Tuesday, January 25, 2011

Marketing Maryland

by Lindsey Robbins | Staff Writer

Standing confidently in the brightly lit dining area of his Volt Restaurant, co-owner and television "Top Chef" finalist Bryan Voltaggio faces the camera, as a block of text beneath asserts: "Living here isn't everything, it's the only thing."

A final statement goes on to describe how Maryland contributes to businesspeople such as the Frederick restaurateur, by having the "best schools, finest hospitals, highest incomes" and, of course, "top chefs."

Voltaggio is one of the business stars featured in the Maryland Department of Business and Economic Development's latest marketing campaign. The MaryLand of Opportunity campaign represents the department's cultural shift from using its internal expertise to sell the state to using the voices and stories of the state's businesspeople.

But while the department fights for the resources it says it needs to keep its marketing efforts in the spotlight, some business leaders question whether those efforts are enough to retain current companies and lure new ones.

"Maryland has 49 predators ... trying to seize our gazelles — the fastest-growing companies," said Georgette "Gigi" Godwin, president and CEO of the Montgomery County Chamber of Commerce. "We think Maryland could be doing more, but we cannot underestimate how determined these predators are .... We have to guard against being complacent."

She said the DBED campaign is only one of the many steps Maryland must take to attract businesses and grow its tax base.

"In our experience, word-of-mouth marketing is often most influential, and local professionals frequently discuss business issues in person and via social media," M. Richard Adams, president and CEO of the Frederick County Chamber of Commerce, said in a statement. "Right now, taxes are a major concern for businesses, and recent reports show that Maryland's ranking is not favorable when compared with other states."

Showcasing state's attributes

"The story of Maryland business is best summed up with location, innovation and education," said Andrea Vernot, DBED's assistant secretary for marketing and communication. "We are a land of opportunity, and we want to showcase why."

Vernot stressed the state's enviable proximity to Washington, as well as the presence of many federal agencies, such as the National Institute of Standards and Technology in Gaithersburg and NASA's Goddard Space Flight Center in Greenbelt. She also pointed to Maryland's well-known institutions of higher education, such as the University System of Maryland and Johns Hopkins University.

"We're working to solve tuberculosis and find cures for cancer," Vernot said, referring to the state's innovation strengths, which play well off the universities.

She also added that Maryland's highly educated work force helped keep the state's unemployment rate lower than the national average during and since the Great Recession.

"There was no better time to have a more proactive campaign," Vernot said, emphasizing that her department works to capture all these attributes in its latest marketing efforts.

The MaryLand of Opportunity campaign reaches an estimated 12,000 people daily through conventional advertising, such as business publications and outdoor transit displays, and digital media, although DBED lacks the budget to pay for as many placements as it has in the past, Vernot said. The department spent $1.2 million in earned media placements in fiscal 2010, increasing its mailing list subscribers from 5,000 to 18,000.

More than marketing needed

While business leaders generally approve of DBED's direction, they urge that more must be done to make Maryland competitive.

"Maryland needs a sustained, consistent campaign or message displayed about the assets the state has, with respect to why businesses should grow here," said Donald Fry, chairman of the Greater Baltimore Committee.

The committee released a report in December that called for eight "core pillars" for business growth, highlighting the need for a business marketing strategy that is aggressive, coordinated, long-term and well-funded.

Fry said DBED has shown improvement in the past year and a half, but the department must continue to help key policy figures recognize the value of marketing Maryland's business community and fight budget cuts.

"This is a good foundation," he said, "but we need a consistent message so companies realize these campaigns aren't just quick hits."

M.H. Jim Estepp, president and CEO of the Greater Prince George's Business Roundtable, said the state's biggest hurdle is a perception that it is not as "business-friendly" as others in the region. Because of this, Estepp said the legislature should not introduce bills that burden the business community. Even if certain bills are not passed, their time in the spotlight can be enough to deter businesses, he said.

"This is a competitive thing. Virginia will beat the pants off us if we don't work hard," Estepp said.

He also emphasized the strong outreach efforts by DBED Secretary Christian S. Johansson and the efforts of Comptroller Peter V.R. Franchot (D) to embrace business interests.

When it comes to its business climate, Maryland remains a blank slate to some businesspeople. A 2008 survey by Development Counsellors International in New York found that among 181 executives surveyed, Maryland was seen as most favorable by 0.5 percent and least favorable by 1.6 percent, compared with Virginia's 5.8 percent and 0.5 percent, respectively.

Against such a backdrop, marketing campaigns can help show a state's assets, said Andrew Levine, president of the organization. Development Counsellors International works with 400 jurisdictions nationwide to focus on economic development marketing.

The organization's surveys show a capable work force is the No. 1 factor in a company's decision to locate, with overall operating costs No. 2, Levine said.

Emphasizing the positive

Emphasizing positive assets — such as Maryland's educated work force — can help offset the areas where the state still struggles, such as its tax and regulatory structure, said Kathleen T. Snyder, president of the Maryland Chamber of Commerce.

In comparison to Virginia, Maryland has higher corporate taxes, combined sales taxes, real property taxes and combined income taxes, according to an Ernst & Young study issued by the chamber. In some cases, the difference is as much as 2 percentage points between the states, according to the study.

Snyder said she has been glad to see DBED working with other agencies to streamline state regulatory processes, such as the time it takes to secure construction approval.

"We need to be able to say Maryland is open for business," she said. "Public policy has to be made with an economic focus in mind."

Richard Parsons, president of Parsons & Associates in Derwood and former president of the Montgomery Chamber of Commerce, argued that a company's location decisions are influenced more by the business climate than marketing efforts.

"The state does a good job marketing our attributes, but where we need to work is improving our business climate," he said. "Companies have to decide if our work force and proximity is worth spending the extra time and money."

Parsons also questioned whether Maryland has the resources to put into its marketing strategy.

Companies hire site location consultants to study overall costs, said Greg LeRoy, executive director of Good Jobs First, a corporate and government accountability organization in Washington. He said these consultants rarely pay attention to marketing.

"As long as Maryland is perceived as a state that taxes its citizens higher than neighboring states and one with a negative regulatory climate, we will continue to lose to others," said Ellen Sauerbrey, chairwoman of Maryland Business for Responsive Government in Towson. "No matter what campaign we wage, those businesses considering location have people that specialize in looking at these factors."

But LeRoy also acknowledged the value of marketing in tempering perceptions of a jurisdiction's business climate. Campaigns, such as DBED's, that involve business leaders addressing their peers can be particularly effective, he said.


State looks to nurture local firms

Detroit Free Press Business Writer

As Bill McGivern built his piping supply business over the years, he quietly stewed over what he saw as the State of Michigan's neglect of homegrown businesses.

Trade missions to China and other distant locales left McGivern wondering, "Why not take care of our own?"

So McGivern, CEO of the Macomb Group, a Sterling Heights-based supplier of industrial piping, said Friday that he was overjoyed to learn of Gov. Rick Snyder's pledge to do some "economic gardening" in Michigan.

The concept means nurturing smaller firms in the state with a variety of new economic-development tools, instead of hunting big out-of-state firms to come to Michigan.

Snyder's economic gardening concept is not new. Agencies such as the Michigan Economic Development Corp. have been working on business-retention programs for years.

But the new emphasis Snyder, a former venture capitalist, placed on growing local firms promises to put a different face on economic-development efforts throughout the state.

Gardening approach a way to help Michigan economy over time
Gov. Rick Snyder's call for more economic gardening in his State of the State address this week may have sounded fairly innocuous. But it could represent a significant change in the way Michigan attracts and nurtures new businesses.

Put simply, the term means nurturing firms already in Michigan rather than hunting big firms elsewhere to relocate here.

"One of the criticism that has been leveled for quite some time is that economic development has paid far too much attention to chasing big projects around the country and around the world," said Mike Finney, Snyder's choice to run the Michigan Economic Development Corp.

Bill McGivern, CEO of the Macomb Group, a Sterling Heights-based piping supply company, calls hunting for out-of-state firms an "anywhere-but-here" strategy. McGivern said he was "overjoyed" to hear of Snyder's new emphasis on homegrown firms.

Economic development agencies, such as the MEDC, typically lure big outside players with a set of tools that include tax abatements, job training funds and infrastructure improvements.

But gardening requires a whole new set of tools. They include giving sophisticated market research to smaller firms that otherwise couldn't afford it. Gardening means playing matchmaker to bring together small firms in need of, say, a new chief financial officer and the people who have those skills.

A third new tool is providing short-term consulting to entrepreneurs who know a lot about their product or service, but not much about marketing or business strategy.

