next economy,” said Mick Fleming, the president of American Chamber of Commerce Executives. “You can pick your industry, whether it’s retail or banking or computers — it’s all going to be different.”

Other cities are also adjusting their economic development strategies. “Our focus is now on entrepreneurship and innovation as opposed to industry attraction in the old-line sectors,” said Jeff Kaczmarek, president of the Economic Development Corporation of Kansas City, Mo. “In times of economic distress, it’s small business and entrepreneurs who lead the way out of these recessionary periods.” More here.

Thursday, July 16, 2009

How the Yahoo! deal got done

Teamwork,hospitalityhelped win project

By Jonathan D. Epstein
Updated: July 12, 2009, 8:49 AM /

It was three simple words, but they practically took David Kinyon’s breath away when Sylvia Kang said them.

“We are Yahoo!.” For the previous few months, regional economic development officials had been working quietly to win a big project, code-named Project Pilgrim.

But that statement, back in April during a visit by Kang and her site selection team, was the first time Kinyon knew who he was dealing with and just how big a deal he was looking at.

“We were very surprised, and very impressed that Lockport would be considered for a Yahoo! data center location,” said Kinyon, the CEO of the Town of Lockport Industrial Development Agency. “We never imagined that it was Yahoo!.”

What ensued over the next eight weeks was an aggressive collaborative campaign by a host of state and local leaders — up to and including the governor — in a bid to sell Western New York to Yahoo! and seal the deal.

Two months later, a Yahoo! executive stood with a cadre of politicians in a packed room at Empire State Development Corp.’s downtown Buffalo office, and announced that the Internet search giant would build a $150 million East Coast regional data center on 30 acres in the Town of Lockport Industrial Park.

In exchange, Yahoo! will receive 15 megawatts of low-cost hydropower from the New York Power Authority, plus local tax breaks from the town.

The project is expected to bring up to 125 jobs to the site, but officials hope Yahoo!’s reputation will also draw other technology companies to the region. More here.

Wednesday, July 15, 2009

Business group looks at other regional development organizations for direction

Leaders examined other regions
Tuesday, July 14, 2009
News staff writer

When Birmingham leaders began pondering a combination of key area business groups, they looked at similar efforts in Nashville and Pittsburgh for direction.

The Birmingham Regional Chamber of Commerce, the Metropolitan Development Board and Region 2020 officially merged last week. The name and logo of the combined organization will be unveiled at a launch party at The Club this evening.

While today's event will be the culmination of the merger process, officials have said they are aware the hard work begins now.

Janet Miller, senior vice president of economic development at the Nashville Area Chamber of Commerce, knows that's true.

"We did just what you guys are doing. We studied a lot of different cities to see how they structured things," she said. "It does seem like there are two models. One is to have a separate economic development organization and a chamber of commerce. We opted to go the second way, which is to have regional chamber house and staff the regional economic development initiative."

The Music City's economic development agency formed within the chamber 16 years ago, and Nashville has benefited, she said. A business community that can speak with one voice and move with unified effort are strong arguments for having a single organization, she added.

"It's easy to develop internal competition unintentionally when you have it as two separate entities," Miller said. "The worst thing in any regional program is the appearance that people aren't all pulling in the same direction."

The driving force of a main business group has to be economic development, Miller said. Otherwise, it will seem rudderless.

"If you strip out the economic development, the prosperity generation function of a chamber of commerce, it is difficult to define the purpose of a chamber of commerce," she said. "Here, at the Nashville Chamber, we are so clear that our mission is to facilitate community leadership to create prosperity. Period. End of story."

The movers behind the business group merger in Birmingham have also expressed the importance of an economic development focus. In addition to Nashville, the group looked at examples in Austin, Charlotte, Jacksonville and Pittsburgh.

`Staying focused':

Pittsburgh perhaps most closely mirrors the approach Birmingham has taken.

The Allegheny Conference on Community Development started coming together in 1997 and was completed about six years ago. A group of Southwest Pennsylvania CEOs heads the Allegheny Conference and pulled in several other agencies, including the Greater Pittsburgh Chamber of Commerce.

"The idea is that we have everything in one organization," said Barbara McNees, executive vice president of public affairs with the Allegheny Conference and president of the chamber. "The leadership from the organizations felt that in order for us to successfully move the region forward, we really needed everybody to be on the same page."

McNees said it has paid off. The Allegheny Conference has been able to take on big issues in the 10-county region including government reform, home rule, government efficiency, business issues and transportation and infrastructure improvements.

She said the group carries out strategic planning every three years to keep a sharp focus. That sort of unity and focus will be important for the Birmingham group, she said.

