THE POWER OF ATTRACTION
Economic development organizations in the Midwest focus on the importance of attracting companies to their areas.
Misty Reagin

Economic growth and job creation are the keys to an area’s prosperity, and economic development organizations are probably the most in tune with this philosophy. Heartland Real Estate Business spoke with economic development authorities in Ohio, Illinois and Michigan this month about what they do to keep ahead of the competition, from offering incentives to drafting master plans for area revitalization.

Waukegan, Illinois

The city of Waukegan, Illinois, is spearheading the renovation of the 2,400-seat Genesee Theatre. Once completed, it will be the focal point of commercial progress on Genesee Street.

The city of Waukegan, home to about 88,000 residents, is making great strides in economic development by realizing Mayor Richard Hyde’s vision for a vibrant and strong 21st century city. “The vision calls for fostering new economic development opportunities that will transform Waukegan into a community of choice — a new destination where people will choose to live, visit and work,” says Russ Tomlin, director of planning and development for the city of Waukegan.

To help make this vision a reality, the city council approved a $1.2 billion master plan last August that details the redevelopment of 1,400 acres, including 400 acres downtown and 3.5 miles of lakefront. The plan, which was designed by Chicago-based Skidmore Owings & Merrill (SOM), includes steps for reviving downtown as a destination for jobs, housing, entertainment, shopping and dining. “The most immediate improvements will focus on landscaping, renovation or adaptive reuse of existing new buildings, new parkland and better access to the lakefront,” Tomlin explains.

Downtown residential development is expected to start within the next 12 months. New neighborhoods also are slated for the South Lakefront area within the next 2 years and in the city’s Harborfront districts within the next 5 years. Other elements of the plan include enhancing the marina, creating open space and recreational facilities (such as a new Town Square and Harborfront Park that will link downtown to the lakefront), relocating industrial facilities to sites closer to Interstate 94, narrowing the Amstutz Expressway, realigning the Metra tracks and building a more pedestrian-friendly train station, Tomlin says. In total, the plan will add 4,000 new homes and 1 million square feet of retail, hospitality, entertainment, educational and cultural facilities during the next 20 years.

A $25 million tax increment financing district (TIF) approved by the city last fall is encouraging development activity such as The Shaw Company’s $250 million transformation of the former Lakehurst Mall into Fountain Square of Waukegan, a 98-acre mixed-use project.

“The TIF is providing assistance for the demolition of the vacant stores and new infrastructure improvements that are already well underway — including utilities, a new street, landscaping and a fountain — that will make the site attractive for new uses such as hotels, restaurants and retail, entertainment venues, banks and commercial offices,” Tomlin adds.

Additionally, the city of Waukegan is spearheading a $23 million renovation and programming of the 2,400-seat Genesee Theatre. Scheduled to open this fall, the theater will offer a variety of cultural performances, 250 nights per year. The city also is working with federal and state agencies to secure funding to start cleaning up Waukegan’s harbor.

These new developments complement Waukegan’s existing strengths, including an international airport, excellent highway and train access, a skilled labor force, abundant natural resources and recreational opportunities, and a strategic location midway between Chicago and Milwaukee.

With these inherent attractions, the city makes a good case for drawing new businesses. During the past several years, the organization has helped many companies locate to and expand within Waukegan. Prominent companies located in Waukegan now include Peer Corporation, Yaskawa Electric, Deublin Corporation, Williams Electronics, Uline, Abbott Labs, Cardinal Health and Nielsen Massey Vanilla.

While the city still faces challenges in securing strong development opportunities compatible with the master plan, Tomlin is confident that the next few years will bring exciting new projects that will benefit the entire Waukegan community. “With Mayor Hyde’s leadership energizing the entire community, we will not only make progress, but we will get the job done.”

Springfield, Missouri

The Springfield Business and Development Corporation worked with its economic development partners to develop the Partnership Industrial Center, an approximately 350-acre industrial park.

The board of directors of the Springfield Area Chamber of Commerce created the Springfield Business and Development Corporation (SBDC) in 1983. The economic development organization serves the Springfield metropolitan statistical area, which consists of five counties with a population of about 380,000.