Don't look for Snyder to abandon the hunting approach completely. Rather, look for this former venture capitalist to try to shift the balance at MEDC and other agencies to include more gardening activities.

"MEDC has, in fact, engaged in economic gardening, but what we're going to do is enhance it and make it a much more robust effort," Finney said this week.

Advocates say the gardening approach -- paying more attention to small, growing firms than to gigantic out-of-state companies that might build a factory in Michigan -- delivers a bigger boost to the state's economy over time.

"It is where the jobs are," said Rob Fowler, president and CEO of the Small Business Association of Michigan. "And the truth is, it's always been where the jobs are. But one and three and four jobs at a time don't get much attention."

Even the size of the target firm is different in gardening. Agencies hunting out-of-state firms often go after big ones with hundreds or thousands of employees. Gardening targets much-smaller firms at what entrepreneurs call the second stage of development.

"Second stage" typically refers to young companies with 7 to 99 employees, $1 million to $50 million in sales, and a good growth potential.

Fowler said no state anywhere yet offers a comprehensive program of economic gardening, so Michigan could show the way.

"We have a chance to lead the nation for a little while," Fowler said. "We're going to have to run fast. But that window's open right now for Michigan, and I'm delighted this governor has seen it."

Contact John Gallagher: 313-222-5173 or gallagher99@freepress.com

Cities band together to lure investors

By VITO PILIECI, Postmedia News January 22, 2011

The Ottawa Centre for Research and Innovation has banded together with economic development groups in 10 other major Canadian cities to lure more international technology investment to Canada.

The group, calling itself the C-11, has launched the website ConsiderCanada.com,which aims to promote successful investments in technology throughout Canada's largest cities and to give international businesses reasons to consider Canadian locations for their future investments.

The cities involved are Ottawa, Montreal, Quebec City, Toronto, Vancouver, Calgary, Edmonton, Winnipeg, Ontario's Waterloo Region, Halifax and Saskatoon.

"Collaboration is the new competitive advantage," said John Jung, chief executive of Canada's Technology Triangle Inc. in Waterloo Region, a C-11 partner.

"Banding together to share knowledge, build consensus on Canada's selling points and getting out a consistent message around the world allows the C-11 to achieve more together than working in isolation."

Until this point, economic development agencies from each of the C-11 municipalities have been lobbying international businesses individually, which often placed them in competition with one another for foreign investment. Working together allows the agencies to prevent duplication, reduce marketing costs, refine their "messaging" and help big international business make quicker decisions about where in Canada to set up shop.

All of the municipalities involved have technology clusters that will make them attractive to various international players.

For example, Ottawa has a strong cluster of networking talent, thanks to companies such as Nortel Networks and JDS Uniphase in the past.

Montreal is particularly strong in software development, Calgary is a leader in nanotechnology, and Waterloo's strength lies in mobile devices thanks to the presence of Research In Motion Ltd.

Mike Darch, executive director of OCRI's global marketing team, said that, even though the cities each offer their own strengths, he still expected them to compete for new business.

"We have to make sure that potential trading partners and investment partners aren't turned off by hearing 11 voices and saying, 'I don't want to listen to you all,' " Darch said. "We want to get a unified message out."

Cities are increasingly taking a larger role in positioning themselves to attract international investment. Darch pointed to the Jan. 17 announcement by Ciena Canada Inc., which plans to invest $900 million into its Ottawa research and development labs over the next five years.

The Baltimore-based company now performs more than 50 per cent of its research and development in Ottawa. Similarly, Huawei Technologies Co. Ltd. announced plans for a $50-million research and development lab in Ottawa last spring,

The C-11 initiative started in 2007, when an economic development group from Calgary proposed that the Canada's largest cities should work together. The idea surfaced again three months ago, prompted by Canada's startling performance during the economic downturn.

Canada is now the only G7 nation to have recouped its losses from the recent recession. Coupled with a strong banking system and wealth of natural resources, the country is quickly becoming a magnet for international investment.

The C-11 will see each of the 11 economic development agencies share the costs of the international marketing initiative.

Darch said the group was looking to secure federal funding for its initiative.

Read more: http://www.montrealgazette.com/business/Cities+band+together+lure+investors/4148588/story.html#ixzz1C6ZSHhDI

Titletown: Green Bay Casts a Shadow Over Game in Chicago

Posted by Dale Buss on brandchannel.com January 21, 2011

They aren’t even playing the actual game on the “frozen tundra” of Lambeau Field in Green Bay this weekend. But the national media still can’t get enough of the city that is the unique home of the Green Bay Packers, who are playing the Chicago Bears – in Chicago – on Sunday afternoon for the National Football Conference championship and the right to advance to the Super Bowl on February 6 in Texas.

Latest to step up and profile “Titletown” – so-named during the Packers’ successful era in the Sixties – is the Washington Post, with a story this week about Green Bay, its devotion to the Packers, and how denizens are gearing up for the big game that will actually unfold a couple hundred miles to the south in Soldier Field.

Sure, the story starts out with a few patronizing word choices which indicate to the sophisticated East Coast reader that he or she is about to descend into Flyover Country – “folks” and “supper club” and “proprietor,” all in the first two paragraphs.

But generally, Post reporter Barry Svrluga likes what he saw during his visit to the 100,000-population burg, by far the smallest U.S. city to support a major professional sports franchise.

The reality is remarkable in this day and age: a small town that remains the lifeblood of a strong, storied entrant in a multi-billion-dollar entertainment juggernaut dominated by billionaire owners and big-city TV markets.

As a Wisconsin native, lifelong Packers fan, and actual Packers “shareholder” — full disclosure: I donated $200 to the Lambeau overhaul several years ago, but the “stock” is worthless — I’ve got a vested emotional interest in seeing appreciation for the home of Lombardi, Nitschke, Starr, Favre (for most of his career) and the current Packers operation.

But there’s no denying that, whatever happens in the game on Sunday, the Green Bay Packers remain one of the feel-good brands in professional sports.

Friday, January 21, 2011

Christie Hopes to Lure Businesses Fleeing Illinois Taxes

Watch out, Illinois: New Jersey wants your businesses.

It is a time-honored tradition for mayors and governors of neighboring cities and states to compete for large corporations with tax breaks and other incentives. And so it was no surprise that the steep new tax increases approved this week by the governor of Illinois inspired the kind of trash talking heard more often from athletes than from state chief executives.

“Escape to Wisconsin,” chortled Scott Walker, the state’s Republican governor. Mitch Daniels, the Republican who runs Indiana, compared Illinois to the Simpsons — “you know, the dysfunctional family down the block?”

But New Jersey? Trenton is about 900 miles from Springfield, Ill. Jersey City is a 13-hour drive from Chicago. None of that deterred Gov. Chris Christie, a New Jersey Republican who spent much of last fall stumping around the country, from speaking up even before Gov. Patrick J. Quinn of Illinois, a Democrat, had signed the legislation.

“I’m going to Illinois,” Mr. Christie said in an interview on Wednesday. “I mean soon. I’m going to Illinois, personally, and going to start talking to businesses in Illinois and get them to come to New Jersey.”

Mr. Quinn was unfazed. “Well, lots of luck to them,” he said, “but that’s not going to happen.”

Illinois raised its personal income tax rate to 5 percent from 3 percent, and its business income taxes to 9.5 percent from 7.3 percent. Despite the eye-catching increases in Illinois, New Jersey may have a tough time making the case that it offers businesses a friendlier environment.

New Jersey’s personal income tax — 6.37 percent for married couples earning more than $150,000 a year, and 8.97 percent for those making more than $500,000 — is among the nation’s highest. The state’s business income tax is 9 percent for businesses with income over $100,000, so Illinois’ is now somewhat higher, but Illinois has lower sales and property taxes.

In October, the Tax Foundation, a nonprofit research organization, rated Illinois as having the 23rd-best tax environment for businesses among the states; if the new increases had been in place then, the foundation says, Illinois would have ranked 36th.

New Jersey, however, stood 48th in the foundation’s assessment, after several years in last place — a dubious distinction taken over by New York. (Mr. Daniels seems to have more room to gloat than Mr. Walker: the foundation ranked Indiana 10th and Wisconsin 40th.)

Mr. Christie acknowledged that over all, taxes remain higher in New Jersey, but he said he could offer something more valuable, certainty.

“The pitch I’m going to make to businesses in Illinois is, ‘With Pat Quinn as your governor and this Democratic Legislature, you can guarantee this is just the beginning,’ ” Mr. Christie said. “As long as I’m governor, you’re not going to see that happen.”

