Kathleen Thurber
Midland Reporter-Telegram Midland Reporter-Telegram
With a thriving oil economy and shortage of workers for companies already in Midland, some city council members have questioned how much recruiting of outside businesses needs to take place.
The Midland Development Corp. has spent nearly $200,000 since the start of fiscal year 2009 in travel to trade shows and expos where its staff works to connect with companies in hopes of bringing a business to the Tall City. From the 4,253 contacts made between the more than 40 shows visited, no major company has selected Midland as a site for expansion during that time.
Staff, board members and some council members said part of the issue is that it simply takes time to land a deal through that process. Continuing to get Midland's name out there by visiting shows and fostering relationships already started is just how economic development works, they said. However, as Midland continues to expand, council and MDC board members said they're also looking at where the development corporation's priorities should be in the future. Some recruitment will always be necessary, most agreed, but a bigger emphasis on infrastructure development and investments in already existing Permian Basin businesses may also become a greater priority.
"When we voted for the sales tax, the 4A, our economy was completely different back then. The oil and gas industry was in a decline, we needed to bring new businesses in," said Scott Dufford, at-large city councilman, who brought the issue of business recruitment up at this year's city council retreat. "With new technology and the price of oil, we really don't need to be bringing in new businesses."
Recruitment
MDC President Mike Hatley said certainly he wishes economic development was a guarantee, where putting in a certain amount of work and making a certain number of contacts automatically led to a deal. But, he said, it's dependent upon a lot of factors and is a competitive process that sometimes can take several years of work with a company before seeing something come to fruition.
"Communities have to work hard to get in front of people. It's probably the most competitive thing I know," he said. "I know a lot of people thought you pass a tax and that's a guarantee. It's a guarantee you're in the game."
Board President Robert Rendall agreed and said they also are continuing to tweak their strategies to ensure all the mechanisms are in place for success.
"There's just a lot of give and take and you just have to be patient through the process," Rendall said. "It's not dissimilar from doing all the preparation work for drilling an oil and gas well. You've got to locate the leases, do the geophysical work, make sure everything is in place and then hopefully you're successful."
When selecting shows to visit, Hatley said, they target the industries they've identified as most likely to fit into Midland's economy. At some shows, they also work with other cities in the region to market West Texas as a whole and have a larger presence than they could alone, Hatley said.
Aviation has been a main priority, though they're working with others, as well.
Marvin Esterly, director of airports, attended the MRO Americas show in Miami with three MDC staff members and told his board they were able to make several promising contacts, in part, because the MDC had visited the show before and attendees already were aware of Midland and what it has to offer.
The exhibitor fee alone for the show totaled $13,497.41, with costs for lodging, transportation and food during the trip coming in at $5,649.45, according to receipts provided through a Texas Public Information Act request.
Esterly and Hatley said when they can bring an MRO (maintenance, repair and overhaul) business to the airport, it should open the doors to additional aviation industry growth in this area and more jobs.
"Our No. 1 potential area is in the aviation business," Hatley said. "Everybody in West Texas who uses our airport realizes how important that is -- that's our lifeblood."
After making contacts at a show -- which could come through casual conversations, meetings already set up or interested parties visiting a booth -- MDC staff get in touch with that business through e-mail blasts, phone calls or both methods to keep the relationship going.
If the contact is a true lead, Hatley said, their next step is to bring company leaders to Midland for a visit. From there, they work not to get eliminated from the list of potential places a business is considering.
Staying in the game
Hatley said a lot of any economic development entity's recruitment success has to do with the national economy. The aviation industry is starting to recover, he said, but other businesses, such as the wind industry, still are in a lull as far as expansion goes.
"Our national economy -- we have a hard time knowing this here -- I don't think you could even say it's close to recovering," he said.
But, he said, they continue attending shows like the Renewable Energy World Conference and Expo earlier this year, which came at a cost to the MDC of $16,214.39, because they think the industry has a future in Texas. While that may mean companies at that show will take longer in considering expansion, if the MDC isn't there at all, they're not ever going to be considered, Hatley said.
"We spend a lot of our time and resources trying to get those relationships built up," he said.
Jerry Morales, at-large city councilman, said knowing the national economy is struggling and the potential for recruiting success is limited, he thinks the MDC's participation in such trade shows could me smaller.
"Are we getting our money's worth when we send staff out there? Because in the last few years we haven't seen results," he said. "It's important we have a presence out there, but definitely I think you can scale back."
John James, councilman for District 3, said while the emphasis on outside recruitment could be lessened at times, it always needs to remain a part of their efforts. With the current local economy, he said, they may invest more in workforce development. But, the MDC also has to anticipate for where the economy will go in the future with its other activities.
"The strategies change depending on what your local economy is like," he said. "You never stop recruiting, you never stop workforce development, you never stop investing in infrastructure."
Future focus
David Mims, former MDC chairman and current board member, said it has always been difficult for him to understand the long process recruiting requires.
"It was hard for me to understand what I call the long incubation period once you identify a prospect," Mims said. "On the one hand that's inefficient salesmanship, but on the other hand that seems to be the way the game is played across the board."
As a board, he said, they've tried to establish a way to at least monitor the progress that's being made through contacts. He said they also still are modifying the recruitment and marketing processes, but the lack of landing a major company through the trade show method isn't because there wasn't effort on the staff's part.
In the grand scheme, the amount of funds spent through the tax fund on outside business recruitment is small in comparison with other initiatives, board members pointed out. The MDC has invested up to $6 million in installing a water line along Highway 191 with the goal of seeing business development because of infrastructure.
Those types of investments is what Mayor Wes Perry and other council members said they would like to see more of in the future. But, citizens also still are saying they want Midland's economy diversified and in the economic development world, traveling, at least to some degree, is a big part of how that's done, Perry said.
"What I'm hearing from the council and the MDC board is infrastructure makes sense. If a little bit is going to trade shows to try to keep that diversification open, then that's what we should do," Perry said. "I don't think it's as high a priority as it was five years ago."
Morales and Dufford said they would support more investment in programs that sustain or help grow businesses already in West Texas.
With a shortage of available workers and housing, Dufford said even if the MDC brings in a large company, Midland doesn't have a way to accommodate them right now.
"Recruiting in my mind is a waste of time with our economy," he said.
The MDC does work each year to recruit employees with an interest of working in Midland, which council members said they support.
Between fiscal year 2009 and April of fiscal year 2011, it invested $5,341.49 in visiting job fairs and career expos, according to information obtained through a Texas Public Information Act request. Because employees apply directly with companies, the MDC has no record of how many individuals have come to Midland as a result of their efforts, though staff say they see a lot of interest in the area.
Rendall and Mims said as they continue to assess processes, they're confident investments in outside recruiting will lead to new development in Midland. As a board, they're also assessing whether the scope of outside recruitment could be narrowed, Mims said.
"There are substantial amounts of money being used to promote the city," Rendall said. "Are we going to get a return for that investment? My personal feeling is at some point we will, but other people might think we ought to do something different with that."
Kathleen Thurber can be reached at kthurber@mrt.com.
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