The SBDC provides a continuing revenue source for the Springfield Area Chamber of Commerce’s economic development program, says Greg Williams, senior vice president of economic development for the SBDC. “The organization was created to provide the community with a focused, full-time economic development program, emphasizing business retention, expansion and attraction,” he says.

The largest project it has been involved with, in terms of the number of people employed, was attracting Bank One to the area in 1997. According to Williams, this was the single largest recruitment project in the last 30 years. “To date, Bank One employs approximately 1,300 people in more than 250,000 square feet of office space on the city’s south side,” he says. Other companies it has attracted recently include Reckitt Benckiser (620,000 square feet), NorthStar Battery (140,000 square feet), Executive Coach Builders (100,000 square feet) and Maiman Company (100,000 square feet).

The SBDC is also involved with development. Since its inception, it has worked with its economic development partners at City Utilities of Springfield, the city of Springfield, Greene County and the Springfield Area Chamber of Commerce to develop two large-scale, master-planned industrial parks in Springfield. The Partnership Industrial Center and Partnership Industrial Center West, which are each in excess of 350 acres, were funded solely by Springfield’s partnership for economic development.

In addition, the SBDC has helped create more than 2,100 new jobs in the manufacturing sector since 1993 with new capital investment in excess of $190 million, Williams says. Mostly, the SBDC targets industries such as stainless steel fabricators, plastic injection molding firms, electronic manufacturing companies, motor vehicle parts and accessories companies, and back office and divisional headquarters operations.

There are several projects that are currently under development in Springfield that will help to further enhance the local economy. For example, the city is developing Jordan Valley Park, a 250-acre brownfields pilot project that features new green space, trails and a 112,000-square-foot Exposition Center that will be used for national and regional trade shows and conferences.

The project, which is located downtown, also features a $30 million, 8,000-seat minor league baseball stadium — called Hammons Field — that is currently under construction. The stadium, which is being funded by its owner, John Hammons, will be home to the Southwest Missouri State University baseball team. It is scheduled for completion this spring. “Once a Double A affiliate is selected and begins play at Hammons Field, the economic ‘spin off,’ such as entertainment dollars, restaurants and additional activities, will be tremendous,” Williams says.

According to Williams, companies are attracted to Springfield because of its central location and its access to major markets. The city also has competitive real estate costs and utility rates that are among the lowest 10 percent in the nation. The cost of living is 12 percent below the national average, and the workforce is growing by 2.9 percent annually and is currently at 200,000 active members, Williams says.

In addition to business attraction and retention, the SBDC has set its sights on five main goals: expanding its reach to a 10-county area; enhancing workforce development programs; creating a higher education/healthcare initiatives by linking the two major sectors together for economic development opportunities; developing marketing and media relations; and enhancing its investor relations program.

Kane County, Illinois

Kane County Chairman Mike McCoy and the Kane County Board created the Economic Development Advisory Board (EDAB) in October 1997. Its goal is to provide technical and financial assistance programs to communities and organizations in Kane County for economic development. (The county, which consists of 28 municipalities, has a population of about 440,000.) In addition, the EDAB encourages business attraction, retention and expansion to promote economic growth and job creation in the county.

To achieve these goals, the EDAB is working to provide an easily accessible, comprehensive database of the economic, demographic and real estate resources available in Kane County. In addition, it works from a “smart growth” philosophy — meaning that it does not recruit for unincorporated areas, and it does not compete against its communities. “Our philosophy is to encourage growth in incorporated areas where infrastructure is in place,” says Sharon Dixon, economic/community planner for the Kane County EDAB.

The board provides a yearly Small Cities Grant Program award, which funds up to $15,000 for economic development planning in cities within Kane County that have populations of 50,000 or less. This year, the EDAB is in its sixth grant cycle. During the last cycle, the EDAB administered $41,163 in total grant money to seven municipalities. Communities have used these grants for projects such as establishing an economic development plan and developing a downtown design guideline manual.

In addition to these grants, the board also has conducted several studies to determine information about the county, such as average wages and commuter patterns. Northern Illinois University has also created community profiles for Kane County and for each municipality in the county. Companies and individuals looking to locate in the county can access these profiles, and data from the studies, on the EDAB’s Web site (www.kced.ws).