It remains to be seen what kind of campaign for defections Mr. Christie has in mind. His administration would not say when he will make his trip to Illinois, or what companies New Jersey will go after.

In an e-mail, Maria Comella, the governor’s communications director, wrote, “We have already begun business outreach, but nothing else cemented enough to be printed in the paper yet.”

Monday, January 17, 2011

It's Always Creative at The Greater Philadelphia Tourism Marketing Corporation

Posted by Abe Sauer at brandchannel.com on January 14, 2011 05:30 PM

New billboards along I-95 in Philadelphia, Route 30 in New Jersey and on the Pennsylvania Turnpike, urge motorists to go to VisitPhilly.com to submit a "love letter" to Philly. One lucky participant's message will end up on a highway-side billboard (and maybe on an ad resume!)

The Greater Philadelphia Tourism Marketing Corporation (GPTMC) is jacking up the "love" part of "city of brotherly love" as a new part of the “With Love, Philadelphia XOXO" campaign. It's just the latest attempt to cultivate and foster both a sense of civic pride and communicate that Philadelphia is more than many outsiders might think. And as with most crowd-sourced campaigns, the journey, not the publicized goal, is the goal.

It's just the latest move from a municipal branding agency that demonstrates how a lot of creativity and a willingness to work outside the normal branding channels, can turn low-budget strategies into big awareness and real results.

Of course, while it is a fun reward to one participant, the final billboard is somewhat inconsequential to the objective of the "Love Philly" campaign. Encouraging participation in, and social network promotion of, a positive activity associated with Philadelphia is the real objective.

The idea is that users will go the the VisitPhilly.com site, create a billboard entry, and then that entry will be emailed back to the creator who can then share it on Facebook and/or Twitter, thus exponentially increasing the reach of the promotion.

The GPTMC has approach promoting the Philly brand in creative ways before. In 2007 it launched Uwishunu, a branding campaign that aimed to "reveal Philadelphia's unconventional and contemporary side and show off the city as a hip, urban destination that fosters the creative class." Central to the endeavor was the blog Uwishunu.com, which, we're impressed (and a little surpassed) to see is still going string with what looks to be a strong, and interactive, following. (Impressed because often those sorts of municipal branding projects are left to wither and die online after the campaign ends.)

And current Philadelphians aren't the manly target. Meryl Levitz, president and CEO, GPTMC, says, “We think the billboard contest is something both residents and visitors can have fun.”

GPTMC is optimistic about the overall reach of the campaign, with 400 entries already only one day after opening the contest. By Thurday, it was 1,000. One previous promotion netted 2,000 entries. With a total of three weeks to run, the GPTMC could expect more than that. Measuring the social network outreach element of the campaign will be the real challenge.

As with many long-term city branding endeavors, GPTMC is challenged with counteracting both large-scale public events and stereotypes. For example, the recent postponement of an NFL game in the city had some blaming Philadelphia, and not the NFL, for a "wussy" approach to bad weather.

A great example of how GPTMC has leveraged, instead of fled from, potentially rough publicity is how the agency seized the opportunity to leverage the cult TV comedy It's Always Sunny in Philadelphia.

For the unaware, It's Always Sunny in Philadelphia is about five irredeemable Philadelphians whose self-centered lives revolve around substance abuse and amusing themselves at the misfortunes of others, including each other. Naturally, the show has a loyal following. What isn't so natural, for a branding agency anyway, is that GPTMC moved immediately to embrace the show. GPTMC created a site Visitphilly.com/sunny to spotlight the memorable locations visited by the characters. A GPTMC spokesperson told us, "We decided to give visitors the tools they need to explore the city just like The Gang," adding that visitors to the site "spend an average of 2.5 minutes on the page, more than twice the normal average for the site."

Then last June, GPTMC sponsored the press event and opening night for Mac’s Tavern, an establishment opened by stars of the show.

The GPTMC has to find creative ways to maximize its reach as the agnecy has just 42 staff members, including advertising, communications, web (visitphilly.com and uwishunu.com), cultural tourism (www.visitphilly.com/philly360), research, special projects (including its hotel program) and accounting, serving a greater Philly area of nearly six million.

Sunday, January 16, 2011

Groups work together to bring more jobs to Shreveport area

By Bobbie J. Clark • bobbieclark@gannett.com • January 16, 2011

Six years ago, local economic development groups were working on about 16 projects in Caddo and Bossier parishes.

Today, there are 44, according to the North Louisiana Economic Partnership.

The boom has been fueled in part by the discovery of the Haynesville Shale natural gas deposit, but also a concerted effort by the NLEP and the Greater Bossier Economic Development Foundation, or GBEDF, as well as local governments and chambers of commerce, to market Northwest Louisiana to companies all over the country.

"We've gotten a lot more aggressive at promoting the area, and we've been pretty successful over the last five or six years," said Kurt Foreman, NLEP president.
In 2010 alone, the NLEP was instrumental in completing 10 projects, resulting in about 1,000 new jobs and $150 million in capital investment.

Foreman said most of the projects were expansions of existing operations in the oil and gas industry, but not all.

For example, the NLEP helped bring Millen Air, a fixed-base operator, to the Shreveport Downtown Airport. The group also helped with the expansion of Red River Pharma at the InterTech Science Park.

In both those projects, the NLEP worked closely with area partners, such as the Shreveport Airport Authority and Biomedical Research Foundation.

Foreman said the key to securing these projects has been the partnerships they have with local governments and business groups across north Louisiana.

The NLEP's ability to connect companies with those partners has become a primary function of the group.

For example, when a proposal to build a hub for trucking company Quality Transport fell through in Caddo Parish, the GBEDF was able to find a place for the company at its Commerce Industrial Park.

Construction already has started on the facility, and the company's ownership estimates they will have 110 new jobs at an annual salary of $55,000 each.

David "Rocky" Rockett, GBEDF's executive director, said it communicates regularly with the NLEP.

"When the opportunity arises to work together, we do," he said. "My area is Bossier, but at the end of the day, we are all trying to accomplish the same goal — to increase jobs."

State agency approves tax credits, leaves locals fuming

Panasonic mulls $100M move to Newark
State agency approves tax credits, leaves Secaucus fuming

by E. Assata Wright
Reporter staff writer Hudson Reporter
Jan 16, 2011

Secaucus officials said they were blindsided Tuesday when they learned a state economic development agency has approved an application from Panasonic to take advantage of a tax incentive program if the company moves from Secaucus to Newark.

Under the program, Panasonic, which currently leases a 1 million square foot site at 1 Meadowlands Parkway in Secaucus, would receive incentives worth more than $100 million through New Jersey’s Urban Transit Hub Tax Credit if it moves to Newark.

It’s a deal the company would not get if it remains in Secaucus, since Secaucus is not eligible under this tax incentive program.

For Secaucus, Panasonic’s departure would mean the loss of roughly 850 jobs and a likely hit to property taxes generated from the 1 Meadowlands Parkway site.

The town is unhappy that the state, through its Economic Development Authority (EDA), would approve a tax incentive that attracts business to some municipalities at the expense of others.

“Realistically, how can Secaucus compete when the company’s been offered $102 million in tax credits to move to a city that’s practically next door?” asked an angry Secaucus Mayor Michael Gonnelli last week.

Misuse of business retention program?

At the heart of this controversy is whether or not the state is misusing the Urban Transit Hub Tax Credit and forcing New Jersey municipalities to compete with one another to attract business.

Mayor Gonnelli and Town Administrator David Drumeler insisted last week the tax credit is really meant to attract out-of-state companies to settle in New Jersey. But occasionally, they argue, the credit is used to lure tax-paying companies away from one city and toward another where the company can get away with paying less money in taxes. In other words, the credit creates an unlevel playing field among municipalities.

Signed into law by former Gov. Jon Corzine in 2008, the Urban Transit Hub Tax Credit Act gives tax credits to certain companies that employ at least 250 full-time workers and build or rent office space in or near nine designated urban transit communities. The law specifically identifies those nine urban transit hubs as Jersey City, Atlantic City, Elizabeth, Paterson, Camden, Trenton, New Brunswick, East Orange, and Newark.

To qualify for the tax credit, a company must make an investment of at least $75 million in its new city. The tax credit equals 10 percent of the company’s real estate investment.

“The main goal of the bill was the bring jobs into the state, and not to take jobs from one community and just move them to another. Because that really doesn’t do too much for the economic development of the entire state,” said Drumeler last week.

In a Dec. 14 letter sent to Lt. Gov. Kim Guadagno – Gov. Christopher Christie’s point person for business and economic development in New Jersey – Mayor Gonnelli was more pointed.