"I think it's a matter of staying with the mission and staying focused," McNees said.

Nashville's Miller said one of the major benefits of having a unified business group is that it can command the undivided attention of business and government leaders.

"In a city like Birmingham or Nashville, it's better to keep the depth and breadth of leadership focused into one area rather than splintered among a whole bunch of organizations," she said. "I think everybody ends up feeling like they have a common vision."

State’s economic efforts praised

Magazine says La., Tenn. tops

Advocate business writer
Published: Jul 15, 2009 - Page: 6B

Louisiana landed atop a regional magazine’s ranking of top Southern economic development states for the second time in three years, and the state is showing signs of improving its standing nationally.

Southern Business & Development magazine named Louisiana its 2009 Co-State of the Year, along with Tennessee, based on jobs and capital investment attracted in 2008.

On the national scene, Chicago-based Pollina Corporate Real Estate Inc. has rated Louisiana in the middle of the pack for business climate — but with a decided improvement from 40th in 2008 to 27th in 2009.

Gov. Bobby Jindal touted the Co-State of the Year honor while on his Louisiana Working Tour in the state Tuesday.

“Southern Business & Development ranking us in the top slot in the region is further proof that our efforts to grow our economy are working,” Jindal said in a statement. “And we are only getting started.”

The magazine awards points for jobs and capital investment generated by economic development deals. Louisiana’s 310 points topped Tennessee’s 290 points, but the publication also looks at intangibles, such as the magnitude of the economic development projects and their potential for economic impact. More here.

Friday, July 10, 2009

Leaders learn steps to improve area development

DOBSON — Surry County and economic development leaders came away with a better sense of what needs to be done in order to recruit new industries to the area Tuesday during a Building Readiness Program sponsored by Duke Energy.

Officials with InSite Consulting Group, a national site consulting firm, explained how the recruitment process works and how Surry County can improve the way it markets itself to potential industries.

“Site selection is like a funnel. It’s like a tornado for crying out loud. There are four phases to this insanity,” said Tonya Crist of InSite.

She explained that Phase I includes regional identification. She said that Web sites are now intensely important to industry recruitment.

“Surry County has a fantastic Web site. My hat’s off to you in that regard,” Crist said.

She said Phase I also includes a “product” which is made up of sites, buildings, industrial areas and parks. Labor force also greatly influences what types of industries will look at an area, she said.

“We need product and people. You have to ask yourself if you have both,” Crist said.

Phase II and III that is conducted by a site consulting firm includes a Request for Information process and community visits.

“Some of the ‘must haves’ are a dedicated staff who can supply research and support, effective and fast communication of assets, professional, astute project management. In Surry County, you are very professional. Your team did an outstanding job,” Crist said.

Phase IV includes incentives, real estate and quality of life issues.The study included research on the old Perry Manufacturing building on Woltz Street in Mount Airy. The study also identified 30 empty buildings around Surry County which are available for manufacturing.

One of the owners of the former Perry Manufacturing building, David McCray, was on hand for the event.

Rob Cornwell, who did the presentation in tandem with Crist, pointed out some of the things that could be changed about the site to make it more appealing. He suggested improving the signage of the area, work on the surrounding landscaping and removing the existing racks. He said marketing the building as a 121,000-square-foot property instead of the 191,000-square feet that the department of commerce has listed would be an improvement as well. He explained that 70,000-square feet of the property is being used for storage and is not available for manufacturing space.

When asked “What is one of the fatal flaws of Surry County?” by a member of the crowd, Cornwell pointed out that the 14-foot ceilings at many area plants is a concern. He said ideally, ceiling heights would be above 30 feet, although not many buildings in the Triad area boast those heights.

One of the positives about Mount Airy that Cornwell pointed out is the excess 5.5 million gallons of water and sewer capacity.

Overall, Crist and Cornwell said the people working in the areas of economic development in Surry County are doing an outstanding job.

“The Surry County team showed great enthusiasm for their community from the moment we arrived,” Crist said. “It is critical that the EDP people are excited about what they do. People’s passion is captivating. This crowd did an amazing job. We really enjoyed the community tour.”

Ted Ashby, chairman of the Surry County Economic Development Partnership, Inc., thanked everyone for attending the Tuesday afternoon event.

“We are all in the same boat heading in the same direction,” said Ashby.

Contact Mondee Tilley at or at 719-1930.

Suffolk plans incentives to lure tech companies

By Dave Forster
The Virginian-Pilot© July 9, 2009


The city hopes to boost its profile as a high-tech hub by offering incentives for companies in the computer and science fields.