According to Dixon, the county is attractive to companies and individuals because it has a high quality of life, good school systems and affordable housing. With these positive factors in place, the biggest challenge for the EDAB is convincing small towns to plan for economic development.

Mercer County, Ohio

In June 1990, county commissioners in Mercer County realized how competitive it had become to attract and retain businesses in their area. Surrounding counties were starting economic development programs, and the commissioners in Mercer County decided they needed to do the same if they wanted to keep up.

That is when the county, which has a total population of about 41,000, started its own economic development department. It covers seven villages and one city, including Celina, Cassella and Rockford, and it spends a considerable amount of time and money on attracting new businesses to the area. However, it spends most of its time taking care of existing companies already located in Mercer County.

“We have developed a pro-business attitude in the county where all of our companies know how and where to get assistance,” says Larry Stelzer, economic development director for Mercer County. “We have put together a team with members from all of the municipalities to determine and address the needs of local businesses.”

The department also works with several schools in the area, the Ohio Department of Development and an eight-county regional office in Lima, Ohio. “Schools are an important team member because they offer training through the Small Business Enterprise Center, which offers free counseling customized to training businesses,” Stelzer says.

According to Stelzer, Mercer County is an agricultural area and, as a result, agribusiness is a good fit. “However, we feel we have so much to offer to any type of business,” he says. For example, the area boasts a strong work ethic, a high quality of life and good infrastructure.

Since the department’s inception in 1990, it has attracted companies from Canada, Japan and the Netherlands, such as Basic Grains, a Honda supplier and Deruijter International USA. The county has the largest revolving loan fund in the state, which is its best economic development tool, according to Stelzer. “We have applied for and received almost $27 million in grants and incentives to help attract and retain businesses,” he says. The department has used those funds to provide low interest loans, tax abatement and infrastructure to companies.

In addition, Mercer County conducts what it calls a Retention and Expansion Survey to determine what companies in the area need to prosper. As a result of this survey, the county has helped to provide needed infrastructure, such as new alleyways and stop signs.

The most notable project that the Mercer County economic development department has worked on took place between 1994 and 1999 when two of the county’s largest companies — Huffy Bicycle Company and AGCO Corporation — closed their doors and, as a result, put 3,000 people out of work. “We not only had 16 percent of our workforce unemployed, but we had two empty buildings with a total of 2.35 million square feet of vacant space,” Stelzer says. “Our unemployment rate hit a high of 12.5 percent.”

The department immediately started promoting the workforce and the vacant buildings. Within 3 years, both buildings were sold and the unemployment rate was less than 5 percent, Stelzer says.

Marion County, Ohio

A group of citizens concerned about Marion County, and its economic growth, created Marion CAN DO! in November 1992 following the downsizing of several major industries. The organization’s main goal is to attract and retain businesses in the area and to improve the quality of life for area residents through economic growth. Marion County, which has a population of 68,000, includes the city of Marion and eight villages: Waldo, Prospect, LaRue, Caledonia, Morral, Martel, Green Camp and Claridon.

Marion CAN DO! works as a public/private partnership collaborating with bankers, architects, engineers, local developers, schools and the Chamber of Commerce, as well as city and county governments. The non-profit organization also works with the Ohio Department of Development on project development, grants, loans and incentive packages.

Since it was created, the economic development organization has developed 433 acres into the Marion Dual Rail Industrial Park. The park is a unique concept in industrial park developments because it features access to two competing railroads (Norfolk Southern and CSXT). Dave Claborn, president of Marion CAN DO!, says the park features ready-to-build sites from 5 acres to 80 acres.

So far, four companies have located in Dual Rail Park, representing nearly $125 million invested and 400 jobs. Dofasco Marion occupies 265,000 square feet and is currently expanding by 132,000 square feet; Marion Industries occupies 144,000 square feet; US Yachiya occupies 122,000 square feet; and Sakamura USA occupies 15,200 square feet at the park.

However, the largest project that Marion CAN DO! helped orchestrate was attracting Silver Line Building Products to the area in 2001. The company needed rail service, and proximity to a good highway and an airport. As a result, it built a 300,000-square-foot facility in Marion’s Airport Industrial Park. “It was the cooperation between the city of Marion, Marion County, the Ohio Department of Development and Marion CAN DO!, combined with state grants totaling $1 million for road and utility extensions, that helped convince the company to choose Marion,” Claborn says.