“[O]f significant concern is the offering and use of this program to foster intra-state relocations from one municipality to another,” Gonnelli wrote. “This is not good public policy and cannot be permitted…Under no circumstance can the state count current New Jersey jobs as ‘new jobs’ for the purpose of a net benefit analysis…If the jobs are truly ‘at risk’ of leaving New Jersey, then the state must work with the business and the current host municipality to develop a benefits package to retain that business.”

Drumeler and others also noted that if Panasonic were to move to Newark, that city would not see a boost in real estate taxes since the tax credit would give the company a 10-year abatement on property taxes.

The state responds

However Caren Franzini, CEO of the state EDA, said Wednesday that when Panasonic approached the agency, the company said it was ready to move from the Secaucus site where it has been based since 1976 and was seriously considering a site out of state.

“The state of New Jersey makes it very clear, our role is never to [pit municipalities against one another],” she said. “In this case, the company wanted to apply for this benefit to see whether or not they could get approved for it. They’ll now take that information and compare it to offers [they have] in other states.”

“We have a number of incentives that we have at our disposal to attract business, to either relocate or remain in New Jersey,” Franzini continued. “And Secaucus has actually benefited in the past from some of these other programs.”

Specifically, Franzini pointed to several businesses that were lured to Secaucus and took ad vantage of he state’s Business Employment Incentive Program. Through this program the EDA awards grants to qualified businesses for up to 10 yeas. The grants equal 10 to 80 percent of the total amount of state income taxes generated by the jobs created by the companies

The Major League Baseball Network, Franzini noted, was lured away from Harlem in New York to Secaucus under the BEIP program, as were Alice & Olivia LLC, Ernst & Young, and Scharff Weisberg.

Franzini plans to meet with Gonnelli Friday, Jan. 14 to discuss ways the EDA might help the town attract new businesses to town to fill the void should Panasonic pull up stakes.

Counter offer in the works

In the meantime, the town, Gonnelli said, is prepared to fight to keep Panasonic in Secaucus.

The mayor said he met with representatives from Hartz Mountain Industries, which owns Panasonic’s current corporate space on Meadowlands Parkway, the day after the EDA decision was announced to devise a counter offer to entice Panasonic to stay where it is. Rough details of a counter offer were outlined at that meeting, including an offer by Hartz to rebuild Panasonic’s Meadowlands Parkway home.

Town officials have also approached State Assemblyman Vincent Prieto, a Secaucus resident, and other elected leaders who represent Secaucus in Trenton to lobby for changes to the Urban Transit Hub Tax Credit Act.

A Hartz spokesman contacted last week said the company is concerned about the possibility of losing Panasonic and confirmed that Hartz representatives met with Gonnelli on Jan. 12 to discuss the situation. The company, he said, had no additional comment regarding the matter at this time.

According to the Office of the Secaucus Tax Collector, Hartz paid a total of $1.4 million in real estate taxes last year for the 1 Meadowlands Parkway site. This amount includes property taxes paid to Hudson County, the local school district, and the municipality.

E-mail E. Assata Wright at awright@hudsonreporter.com.

Indiana Moves to Attract Illinois Employers

The Indiana Economic Development Corporation is already targeting companies that have publicly stated they are looking to leave Illinois. The revelation was included in Governor Mitch Daniels' budget presentation to the State Budget Committee.

Lawmakers in Illinois approved massive tax hikes this week, and Governor Pat Quinn signed the increases into law Thursday.

Once signed by the state's governor, Illinois' corporate tax rate will jump 46 percent and the personal rate will increase 67 percent.

The IEDC has told Inside INdiana Business an aggressive marketing strategy will be employed in an effort to draw business away from the neighboring state.

A bill to decrease Indiana's corporate income tax rate is being filed at the Statehouse. State Senator Brandt Hershman (R-7) says it is the result of several hearings into the issue, not a sudden reaction to developments in Illinois.

Source: State of Indiana, Inside INdiana Business

Decline in U.S. Manufacturing: to Cluster or Diversify One's Economy?

A recent Brookings Institution report looks at the nearly 30-year impact of manufacturing's global realignment on US metropolitan areas, finding those with the highest dependence on manufacturing were impacted in several negative ways in addition to the losses in manufacturing. In particular, the resilience of the most manufacturing-centered economies — their ability to transition employment into other sectors — was particularly poor, many experiencing below national average growth in jobs and wages. Brookings reports only 3 of the 114 metro areas in the study exceeded the national averages for both jobs and wages: Charlotte, Manchester and Portland, ME.

Diversity, rather than clustering, appears to have been more closely related to growth during the period, Brookings finds, albeit a modest relationship. The inflation-adjusted average wage grew by 16.9 percent between 1980 and 2005 in the 38 metropolitan areas that were most industrially diverse in 1980, but by only 9.5 percent in the 38 areas that were least industrially diverse. In addition, the metropolitan areas that lost the fewest manufacturing jobs gained the most non-manufacturing and advanced service jobs.

Somewhat surprisingly, the report states "a metropolitan area's industrial diversification or concentration had little to do with its job growth." This leaves open questions for economic developers as to the appropriateness or potential impact of either cluster or diversification strategies for encouraging economic development.

More information is available at: http://www.brookings.edu/reports/2010/1216_manufacturing_wial_friedhoff.aspx.

What Attaches People to Their Communities?

What makes a community a desirable place to live? What draws people to stake their future in it? Are communities with more attached residents better off?

Gallup and the John S. and James L. Knight Foundation launched the Knight Soul of the Community project in 2008 with these questions in mind. After interviewing close to 43,000 people in 26 communities over three years, the study has found that three main qualities attach people to place: social offerings, such as entertainment venues and places to meet, openness (how welcoming a place is) and the area’s aesthetics (its physical beauty and green spaces).

We’ve seen now why attachment is an important metric for communities, since it links to key outcomes like local economic growth (GDP). So, the next obvious question is: what drives attachment? After three years of research, the results have been very consistent, and possibly surprising.

First, what attaches residents to their communities doesn’t change much from place to place. While we might expect that the drivers of attachment would be different in Miami, Fla., from those in Macon, Ga., in fact, the main drivers of attachment show little difference across communities. In addition, the same drivers have risen to the top in every year of the study.

Second, these main drivers may be surprising. While the economy is obviously the subject of much attention, the study has found that perceptions of the local economy do not have a very strong relationship to resident attachment. Instead, attachment is most closely related to how accepting a community is of diversity, its wealth of social offerings, and its aesthetics. This is not to say that jobs and housing aren’t important. Residents must be able to meet their basic needs in a community in order to stay. However, when it comes to forming an emotional connection with the community, there are other community factors which often are not considered when thinking about economic development. These community factors seem to matter more when it comes to attaching residents to their community.

And finally, while we do see differences in attachment among different demographic groups, demographics generally are not the strongest drivers of attachment. In almost every community, we found that a resident’s perceptions of the community are more strongly linked to their level of community attachment than to that person’s age, ethnicity, work status, etc.


3 Signs That A Content Strategy Is Needed For Investment Attraction

Published by Ian Smith on January 12, 2011

Marketing a product or service efficiently requires a strategy in order to communicate the right message to the right audience. The strategy ensures that organizations are focused on objectives and are using the best marketing tools available.

Although many economic development agencies have a marketing strategy for investment attraction for their region, social media marketing campaigns are fueled by a content strategy. Agencies looking for a sustainable presence on Facebook, Twitter and or YouTube must have a content strategy.

Here are three signs that you may want to keep mind to see if your agency is in need of a content strategy.

1. You must substantiate your marketing budget for social media.

Once a budget has been set aside for your social media initiative, your efforts must be accounted. The content strategy can be your reference in terms of what actions will be taken in future. For example, will a YouTube Channel be needed? If so, what will it say, who will created it and how much will it cost? The answers to these questions will be clearly stated in a content strategy.

2. You are looking for a way to bridge the gap between branding efforts and planned Web 2.0 initiatives.

Chances are that your agency has an existing branding strategy that you wish to have transferred on a Facebook Page or through Twitter. Well, it is easier said that done. A content strategy can define a region’s brand by positioning the region as a location that will appeal to investors and site selectors. A region which attempts to brand itself as THE place for manufacturing-driven sectors to relocate should have a coherent content strategy that demonstrate that it has the best business environment to attract companies. This might result in having a blog branded, “Investing In Manufacturing” where success stories can be read or a YouTube Channel profiling existing companies.

3. You are running out of things to say to engage your audience.

At its core, a content strategy helps organizations avoid “content block”. Similar to writers’ block, “content block is defined as the inability to provide content on a frequent basis on social media platforms.