Northeastern Suffolk is already a hotbed for modeling and simulation research, with U.S. Joint Forces Command and the Virginia Modeling, Analysis and Simulation Center.

To augment that, a plan is under way to create zones where new or expanding technology companies can get rebates on business license fees and personal property taxes. The Economic Development Authority reviewed a proposal Wednesday and plans to consider it next month.

The two proposed zones would cover large swaths of northern Suffolk and the greater downtown area to expand the reach of the city's existing tech corridor, said acting Economic Development Director Kevin Hughes.

"We want to show them we're forward-thinking," Hughes said.

The zones expire after 10 years. About 20 localities in Virginia have one or more, including Franklin and Newport News. Hampton had two that expired last year but has a third that will last until 2012, said Amber Callahan, the city's marketing and research manager in economic development.

Buena Vista, a city of about 6,500 people southwest of Charlottesville, has two zones.

"It's not something that we've seen businesses locate here as a result of, but it's certainly a nice tool to have to help seal the deal," said Tim Reamer, the city's economic development director.

Cities can tailor their incentives. The initial proposal in Suffolk would require businesses to have at least five employees in the city and require it to fill at least 2,500 square feet of new or vacant space or expand by that much.

The list of businesses that would qualify include modeling and simulation, computer systems design, scientific research, software and Internet publishing, data processing and telecommunications.

"We wanted to be clear that it's not just, 'Hey, I use a computer, so I count as technology,' " Hughes said.

City Manager Selena Cuffee-Glenn asked her economic development staff to run some numbers on the potential impact of the incentives on revenues.

Historically, companies that would qualify for the incentives have opened in the city at a rate of about two per year, Hughes said.

Dave Forster, (757) 222-5563,

Thursday, July 02, 2009

Rival states hope California's economic woes will send businesses their way

By Dale Kasler
Published: Thursday, Jul. 2, 2009 - 12:00 am Page 1A

California's budget crisis is turning into a worldwide spectacle that could harm the state's business climate – and chase companies away.

Rival states are revving up their economic-development efforts as global news outlets fixate on the $26.3 billion deficit and the IOUs the state is expected to issue today.

California companies are making inquiries to out-of-state groups like the Economic Development Authority of Northern Nevada. Besides asking about tax rates and other expenses, many are worried about California's "general overall chaos, that uncertainty," authority marketing director Julie Ardito said from her office in Reno.

The recession is freezing many companies in place. But as the economy begins to stir, CEOs are starting to compare the costs of doing business in California vs. going elsewhere. Ardito said the volume of calls to her organization – from California and other states – has jumped 40 percent from a year ago.

Jack Boyd of the Boyd Co., a relocation consultant in New Jersey, predicted "a new wave of companies … leaving California." Many other firms looking to reach California consumers will do so from locations just outside the state, he said.

Boyd said Sacramento's budget problems are feeding the perception that California is a high-cost, overregulated, out-of-control place to do business.

"The California business climate has always been difficult," he said. "This is a whole new overlay to that."

The media aren't helping California's cause. On Wednesday, former Gov. Gray Davis was interviewed on CNBC over a headline that said, "The IOU State." London's Financial Times ran a lengthy piece on the IOUs, while a Washington Post column was headlined, "California: A Dream Decimated." An Associated Press story said that because California is so big, its economic woes could delay the national recovery. More here.

Wednesday, July 01, 2009

At Chicken Plant, a Recession Battle


DOUGLAS, Ga. -- This small town was devastated in February when its largest employer, Pilgrim's Pride Corp., said it would close a chicken-processing plant as part of the company's bankruptcy filing.

Since then, city and county officials have been working to find a buyer who could save the plant's nearly 1,000 jobs and $300,000 in annual county tax revenues. But there's a problem: Pilgrim's Pride isn't eager to sell. The standoff shows how two important imperatives in a recession -- creating jobs and cutting excess capacity -- can collide.

Pilgrim's has so far rejected a $32 million bid for the plant from Amick Farms LLC of Batesburg, S.C., company and city officials say. Another chicken company took a look and decided Pilgrim's asking price was too high, say people familiar with the matter. City officials say the company kept a prospective bidder from touring the plant, making it a challenge to market.

"We've played by the book," says JoAnne Lewis, executive director of the Douglas-Coffee County Economic Development Authority. But "there has been no meeting in the middle. We feel like we're part of a giant game."

Pilgrim's says it hasn't been offered a fair price for the plant and is cautious about letting rivals see its manufacturing processes. Company emails and court documents suggest the Pittsburg, Texas-based company also is concerned about adding capacity in an already struggling industry. More here.