Together, the Marion Dual Rail Industrial Park and the Airport Industrial Park offer about 300 acres of ready-to-build space for manufacturing, distribution and warehousing operations. However, Marion County also offers other amenities that make it an attractive place for companies to locate.

“Marion has a rich industrial heritage and is located in central Ohio where approximately 60 percent of the U.S. and Canadian industrial markets can be reached within a 1-day drive,” Claborn says. “Marion is also a safe place with good schools. Over $150 million has recently been spent in two area school districts to build new high schools, and middle and elementary school buildings.”

In addition, Marion also features amenities such as the restored Palace Theater, the Marion Country Club, and ample shopping, dining and entertainment activities. The Columbus metropolitan area (about a 1-hour drive from Marion) offers Ohio State University (OSU) sports and the Columbus Symphony.

Marion CAN DO! works with the local branch of OSU and Marion Technical College on workforce development issues and on community planning. “Competition for good companies and good jobs is fierce,” Claborn says. “The best prepared communities win the deals. We like to think we have something to offer almost any company — from good existing spaces to attractive greenfield sites.”

Saginaw, Michigan

In 1992, the city of Saginaw, Saginaw County and the Saginaw County Chamber of Commerce formed Saginaw Future to develop a comprehensive economic development plan for the area. Prior to this combined effort, the city and the county each had their own economic development organizations, and the Chamber of Commerce had a separate business attraction effort.

“Unfortunately, there was little coordination and a great duplication of efforts,” says JoAnn Crary, president of Saginaw Future. “The leadership at the county, city and Chamber determined that, to diversify the economy, they needed to combine resources and form a single economic development organization focused on base job creation and retention.”

Now, the combined entity works with and is supported by 16 local governments, the city and county of Saginaw, several downtown development authorities and the Saginaw County Chamber of Commerce. “We are also close partners with the Michigan Economic Development Corporation, and we work with the governor and the lieutenant governor. In addition, we have a regional partnership with the Chambers and economic development organizations in Saginaw, Bay and Midland counties and with Saginaw Valley State University and Delta College,” Crary explains.

With help from these partners, Saginaw Future has created and retained more than 7,000 jobs and attracted more than $1.7 billion in new investment since its inception. For example, Saginaw Future recently was instrumental in securing an $88 million investment from a local General Motors (GM) plant to build the V-8 Generation IV engine heads and blocks in Saginaw. The project was originally slated for Mexico, but the local plant executives, the United Auto Workers (UAW) and Saginaw Future secured incentives from the city of Saginaw and Michigan Economic Development Corporation to convince GM to invest in Saginaw, Crary says. The UAW also implemented $75 million in cost-savings for a 3-year period. As a result of this project, Saginaw Future is now working with GM to attract four new suppliers to service the contract.

Last year, Saginaw Future worked with the Michigan CardioVascular Institute (MCVI) to construct a combined facility in Saginaw. MCVI subsequently moved into a new 60,000-square-foot medical office building along the Saginaw River. In addition, an approximately 33,000-square-foot second medical office building adjacent to MCVI is being planning for this year.

Saginaw Future mainly focuses its efforts on attracting and retaining base industries, such as manufacturing, high-tech, medical specialties, tourism, agribusiness and automotive. “These businesses bring new money into the area, they typically are higher paying and they provide worker benefits,” Crary says. “The automotive industry remains Saginaw County’s Number 1 employer and taxpayer, and we have had many opportunities to attract investment at those firms.”

With this strong focus on base industries, Saginaw County, which has a population of about 210,000, also has an educated workforce with skills in automotive technology, agricultural processing and the medical industry. Other features that make Saginaw an attractive place to locate include its international airport, a CSX rail switching station, the Great Lakes shipping channel and Interstate 75.

Saginaw Future currently has several efforts in place that serve to enhance economic development in the area. One of its most important efforts, the Corporate Watch program, entails visiting more than 150 base job employers each year to determine plans for expansion and identify barriers to growth.

While each of these economic development organizations may have their own methods for attracting and retaining businesses, they all have the same goal in mind: to further the local economy. By having companies in their areas, these groups can ensure jobs and economic prosperity — and commercial real estate stands at the heart of it all.

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