So often, economic development agencies quickly establish their Facebook Page without a content strategy just to end up with a page ihttp://www.blogger.com/img/blank.gifn a few months that will not be updated with new and engaging content. (Tip: Browse through a number of Facebook Pages dealing with “economic development” and see how many of these pages are updated with content specifically targeting potential investors?)

A content strategy can help direct organizations create content by using existing information that could be found offline and on the web and establish schedule when content will be posted.

Does your economic development agency have a content strategy that is fueling your social media marketing campaign? If so, what makes it successful?

See the original post here.

Saturday, January 08, 2011

Calgary may axe slogan revision

By Richard Cuthbertson, Calgary Herald

A controversial project to rebrand Calgary and replace its Heart of the New West slogan is being re-evaluated and could even be axed.

A Calgary Economic Development official said Friday evening that with a new mayor and council, along with some changes in staff at various local agencies involved in the project, this is the moment to take a close look at where the effort -- which cost roughly $200,000 -- is going.

"Then, really, we hope to in short order be able to make a recommendation as to what do we do: Do we proceed, do we stay where we are, do we start all over?" Mary Moran, who was recently hired by Calgary Economic Development as its director of marketing and communications, said in an interview.

In the summer of 2009, American consulting giant Gensler was awarded the contract to help rebrand the city, part of an effort stewarded by Calgary Economic Development.

The project has faced sharp criticism from certain quarters, with some saying a local company should have been awarded the contract and others saying they don't believe there is anything wrong with Calgary's slogan as it is.

This includes the chairman of Tourism Calgary, George Brookman, who said Friday he thinks the project is a waste of taxpayers' money, adding he hopes the effort "will die a slow death."

"This is somebody's idea of how to make themselves look busy, as far as I'm concerned," he said in an interview.

Brookman argues there's nothing wrong with the Heart of the New West slogan and cowboy hat logo, adding the problem has been too little effort and money were put into marketing the existing brand.

"If they'd invest all the money they're wasting on trying to come up with a new brand in promoting the Heart of the New West, it would do the job for us."

The project also hit controversy last spring when the chairman of the committee heading the rebranding took a job with the American company hired to lead the exercise.

Lance Carlson was president of the Alberta College of Art & Design until he resigned in the spring and took a position at Gensler's Los Angeles office as director of design strategy.

Gensler said it wasn't able to comment Friday and Carlson was unavailable.

An update on the project was released last year, which found the words bold, encouraging, accepting and active best suit the personality of Calgary.

The bottom of the update ended with "Calgary -- The Most Dynamic City in Canada."

Some criticized the document at the time, saying it seemed to cast aside the city's western heritage.

Brookman said he was "extremely impressed" with the write-up Gensler did on the image of Calgary.

The problem, he said, is it didn't seem to follow through with the brand.

The one he saw this summer looked like a "thousand red pickup sticks" in the shape of a "C."

"The brand they proposed was absolutely nothing," Brookman said.

"Very distressing to me. I just think it's a waste of money and I'm very upset about it."

The rebranding effort was launched after council adopted a 10-year economic development strategy in 2008. Community consultation found Heart of the New West wasn't particularly effective, and critics said its western theme reflected only one aspect of the Calgary experience.

Moran said they've received mixed reviews from the public over the slogan Heart of the New West. Some like it, and others don't.

The work already done is very valuable, she said.

But she also understands there's a frustration at the pace of the process, and said it comes down to some changes inside various local promotional groups that have been working on the project.

"To date, there's been a lot of good work that has been done," Moran said.

"The research is quite informative and so I think that going back on the research and just seeing if that fits with the new regime at the city is really important at this stage."


© Copyright (c) The Calgary Herald

Wednesday, January 05, 2011

Michigan to expand "Pure Michigan: campaign to attract businesses

By Jeff Cranson | The Grand Rapids Press

The Grand Rapids area's top economic development official said today she's thrilled that state officials want to solidify “Pure Michigan” as the state's primary campaign to grow and attract businesses.

“Pure Michigan is the number one state campaign in the country. It just hits all the right notes,” said Birgit Klohs, president of The Right Place.

Michael Finney, who was formally approved Tuesday as president and CEO of the Michigan Economic Development Corporation, said he wants to combine the state’s marketing programs under “Pure Michigan.” That would include folding in the “Upper Hand” campaign the MEDC has used to attract businesses for several years.

Klohs shares Finney's view that “Pure Michigan” is a much more effective campaign and hopes he's successful in convincing the Legislature to fund an expansion to go beyond tourism promotion and add a business-attraction component.

“Rather than have multiple campaigns, it makes sense to have one. Otherwise you're splitting your resources, splitting your message,” Klohs said.

The award-winning "Pure Michigan campaign" -- Klohs says it's the best in the country -- features gorgeous Michigan scenery and the narration of native son Tim Allen. The program hung in the balance after the fall campaign was cut for lack of funds.

After a great deal of wrangling, legislators and former Gov. Jennifer Granholm agreed in December to add $10 million from the 21st Century Jobs Fund to pay for the "Pure Michigan" campaign. The money is in addition to the $5.4 million allotted for the tourism campaign in the fiscal year 2011 budget. The money is targeted to pay for winter and spring ad campaigns.

Two years ago, "Pure Michigan" received more than $30 million in funding. Granholm said in October she wanted $25 million more for "Pure Michigan" in 2011.

The governor of Virginia, where lawmakers closed a $4.2 billion funding gap, decided to aggressively fund his state's economic development efforts, adding $54 million in December. That was in addition to a $57 million package approved earlier in the year.

The Wall Street Journal reported that the jobs push aided some 215 deals in 2010, including $22.9 million in incentives for 20 major projects, up from $15 million spent on 13 big deals in 2009.

Virginia's deficit was more than twice what Michigan lawmakers are facing as they begin their new term, leaving economic development officials hopeful the Legislature will find a way to increase funding for Pure Michigan.

Klohs said Pure Michigan is recognized around the world and shapes perceptions of the state. "I have people overseas say they saw the ads on CNN International.

"We know how pretty it is here. You have to tell that to others. You can do that best through pictures that show people it is not an old, tired, industrial state," Klohs said.

"The biggest hurdle is to change perceptions about what the state is."

Tuesday, January 04, 2011

NYC Tech Startups Frustrated With Bloomberg’s Economic Development Agency

By Jim Flood

Last week Mayor Michael Bloomberg took considerable flak for his administration’s handling of the blizzard. The Departments of Transportation and Sanitation were roundly criticized by New Yorkers who found their streets unplowed for days and commuters who found themselves stuck on trains and buses. When it comes to basics like clearing snow and keeping traffic running, the people of this city have no qualms about holding government accountable. But not all city agencies have mandates that affect people’s lives so immediately and dramatically when they fall short of expectations.

The New York City Economic Development Corporation (NYCEDC) is a city hall agency that many NYC residents have probably never heard of, let alone interacted with. Its goal is to encourage economic development and spur job growth. A few weeks ago, NYCEDC sponsored a “Startup Exchange,” inviting tech entrepreneurs from a range of industries to interact with VCs and each other in a cocktail party setting. A subsequent thread on the nextNY e-mail list made it clear that several people who attended the event found it unfocused and unhelpful. In interviews and e-mail exchanges since then, a few of these technologists expressed frustration with the way the city has attempted to engage the Silicon Alley tech community overall.

Alex Poon, co-founder and VP of Data Modeling at Visual Revenue, thought the event was more about self-promotion by NYCEDC than helping to foster connections within the tech industry. “NYCEDC should spend more effort in seeking out people who are working in tech to invite to these events,” he argued. “This event was not mentioned on any of the top NYC tech mailing lists I am part of. This gives me the feeling that they weren’t reaching out to all the right people.”

Apar Kothari, founder and CEO of MyNines, suggested that she would have found the Startup Exchange more helpful if introductions had been facilitated and companies had been divided into categories. “There was no organization to the event,” she said. “You didn’t know who was who.” Among examples of more useful networking opportunities, Kothari mentioned the monthly Fashion 2.0 Meetup, where “you always learn something.”

The organizer of that Meetup, Yuli Ziv, founder and CEO of Style Coalition and co-founder of MyItThings, said she has approached NYCEDC about co-sponsoring events, but the agency seems uninterested in taking advantage of the existing community that she and other entrepreneurs have built up. Ziv said she would be glad to have city officials attend one of the Fashion 2.0 Meetups and hear the concerns and requests of members directly. “They need to listen first,” she said. “Then they could take that feedback into consideration when they do their planning.”

A spokesperson for NYCEDC president Seth W. Pinsky explained that the agency sees itself as a higher-level facilitator: given its broad mandate of encouraging economic growth in all industries throughout the entire city, its focus is on creating programs and providing funding, then letting the private sector take over. The agency convenes meetings with CEOs to find out what issues industries are facing. As evidence of efforts it has undertaken to make New York City a “hub of innovation,” she cited the information portal Venture Connect, business incubators such as the Varick Street location administered by NYU-Poly and the NYC BigApps competitions.

However, these NYCEDC programs do not seem to be fully resonating with a number of the people and companies they’re designed to help.

“I keep my finger on the pulse of what’s going on, and if there are real initiatives from the city, I haven’t heard about it and none of my cohorts have heard about it either,” said Reece Pacheco, founder of Overtime Media. This sentiment was echoed by Mojo Talantikite, cluster engineer at Engine Yard, who said he is unaware of what the city is doing to help start-ups beyond what he called “symbolic steps” such as hosting occasional events and app competitions.

Nearly all the technologists who expressed dissatisfaction with the NYCEDC suggested that the city could make a bigger impact by taking a less top-down approach in its efforts to reach the tech community. “They should be coming to the tech events that we hold on our own,” Talantikite said. “By increasing their direct interactions with the entrepreneurs and hackers in the city, we’ll be in a much better place to know how we can help each other,” he added.

Similarly, Pacheco contended that the city should make more of an effort to connect to early-stage startups instead of just established players. “They know where Google is, they know where Gilt Groupe is,” he said. “If they want to know what’s going on, they need to listen from the bottom up, not just the top executives.” He suggested that the city could send representatives to the monthly NY Tech Meetup, which regularly draws more than 800 attendees from its 16,000-plus members, to solicit input.

The NYCEDC spokesperson said the agency is open to proposals on how to improve its interaction with the city’s tech sector. Among other ideas offered by the entrepreneurs interviewed for this story, Talantikite recommended that the city put its non-sensitive software projects on collaborative development site Github and assemble a board of advisors “culled from the startup community, not just the name-brand VCs.” He also mentioned Code for America, a program that according to its website “helps city governments become more transparent, connected and efficient by connecting the talents of cutting-edge web developers with people who deliver city services,” as an initiative that could benefit New York City, which is not currently a participant.

Pacheco said that providing more office space and attracting tech talent should be considered priorities in creating an environment where start-ups can thrive. He also believes that advocating for the so-called Startup Visa, which aims to ease immigration requirements on would-be entrepreneurs, would be helpful.

Along with all of his fellow technologists interviewed for this post, Pacheco expressed interest in cooperating with NYC’s government in ways that would be mutually beneficial. “I think people are willing to accept the help of the city, and work with the city,” he said.


Sunday, January 02, 2011

Economic chiefs call on Cuomo for action

Kathy Kahn | Dec 20, 2010

Will Gov.-elect Andrew Cuomo make good on promises to reform the way New York attracts and retains business? Economic development corporation presidents are putting their trust in Cuomo’s business acumen and plans to put the state back on top again.

Ron Hicks, president and CEO of Rockland’s EDC is ready to see a revolving fund for shovel-ready sites.

“This is taking money from the comptroller, not the state. Let him (Thomas DiNapoli) use the pension fund by investing in our communities at a reasonable interest rate at a good return on its investment – at least five percent, better than any other that is available.”

Lance Matteson, president and CEO of Ulster’s EDC would like to see those shovel-ready sites happen, and “particularly see the permitting process tweaked.”

And he’s not alone. All of the economic development chiefs who HV Biz spoke with voiced concern over the amount of time it takes for a company to get through the process.

“Here in Putnam,” said Kevin Bailey, the county’s economic development president and CEO, “it is not our local boards that are causing the delays – it is the state and New York City.”

In Putnam’s case, since more than half the county is in the New York City watershed, it is even more difficult to find a clean, environmentally acceptable business to pass muster, “but it shouldn’t take years to get the green light.”

Hicks said companies look to southern states where the permitting process allows a company to be up and running within 18 months. “Yes, we need to plan and make sure the company is a good, sustainable one, but we also need to help owners get sites shovel-ready – not sit around and wait for someone to come along and do it.”

John MacEnroe, president of Dutchess County’s economic development team, said IBM’s East Fishkill building is being marketed to high-tech companies and a commutable 90-minute drive from Fishkill to Albany, where the College of Nanoscale and Engineering is headquartered.

“IBM still plays a big role in the region and we are creating a cluster of clean-tech companies as a result. The Fishkill property is in the Foreign Trade Zone and helped considerably in marketing the property, but the Empire Zone was a much more effective tool to get business here; the Excelsior Program is just not making enough of an impression,” MacEnroe said.

“Empire State Development Chairman Dennis Mullen has fought for the packages we’ve needed to land business deals – that’s fundamental to me,” Matteson said. “The rest is rhetoric without that real kind of championing. The governor-elect seems to want to make this a priority; now, he’ll have that chance. Mullen has been a tremendous asset. He’s a businessman – and he understands the needs. I’d like to see him stay on.

“Cuomo has said he wants to fix the Excelsior program – that’s welcome,” Matteson said. “We need accountability and focus the Excelsior program is set up for, but we also need appropriate scale. The Empire Zone had an aggressive program for investment tax credits, whereas Excelsior is much weaker.”

Bailey said unfunded mandates coming from Albany and New York City during the Spitzer-Paterson years have hurt both EDCs and IDAs.

“We are now mandated to have a chief executive officer and a chief financial officer for both organizations. I understand the logic, but for a small county like Putnam, it’s a financial burden. We filled the positions at relatively low salaries, but the money is running out. I’d like to see Gov.-elect Cuomo make it illegal to pass any more unfunded mandates. As far as the Excelsior Program, it’s not worth the paper it’s printed on.”

Matteson said another sore point is the “egregious example of assessments levied on IDAs. If it gets a grant and sub-grant, it is taxed on it. IDAs are nonprofit entities – for some, it is not a significant hit to their bottom line. To others, it’s hurtful. Even if you lose money, you must still pay the assessment.”

Bailey said Putnam challenged the ruling when it was first instituted and received a refund. Putnam plans to withhold its 2010 payment until the new administration comes in and decides what to do.

All economic development leaders are staying positive when it comes to Cuomo. They perceive him as more in touch with the business community and with the property tax concerns than his predecessors, since he resides in Westchester, the highest-taxed county in the state.

Every EDC president was disheartened to learn Macy’s chose West Virginia over Orange County for its new distribution center, a company Orange County Partnership and its economic partners “put thousands of hours of hard work into making happen,” said Maureen Halahan, president. “Everyone in the region, from our own county, to Hudson Valley Economic Development Corp. to our neighboring counties, worked with us. It was an unbelievable effort by everyone and it is an overwhelming loss for our state. When you think of Macy’s, you think New York – its flagship 34th Street store is known the world over – but it is taking its distribution center to another state,” Halahan said.

The 1 million square feet of space the distribution center would have needed, the $189 million that would have been infused in the building of the distribution center would have created 1,000 permanent jobs and created temporary jobs during peak seasons in the hundreds, has been felt by all.

“New York had better wake up,” Halahan said. “I’m hoping the dynamic team we have here in the Hudson Valley from my county and from the entire region can talk to the incoming administration and let us show them how we can help them to achieve the goals Cuomo would like to achieve – retain and create jobs. Would the Empire Zone program have changed Macy’s mind? I do believe it would have,” Halahan said. “But we don’t have it, and we have nothing like it to offer. It’s time for New York to change its tune and become business-friendly.

Hicks said grandparents and parents were able to build companies and provide a future for their children. “But will we be able to do the same? We’re losing our young talent. We have to build a future here for our children and for their children’s children if we truly want to be the ‘Empire State’ once more.”

North Carolina Economy Moves From Textiles to Tech

By Jonathan Serrie

The foothills of North Carolina are famous for furniture and textiles. But as jobs in those industries moved overseas, local leaders worried about too many closed factories and skyrocketing unemployment.

“We have been as high this year as 17.9 percent,” said Tom Johnson of the Economic Development Commission of North Carolina’s Rutherford County. “A lot of that, of course, is attributable to textile operations closing.”

So, Rutherford County, and other small communities in the foothills of North Carolina, banked on a high-tech future. They started luring companies such as Apple, Google and Facebook to build massive computer data centers. Such facilities require plenty of electricity and extensive cooling systems.

With the region’s history of manufacturing, much of the power and water infrastructure is already in place. In fact, Facebook is building a new data farm right on the property of an old textile mill near Forest City, N.C.

“What we recognized in North Carolina is that it has an abundance of power,” said Peter Marin, president of T5 Partners, a company that develops data centers. “It has nuclear power. It has a pro-business environment.”

Marin said generous tax incentives are another big factor in attracting the expensive facilities to North Carolina.

The region is now aggressively marketing itself as a “Data Center Corridor.”

“The opportunity that these facilities are providing goes long beyond just the taxable opportunities,” said Scott Millar, president of the Catawba County Economic Development Corporation. “But the taxes aren’t bad by themselves.”

Economic development officials predict the data centers will create jobs, albeit indirectly.

“A typical data center may have 35 or 40 or 45 jobs, whereas a textile company may have 450 or 500 jobs,” said Rutherford County’s Tom Johnson. “There’s a huge difference in the employment. But there’s also a huge difference in the investment level. Facebook was announced at $450 million.”

Johnson said that level of investment has already created construction jobs and is likely to create new opportunities for support industries and related employment in a region that is hungry for work.

Inside the deal that lured Amazon to Chattanooga

By: Dave Flessner & Mike Pare

When Amazon.com representatives first landed in Chattanooga in September to talk about a possible fulfillment center here, city officials thought they were competing against neighboring Bradley County for the facility.

"Both communities had sites in play," said Trevor Hamilton, the Chattanooga Area Chamber of Commerce's vice president for economic development.

Only later did Amazon disclose it was looking at building two noncompeting 1 million-square-foot distribution centers -- one each in Hamilton and Bradley counties -- and another similar-sized center in South Carolina.

"What was interesting is that both Cleveland and Chattanooga stayed in the hunt," Hamilton said.

Seven months after Amazon's site selection firm first received proposals for a then-unnamed prospect, Amazon last week finalized both centers in Southeast Tennessee. Amazon.com also is planning a third new distribution center for the Southeast in Lexington County, S.C.

In this photo made Monday, Nov. 16, 2009, Stephen Guymon, of Twin Falls, Idaho, separates packages for final shipment inside the 800,000 sq. ft. Amazon.com warehouse in Goodyear, Ariz. (AP Photo/Ross D. Franklin)

Enlarge photo
Tennessee jobs

For Hamilton and Bradley counties, the result is a $139 million investment, more than 1,400 full-time jobs and more than 2,000 seasonal slots, according to the world's No. 1 Internet retailer.

The Amazon announcement represents this year's biggest job addition by any new business to Tennessee, according to the state's Department of Economic and Community Development.

The Chattanooga distribution center will be built near the $1 billion Volkswagen auto assembly plant -- the biggest investment in Tennessee in 2008. The Bradley County distribution center will be near the $1.45 billion Wacker Chemical polysilcon plant near Charleston, Tenn. -- the biggest corporate investment announced in Tennessee in 2009.

"It was like an early Christmas," Chattanooga Mayor Ron Littlefield said of Amazon's decision to locate in Southeast Tennessee in the wake of the VW and Wacker projects. "It's the old adage that success begets more success."

But it's been no holiday getting ready for the Internet giant.

"They were very eager to get this deal closed and start building so that these new centers are in operation for the holidays next year," said Matt Kisber, Tennessee's chief business recruiter and commissioner for the Department of Economic and Community Development.

The expedited schedule was emphasized by one of the early code names for the project -- dubbed "ASAP" for "as soon as possible."

Quickly and Efficiently

Amazon officials remain tight-lipped about the selection of the Tennessee and South Carolina sites. But local recruiters and company officials note that the sites in Hamilton and Bradley counties are near Interstate 75 and a local airport and were within a labor market that could supply the thousands of seasonal workers Amazon needs to fulfill gift orders prior to Christmas.

Dave Clark, vice president of Amazon's North American operations, said the company is eager to open the new centers "to allow us to serve customers more quickly and efficiently." In the first nine months of 2010, North American sales by Amazon jumped 46 percent, and the company projects even more growth next year through its expanding product lines.

Amazon employed an Atlanta-based management and development firm -- Seefried Properties -- to pick the sites and build the distribution centers. Seefried leases and manages nearly 25 million square feet for its clients and develops more than 3 million square feet a year, on average, for other companies.

The decision to open the new Southeast distribution centers comes nearly a decade after Amazon closed what was then its biggest distribution center in the Atlanta suburb of McDonough, Ga. That 800,000-square-foot facility, opened by Amazon in 1999, closed after business slumped following the 9/11 attacks two years later.

Around some Amazon facilities, "work campers" live in recreational vehicles while they perform seasonal jobs for the Internet giant. Fred Kiga, director of policy for Amazon who finalized the tax incentives for the company earlier this month, said the company doesn't expect to have such labor issues in Southeast Tennessee.

Amazon and development officials say that speed was of the essence in getting the site in Enterprise South permitted, cleared and ready to build.

"The overall factor is it had to have this thing up by Christmas 2011," said Tom Edd Wilson, president of the Chattanooga Area Chamber of Commerce.

Hamilton said the Amazon project was the most compressed site evaluation process yet for the Chamber's development program. But the city's earlier experience in recruiting Volkswagen to Enterprise South by grading the site even before VW made its final decision proved to be a valuable lesson.

Even before the deal officially was announced last week, the Atlanta developer that is constructing the Amazon distribution center began clearing and leveling the site along Volkswagen Drive.

"That really impresses prospects," Kisber said.

Littlefield and Hamilton County Mayor Claude Ramsey agreed last summer to offer one of their prime parcels of real estate -- 80 acres connected directly to I-75 by a new five-lane road, adjacent to the new VW plant and an Erlanger Health and Fitness Center.

"Given the prospect of more than 1,400 jobs on 80 acres, it was an easy call," Littlefield said.

In Bradley County, two sites were pitched for the Amazon center.

"We initially thought we were competing with Chattanooga, but in the end it was great to get at least one center in Bradley County to complement the Chattanooga center," said Doug Berry, vice president of economic development for the Cleveland/Bradley County Chamber of Commerce.

Arriving in Arizona

After Hamilton County was selected from the initial screening of sites this summer, Littlefield, Hamilton and Hamilton County Mayor Claude Ramsey flew to Phoenix on Oct. 29 to view Amazon distribution centers similar to what they hoped would be built in Hamilton and Bradley.

"We wanted to make sure we weren't getting a pig in a poke, but we were very impressed," Littlefield said.

Watching hundreds of workers packing orders for shipment around the clock, Littlefield likened the Amazon operation he saw in Phoenix to "Santa's elves on steroids."

Amazon has said the Hamilton County center would handle smaller items, such as books, DVDs and electronics, while Bradley County would deal with bulkier items.

The new $91 million Amazon complex is being built next to a $6.7 million Erlanger Health and Fitness Center, which is scheduled for completion by June. With both projects under way, the bulldozer army is back at Enterprise South, albeit a much smaller battalion than what was deployed at the nearby VW site.

"We may never see that much yellow iron again as we did at Volkswagen, but this is impressive," Littlefield said of the work under way for the new Erlanger and VW sites.

Competitive Landscape

Just as Volkswagen brought a 21st century feel to Chattanooga's manufacturing history as the "Dynamo of Dixie," Amazon will build upon Chattanooga's longtime role as a transportation hub, first for water and later for rail and highway shipments as the "Choo-Choo city."

Because of Tennessee's central location and transportation networks, Kisber said, Tennessee has lured fulfillment and distribution facilities ranging from Macy's to the Home Shopping Network and from FedEx in Memphis to U.S. Xpress and Covenant Transport in Chattanooga.

But during talks with Amazon about the Chattanooga project, officials said they knew they were competing with other locations

J.Ed. Marston, the Chamber's vice president of marketing, said there was still a degree of uncertainty even after the Amazon name was disclosed.

"There were ways it might not have happened," he said. "If we had not been able to meet their timeline, we would have lost it."

He said when South Carolina announced Dec. 7 that it landed an Amazon fulfillment center with exactly the number of jobs proposed for Chattanooga, "we had a morning we were like, 'Crud.'"

But soon, local officials learned that the growing Internet company wanted new fulfillment centers in both Tennessee and South Carolina.

All of the new sites are near interstate highways and local airports and are expected to use a variety of transportation venues.

Government Incentives

Chattanooga offered richer incentives than did Bradley County for a similar-sized 1 million-square-foot warehouse near Charleston. Bradley County will cut Amazon's property taxes in half after the company buys 116 acres. In Hamilton County, Amazon will pay only the school portion of the property tax bill -- about 27 percent of the normal bill -- and will receive the Enterprise South site free.

But among the 1,425 full-time jobs in Southeast Tennessee, 1,249 will be in Chattanooga.

Kisber said the state is offering its usual array of job tax credits and employee training assistance provided to any major business that locates or expands in Tennessee.

Such assistance has been key to Tennessee's luring more than $34 billion of investments with nearly 200,000 jobs during the eight years of Gov. Phil Bredesen's administration, Kisber said.

Kisber touted the state's Jobs Cabinet, which brings together state departments to try to address business needs and concerns.

"We don't just tell a prospect what we can offer. We try to listen to what the business needs and see how we can best address their needs," Kisber said.

Taxing Questions

The Jobs Cabinet includes economic recruiters from the Department of Economic and Community Development and tax collectors from the state Department of Revenue.

Kisber said any decision on whether to require Amazon to collect sales taxes on its sales to Tennessee consumers would be made by the Department of Revenue. That agency won't discuss its taxation of individual companies.

Amazon doesn't collect sales taxes on most of its products outside five states that impose such taxes because of Amazon facilities in those states. But at least a dozen other states where Amazon has distribution facilities don't require the company to collect sales taxes.

Regardless of how the state sales tax is resolved, local officials insist Amazon will provide a boost to the region through increased employment, investment and spinoff businesses.

"We asked Amazon if they will ship using FedEx, UPS or the post office," Littlefield said. "They said all three and then some, so these facilities should be a real benefit to a lot of companies."

SEDA: 2011 a year to deliver on promises

With recent announcements projected to bring at least 4,000 new jobs to area within the next three years, work force readiness is key

By Mary Carr Mayle

In terms of economic development, 2010 is likely to go down as a banner year for Savannah and the surrounding area.

It is, after all, the year Mitsubishi Power Systems America began moving onto the Pooler megasite and JCB restructured its Savannah-based North American business to focus on building skid steer and track loaders.

It's the year the Portuguese company EFACEC opened its power transformer manufacturing plant in Effingham County, while Firth Rixson Limited, a United Kingdom-based provider of highly engineered forged metal products, announced it will build a manufacturing plant in Liberty County.

And it's the year Gulfstream Aerospace announced another major expansion - its second in five years - in Savannah, this one boasting a $500 million price tag and 1,000 new jobs.

So what's in the works for 2011?

"If 2010 was all about successes, 2011 will be about implementation of those successes," said Tommy Hester, chairman of the Savannah Economic Development Authority.

"We've had a lot of big announcements in the last year. Now we have to make sure we deliver on the promises that brought us those projects."

SEDA vice chairman David Paddison agreed.

"Economic development isn't just about announcements," he said. "We now have 4,000 jobs in the funnel over the next three years, and it's imperative that we work with Georgia QuickStart and Savannah Technical College to make sure we have a well-trained, skilled work force available to fill those jobs."

Looking ahead

At SEDA, 2011 will also be a time for reflection and planning, said Steve Weathers, who came on board as the authority's president and CEO in November, following longtime leader Rick Winger's retirement.

While he is still in the "listening mode" he assumed when he came in last month, Weathers has some definite ideas about what he hopes to accomplish in the coming year.

Mostly, he expects SEDA and its partners in economic development to start looking for answers to a lot of questions. Among them:

-- What are the major industry sectors that will lead and grow Savannah's economy over the next 10 years?

-- Are we on the right track to attract and retain those industry sectors and help provide the work force they need?

-- Are we doing everything we can to work with and support our regional partners?

"I really see the upcoming year as one in which we lay the foundation for prosperity, developing a strategic, five-year plan that focuses on those industries that are the right fit for our area," he said.

"We've done a good job in the past catching those opportunities that have come our way, but I'd like to see us become more proactive in our recruitment," Weathers said. "We'll still field every call that comes our way, but we also need to ask, 'What businesses are we calling, what industries are we targeting?'

"Once that determination is made, our focus will become clearer."

Beyond the subjective

While Savannah has a lot to offer, Weathers said he doesn't want to fall into the trap so many economic development people do of selling their location based on subjective values.

"Every community believes they have a great quality of life and a committed work force," he said. "But no CEO is going to choose a project location based on anything other than the bottom line. So, what we want to do is show them how they can make a profit here, how we're equipped to educate a work force, how we can help them clear the hurdles and get their company to the finish line first."

Another major theme in 2011 will be expanding and enriching Savannah Gateway, the regional partnership with economic development authorities in Bryan, Effingham and Liberty counties, Weathers said.

"We want to embrace our development partners and build a level of trust that allows us all to work for the common good," he said. "We want to know what tools we can offer to support their efforts."

At the end of 2011, Weathers said, he'll also have some questions to ask himself and his staff.

"Have we been proactive in targeted recruiting? Have we been proactive in fostering regional growth? Have we been proactive in retaining and growing our existing industry?

"If those answers are positive, we will have had a really good start."

Saturday, January 01, 2011

Hard road for Mississippi to recover jobs

By ALAN SAYRE - Dec 30, 2010 10:14 AM ET By The Associated Press

Struggling back from the Great Recession has been a hard road for Mississippi. And although there are bright spots in the works for 2011 and beyond, economic forecasts say the state's recovery will be a yearslong process — provided another national slowdown is not in the works.

From February 2008 to October 2010, Mississippi lost about 71,000 jobs, or 5.8 percent of its work force, according to state economist Darrin Webb.

At the same time, though, the Mississippi Development Authority, armed with government expansion and relocation incentives, said in a recent report that it attracted commitments for $1.53 billion in new business investment to the state in 2010 with the promise of just over 6,400 new jobs.

And 2011 is the year Mississippi's second major auto manufacturing plant is scheduled to open. Toyota's plant near Blue Springs is expected to have an initial payroll of 1,000, eventually growing to 2,000. Along with that, auto suppliers are expected to add another 1,500 to 2,000 jobs.

But the difference between the list of new jobs and the number that have disappeared illustrates how deep the downturn has been for the state. According to a recent forecast by the state Institutions for Higher Learning, Mississippi likely won't reach its record employment — set in 2000 — until at least 2015.

"This economy has just taken a terrible hit from this recession," Webb said.

The 2015 job recovery forecast is based on an annual job growth rate of about 1.4 to 1.5 percent — a figure that Mississippi hasn't hit since 1999, Webb said.

Nationally, much of the recovery focus has been on breaking the stubbornly high unemployment rate, which economists say will get consumers spending again. But Webb said he doesn't expect an overnight change in the new tightfisted habits of buyers anytime soon.

"Obviously, jobs are the big problem," Webb said. "On the spending side, the consumer that exited this recession is totally different from the one who entered it. Before, he was willing to spend his home equity on his vacation. Now, he's much more frugal. We don't expect the consumer to change that attitude anytime soon."

Another national problem is the collapse of housing. Although Mississippi ranks near the bottom of foreclosure rates, the state has seen a 62 percent decline in housing starts since the period just before Hurricane Katrina in 2005, Webb said.

"Our current level is back to where it was in 1991," he said. "That will continue to be a drain, a weight on our neck."

The IHL forecast says Mississippi likely will lag behind national employment growth, partly because government already accounts for about 23 percent of total employment and the state's health care and professional sectors are below the national average. Still, the health care and professional sectors are expected to outstrip the average with annual growth rates of 2.7 percent and 2.3 percent.

The Mississippi Development Authority, the state's economic development agency, reported a much stronger 2010 in terms of attracting new businesses and expanding existing companies. The agency said it obtained commitments for $1.53 billion in investment and 6,370 new jobs. The value of projects nabbed in the first three quarters exceeded the annual total of 2009.

The authority's executive director, Gray Swoope, said he expects tougher competition between states for new jobs, especially as funding for economic development is lined up in tight government budgets. A money-pressed state could hurt its competitive position by approving tax increases, he said.

"We've continued to make economic development a priority," Swoope said. "Other states will have to question their funding. That will be a competitive advantage for those states who make economic development a priority."

Swoope credited incentives approved by the Legislature in 2010 for three clean energy manufacturing projects committing to Mississippi: Twin Creeks Technologies, a solar technology company planning 512 jobs in Tate County; KiOR, which plans five biofuels production plants in Mississippi with as many as 1,000 jobs; and Soladigm, which is planning 300 jobs in DeSoto County. Soladigm said it will produce glass that can be quickly switched from clear to tinted as an energy-saving measure.

One key economic driver — the tourism-casino industry — likely will see its growth lag behind other sectors, managing only an annual growth rate of less than 1 percent through 2015, according to the state forecast.

"It's such a slow recovery, it will be a while before people are spending again on vacations," said Marianne Hill, senior economist for the IHL.